Swedish Match - Annual Report 2006

Five-year summary

Condensed consolidated income statements, MSEK*
	2006	2005	2004	2003	2002
Net sales	12,911	13,311	13,007	13,036	13,643
Gross profit	6,237	6,033	5,761	5,933	6,124
Settlement income, UST	–	–	1,521	–	–
Operating profit	3,235	2,825	3,593	2,224	2,371
Net finance cost	–68	–128	–164	–50	–245
Profit before income tax	3,167	2,696	3,429	2,174	2,126
Profit for the year	2,331	1,777	2,084	1,558	1,429
EBITDA excluding larger one time items	3,533	3,206	2,916	2,889	3,022

Condensed consolidated balance sheets, MSEK*
	2006	2005	2004	2003	2002
Assets
Intangible assets	3,469	4,265	3,452	3,648	4,145
Property, plant and equipment	2,221	2,488	2,712	2,862	2,938
Non-current financial assets	1,156	1,150	848	616	606
Inventories	2,473	2,770	2,476	2,676	3,154
Current receivables	3,354	2,475	2,408	2,634	2,588
Cash and cash equivalents including other investments	3,098	3,657	3,002	2,666	2,016
Total assets	15,770	16,806	14,898	15,102	15,447

Equity and liabilities
Equity, including minority interest	2,290	5,083	5,060	4,010	4,007
of which, minority interest	3	3	481	597	686
Non-current provisions	1,748	3,072	2,512	2,119	2,293
Non-current liabilities	7,819	2,884	2,580	4,601	4,603
Current provisions	61	293	647	–	–
Current liabilities	3,852	5,474	4,099	3,775	3,858
Total equity and liabilities	15,770	16,806	14,898	15,102	15,447

Cash flow, MSEK*
	2006	2005	2004	2003	2002
Net cash from operating activities	1,335	2,718	3,626	2,638	2,585
Net cash used in investing activities	–255	–140	–658	–701	–155
Net cash used in financing activities	–1,164	–1,441	–2,779	–1,469	–1,633
Net increase/decrease in cash and cash equivalents	–85	1,137	189	468	797
Cash and cash equivalents at beginning of the year	3,325	2,058	1,909	1,477	772
Effect of exchange rate fluctuations on cash and cash equivalents	–198	130	–40	–36	–92
Cash and cash equivalents at end of year	3,042	3,325	2,058	1,909	1,477

* Data as of 2004 are based on reporting in accordance with IFRS. Data for the years prior to 2004 are based on the then applicable Swedish GAAP.

F I V E -Y E A R S U M M A R Y

Key figures1)
	2006	2005	2004	2003	2002
Operating capital at year-end, MSEK2)	7,883	7,765	7,314	8,377	9,477
Net debt, MSEK	5,126	674	527	2,715	3,492
Investments in property, plant and equipment, MSEK	304	328	486	551	751
Operating margin, %3)	23.9	19.7	17.8	17.1	17.4
Return on operating capital, %3)	39.5	34.7	29.4	24.9	23.7
Return on equity, %	63.3	36.6	48.2	38.9	35.2
EBITA interest cover	19.6	26.6	15.4	46.8	11.8
Net debt/EBITA	1.6	0.2	0.2	1.1	1.3
Equity/assets ratio, %	14.5	30.2	34.0	30.5	30.4
Share capital, MSEK	390	390	808	844	868
Dividends per share, SEK	2.504)	2.10	1.90	1.70	1.60
Earnings per share basic, SEK	8.12	5.61	6.18	4.68	4.10
1) Data as of 2004 are based on reporting in accordance with IFRS. Data for the years prior to 2004 are based on the then applicable Swedish GAAP.
2) Due to changes in accounting principles governing pensions, the company decided to amend the internal definition of operating capital. As of 2004, pension liabilities and pension
receivables are included in operating capital. The comparative figures have been restated in line with the same principle. 3) Excluding the pension curtailment gain during 2006, income from sale of real estate during 2005, the settlement income from UST, and impairment and reserves in match operations during
2004. 4) Board proposal.

