Swedish Match: Interim Report January - March 2008

Swedish Match AB (STO:SWMA): Net sales for the first quarter amounted to 2,818 MSEK (2,663) In local currencies, net sales for the first quarter increased by 10 percent Operating profit for the first quarter amounted to 543 MSEK (534) Net profit for the first quarter amounted to 341 MSEK (332) EPS for the first quarter amounted to 1.34 SEK (1.23) Significantly improved profitability in the Scandinavian snus business compared to the first quarter previous year US cigar business had a weak first quarter but sales and operating profit are expected to improve for the remainder of the year Summary of Consolidated Income Statement   January - March   Full year MSEK 2008   2007 2007   Sales 2,818 2,663 12,551 Operating profit excl. larger one time items 543 534 2,730 Operating profit 543 534 2,997 Profit before income tax 427 468 2,662 Net profit for the period 341 332 2,056 Earnings per share (SEK) 1.34 1.23 7.82 Sales and results for the first quarter In local currencies sales for the first quarter 2008 increased by 10 percent compared with the first quarter 2007. Reported sales for the first quarter increased by 6 percent to 2,818 MSEK (2,663). Currency translation has affected the sales comparison negatively by 100 MSEK. For snuff, sales increased by 24 percent during the first quarter to 821 MSEK (662) and operating profit increased by 38 percent to 318 MSEK (231). Scandinavian snuff sales were up 32 percent compared to the first quarter prior year. Sales volumes increased as the negative hoarding effects in Sweden were less accentuated in 2008. Sales for North American snuff increased by 21 percent in local currency, driven by strong volume growth. Sales of cigars in the first quarter were 757 MSEK (735), while operating profit was 112 MSEK (164). Sales for cigars grew in both the US and in Europe in local currencies as a result of acquired businesses. Operating margin for cigars reached 14.8 percent (22.3). The main explanation for the decline in operating profit and margin is the weak start of the year for premium cigars in the US market. Group operating profit for the first quarter increased by 2 percent to 543 MSEK (534). In local currencies operating profit increased by 6 percent. Currency translation has affected the operating profit comparison negatively by 21 MSEK. Operating margin for the first quarter amounted to 19.3 percent compared to 20.0 percent for the first quarter 2007. EPS (basic) for the first quarter was 1.34 SEK (1.23). Diluted EPS amounted to 1.33 SEK (1.22). Sales by product area   January - March   Chg   Full year MSEK 2008   2007 % 2007   Snuff 821 662 24 3,289 Cigars 757 735 3 3,411 Chewing tobacco 210 238 -12 956 Pipe tobacco & accessories 198 205 -3 851 Lights 347 340 2 1,473 Other operations 484 483 0 2,571 Total 2,818 2,663 6 12,551 Operating profit by product area   January - March   Chg   Full year MSEK 2008   2007 % 2007   Snuff 318 231 38 1,366 Cigars 112 164 -32 737 Chewing tobacco 69 72 -4 312 Pipe tobacco & accessories 51 56 -7 201 Lights 54 57 -5 252 Other operations -61 -45   -137 Subtotal 543 534 2 2,730 Larger one time items Capital gain from sale of real estate - -   267 Total 543 534 2 2,997 Operating margin by product area a)   January - March       Full year Percent 2008   2007   2007   Snuff 38.7 34.9 41.5 Cigars 14.8 22.3 21.6 Chewing tobacco 32.7 30.1 32.7 Pipe tobacco & accessories 26.0 27.1 23.6 Lights 15.5 16.8   17.1 Group 19.3 20.0 21.8 a) Excluding larger one time items EBITDA by product area   January - March   Chg   Full year MSEK 2008   2007 % 2007   Snuff 356 267 34 1,511 Cigars 161 209 -23 920 Chewing tobacco 74 77 -4 330 Pipe tobacco & accessories 60 64 -7 235 Lights 64 69 -6 299 Other operations -60 -43   -129 Total 655 642 2 3,166 EBITDA margin by product area   January - March       Full year Percent 2008   2007 2007   Snuff 43.4 40.3 45.9 Cigars 21.3 28.5 27.0 Chewing tobacco 35.2 32.3 34.5 Pipe tobacco & accessories 30.1 31.3 27.6 Lights 18.5 20.2 20.3 Group 23.3 24.1 25.2 Snuff/Snus Sweden is the world’s largest snuff market measured by per capita consumption. A substantially larger proportion of the male population uses the Swedish type of moist snuff called snus* compared to cigarettes. The Norwegian market is significantly smaller than the Swedish market but in recent years has experienced solid volume growth. The US is the world’s largest snuff market measured in number of cans and is approximately five times larger than the Swedish market. In Sweden and Norway, Swedish Match has a leading position. In