Financial development
Sales for snuff during the year decreased 2 percent to 3,289 MSEK (3,363). Operating profit for the year declined by 15 percent to 1,366 MSEK (1,614).
In the Scandinavian market, Swedish Match sales declined by 4 percent, as improved pricing and strong growth in Norway and duty free sales offset sales declines in Sweden. Sales volumes declined by 9 percent in Scandinavia. In Sweden, volumes declined, impacted by a doubling of the weight based tax for snus. Volumes in Norway, as well as duty free sales, increased.
In the US, sales grew as the Company gained market share in a market that grew by more than 7 percent*. Swedish Match shipment volumes increased by 21 percent.
The operating margin was 42 percent for the year (48). The lower operating margin results from a combination of factors including lower volumes in the first part of the year in Scandinavia, a mix shift toward value price products, and higher expenses for marketing and product launches.
* Source: Swedish Match and industry estimates. ACNielsen estimates 2007 market growth of 10 percent.
Snuff, key data
* Operating capital for 2005 has not been restated in accordance with the new definition of net debt and includes net pension liabilities.