Net sales by product area, MSEK*
	2006	2005	2004	2003	2002
Snuff	3,363	3,131	3,081	2,995	2,788
Cigars	3,407	3,283	3,171	3,008	3,318
Chewing tobacco	1,063	1,079	1,058	1,146	1,333
Pipe tobacco and Accessories	899	920	901	909	843
Lights	1,503	1,936	1,960	1,994	2,348
Other operations	2,677	2,962	2,836	2,984	3,013
Subtotal	12,911	13,311	13,007	13,036	13,643

Operating profit/loss by product area, MSEK*
	2006	2005	2004	2003	2002
Snuff	1,604	1,504	1,376	1,386	1,233
Cigars	747	613	567	393	472
Chewing tobacco	326	347	304	336	406
Pipe tobacco and Accessories	261	237	254	201	164
Lights	247	58	1	97	277
Other operations	–99	–140	–190	–189	–181
Subtotal	3,087	2,618	2,312	2,224	2,371
Pension curtailment gain	148	–	–	–	–
Gain from sale of office property	–	206	–	–	–
Settlement income, UST	–	–	1,521	–	–
Impairment and reserves in match operations	–	–	–150	–	–
Costs for acquisition of shares in Wimco Ltd	–	–	–90	–	–
Total	3,235	2,825	3,593	2,224	2,371

Operating margin by product area, %*
	2006	2005	2004	2003	2002
Snuff	47.7	48.0	44.7	46.3	44.2
Cigars	21.9	18.7	17.9	13.1	14.2
Chewing tobacco	30.7	32.1	28.7	29.3	30.5
Pipe tobacco and Accessories	29.0	25.8	28.2	22.1	19.5
Lights	16.4	3.0	0.0	4.9	11.8
Group**	23.9	19.7	17.8	17.1	17.4
* Data as of 2004 are based on reporting in accordance with IFRS. Data for the years prior to 2004 are based on the then applicable Swedish GAAP.
** Excluding the pension curtailment gain during 2006, income from sale of real estate during 2005, the settlement income from UST, and impairment and reserves in match operations during 2004.

F I V E -Y E A R S U M M A R Y

Page 90

Five-year summary

Condensed consolidated income statements, MSEK*
	2006	2005	2004	2003	2002
Net sales	12,911	13,311	13,007	13,036	13,643
Gross profit	6,237	6,033	5,761	5,933	6,124
Settlement income, UST	–	–	1,521	–	–
Operating profit	3,235	2,825	3,593	2,224	2,371
Net finance cost	–68	–128	–164	–50	–245
Profit before income tax	3,167	2,696	3,429	2,174	2,126
Profit for the year	2,331	1,777	2,084	1,558	1,429
EBITDA excluding larger one time items	3,533	3,206	2,916	2,889	3,022

Condensed consolidated balance sheets, MSEK*
	2006	2005	2004	2003	2002
Assets
Intangible assets	3,469	4,265	3,452	3,648	4,145
Property, plant and equipment	2,221	2,488	2,712	2,862	2,938
Non-current financial assets	1,156	1,150	848	616	606
Inventories	2,473	2,770	2,476	2,676	3,154
Current receivables	3,354	2,475	2,408	2,634	2,588
Cash and cash equivalents including other investments	3,098	3,657	3,002	2,666	2,016
Total assets	15,770	16,806	14,898	15,102	15,447

Equity and liabilities
Equity, including minority interest	2,290	5,083	5,060	4,010	4,007
of which, minority interest	3	3	481	597	686
Non-current provisions	1,748	3,072	2,512	2,119	2,293
Non-current liabilities	7,819	2,884	2,580	4,601	4,603
Current provisions	61	293	647	–	–
Current liabilities	3,852	5,474	4,099	3,775	3,858
Total equity and liabilities	15,770	16,806	14,898	15,102	15,447

Cash flow, MSEK*
	2006	2005	2004	2003	2002
Net cash from operating activities	1,335	2,718	3,626	2,638	2,585
Net cash used in investing activities	–255	–140	–658	–701	–155
Net cash used in financing activities	–1,164	–1,441	–2,779	–1,469	–1,633
Net increase/decrease in cash and cash equivalents	–85	1,137	189	468	797
Cash and cash equivalents at beginning of the year	3,325	2,058	1,909	1,477	772
Effect of exchange rate fluctuations on cash and cash equivalents	–198	130	–40	–36	–92
Cash and cash equivalents at end of year	3,042	3,325	2,058	1,909	1,477

* Data as of 2004 are based on reporting in accordance with IFRS. Data for the years prior to 2004 are based on the then applicable Swedish GAAP.