the US, the Group is well positioned as the third largest player. Some of the best known brands include General, Ettan, and Grov in Sweden, Timber Wolf and Longhorn in the US. In 2007 the Company launched a snuff line extension under its well known Red Man brand in the US market. During the first quarter, sales increased by 24 percent compared to the same quarter previous year, to 821 MSEK (662), and operating profit increased by 38 percent, to 318 MSEK (231). Currency translation impacts have affected the sales and operating profit comparison negatively. Operating profit improved significantly in the Scandinavian snus business. The operating margin improved in Scandinavia as a result of higher volumes and improved pricing. In the US, the operating margin was significantly lower than previous year due to substantial marketing costs related to the national rollout of Red Man moist snuff. The operating margin for the total product group was 38.7 percent (34.9). In Scandinavia, sales volumes measured in number of cans, were up by 8 percent during the first quarter compared to the previous year. Effective January 1, 2008 the excise tax on snus in Sweden increased by 37 percent to 336 SEK per kilogram. As a result of the tax increase, sales volumes were unusually low in the first quarter of both 2007 and 2008. In 2008 destocking from the hoarding at the end of 2007 is estimated to have affected sales volumes negatively by approximately 5 million cans. In the first quarter of 2007 a similar negative hoarding effect was estimated to be more than twice that amount of cans. Excluding destocking effects in both 2007 and 2008, net sales and operating profit in Scandinavia increased as strong volume growth in tax-free channels and improved price levels more than offset an underlying volume decline in the Swedish market. In the US, sales volumes during the first quarter were up by 22 percent compared to the same period in the previous year. Volumes for Longhorn and Timber Wolf combined were up by 7 percent. Volumes of Red Man moist snuff contributed significantly to the volume increase, as the brand began to be rolled out nationally. The Red Man national launch is being supported by extensive marketing programs throughout the year. At the beginning of the year, the Triumph brand of Swedish style snus was launched in a test market in Ohio as part of the joint venture with Lorillard. The product is currently available in most outlets that sell tobacco products in the state. * Swedish snus is moist snuff which is produced using a special heat treated process, much like pasteurization, as opposed to other snuff products for which a fermentation process is used. Cigars Swedish Match is one of the world’s largest producers of cigars and cigarillos. Swedish Match offers a full range of different cigars and brands. Well known brands include Macanudo, La Gloria Cubana, White Owl, Garcia y Vega, La Paz, Hajenius, Justus van Maurik, Willem II, Salsa, and Wings. The US is the largest cigar market in the world. Swedish Match has a leading position in the premium segment and is well established in the segment for machine made cigars. After the US, the most important cigar markets are in Europe, where Swedish Match is well represented in most countries. The largest markets for Swedish Match in sales terms in Europe are France, Benelux, Finland and Spain. During the first quarter, sales were 757 MSEK (735), while operating profit was 112 MSEK (164). Currency translation has affected the comparisons for both sales and operating profit negatively. In local currencies, sales in the first quarter increased by 9 percent compared to the same period previous year, while operating profit declined by 28 percent. Operating margin was 14.8 percent (22.3). In the US, Cigars International, acquired in September 2007 has showed a strong performance and growth in line with the acquisition plan. Excluding the impact of acquisitions, sales in local currencies were down approximately 25 percent for premium cigars in the US primarily due to lower shipments to national accounts and trade destocking. It is expected that in the coming quarters there will be a return to more normal shipment levels for premium cigars. Sales of mass market cigars in the US also decreased. Higher shipments are expected for mass market cigars in the US from new product launches going forward. For the remainder of the year, sales and operating profit in the US should therefore improve. Cigar sales in Europe increased. Excluding the impact of the Bogaert acquisition, sales were flat