Swedish Match Inside No 4, 2008
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NOVEMBER 2008 QUALITY HALLMARK OF CIGAR MAKING MODESTA FONDEUR A CIGAR LOVING LADY 7 NEW WONDERS FFOCUSOCUS ONON NORTHNORTH AMERICAAMERICA TERRELL, DARRAH AND ELIADES – ON A MISSION FOR SNUS PLUS! DEDICATION IMPROVES ENVIRONMENTAL HEALTH Editorial A record-strong quarter ur recently published results confi rm a Physicians in the UK presented a report indicating strong performance in all our product areas. that smokefree products have a role to play in the O Our snus products continue to deliver battle against harmful cigarette smoking. It is parti- strong growth in Scandinavia and the US, and our cularly interesting that another EU country has pre- succesfully launched Red Man moist snuff product sented such fi ndings and demonstrates, once again, is now available throughout the US market. Several how preposterous the EU ban on snus is. Snus plays new products have been launched in Scandinavia, an important role for the Swedish public health, including General Extra Sterk in Norway, a great and personally, I am convinced that snus has played snus experience that has been well received by our a vital role for the exceptionally low incidence of consumers. tobacco-related illnesses among Swedish men com- The cigar segment has held up well despite some pared to other Western countries. This has also been challenging market conditions for European cigars established by the National Swedish Board of Health and for premium cigars in the US. New innovative and Welfare in its public health report of 2005. We products have been launched in these markets, such have every reason to be proud of our Swedish snus! as Macanudo 1968 in the US, a rich tobacco experi- Our North American operations, which account ence. Your can read more about this for approximately 30 percent of the new cigar on page 24. For the other Group’s sales, will be presented in greater product areas, Lights, Chewing Tobacco detail in this issue. We will describe how we and Pipe Tobacco, we have delivered a view our future developments for smoke- solid performance and strong earnings. free products and cigars. You will also Financially, Swedish Match remains meet Modesta Fondeur, Cigar Master in strong despite the prevailing global fi - the Dominican Republic, with 35 years in nancial crisis. We maintain good liquid- the industry. ity and loan maturities are limited this year and next. In these turbulent times it Happy reading! is more important than ever to maintain a solid fi nancial position. Lars Dahlgren In September, the Royal Colleges of FOND MAGNUS PHOTO: President and CEO of Swedish Match NO. 4, 2008 Swedish Match Inside is a magazine for Swedish Match shareholders, Swedish Match is a global Group with a broad offering of employees and other interested parties. A total of 50,000 copies are market-leading brands in smokefree tobacco products, published in Swedish and 6,000 in English. cigars, pipe tobacco and lights products. The Swedish Match share is listed on the OMX Nordic Exchange in Stockholm. PUBLISHER COVER PHOTO Swedish Match AB Chip Mitchell RESPONSIBLE UNDER LAW REPRODUCTION Henrik Brehmer, Swedish Match AB Bildrepro EDITOR-IN-CHIEF PRINTING Annette Kaunitz, Swedish Match AB Intellecta Tryckindustri PRODUCTION Swedish Match AB Karoline Hammar, Swedish Match AB S-118 85 Stockholm Tel: +46 8 658 02 00 ART DIRECTOR www.swedishmatch.com Tom Sörhuus, Citat Journalistgruppen AB [email protected] PHOTO: HÅKAN MOBERG 2 inside | november 2008 NOVEMBER 2008 CONTENT PHOTO: CHIP MITCHELL CHIP PHOTO: 14 08 MITCHELL CHIP PHOTO: 18 PHOTO: MAGNUS FOND MAGNUS PHOTO: 19 16 PHOTO: LINDAHL JERRY 06 |SALES DRIVING GROWTH 16 |QUALITY – HALLMARK OF CIGAR MAKING After ten successful years, Swedish Match in North America is To maintain a leading position within the premium cigar continuing to drive sales and focus on innovation. New segments are category, quality is of the utmost importance. Swedish Match has emerging continuously and the American snuff is rapidly gaining ground. cultivated a stellar reputation for quality among retailers and consumers. 08 |INNOVATION IN SNUS AREA Smokefree tobacco is one of the fastest-growing consumer 18 |ENVIRONMENTAL HEALTH categories in the US. Many players have endeavored to Swedish Match North America has a long tradition of working with penetrate the market but few have succeeded. However, environmental issues as an integral part of daily business. Read Swedish Match’s innovativeness is ideally suited for about a continuous development to increase resource expansion in a dynamic market. effi ciency and systems for cleaning and reducing emission. 