Page 90

Page 91

Key figures1)
	2006	2005	2004	2003	2002
Operating capital at year-end, MSEK2)	7,883	7,765	7,314	8,377	9,477
Net debt, MSEK	5,126	674	527	2,715	3,492
Investments in property, plant and equipment, MSEK	304	328	486	551	751
Operating margin, %3)	23.9	19.7	17.8	17.1	17.4
Return on operating capital, %3)	39.5	34.7	29.4	24.9	23.7
Return on equity, %	63.3	36.6	48.2	38.9	35.2
EBITA interest cover	19.6	26.6	15.4	46.8	11.8
Net debt/EBITA	1.6	0.2	0.2	1.1	1.3
Equity/assets ratio, %	14.5	30.2	34.0	30.5	30.4
Share capital, MSEK	390	390	808	844	868
Dividends per share, SEK	2.504)	2.10	1.90	1.70	1.60
Earnings per share basic, SEK	8.12	5.61	6.18	4.68	4.10
1) Data as of 2004 are based on reporting in accordance with IFRS. Data for the years prior to 2004 are based on the then applicable Swedish GAAP.
2) Due to changes in accounting principles governing pensions, the company decided to amend the internal definition of operating capital. As of 2004, pension liabilities and pension
receivables are included in operating capital. The comparative figures have been restated in line with the same principle. 3) Excluding the pension curtailment gain during 2006, income from sale of real estate during 2005, the settlement income from UST, and impairment and reserves in match operations during
2004. 4) Board proposal.

Net sales by product area, MSEK*
	2006	2005	2004	2003	2002
Snuff	3,363	3,131	3,081	2,995	2,788
Cigars	3,407	3,283	3,171	3,008	3,318
Chewing tobacco	1,063	1,079	1,058	1,146	1,333
Pipe tobacco and Accessories	899	920	901	909	843
Lights	1,503	1,936	1,960	1,994	2,348
Other operations	2,677	2,962	2,836	2,984	3,013
Subtotal	12,911	13,311	13,007	13,036	13,643

Operating profit/loss by product area, MSEK*
	2006	2005	2004	2003	2002
Snuff	1,604	1,504	1,376	1,386	1,233
Cigars	747	613	567	393	472
Chewing tobacco	326	347	304	336	406
Pipe tobacco and Accessories	261	237	254	201	164
Lights	247	58	1	97	277
Other operations	–99	–140	–190	–189	–181
Subtotal	3,087	2,618	2,312	2,224	2,371
Pension curtailment gain	148	–	–	–	–
Gain from sale of office property	–	206	–	–	–
Settlement income, UST	–	–	1,521	–	–
Impairment and reserves in match operations	–	–	–150	–	–
Costs for acquisition of shares in Wimco Ltd	–	–	–90	–	–
Total	3,235	2,825	3,593	2,224	2,371

Operating margin by product area, %*
	2006	2005	2004	2003	2002
Snuff	47.7	48.0	44.7	46.3	44.2
Cigars	21.9	18.7	17.9	13.1	14.2
Chewing tobacco	30.7	32.1	28.7	29.3	30.5
Pipe tobacco and Accessories	29.0	25.8	28.2	22.1	19.5
Lights	16.4	3.0	0.0	4.9	11.8
Group**	23.9	19.7	17.8	17.1	17.4
* Data as of 2004 are based on reporting in accordance with IFRS. Data for the years prior to 2004 are based on the then applicable Swedish GAAP.
** Excluding the pension curtailment gain during 2006, income from sale of real estate during 2005, the settlement income from UST, and impairment and reserves in match operations during 2004.