despite difficult market conditions in some countries. Operating profit declined somewhat. Chewing tobacco Chewing tobacco is sold primarily on the North American market, mainly in the southern US. Swedish Match is the leading producer of chewing tobacco in the US. Well known brands include Red Man and Southern Pride. The chewing tobacco segment shows a declining trend. During the first quarter, sales declined by 12 percent, to 210 MSEK (238). In local currency, sales of chewing tobacco on the North American market declined by 1 percent. As a result of the weaker USD, operating profit declined by 4 percent, to 69 MSEK (72). Operating margin was 32.7 percent (30.1). Pipe tobacco and accessories Swedish Match is one of the world’s largest pipe tobacco companies. The Borkum Riff brand is sold in over 60 countries. The Company has a significant presence in South Africa. Best Blend and Boxer are the most important brands in South Africa. Accessories include the sales of papers and other smoking related items. Pipe tobacco consumption is declining in most established markets. During the first quarter, sales declined by 3 percent to 198 MSEK (205) and the operating profit declined to 51 MSEK (56). The sales and operating profit comparisons are affected by the depreciation of the South African Rand. Operating margin was 26.0 percent (27.1). Lights Swedish Match is the market leader in a number of markets for matches. The brands are mostly local, with leading positions in their home countries. Larger brands include Solstickan, Three Stars, Fiat Lux, and Redheads. The Group’s main brand for disposable lighters is Cricket. Swedish Match’s largest market for lighters is Russia. During the first quarter sales amounted to 347 MSEK (340), while operating profit amounted to 54 MSEK (57). Operating margin was 15.5 percent (16.8). Other operations Other operations include the distribution of tobacco products on the Swedish market, as well as corporate overheads. Sales in Other operations for the first quarter amounted to 484 MSEK (483). Sales were unusually low both in the first quarter of 2008 and 2007 as a result of high retail inventories at the beginning of the year in anticipation of the increased excise taxes for tobacco products. Operating profit for Other operations was a negative 61 MSEK (negative 45). Taxes The Group tax expense for the first quarter amounted to 85 MSEK (136), corresponding to a tax rate of 20 percent (29). In 2007 a realignment of the operational and legal structures resulted in a more effective capital structure and thus a lower tax rate. Earnings per share Earnings per share for the first quarter amounted to 1.34 SEK (1.23). Depreciation and amortization Total depreciation and amortization for the first quarter amounted to 113 MSEK (109), of which depreciation on property, plant and equipment amounted to 78 MSEK (76) and amortization of intangible assets amounted to 34 MSEK (33). Financing and cash flow Cash flow from operations for the first quarter decreased to negative 22 MSEK compared with 34 MSEK for the same period previous year. Tax payments during the quarter were 206 MSEK, compared with 169 MSEK in 2007. The cash flow was adversely impacted by high payments of tobacco taxes following the hoarding of tobacco products in the Swedish market at the end of 2007. The net debt as per March 31, 2008 amounted to 7,600 MSEK compared to 7,127 MSEK at December 31, 2007. The increase of 473 MSEK was impacted by share repurchases, net, of 436 MSEK. Investments in property, plant and equipment amounted to 73 MSEK (124). During the first quarter new bond loans of 236 MSEK were issued. Repayment of bond loans for the same period amounted to 642 MSEK. Cash and cash equivalents amounted to 2,324 MSEK at the end of the period, compared with 3,439 MSEK at the beginning of the year. As of March 31, 2008, Swedish Match had 2,849 MSEK in unutilized committed credit lines. Net finance cost for the first quarter increased to 116 MSEK (66) as a result of higher net debt and increased interest rates on bond loans with variable rates. Average number of employees The average number of employees in the Group during the first quarter was 11,834 compared with 12,075 for the full year 2007. Share structure During the first quarter 3.6 million shares were repurchased at an average price of 138.81 SEK. Total shares bought back by Swedish Match since the buyback programs started have been repurchased at an average price of 78.18 SEK. During the first quarter the Company sold 0.8 million treasury shares at an average price of 78.22 SEK