In 1996, operating income before
nonrecurring items rose by slightly more than 15 percent, from
SEK 1,494 M to SEK 1,723 M. This was achieved despite virtually
unchanged sales of SEK 7,416 M, compared with SEK 7,435 M a year
earlier. All divisions reported higher operating income.
The improvement in Group income
was attributable to strong price trends for several product
groups, higher volumes for certain products and substantial
improvements in efficiency and costs savings.
Net income, that is, income after
nonrecurring items, net financial items, minority interests and
taxes, is largely unchanged at SEK 1,109 M in 1996, compared with
SEK 1,097 M a year earlier. Net income was charged with
SEK 92 M in nonrecurring items
after tax pertaining mainly to restructuring costs in conjunction
with the closing of the plants in Arvika and Härnösand. In
1995, net income was affected positively by nonrecurring items
amounting to SEK 218 M.
Earnings per share after full tax,
but before nonrecurring items, rose by 37 percent to SEK 2.59.
Shareholders’ equity per share increased 48 percent to SEK
4.99.
A dividend of SEK 1.10 per share
is proposed.
Chief Executive Göran Lindén
comments:
This year’s result
demonstrates strength in many respects. The sales trend is
positive for several product groups, including moist snuff,
lighters and matches, although as a result of currency effects
the volume increases did not gain full impact on sales revenues
expressed in Swedish kronor. Operating margin rose from 20.1 to
23.2 percent and return on operating capital increased to 49.9
percent, compared with 41.3 percent in 1995.
The Group continues to be
characterized by favorable profitability and profit margin and a
strong cash flow.
Just as development in the market
is important for our earnings, so is the ongoing program to
reduce costs. This will affect earnings positively, with full
effect from 1998 and partly already in 1997.
In order to increase the
effectiveness of cultivating new markets while concurrently
increasing strengths in the existing markets, an entirely new
organization was implemented at year end 1996, with seven product
divisions which market their products through seven sales regions
which are oriented towards consumer markets and a global unit for
advertising products activities.
Increased sales, higher costs
efficiency and increased competitiveness are several of the
effects we foresee as a result of the new organization.
For further information
contact:
Bo Aulin, phone +46 8 658 03 64
Jan Gabrielsson, phone +46 8 568
01 72
Alf J Ehinger, phone +46 8 658 01
73