14 |PREMIUM CIGARS SHOW POTENTIAL 19 |NEW PRODUCTS A record-breaking year in terms of the number of launches of new New snus products have been launched. Read about Grovsnus premium cigars – that’s how 2008 can be summarized. However, Svart and the new member of the snus family General: General current market conditions make it more important than ever to work clo- Ekstra Sterk, a stronger original portion-packed snus. The snus has sely with customers in order to fi nd new sales concepts and drive sales. a powerful tobacco taste with elements of citrus and pepper. november 2008 | inside 3 News Tobacco museum ready to reopen In November, the doors will open to a renovated and cultural-historically restored tobacco and match museum. The inauguration will be performed by Swedish Match President Lars Unscientifi c snus Dahlgren and Johan Brattmyr, Director of the Skansen Open-air debate in Norway Museum, during a ceremony According to Norwegian media, the featuring a brass band and a large Public Health Authorities wants to amount of pomp. wants to re introduce a cancer warning for Swedish snus. The background is a In addition to renovation of the recently published report indicating that building, the manufacturing plant will Swedish snus can cause cancer in both be in full operation. Museum curator the oesophagus and the pancreas. Patrik Inga Junhem is pleased: Hildingson, Vice President, Swedish “We have reviewed and renewed Match Group Public Affairs, believes our exhibitions and added new that there is no scientifi c evidence that concepts in which we have placed supports a reintroduction of the cancer tobacco in the context of enjoyment. warning for snus, a conclusion that the EU already reached in 2001. At that time, Coffee, chocolate and tobacco have provide visitors with inspiring taste the cancer warning was replaced by a experiences. In future, we will also similar histories. By linking them, more general warning text. in part through collaboration with have cigar tasting at the museum,” says “This type of disinformation makes the museum restaurant, we hope to Inga Junhem. it diffi cult for the more than 100 million smokers in the EU who are seeking a sensible alternative to cigarettes,” says Patrik Hildingson. “The report has been Final for General Golf criticized in scientifi c literature due to its methodological weaknesses. In addition, General Golf is Swedish Match’s golf its assertions are not supported by public tournament in which the Swedish health statistics. The incidence of these sales force invite customers to play cancer types among Swedish men is together with professional golfer among the lowest in the world, and they Fredrik Jacobsson. The tournament are the only men in the world who have used snus on a broader scale over the takes place on fi ve Swedish courses, and past 200 years.” the fi nal was held at Bro Hof Castle, EU’s SCENHIR report 2008, conclu- outside Stockholm. The competition ded that snus has a positive effect on days began with a joint dinner at which Swedish public health. Fredrik Jacobsson spoke about life on Read more at www.swedishmatch.com. the PGA Tour. Swedish Match has had a sponsorship agreement with Fredrik Jacobsson since Contact us! 2004. His tournaments include competitions on both the PGA Tour and the Mail to [email protected] European Tour. During the 2003 European Tour, he won the Omega Hong Kong or write to: Swedish Match AB, Inside, Open, Algarve Open de Portugal and Volvo Masters. SE-118 85 Stockholm, Sweden 4 inside | november 2008 FOCUS. Swedish Match has enjoyed a number of successes over the past year – proving the viability of the Group’s long-term strategies. Swedish Match Inside provides in-depth insight on the strategies for continued growth and profi tability. In this issue we take a deeper look at the US market. Swedish Match North America Division has substantial businesses in the strategically important cigar and snuff product areas. Other product areas such as chewing and pipe tobacco provide strong cash fl ows and support the division’s efforts. PHOTO: MAGNUS FOND >> Focus North America NEW PRODUCTS AND INCREASED SALES DRIVING GROWTH “We have had ten years of success and when looking at at the fi nancials, we have increased operating income almost four times over the past decade,” says Lennart Freeman, President, Swedish Match North America Division. BY: KAROLINE HAMMAR o be as successful over the next into profi table business opportunities.” In the US market, the moist snuff ten years there is hard work Freeman nevertheless describes the product Red Man was launched in T ahead. Despite a declining market as dynamic and concludes that 2007. As the number one brand of world economy, increasing tobacco new segments are constantly growing. chewing tobacco, Red Man has strong regulations and a tough market recognition among smokefree tobacco environment, Freeman is convinced EXPANDING STRONG BRANDS consumers in the US. Expanding that Swedish Match will continue “The snuff area is growing rapidly,” the brand to include the moist snuff to successfully drive innovation and he says. “Over the past several years category provides access to the strong increase sales in the North American the US moist snuff market has grown brand values that Red Man represents: market.