Market development

Market for Lights

Swedish Match’s matches and lighters are sold across the globe and the most important markets are in Europe and Asia, as well as in Brazil in Latin America.

For lighters, Swedish Match manufactures and sells the Cricket brand, with its range of disposable lighters and specialty products for both household and outdoor lighting needs. Cricket lighters are well known for their quality, unique design and a number of safety features, such as a fixed flame technology, child safety mechanisms, and fire resistant lighter bodies.

Match brands tend to be local, with one brand being iconic in its own country. The Company’s match assortment includes products for a wide variety of uses, in sizes and formats that fit every fire lighting need. Swedish Match also sells complementary products, such as razors, light bulbs, and toothpicks mainly for the Brazilian market, as well as e-cigarettes in Russia and Greece.

Market

The match market is in a long term state of decline in most countries where Swedish Match has a presence. The largest Swedish Match markets are in Europe, Brazil, and parts of Africa. For lighters, market volumes are flat to declining in most developed markets, while they are growing in many developing countries. For lighters, the ­largest Swedish Match markets are located in Asia and Europe, while the Company also maintains a strong presence in Brazil. During much of 2015 and early in 2016, the Eastern European lighter markets faced particularly difficult economic conditions, which improved during the course of 2016. Both quality and pricing are important consideration for matches and lighters, and Swedish Match offers products with high quality at competitive prices. Most markets for matches and lighters remain highly competitive. Swedish Match also sells complementary products, such as light bulbs, batteries, razors, and certain other products. The main Swedish Match market for complementary products is Brazil.

Matches

During 2016, Swedish Match maintained significant or leading market positions in its largest markets for matches, including Australia (Redheads), the UK (Swan Vestas), Spain (Tres Estrellas), the Nordic countries (Solstickan, Nitedals Hjelpestikker, and Tordenskjold), and Brazil (Fiat Lux). Sales of matches declined compared to the prior year as a result of lower volumes and negative currency translation effects, partly offset by improved pricing. Operating profit declined during the year.

Lighters

Swedish Match offers a wide range of lighter products which include both premium disposable lighters and utility lighters. With its flexible and efficient manufacturing process, Swedish Match is able to quickly manufacture and deliver both mainstream and special order varieties to satisfy customer requirements for quality, reliability, design, and innovation.

The lighter business is characterized by variability in volumes and mix, depending on the timing and type of products delivered, geography, and ­currency fluctuations. For the full year, while overall shipments were relatively flat, sales and profitability improved versus the prior year, aided by strict cost controls, and a favorable product mix.

Complementary products

Swedish Match offers a portfolio of complementary products mainly on the ­Brazilian market, including disposable razors, batteries, light bulbs and tooth picks under the Fiat Lux brand. Sales of complementary products increased in 2016 ­compared to the prior year.

Competitors

Match competition varies widely between markets. Lighter competitors include Bic, Tokai, Flamagas, and a number of other smaller manufacturers.