as a result of option holders exercising options. As per March 31, 2008 Swedish Match held 13.9 million shares, corresponding to 5.2 percent of the total number of shares. The number of shares outstanding, net after repurchase and after the sale of treasury shares, as per March 31, 2008 amounted to 253.1 million. In addition, the Company has call options outstanding as of March 31, 2008 corresponding to 2.6 million shares exercisable in gradual stages from 2008-2012. Annual General Meeting The Annual General Meeting on April 22, 2008 approved the Board’s proposal to pay a dividend to the shareholders of 3.50 SEK per share for a total of 886 MSEK. The Meeting also approved a mandate to repurchase shares for a maximum amount of 3,000 MSEK until the next Annual General Meeting with the condition that the Company at any time does not hold more than 10 percent of all shares of the Company. In addition, a decision was made to cancel 12.0 million shares held in treasury, with a contemporaneous bonus issue, without issuing of new shares, of an amount equivalent the amount represented by the cancelled shares or 17.5 MSEK. With the latter transaction the Company’s share capital will not decrease through the cancellation of shares. The total amount of registered shares in the Company before the cancellation of shares is 267,000,000. The Annual General Meeting also approved the proposal of the Board of Directors that the Company may issue a maximum of 1,592,851 call options to senior Company officials and key employees for the stock option program for 2007 and that the Company, in deviation from the preferential rights of shareholders, be permitted to transfer a maximum of 1,592,851 shares of the Company at a selling price of 172.68 SEK per share in conjunction with a demand for the redemption of these call options. Redemption can take place from March 2011 to February 2013. The Meeting re-elected Charles A. Blixt, Andrew Cripps, Arne Jurbrant, Conny Karlsson, Kersti Strandqvist and Meg Tivéus as Board members and elected Karen Guerra as new member of the Board. Conny Karlsson was elected Chairman of the Board and Andrew Cripps was elected deputy Chairman of the Board. Risk factors Swedish Match faces intense competition in all of its markets and for each of its products and such competition may increase in the future. In order to be successful the Group must promote its brands successfully and anticipate and respond to new customer trends. Restrictions on advertising and promotion may, however, make it more difficult to counteract loss of consumer loyalty. Competitors may develop and promote new products which could be successful, and could thereby have an adverse effect on Swedish Match’s results of operations. Changes in the regulatory landscape might affect the demand for Swedish Match products in the market place. Swedish Match has a substantial part of its production and sales in EMU member countries as well as South Africa, Brazil and the US. Consequently, changes in exchange rates of euro, South African rand, Brazilian real and the US Dollar in particular may adversely affect the Group’s results of operations, cash flow, financial condition or relative price competitiveness in the future. Such effects may occur both in local currencies and when such local currencies are translated into Swedish currency for purposes of financial reporting. Regulatory changes in the countries where the Group is operating related to tobacco taxes as well as to the marketing, sale and consumption of tobacco products may have an adverse effect on Swedish Match’s results of operations. For a further description of risk factors affecting Swedish Match see Report of the Board of Directors in the Swedish Match Annual Report for 2007. Outlook A positive development is foreseen for the remainder of 2008. Both underlying sales and operating profit for the Group are expected to improve compared to 2007. For the product line snuff a continued volume and market share increase is expected in the US during 2008. The Scandinavian snus business is expected to improve sales and operating profit for the year. After a weak start in the first quarter, we expect both sales and operating profit in the cigar business to improve for the remainder of the year. The tax rate for 2008 is estimated to be around 20 percent. Accounting principles The financial information in this report has been prepared in accordance with the International Financial Reporting Standards (IFRS) approved by the European Commission for application within the EU. The report is prepared in