Swedish Match: Report on Operations Full Year 2006.STOCKHOLM, Sweden -- Swedish Match Swedish Match is a Swedish company based in Stockholm that makes tobacco products and matches. It was founded as Svenska Tändsticksaktiebolaget by Ivar Kreuger in 1917 in Jönköping ("City of the matches"). The company changed its name in 1980. (STO:SWMA SWMA Software Maintenance SWMA Solid Waste Management Act SWMA Sine-Weighted Moving Average SWMA Storm Water Management Authority, Inc. (Homewood, AL) SWMA Segmental Wall Motion Abnormality (cardiology) ): * Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fourth quarter amounted to 3,457 MSEK MSEK Meyer, Suozzi, English & Klein (New York law firm) MSEK Million Swedish Kroner (3,500), and 12,911 MSEK (13,311) for the full year * Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased by 18% to 799 MSEK (678) for the fourth quarter and by 15% to 3,235 MSEK (2,825) for the full year * Net income for the fourth quarter amounted to 602 MSEK (456), and 2,331 MSEK (1,777) for the full year * EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for the fourth quarter was up 48% to 2.18 SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. (1.47), and up 45% to 8.12 SEK (5.61) for the full year * The Board proposes an increased dividend to 2.50 SEK (2.10) [TABLE OMITTED] Sales and results for the fourth quarter In local currencies and excluding divested businesses sales for the fourth quarter 2006 increased by 10 percent compared with the fourth quarter 2005. Reported sales for the fourth quarter decreased by 1 percent to 3,457 MSEK (3,500). Currency translation has affected the sales comparison negatively by 197 MSEK. For snuff snuff, preparation of pulverized tobacco used by sniffing it into the nostrils, chewing it, or placing it between the gums and the cheek. The blended tobacco from which it is made is often aged for two or three years, fermented at least twice, ground, and usually , sales increased by 18 percent during the fourth quarter, to 963 MSEK (819) and operating income increased by 17 percent to 460 MSEK (392). North European snuff sales were up 25 percent, stemming from higher than normal volumes due to hoarding in anticipation of an excise tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. increase on snuff in Sweden effective January 1, 2007. North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. snuff sales were flat, but were up 11 percent in local currency terms. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: reached 47.8 percent (47.8). Sales of cigars in the fourth quarter increased to 857 MSEK (834), while operating income declined by 8 percent, to 163 MSEK (176). Sales and operating income for cigars grew in the US. Sales grew in Europe, but operating income declined, due to a less profitable product mix and some restructuring costs. Operating margin for cigars declined to 19.0 percent (21.1). Group operating income for the fourth quarter increased by 18 percent to 799 MSEK (678). Currency translation has affected the operating income comparison negatively by 53 MSEK. Operating margin for the fourth quarter amounted to 23.1 percent compared to 19.4 percent for the fourth quarter 2005. In the fourth quarter financial income was favorably impacted by a gain on a sale of securities with an amount of 111 MSEK before tax. EPS (basic) for the fourth quarter was 2.18 SEK (1.47). Diluted EPS amounted to 2.18 SEK (1.46). Sales and results full year 2006 Sales for the year amounted to 12,911 MSEK (13,311). In local currencies sales increased by 3 percent, excluding divested businesses. Currency translation has affected the sales comparison negatively by 67 MSEK. Operating income increased by 15 percent, and amounted to 3,235 MSEK (2,825). Last year's operating income included a 206 MSEK income from the sale of the General Cigars headquarters building. This year's operating income was positively affected by a pension plan curtailment gain of 148 MSEK. Operating income excluding these larger one time items amounted to 3,087 MSEK (2,618). Operating margin for the Group grew to 23.9 percent (19.7) excluding the pension plan curtailment gain in 2006 and the income from the sale of the real estate in 2005. EPS (basic) for the year was 8.12 SEK (5.61). Diluted EPS amounted to 8.09 SEK (5.59). The Board proposes an increased dividend to 2.50 SEK (2.10). [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] (a) Excluding larger one time items Snuff / Snus Sweden is the world's largest snuff market measured by per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. consumption. In Sweden, a substantially larger proportion of the male population uses the Swedish type of snuff called snus(*) compared to cigarettes. The Norwegian market, which is significantly smaller than the Swedish market, is at present showing strong 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 Company is well positioned as number three on the market. Some