Coming off a year in which sales rose 7 per cent, Swedish Match said it expects snus and snuff volumes will continue to grow in 2013 but profit to decline due to pricing competition and product investment.
“As a consequence of the increased market investments in the US and the competitive situation in Sweden, it is likely that the operating profit from the snus and snuff product area for the full year 2013 will be lower than in 2012,” the company said in a statement. Swedish Match said it is the number one snus company in Scandinavia and number three company in the US moist snuff market, the world’s largest.
Operating profit from snus and snuff rose 8 per cent to SEK 2.35 billion (EUR 278 million). Sales were SEK 5 billion in 2012. Combined sales including other tobacco products (cigars), matches and revenue from other operations also rose 7 per cent, to SEK 12.5 billion. Combined operating profit at SEK 4.1 billion was 10 per cent more than in 2011.
“We will continue to invest in growth for snus internationally, particularly in the US, and also increase spending in order to drive share growth in the fast growing pouch segment of the US moist snuff market. In Scandinavia, we will increase investments behind new market initiatives, particularly in Sweden, which has been negatively impacted by portfolio mix shifts,” the company said.
"In view of the competitive pricing environment in the Swedish market, we have decided to make necessary pricing adjustments to our low priced portfolio in order to compete more effectively.” (ci)