accordance with the Accounting Standard IAS 34 Interim Financial Reporting. The accounting principles are the same as in the 2007 Annual Report. Additional information This report has not been reviewed by the Company’s auditors. The half year 2008 report will be released on July 18. Stockholm, April 25, 2008 Sven Hindrikes President and Chief Executive Officer Key data   January - March   12 months ended   Full year 2008   2007 Mar 31, 2008 2007   Operating margin, %1) 19.3 20.0 21.6 21.8 Operating capital, MSEK 8,213 8,486 8,213 8,439 Return on operating capital, %1) 32.8 33.1   Net debt, MSEK 7,600 6,800 7,600 7,127 Investments in property, plant and equipment, MSEK2) 73 124 490 541 EBITDA, MSEK3) 655 642 3,179 3,166 EBITA, MSEK4) 577 566 2,876 2,865 EBITA interest cover 5.4 8.4 8.0 9.0 Net debt/EBITA 2.6 2.5 Share data5) Earnings per share, SEK Basic 1.34 1.23 7.97 7.82 Diluted 1.33 1.22 7.95 7.80 Number of shares outstanding at end of period 253,084,575 265,759,734 253,084,575 255,874,800 Average number of shares outstanding 255,309,093 270,159,813 258,891,964 262,604,644 Average number of shares outstanding, diluted 255,811,611 271,198,474 259,586,211 263,405,637 1) Excluding a gain of 267 MSEK from the sale of head office buildings in Stockholm during the fourth quarter 2007 2) Includes investments in assets held for sale and biological assets 3) Operating profit excluding larger one time items adjusted for depreciation, amortization and writedowns of tangible and intangible assets 4) Operating profit excluding larger one time items adjusted for amortization and writedowns of intangible assets 5) Profit attributable to equity holders of the Parent Consolidated Income Statement in summary   January - March   Chg   12 months ended   Full year   Chg MSEK 2008   2007 % Mar 31, 2008 2007 %   Sales, including tobacco tax 5,002 4,623 23,230 22,852 Less tobacco tax -2,183 -1,961   -10,524 -10,301   Sales 2,818 2,663 6 12,706 12,551 1 Cost of sales -1,434 -1,368   -6,645 -6,578   Gross profit 1,384 1,295 7 6,061 5,973 1 Sales and administrative expenses b) -838 -762 -3,053 -2,976 Share of profit in equity accounted investees -3 0   -2 1   Operating profit 543 534 2 3,006 2,997 0   Financial income 40 36 169 165 Financial expenses -156 -102   -555 -501   Net finance cost -116 -66   -386 -336     Profit before income taxes 427 468 -9 2,621 2,662 -2 Income tax expense -85 -136   -556 -606   Net profit for the period 341 332 3 2,065 2,056 0 Attributable to: Equity holders of the Parent 341 332 2,064 2,055 Minority interests 0 0   1 1   Net profit for the period 341 332 3 2,065 2,056 0 Earnings per share, basic, SEK   1.34   1.23       7.97   7.82 Earnings per share, diluted, SEK 1.33 1.22   7.95 7.80 b) Including a gain of 267 MSEK from sale of head office buildings in Stockholm during the fourth quarter 2007 Consolidated Balance Sheet in summary MSEK     Mar 31, 2008 Dec 31, 2007   Intangible fixed assets 4,058 4,419 Property, plant and equipment 2,291 2,388 Financial fixed assets 976 1,011 Current operating assets c) 4,614 5,204 Other current investments 5 5 Cash and cash equivalents 2,324 3,439 Total assets 14,268 16,467   Equity attributable to equity holders of the Parent -18 720 Minority interest 4 4 Total equity -15 724   Non-current provisions 1,309 1,292 Non-current loans 8,669 8,768 Other non-current liabilities 538 567 Current provisions 39 60 Current loans 918 1,271 Other current liabilities 2,810 3,785 Total equity and liabilities 14,268 16,467 c) Includes assets held for sale amounting to 7 MSEK (0). Consolidated Cash Flow Statement in summary MSEK   January – March 2008   2007   Profit before income taxes 427 468 Adjustments for non-cash items and other 170 100 Income tax paid -206 -169 Cash flow from operating activities before changes in working capital 391 400 Cash flow from changes in working capital -413 -365 Net cash from operating activities -22 34 Investing activities Acquisition of property, plant and equipment d) -73 -124 Proceeds from sale of property, plant and equipment 30 16 Acquisition of intangible assets - -34 Acquisition of subsidiaries, net of cash acquired -4 - Changes in financial receivables etc. -6 47 Changes in current investments 0 1 Net cash used in investing activities -53 -94 Financing activities Changes in loans -408 740 Repurchase of own shares -497 -1,243 Stock options exercised 61 122 Other -138 14 Net cash used in financing activities -983 -367 Net decrease in cash and cash equivalents -1,057 -427 Cash and cash equivalents at the beginning of the period 3,439 3,042 Effect of