of the best known brands include General, Ettan, and Grov in Sweden, Timber Wolf and Longhorn The code name for the Windows Vista operating system. After the client version was renamed "Vista" in 2005, Longhorn referred to the server version until it was officially named Windows Server 2008 in May of 2007. See Windows Vista. in the US and Taxi in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. . During the fourth quarter, sales increased by 18 percent versus the previous year, to 963 MSEK (819), and operating income increased by 17 percent, to 460 MSEK (392). Currency translation impacts have affected the sales and operating income comparison negatively. Volumes increased in Scandinavia by 27 percent, mainly as a result of the trade load effect in anticipation of the weight based tax increase effective January 1, 2007 for snus in Sweden. Volumes in the US increased by 10 percent, measured in number of cans. Operating margin was 47.8 percent (47.8). (*) Swedish snus is moist snuff which is produced using a special heat treated process, much like pasteurization pasteurization (păs'ch  rĭzā`shən, -rīzā`shən), partial sterilization of liquids such as milk, orange juice, wine, and beer, as well as cheese, to destroy as opposed to other snuff
products for which a fermentation process is used.Sales for the year amounted to 3,363 MSEK (3,131), an increase of 7 percent. In Scandinavia sales volumes increased by 9 percent measured in number of cans. In Sweden the increase was 8 percent. Volumes in Norway and tax free sales also increased. Sales volume of both loose and pouched pouched adj. Having a pouch, as a gopher, pelican, or marsupial. Adj. 1. pouched - having a pouch snuff increased. Of Swedish Match snuff volume sold in Sweden, the proportion of pouched snuff for the year was 59 percent compared to 58 percent in 2005. In the US, sales volumes for 2006 were up by 13 percent versus previous year measured in number of cans. Sales of Longhorn were considerably higher than the year before, and sales for Timber Wolf increased. In Sweden the Company continued its rollout of Onico, a nicotine and tobacco free pouch product, and Kardus, a premium loose snus product. Kronan, a value priced brand, continued to grow at a rapid pace, and became the best selling value priced brand on the Swedish market. In the US the launch of Wolf Packs, Timber Wolf in pouched form, has continued and Longhorn has been re-launched with a new package design. Operating income for 2006 for the product area amounted to 1,604 MSEK (1,504), up 7 percent. Operating margin for snuff for the year was 47.7 percent (48.0). Cigars Swedish Match is the world's second largest producer of cigars and cigarillos in sales value. Swedish Match offers a full range of different cigars and brands. Well known brands include Macanudo, La Gloria Cubana, White Owl See Snowy owl , Garcia y Vega, La Paz La Paz, city, Bolivia La Paz (lä päs), city (1992 pop. 713,378), W Bolivia, administrative capital (since 1898) and largest city of Bolivia. The legal capital is Sucre. , Hajenius, Justus van Maurik, Willem II This could refer to one of the following:
During the fourth quarter, sales increased by 3 percent, to 857 MSEK (834), while operating income declined to 163 MSEK (176). Currency translation impacts have negatively affected comparisons for both sales and operating income. In local currencies, sales in the fourth quarter increased by 12 percent, while operating income was flat. Operating margin reached 19.0 percent (21.1). During the fourth quarter sales and operating income increased in the US, while in Europe, sales increased but operating income declined. The main increase in sales on the European market came from the acquisition of the Hajenius and Oud oud n. A musical instrument of northern Africa and southwest Asia resembling a lute. [Arabic '  d, wood, stem, lute, oud.] Kampen
cigar brands In the list of cigar brands, those cases where two or more brands of cigars from different countries bear the same name, the one mentioned is the original one (e.g., Montecristo is listed under Cuba, although there exists a Dominican and a Mexican brand with the same name). . In Europe, a shift toward smaller cigars, reorganization
costs and somewhat higher marketing spending had a negative impact on
