Press releaseMay 31, 1999
Swedish Match to sell the cigarette business to Austria Tabak for MSEK 4,800
Swedish Match and Austria Tabak
have reached an agreement to transfer the cigarette business of
Swedish Match to Austria Tabak for 4,800 MSEK in cash. The
capital gain is estimated to be MSEK 4,200.
The agreement is subject to the
satisfactory resolving of certain questions of practical and
legal nature and that appropriate approvals from relevant
authorities can be obtained. The results of this business will be
included in Swedish Match's financial reporting through June 30,
1999.
The cigarette business of Swedish
Match with sales of 1,490 MSEK and EBIT of 473 MSEK (rolling 12
months) includes production facilities in Malmo, Sweden,
management and marketing functions in Stockholm and a sales-force
and in addition, a local Estonian operation. In total approx. 500
employees will be subject to the transfer. The main products of
Swedish Match's cigarette business are Blend, Right, and John
Silver. Swedish Match had a 48 percent market share in Sweden in
1998.
The sale of the cigarette business
is in line with Swedish Match's redefined strategy to concentrate
its main resources and future investments in smokeless products
and cigars.
Proforma results for Swedish Match
first quarter 1999 would have been approximately SEK 0:52 per
share, a reduction of approximately SEK 0:15 per share out of the
total result of SEK 0:67 per share for first quarter 1999.
Swedish Match's board maintains
their continued positive view of transferring to the shareholders
funds deemed not necessary for the Group's expansion and
consolidation.
The financial goals for Swedish
Match remain:
- debt/equity ratio shall not
exceed 100 percent
- equity/assets ratio not more
than 30 percent, in the long run
- interest coverage should not
be less a multiple of 10
Swedish Match is an
international group with headquarters in Stockholm, Sweden. The
company manufactures a broad range of tobacco products, matches
and disposable lighters which are sold in approximately 140
countries. Annual sales in 1998 amounted to approximately 8,200
MSEK. Swedish Match is listed on the Stockholm Stock Exchange and
on NASDAQ.
For further information, please
contact:
Lennart Sundén, President and
Chief office +46 8-658 01 75
Executive Officer
Sven Hindrikes, Senior Vice
President and office +46 8-658 02 82 Chief Financial Officer
mobile +46 70-567 41 76
Bo Aulin, Senior Vice
President, Corporate Affairs office +46 8-658 03 64 mobile +46
70-558 03 64
Boel Sundvall, Vice President,
Investor Relations office +46 8-658 01 73 mobile +46 70-651 39 09
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