News; Jul 27, 2008 CET

Dahlgren and Tilly: At the cutting edge

Lars Dahlgren and Joakim Tilly stepped into new positions on June 1 this year, when Lars took on the mantle of President and CEO of Swedish Match with Joakim succeeding Lars as the CFO. More of the same or something new?

Swedish Match has a solid business platform which has generated good returns over the past several years,” says Lars. In that regard, this platform should also provide for further positive developments in many areas. Particularly for snuff and snus, but we also see opportunities for innovative moves in other areas.”

The new duo with a true passion for the business has a collective twenty years worth of experience at Swedish Match, working closely with each other for several years. There’s no question they share a deep and informed understanding of a business that may seem fraught with challenges but which has persistently turned these into opportunities.

CEO Lars Dahlgren, who took over the reigns when former chief Sven Hindrikes stepped down, has showed his mettle. He has successfully managed company finances through significant restructuring, both operationally and on the financial side, over the last four years.

“I appreciate the opportunity and acknowledge the challenge in my new role, while I am also very excited about what we can do together to take Swedish Match further. We have a solid platform for further development, especially within the smokefree area and cigars”, says Lars.

At the forefront of innovation

Outsiders may describe the industry as jaded, but the new CEOCFO team attributes this almost 100-year old company characteristics of a cutting-edge, fast-moving consumer goods group, with the genes of a trailblazer. “It’s a vibrant industry especially when it comes to snus where we have forefront positions today” Joakim notes.

With roots in the production of the very first safety matches, the very first pouch products and a patented white-portion technology, Swedish Match aims to remain at the forefront of technology and innovation.

“We should speed up from where we stand today,” says Lars, whose focus is to leverage the business formula and to grow business, profits, and shareholder value.

In the near term, despite what many describe as a mature main market for snus, Swedish Match’s CEO and CFO see continued prospects for growth in Scandinavia. Opportunities abound for growth of the snus business in Norway and in the taxfree trade, they say, noting that one should not preclude better volumes in Sweden either.

“The second quarter results confirmed the continued strong development for snus and snuff both in Scandinavia and the US,” Lars notes.

That said, both Lars and Joakim feel that a change in regulations at EU level to overturn a ban that prohibits snus sales elsewhere in the Union is key – at the very least symbolically.

Great potential of smokefree products

Snus outside Scandinavia will likely be a niche product in the near future, says Lars.

“However, we strongly believe in the potential of smokefree products and Swedish Match has a unique position through our snus and snuff products, and our technology leadership.”

Snus, Lars says, is first and foremost a lifestyle product for the modern tobacco consumer and is also dramatically less harmful than cigarette smoking.

Longer term, the jury is still out on how Swedish Match will succeed in markets outside Sweden and the US competition has certainly heated up in the past year as international tobacco companies have started producing snus, catching onto a trend among consumers who are increasingly switching to smokefree tobacco amid smoking bans and a generally bigger focus on more modern choices.

 

Joakim Tilly“Other product areas
provide good
margin contribution
and cash flow
to the Group”

Joakim Tilly

FAVORITE SNUS: Onico enbär, at any occasion.
FAVORITE CIGAR: Macanudo Gold Label, best enjoyed after a good dinner, on New Year’s Eve or after the birth of a new Tilly.
FAVORITE FOOD: Italian or Japanese – usually at a small, unassuming but authentic place anywhere in the world.
HIDDEN TALENT: Coach to a kids football team Brommapojkarna in Stockholm.
A FAVORITE BOOK: ”Freakonomics” because the author uses science in a fun, down-to-earth manner in order to advance complicated theories.
“Looking at Swedish Match as a whole, we have a broad and well known portfolio of modern tobacco products and have generated growth through the years,” Joakim Tilly says. “Most of our future growth will come organically but we also keep our eyes open for complementary acquisitions.”

“The scope for acquisitions, lies largely in the relatively fragmented cigar industry, both in Europe and in the US. As long as it is synergistic, strategic and at the right price. Then we will look at it,” says Joakim.

Swedish Match is today the number one player in the us for premium cigars, with strong brands and future growth potential. In the European cigar market, the company has a deep footprint in several countries, supported by a well-recognized brand portfolio.

Long heritage of expertise

“Our cigar business prides itself on a heritage of long-standing expertise and craftsmanship, combined with extensive insight of the modern cigar consumer and emerging lifestyle trends. People will always like pleasure,” says Lars. “For many, there are few things that can beat a good hand rolled cigar – the making of cigars is an art form and we have a unique legacy through our cigar business.”

At the same time, Lars and Joakim  say, one should not underestimate the role of the other product areas - lights, chewing and pipe tobacco as well as accessories. They are complements to the core and provide good margin contribution and cash flow to the Group.

Swedish Match will keep rolling out products that consumers want. The company has always had good consumer insight and it aims to continue being on the pulse of consumer trends, especially among snus and cigar enthusiasts.

“We share the pride of being part of a great business with talented and committed people”, say both Lars and Joakim. Their commitment, they say, is to make the most of Swedish Match in the best interest of its customers and consumers, thus continuing to deliver value to shareholders.


 

Lars Dahlgren”A cuttingedge,
fastmoving consumer
goods group
with the genes 
of a trailblazer”

Lars Dahlgren

FAVORITE SNUS: Göteborgs Rapé Lingon Nr. 2, anytime, anyplace.
FAVORITE CIGAR: Reserva Figuerada presented to Lars by Ernesto, one of Swedish Match’s fantastic cigar masters.
FAVORITE CUISINE: Pasta and Asian. Especially a hidden jewel in the Thai crown, called Patara Restaurant on a London backstreet.
HIDDEN TALENT: Lars is good at teaching. During his studies he worked as a substitute teacher.
A FAVORITE BOOK: “The Emigrants” by Wilhelm Moberg.
BY: Rupini Bergström