operating margins.Sales for the year amounted to 3,407 MSEK (3,283), an increase of 4 percent. Sales were up for US premium cigars, US mass market cigars, and European cigars. Operating income for the year grew by 22 percent to 747 MSEK (613). Excluding restructuring costs of 75 MSEK in 2005, operating income grew by 9 percent. Operating margin amounted to 21.9 percent (21.0 excluding restructuring costs of 75 MSEK). The increase in operating income is primarily due to stronger sales and gross profit and lowered overhead costs overhead costs see fixed costs. following the integration of General Cigar. Chewing Tobacco chewing tobacco, n See smokeless tobacco. chewing tobacco Smokeless tobacco, see there Chewing tobacco is sold primarily on the North American market, mainly in the southern US. Well known brands include Red Man and Southern Pride. Swedish Match is the leading producer of chewing tobacco in the US. The chewing tobacco segment shows a declining trend. During the fourth quarter, sales declined by 14 percent, to 240 MSEK (280). In local currency, sales declined by 3 percent. Operating income declined by 27 percent, to 73 MSEK (100). Currency translation affected the operating income comparison negatively. Operating margin was 30.5 percent (35.6). Sales for the year declined by 2 percent to 1,063 MSEK (1,079), and operating income declined by 6 percent to 326 MSEK (347). In local currency, sales revenues for the year were flat as higher average prices compensated for volume declines. Operating margin amounted to 30.7 percent (32.1). Pipe Tobacco and Accessories Swedish Match is one of the largest pipe tobacco companies in the world and its products are marketed worldwide. The Borkum Riff  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . brand is sold in over 60 countries. The Company has its most significant presence in South Africa, where local production takes place. Best Blend and Boxer are the most important brands in South Africa. Accessories include the sales of papers, filters, and other smoking related items, primarily in the UK and Australia. Pipe tobacco consumption is declining on most established markets. During the fourth quarter, sales decreased to 226 MSEK (245). In local currencies, sales increased by 6 percent. Operating income grew by 4 percent, to 62 MSEK (60). Operating margin was 27.5 percent (24.4). Sales for the year amounted to 899 MSEK (920). In local currencies, sales increased by 2 percent. Improved price levels compensated for lower volumes. Operating income was 261 MSEK (237). Operating margin amounted to 29.0 percent (25.8). Lights (Matches and Lighters) Swedish Match is a market leader in a number of markets for matches. The brands are mostly local, and have leading positions in their home countries. Larger brands include Solstickan, Three Stars, Fiat Lux, and Redheads. The Company produces and distributes disposable lighters and the main brand is Cricket. Swedish Match's largest market for lighters is Russia. During the fourth quarter sales amounted to 388 MSEK (521), while operating income increased to 50 MSEK (negative 31). Excluding divested businesses, sales for the fourth quarter were 4 percent below the fourth quarter prior year. In the fourth quarter of previous year, a total of 85 MSEK of restructuring costs were incurred. Operating margin was 13.0 percent (negative 5.9). Sales for the year amounted to 1,503 MSEK (1,936). Excluding divested businesses, sales increased by 1 percent. Operating income during the year was 247 MSEK (58). During 2005, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of 116 MSEK were incurred. Operating margin amounted to 16.4 percent (3.0). Other Operations Other operations include primarily the distribution of tobacco products on the Swedish market, as well as corporate overheads. Sales in Other operations for the year decreased to 2,677 MSEK compared to 2,962 MSEK previous year, mainly as a result of divested businesses. For the year, operating income for Other operations was a negative 99 MSEK (negative 140). Taxes Total tax expense for the year amounted to 836 MSEK (919), corresponding to a tax rate of 26 percent (34). Following the ratification of a new double taxation treaty between Sweden and the USA in August, a tax provision for withholding tax The amount legally deducted from an employee's wages or salary by the employer, who uses it to prepay the charges imposed by the government on the employee's yearly earnings. on unremitted earnings from US subsidiaries has been reversed. The tax rate in 2005 was unusually high due to the one-time gain on the sale of real estate in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and the non-deductible nature of certain restructuring expenses. During the fourth quarter, an income tax related contingency accrual related to General Cigar, which was recorded prior to Swedish Match's acquisition of General Cigar in 2000, was reversed. The reversal was recorded against goodwill, which decreased by 71 MUSD. Earnings per share Earnings per share for the year amounted to 8.12 SEK (5.61). This year's earnings per share was positively affected by the one time pension plan curtailment gain, the unusually low income tax expense, as well as the one-time gain on investments. Earnings per share for 2005 was favorably impacted by the income from sale of real estate. The Board proposes an increased dividend to 2.50 SEK (2.10). The dividend then amounts to 686 MSEK based on the number of shares outstanding at the end of the year. Depreciation and amortization Total depreciation and amortization amounted to 435 MSEK (458), of which depreciation on tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. amounted to 303 MSEK (337) and amortization of intangible assets amounted to 132 MSEK (121). Financing and cash flow At the close of the period the Group's net debt amounted to 5,126 MSEK, as compared to 674 MSEK on December 31, 2005, an increase of 4,452 MSEK. The increase is primarily due to share repurchases, net, of 3,580 MSEK, acquisition of the Stockholm head office building, payments of dividend of 627 MSEK, unusually high tax payments and the acquisition of the Hajenius and Oud Kampen cigar brands. The Group's direct investments in tangible fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → amounted to 304 MSEK (328). Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was 1,335 MSEK compared with 2,718 MSEK a year ago. Cash flow from operations has been negatively affected by unusually high tax payments of 1,732 MSEK compared with 606 MSEK during 2005. Income tax payments include tax payments during the first quarter after dissolution of a Swedish tax allocation reserve in 2005. During the period new bond loans of 5,457 MSEK have been issued, including the issuance of a 300 MEUR MEUR Million Euros Eurobond under the Group's Global MTN MTN A short-form for Medium Term Note. MTN Medium term notes issued by corporations, much like shorter-term commercial paper. MTN See medium-term note (MTN). program. Cash and cash equivalents, together with short term investments, amounted to 3,098 MSEK at the end of the period, compared with 3,657 MSEK at the beginning of the year. Net financing cost Net financing cost Also called the cost of carry or, simply carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the for the year amounted to a negative 68 MSEK (negative 128). Net financing cost in the fourth quarter 2006 was positively affected by the gain on a sale of securities with an amount of 111 MSEK. Average number of Group employees The average number of employees in the Group during the year was 12,465 compared with 14,333 for the full year 2005. The number of employees decreased as a result of the divestment of businesses and rationalizations within several product areas. Share structure The Annual General Meeting on April 20, 2006 renewed the mandate to repurchase up to 10 percent of the shares of the Company. In addition, a decision was made to cancel 24.0 million shares held in treasury, with a contemporaneous con·tem·po·ra·ne·ous adj. Originating, existing, or happening during the same period of time: the contemporaneous reigns of two monarchs. See Synonyms at contemporary. bonus issue, without issuing new shares, of an amount equivalent to the amount represented by the cancelled shares or 28.8 MSEK. With the latter transaction the Company's share capital did not decrease through the cancellation of shares. At an Extraordinary Meeting of the Shareholders on December 4, 2006 it was decided to cancel a further 20.6 million shares with a contemporaneous bonus issue, without issuing new shares, of an amount equivalent to the amount represented by these cancelled shares or 26.7 MSEK. The total number of registered shares of the Company, after the cancellations, is 280 million shares with a ratio value of 1.39 SEK. The Extraordinary Meeting of the Shareholders also renewed the mandate to repurchase shares up to an amount of 1,250 MSEK until the Annual General Meeting in April 2007. Of this amount 298 MSEK was utilized in January 2007. In June, after Annual General Meeting approval, the Company issued 523,817 call options to senior management and key employees for the stock option program for 2005. These call options can be exercised from March 2, 2009 to February 28, 2011. The exercise price is 127.10 SEK. During the year 32.9 million shares were repurchased at an average price of 111.57 SEK. As at December 31, 2006 Swedish Match held 5.6 million shares in its treasury, corresponding to 2.0 percent of the total number of shares. Total shares bought back by Swedish Match since the buyback programs started in 2000 have been repurchased at an average price of 69.15 SEK. During the year the Company has also sold 1.4 million treasury shares as a result of option holders exercising their options. The number of shares outstanding, net after repurchase and after the sale of the treasury shares as per year end amounted to 274.4 million. In addition, the Company has call options outstanding at year end corresponding to 4.0 million shares exercisable in gradual stages from 2007-2011. The Board will propose to the Annual General Meeting in April 2007 a renewed mandate to repurchase shares of the Company up to an amount of 3 billion SEK until the next Annual Meeting in 2008. In addition a proposal will be made to cancel shares held in treasury with a contemporaneous bonus issue without issuing new share of an amount equivalent to the reduction of share capital through the cancellation of shares. Other