ArticleMay 11, 2007
Record earnings pleased shareholders
The arrival of spring in Stockholm, with masses of wood anemones,
scillas and spring bulbs blooming in the park outside the Stockholm
International Fairs facility, must have been matched by the spring
feelings of the 435 shareholders represented in the meeting venue itself.
Shareholders in Swedish Match could look back
on a very strong 2006, with the best operating
income ever for the company. Among other
reasons shareholders had for celebrating, the
dividend was raised to 2.50 SEK and the share
price showed a 37-percent increase during 2006.
"Since its stock market introduction, Swedish
Match, together with such companies as Nokia,
has had the best share performance among
the major listed companies," noted CEO Sven
Hindrikes.
The favorable result is attributable not only
to intensive work during the past year, but also
to the extensive rationalization program that
has been under way for several years and whose
effects were fully realized in the results for 2006.
Searching for acquisition targets
Sven Hindrikes promised an even more aggressive
acquisition strategy in the future for the cigars
product area, as well as further investments in the
snuff operations, particularly in North America
and Scandinavia.
"There is an enormous snuff market to be
penetrated in the US," said Sven Hindrikes.
Gunnar Ek, representing the Swedish
Association of Share Investors, wondered
whether Swedish Match would be retaining its
present structure or was contemplating complete
withdrawal from match operations.
"We have no plans to sell off more of the match
operations," replied Hindrikes. "Both the plants
that remain, in Sweden and Brazil, have favorable
capacity utilization and profi tability. The present
structure will be retained, and it will be within
this structure that we search for opportunities to
grow. But in regard to snuff, it should be borne
in mind that there are in fact no companies for
sale. Within cigars, we are constantly seeking
acquisitions."
Taking leave after 28 years
A special aspect of this year's meeting was
that it marked the end of a long era with Bernt
Magnusson as Chairman of the Board. After 28
years in the company, 14 years on the Board - 12 of them as Chairman - Bernt Magnusson has
decided to move on to new tasks, and when he
reported on the work of the Board during the
past year, it was also a form of summation of the
view of Board work that had characterized his
time as Chairman.
"Judging from the public debate, it would
be easy to believe that remuneration issues were
the highest priority on the agenda, but this was
not the case," said Bernt Magnusson. "Strategy
issues have been by far the most important topics
at our meetings. They are always a key item at all
meetings, and we also devote an entire meeting
each year exclusively to strategy."
With the exception of snuff and cigars, all of
Swedish Match's products are sold in declining
markets, according to Bernt Magnusson.
"This means that much inventiveness is
required to nevertheless achieve growth in
profits," he continued. "We are constantly
weighing alternatives to offset declining volumes.
We have chosen to maintain a strict focus on
our main product areas, to look continuously
for complementary acquisitions, and not
to diversify too much. Swedish Match's
history includes some unsuccessful diversifi cation
attempts that have been costly for the owners."
Finally, Sven Hindrikes thanked Bernt
Magnusson for his efforts on behalf of the
company.
"Bernt has really been in for the long haul,
with experience of Swedish Match dating back to
1979. He deserves a huge vote of thanks for his
efforts and is going to be missed here."
New Board members
Conny Karlsson, who has been a Board member
since 2006, was elected as Swedish Match's new
Chairman of the Board.
"Conny is highly competent in the marketing
of consumer goods. We hope this will contribute
to the company’s continued growth," said Mads
Eg Gensmann, Chairman of the Nominating
Committee.
The two new Board members elected were
Charles A, Blixt, with solid experience of the US
tobacco industry, and John P. Bridendall, who has
extensive experience of fast-moving consumer
goods with strong brands.