Sales and operating profit increased for the smoke-free product segment in both the US and Scandinavia, as well as for cigars. It is though that both were elevated by COVID-19 related effects on consumer demand and channel shifts.
In local currencies, sales increased by 23 per cent for the third quarter. Reported sales increased by 15 per cent to SEK 4.4 billion (USD 503 million).
In local currencies, operating profit from product segments increased by 37 per cent for the third quarter. Reported operating profit from product segments increased by 28 per cent to SEK 2.05 billion (USD 234 million).
Operating profit amounted to SEK 2.02 billion (USD 230.7 million) for the third quarter.
Profit after tax, which includes a charge of SEK 286 million (USD 32.7 million) following adverse ruling in a tax case, amounted to SEK 1.19 billion (USD 135.9 million) for the third quarter.
The company’s revised outlook reflects a higher than expected underlying corporate tax rate for the year 2020 as a consequence of a stronger than previously anticipated result development for the business in the US.
“Swedish Match delivered an outstanding performance during the third quarter. While we estimate that COVID-19 related effects had a notably positive net impact on group earnings, the underlying financial development across our product segments was strong. Impressive performance for ZYNin the US continued to be the key contributor to profit growth,” said CEO Lars Dahlgren.
“For ZYN in the US, we continued to capture the bulk of the growth in the nicotine pouch market, and we again experienced increased velocities at the retail level, despite expanded store distribution and significantly more aggressive promotional activity by our competitors. Our manufacturing operations in Owensboro continued to impress by managing to further increase utilization and efficiency from existing capacity while continuing to progress with the next phase of the capacity expansion according to plan,” he continued.