events In January, 2006, the Company sold its Arenco subsidiary. Arenco manufacture machines for match manufacturing and packaging in Kalmar and Halmstad, Sweden and Shanghai, China. On March 31, 2006 the Company divested its advertising lights and accessories business. On March 31, 2006 the Company acquired the Hajenius and Oud Kampen premium cigar brands, related production machinery and the Hajenius cigar shop in Amsterdam from the Burger Group. The two brands, that are primarily sold in the Netherlands, Belgium and Germany have an annual turnover of approximately 12 MEUR. In a matter regarding the use of the Cohiba brand in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Cubatabaco has been seeking to cancel General Cigar's registration for the Cohiba trademark in the US. The US Court of Appeals of the Second Circuit concluded that General Cigar was the rightful owner of the Cohiba trademark in the US. The matter was appealed to the US Supreme Court, and in June 2006, the Supreme Court denied review of the case. General Cigar is now seeking a final order of dismissal from the district court which heard this in September 2006. Further, Cubatabaco has asked the Office of Foreign Assets Control The Office of Foreign Assets Control (OFAC) is an agency of the United States Department of the Treasury under the auspices of the Under Secretary of the Treasury for Terrorism and Financial Intelligence. OFAC administers and enforces economic and trade sanctions based on U. for a license to register the Cohiba trademark in the US and thereby cancel General Cigar's registration of the trademark. General Cigar is opposing the granting of such a license. On October 9, 2006, Standard & Poor's lowered Swedish Match AB's long term credit rating from A- to BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. + with a negative outlook. Swedish Match's credit rating with Moody's is Baa1 with stable outlook. Swedish Match North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Lorillard Tobacco Company “Lorillard” redirects here. For other uses, see Lorillard (disambiguation). Lorillard Tobacco Company is the 18th oldest company in the United States. They are the third largest American tobacco company and market cigarettes under the brand names Newport (the number have agreed to jointly develop and market a select line of smokeless tobacco smokeless tobacco, n chewing tobacco (leaves) or tobacco powder (snuff) that allows the nicotine to be absorbed through the mucous membrane of the oral cavity or digestive tract. It is related to a high risk of oral cancer. products in the United States. The parties anticipate that an initial product offering may be launched on some basis of geographic distribution in the not too distant future. Lorillard Tobacco Company is the third largest manufacturer of cigarettes in the United States, including the Newport brand, the best selling menthol cigarette A menthol cigarette is a cigarette flavored with the compound menthol, a substance which triggers the cold-sensitive nerves in the skin without actually providing a drop in temperature. in the country, and the Maverick, Old Gold, Kent and True brands. Lorillard is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Loews Corporation, a NYSE NYSE See: New York Stock Exchange company (LTR LTR - Langage Temps-Réel. (French for "real-time language") A French predecessor to Ada, LTR is Modula-like with a set of special-purpose real-time constructs based on an event model. It was mentioned in the reference below. ["An Overview of Ada", J.G.P. ). The Stockholm head office building was acquired in the fourth quarter. The book value of the building is 736 MSEK and is recorded as assets held for sale. Nominating Committee A nominating committee is a group formed usually from inside the membership of an organization for the purpose of nominating candidates for office within the organization. It works similarly to an electoral college, the main difference being that the available candidates, either In accordance with the decision by the shareholders at the Annual General Meeting on April 20, 2006, the chairman of the Board, Bernt Magnusson, has formed a Nominating Committee with four representatives of the major shareholders of the Company. In addition to Mr. Magnusson the Committee consists of William N Booth (Wellington Management Company Wellington Management Company is a Boston, Massachusetts based investment management firm. Founding and Early Years Wellington Management Company was incorporated in Philadelphia, Pennsylvania in 1933, five years after the creation of the Wellington Fund by Walter L. ), Michael Allison (Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. ), Mads Eg Gensmann (Parvus
Asset Management) and Andy Brown Andy Brown may refer to:
Conny Karlsson (b. as chairman to the Swedish Match Board of Directors and Charles A. Blixt and John P. Bridendall as new members. Karsten Slotte has announced that he will not stand for another term. Extraordinary shareholders' meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. At the Extraordinary General Meeting of Swedish Match on December 4, 2006 a mandate to repurchase shares of the Company for a maximum value 1,250 MSEK before the next Annual General Meeting in April 2007, as proposed by the Board of Directors, was approved. In addition a decision was made to cancel shares held in treasury with a contemporaneous bonus issue without issuing new shares equivalent the amount of cancelled shares. The shareholders also approved adoption of amended principles for remuneration and other terms of employment for Group management. In addition, the stock option program for 2007 was approved. The shareholders also approved the Nominating Committee's proposal to change the fees to be paid to the Board of Directors, with the members of the board acquiring shares in the Company for an amount equal to the fee net after tax. Swedish Match AB (publ) Swedish Match AB (publ) is the parent company of the Swedish Match Group. Sales in the parent company for the year amounted to 13 MSEK (16). Profit before tax for the same period amounted to 6,904 MSEK (5,305) and net profit to 6,619 MSEK (4,562). Capital expenditures during the year amounted to 1 MSEK (2). The cash flow for the period was 223 MSEK (1,380). Cash and cash equivalents at the end of the period amounted to 1,684 MSEK compared with 1,907 MSEK at the beginning of the year. Equity in the parent company as of December 31, 2006 amounted to 8,253 MSEK of which 7,863 MSEK represents non-restricted equity. Accounting principles The financial information in this interim report has been prepared in accordance with the International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). (IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System ) approved by the European Commission European Commission, branch of the governing body of the European Union (EU) invested with executive and some legislative powers. Located in Brussels, Belgium, it was founded in 1967 when the three treaty organizations comprising what was then the European Community for application within the EU. The report is prepared in accordance with the Accounting Standard IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 34 Interim Financial Reporting. The accounting principles are the same as in the 2005 Annual Report. From 2006 Swedish Match reports its operation in six primary segments: snuff, cigars, chewing tobacco, pipe tobacco & accessories, lights, and other. The lights segment comprises the former matches and lighters segments. Previous periods have been restated. Outlook Our strategic orientation holds firm. We will continue working with measures to stimulate organic growth particularly for moist snuff and cigars. The work of strengthening our established brands and launching new brands continues. We are intensifying our search for suitable acquisitions within the cigar product area. In terms of results, 2006 was strong. Specifically for 2007, our results will be impacted by higher spending to drive organic growth and the unwinding of hoarding of snuff in Sweden in 2006 ahead of the excise tax increase. The operating margin for snuff will also be impacted negatively by a general decline of consumption as a consequence of the tax increase, at least for the first half year. Additional information The Annual General Meeting will be held in Stockholm on April 23, 2007. The annual report for 2006 is expected to be released and distributed in mid March. The first quarter 2007 report will be released on April 27. Stockholm, February 14, 2007 Sven Hindrikes President and Chief Executive Officer [TABLE OMITTED] 1) Excluding larger one time items 2) Pension liabilities Pension liabilities Future liabilities resulting from pension commitments made by a corporation. Accounting for pension liabilities varies widely by country. are not included in net debt 3) Operating income excluding larger one time items adjusted for depreciation, amortization and writedowns 4) Operating income excluding larger one time items adjusted for amortization and writedowns of intangible assets 5) Net income attributable to Swedish Match equity holders [TABLE OMITTED] (a)) Including income from sale of real estate of 206 MSEK during the third quarter 2005 and a pension curtailment gain of 148 MSEK during the second quarter 2006 (b)) Including a gain on sale of securities of 111 MSEK in the fourth quarter 2006 [TABLE OMITTED] (a)) Includes assets held for sale amounting to 747 MSEK, mainly attributable to the head office in Stockholm [TABLE OMITTED] (a)) Cash and cash equivalents include short term investments with a maturity of less than 90 days from acquisition. Prior year has been restated. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] (a)) 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 |
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