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Second quarter
Sales and results
In local currencies sales for the second quarter of 2008 increased by 12 percent compared with the second quarter of 2007. Reported sales for the second quarter increased by 6 percent to 3,284 MSEK (3,090). Currency translation has affected the sales comparison negatively by 175 MSEK.
For snuff, sales increased by 20 percent during the second quarter to 953 MSEK (794) and operating profit increased by 32 percent to 410 MSEK (311). Scandinavian snus sales were up 26 percent compared to the second quarter of the prior year, volumes measured in number of cans declined by 2 percent. Snuff sales in North America were up by 22 percent in local currency, as a result of a volume growth of 21 percent.
For cigars, sales increased by 7 percent during the second quarter to 908 MSEK (847). Operating profit increased in local currencies but due to translation effects declined in Swedish kronor to 184 MSEK (193). Sales for cigars grew in both the US and in Europe in local currencies as a result of acquired businesses. Operating profit increased in the US in local currency and remained flat versus prior year in Europe. Operating margin for cigars reached 20.3 percent (22.7).
Group operating profit for the second quarter increased by 14 percent to 733 MSEK (642). In local currencies operating profit increased by 21 percent. Currency translation has affected the operating profit comparison negatively by 47 MSEK.
Operating margin for the second quarter amounted to 22.3 percent compared to 20.8 percent for the second quarter of 2007.
Earnings per share (basic and diluted) for the second quarter increased by 22 percent to 2.02 SEK (1.66).
Sales and results for the first six months
Sales for the first six months amounted to 6,103 MSEK (5,752). In local currencies, sales increased by 11 percent. Operating profit amounted to 1,276 MSEK (1,176). Currency translation has affected the operating profit comparison negatively by 68 MSEK.
Group operating margin during the first six months was 20.9 percent (20.4).
EPS (basic) for the first six months was 3.36 SEK (2.89). Diluted EPS was
3.35 SEK (2.89).
SALES
3,284 MSEK
OPERATING PROFIT
733 MSEK
SUMMARY OF CONSOLIDATED INCOME STATEMENT      
  April–June January–June Full year
MSEK 2008 2007 2008 2007 2007
Sales 3,284 3,090 6,103 5,752 12,551
Operating profit excl. larger one time items 733 642 1,276 1,176 2,730
Operating profit 733 642 1,276 1,176 2,997
Profit before income tax 614 563 1,041 1,031 2,662
Net profit for the period 512 441 854 773 2,056
Earnings per share, diluted (SEK) 2.02 1.66 3.35 2.89 7.80
CEO Lars Dahlgren:
The second quarter confirms a continued strong development of the snus and snuff product lines. Tax-free and Norway compensated for lower volumes in Sweden and overall profit for snus in Scandinavia improved significantly compared to the second quarter of 2007. In the US the national launch of Red Man moist snuff continued, and our US snuff business gained market share during the quarter. For cigars, sales have started to return to more normal levels following a weak first quarter of 2008. The remaining product groups delivered solid results in local currencies. We maintain our outlook for 2008 with improving sales and underlying operating profit for the Group compared to 2007.”
  April–June Change January–June Change July 2007– Full year
Sales by product area, MSEK 2008 2007 % 2008 2007 % June 2008 2007
Snuff 953 794 20 1,774 1,457 22 3,606 3,289
Cigars 908 847 7 1,665 1,581 5 3,495 3,411
Chewing tobacco 227 253 –10 437 492 –11 901 956
Pipe tobacco & accessories 189 203 –7 387 408 –5 830 851
Lights 374 354 5 721 694 4 1,500 1,473
Other operations 634 638 –1 1,119 1,121 0 2,569 2,571
Total 3,284 3,090 6 6,103 5,752 6 12,901 12,551
  April–June Change January–June Change July 2007– Full year
Operating profit by product area, MSEK 2008 2007 % 2008 2007 % June 2008 2007
Snuff 410 311 32 728 541 34 1,553 1,366
Cigars 184 193 –4 296 357 –17 676 737
Chewing tobacco 77 82 –6 146 154 –5 305 312
Pipe tobacco & accessories 47 24 99 99 79 24 220 201
Lights 62 62 0 116 119 –3 249 252
Other operations –47 –29   –108 –74   –172 –137
Subtotal 733 642 14 1,276 1,176 9 2,830 2,730
Larger one time items                
Capital gain from sale of real estate             267 267
Total 733 642 14 1,276 1,176 9 3,098 2,997
  April–June January–June July 2007– Full year
Operating margin by product area, percent 2008 2007 2008 2007 June 2008 2007
Snuff 43.0 39.1 41.1 37.2 43.1 41.5
Cigars 20.3 22.7 17.8 22.6 19.3 21.6
Chewing tobacco 34.1 32.3 33.4 31.2 33.8 32.7
Pipe tobacco & accessories 25.0 11.7 25.5 19.4 26.5 23.6
Lights 16.6 17.5 16.0 17.1 16.6 17.1
Group* 22.3 20.8 20.9 20.4 21.9 21.8
* Excluding larger one time items            
  April–June Change January–June Change July 2007– Full year
EBITDA by product area, MSEK 2008 2007 % 2008 2007 % June 2008 2007
Snuff 448 347 29 804 614 31 1,701 1,511
Cigars 232 237 –2 393 446 –12 867 920
Chewing tobacco 82 87 –5 156 164 –5 322 330
Pipe tobacco & accessories 55 32 69 114 96 18 252 235
Lights 72 74 –3 136 142 –4 293 299
Other operations –46 –26   –105 –69   –165 –129
Total 842 750 12 1,498 1,393 8 3,271 3,166
  April–June January–June July 2007– Full year
EBITDA margin by product area, percent 2008 2007 2008 2007 June 2008 2007
Snuff 47.0 43.7 45.3 42.1 47.2 45.9
Cigars 25.5 28.0 23.6 28.2 24.8 27.0
Chewing tobacco 36.3 34.3 35.7 33.3 35.7 34.5
Pipe tobacco & accessories 28.9 15.8 29.5 23.6 30.4 27.6
Lights 19.2 20.8 18.9 20.5 19.5 20.3
Group 25.7 24.3 24.5 24.2 25.4 25.2