exchange rate fluctuations on cash and cash equivalents -59 26 Cash and cash equivalents at the end of the period 2,324 2,641 d) Includes investments held for sale and biological assets Consolidated Statement of Recognized Income and Expense MSEK   January – March 2008   2007   Net profit for the period recognized in the income statement 341 332 Income and expenses recognized in equity: Effective portion of changes in fair value of cash flow hedges 10 21 Translation difference in foreign operations -659 131 Tax on items taken to/transferred from equity -3 -6 Total transactions taken to equity -652 146 Total income and expense recognized for the period -310 478 Attributable to: Equity holders of the Parent -310 478 Minority interest 0 0 Total income and expense recognized for the period -310 478 Change in Shareholders’ Equity MSEK   January – March 2008   2007   Opening balance as per January 1 724 2,041 Total income and expense recognized for the period -310 478 Repurchase of own shares -497 -1,243 Stock options exercised 62 122 Share-based payments, IFRS 2 7 8 Minority interest 0 0 Closing balance as per March 31 -15 1,405 Quarterly data MSEK   Q1/06   Q2/06   Q3/06   Q4/06   Q1/07   Q2/07   Q3/07   Q4/07   Q1/08   Sales, including tobacco tax 4,797 5,502 5,595 6,097 4,623 5,645 5,984 6,600 5,002 Less tobacco tax -1,846 -2,260 -2,335 -2,640 -1,961 -2,555 -2,713 -3,073 -2,183 Sales 2,951 3,242 3,261 3,457 2,663 3,090 3,272 3,527 2,818 Cost of sales -1,456 -1,657 -1,675 -1,877 -1,368 -1,629 -1,702 -1,880 -1,434 Gross profit 1,495 1,584 1,586 1,581 1,295 1,461 1,570 1,647 1,384   Sales and administrative expenses   -763 -805 -780 -772 -762 -821 -810 -851 -838 Share of profit in equity accounted investees 1 5 3 3 0 2 0 -1 -3 733 785 809 811 534 642 759 795 543 Larger one time items Capital gain from sale of real estate - - - - - - - 267 - Pension curtailment gain   - 148 - - - - - - - Operating profit 733 933 809 811 534 642 759 1,062 543   Financial income 32 26 34 39 36 40 33 56 40 Financial expenses -68 -77 -101 -107 -102 -119 -137 -142 -156 -36 -51 -67 -68 -66 -79 -105 -86 -116 Larger one time items Gain on sale of securi- ties - - - 111 - - - - - Net finance cost -36 -51 -67 43 -66 -79 -105 -86 -116   Profit before income taxes 697 882 742 854 468 563 655 976 427 Income tax expense -209 -264 -113 -251 -136 -122 -164 -185 -85 Net profit for the period 488 617 628 603 332 441 491 791 341 Attributable to: Equity holders of the Parent 488 617 628 603 332 441 491 791 341 Minority interest 0 0 0 0 0 0 0 0 0 Net profit for the period 488 617 628 603 332 441 491 791 341 Sales by product area MSEK                   Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08   Snuff 785 831 785 963 662 794 852 981 821 Cigars 759 888 903 857 735 847 902 928 757 Chewing tobacco 273 277 273 240 238 253 243 222 210 Pipe tobacco & accessories 238 218 217 226 205 203 220 223 198 Lights 387 368 360 388 340 354 374 405 347 Other operations 510 659 723 784 483 638 682 769 484 Total 2,951 3,242 3,261 3,457 2,663 3,090 3,272 3,527 2,818 Operating profit by product area MSEK                   Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08   Snuff 383 383 385 462 231 311 383 441 318 Cigars 163 207 231 168 164 193 185 195 112 Chewing tobacco 86 81 95 76 72 82 83 75 69 Pipe tobacco & accessories 76 58 68 63 56 24 64 58 51 Lights 63 72 64 51 57 62 67 67 54 Other operations -38 -17 -35 -9 -45 -29 -22 -41 -61 Subtotal 733 784 808 811 534 642 759 795 543 Larger one time items Capital gain from sale of real estate - - - - - - - 267 - Pension curtailment gain - 148 - - - - - - - Subtotal - 148 - - - - - 267 - Total 733 932 808 811 534 642 759 1,062 543 Operating margin by product area e) Percent                   Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08   Snuff 48.8 46.1 49.1 48.0 34.9 39.1 45.0 45.0 38.7 Cigars 21.5 23.4 25.6 19.6 22.3 22.7 20.5 21.0 14.8 Chewing tobacco 31.5 29.3 34.7 31.7 30.1 32.3 34.3 34.1 32.7 Pipe tobacco & accessories 31.8 26.5 31.5 28.0 27.1 11.7 28.9 25.9 26.0 Lights 16.2 19.5 17.7 13.1 16.8 17.5 17.8 16.4 15.5 Group 24.8 24.2 24.8 23.5 20.0 20.8 23.2 22.5 19.3 e) Excluding larger one time items Swedish Match AB (publ), SE-118 85 Stockholm Visiting address: Rosenlundsgatan 36, Telephone: +46 8 658 02 00 Corporate Identity Number: 556015-0756 www.swedishmatch.com The character of the information in this report is such that it shall be disclosed by Swedish Match AB (publ) in accordance with the Swedish Securities Markets Act. The information was disclosed to the media on April 25, 2008 at 08.00 a.m (CET).