Swedish Match: Full Year Report January - December 2021

Highlights for the full year and the fourth quarter

• Record full year sales and operating profit with double-digit growth in both revenues and earnings in local currencies across all product segments.
• Impressive performance for the Smokefree product segment with strong growth in both the US and Scandinavia. Growing demand for natural leaf cigars drove the robust full year local currency financial performance for the Cigars product segment. Strong underlying performance for the Lights product segment.
• Strong financial performance in the fourth quarter driven by Smokefree with continued strength in both the US and in Scandinavia. Sales and earnings decline for Cigars, impacted by production constraints. Increased sales and earnings for Lights.
• In local currencies, sales increased by 16 percent for the full year and by 12 percent for the fourth quarter. Reported sales increased by 11 percent to 18,489 MSEK (16,698) for the full year and by 15 percent to 4,751 MSEK (4,136) for the fourth quarter.
• In local currencies, operating profit from product segments[1)] increased by 19 percent for the full year and by 11 percent for the fourth quarter. Reported operating profit from product segments increased by 14 percent to 8,136 MSEK (7,160) for the full year and by 15 percent to 1,957 MSEK (1,695) for the fourth quarter.
• Operating profit amounted to 8,286 MSEK (6,991) for the full year and to 1,901 MSEK (1,650) for the fourth quarter.
• Profit after tax amounted to 6,218 MSEK (4,888) for the full year and to 1,457 MSEK (1,244) for the fourth quarter. Profit after tax of the prior year included a charge of 286 MSEK following an adverse ruling in a tax case.
• Earnings per share increased by 31 percent to 3.97 SEK (3.04) for the full year and by 21 percent to 0.94 SEK (0.78) for the fourth quarter. Adjusted earnings per share increased by 19 percent to 3.82 SEK (3.22) for the full year and by 21 percent to 0.94 SEK (0.78) for the fourth quarter.[2)]
• On September 14, Swedish Match announced its intention to spin off its US cigar business to shareholders, subject to various conditions. The separation is expected to be completed during the second half of 2022, at the earliest.
• The Board proposes to increase the dividend to 1.86 SEK per share, to be paid in two installments; 0.93 SEK per share in May 2022 and 0.93 SEK per share in November 2022.
• The outlook for 2022 can be found on page 13.

1) Excludes Other operations and larger one-time items.
2) A share split (10:1) was made in May 2021. Historical share data in this report has been restated in accordance with IAS 33.