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Research Tree provides access to ongoing research coverage, media content and regulatory news on SWEDISH MATCH AB. We currently have 7 research reports from 1 professional analysts.
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SWEDISH MATCH AB
SWEDISH MATCH AB
Q4 weaker than expected, arising regulatory concerns
17 Feb 17
FY and Q4 update: in Q4 sales grew +3% in local currencies. Operating profit was flat in local currencies. For FY16, organic sales were up +7% and 7% on reported figures. Operating profit was up +8% organically and on reported figures. Operating margin is up 20bp. For FY17, the group expects Scandinavian snus as well as US moist snuff consumption to grow as measured by number of cans. However, in Scandinavia, the growth should be more modest than in 2016. For cigars in the US, the market is expected to continue to grow in 2017 but remains highly competitive. Costs of goods per cigar are expected to increase due to both the full-year effect of FDA fees as well as higher raw material costs. Chewing tobacco is expected to decline. Norway made a decision to move into plain packaging (including snus) with full implementation in FY18, we believe this will put pressure on the company’s business. The proposed dividend is SEK16.00 (ordinary dividend of SEK8.50 (SEK8.00 last year) and a special dividend of SEK7.50, following Swedish Match’s divestment of shares in STG in January 2017).
Q3: another solid quarter but the stock seems to be fairly valued
28 Oct 16
Swedish Match Q3 update: good quarter with an improvement in the snus & snuff margin. Sales are up +9% in local currencies and +10% on reported figures. The operating margin is up 100bp to 26.5% on the back of good performances in all divisions. By product, Snus & snuff sales were up 2% with the operating margin up 70bp yoy driven by the solid performance in both Scandinavia and US. Cigars and chewing tobacco performed strongly with revenue up +22% and the operating margin up 90bp partially supported by channel loading ahead of FDA regulations. Lights continues its recovery, recording a good +11% in sales and 240bp in the operating margin. Other operations (distribution & corporate overheads) increased by 8%. In September, SWMA reduced its ownership in STG to 18.1% (from 31.1%). Following this event, a special dividend of SEK9.5 will be proposed to the shareholders. No changes to the FY guidance.
Great Q2 driven by snus & cigars; regulatory pressure rises
22 Jul 16
SWMA released its Q2 update. Sales are up +10% in local currencies and +8% on reported figures. The operating margin stood at 25.5% (vs. 26.4% in Q1). By division, sales of snus & snuff were up +7% on constant FX (+5% on reported) with a good 41.6% operating margin. Underlying sales grew in both Scandinavia and the US, however, in Sweden and Norway, SWMA experienced some market share loss. Other tobacco products performed well (+8% on constant FX and +5% on reported figures) driven by cigars (very strong volumes +15%). The company announced that FDA user fees on cigars will be implemented starting from October 2016 (with a $2m impact in Q4). Chewing tobacco sales were down. A positive surprise comes from lights which saw flat sales and a significant improvement in profitability driven by higher volumes in Western Europe and Russia.
Q1: Good start to the year driven by better than expected snus results
04 May 16
SM reported its Q1 results. Sales were up +6% (+7% on an organic basis). The operating profit margin was up +70bp. Results by division: Snus & Snuff sales grew +5% (operating margin was up +260bp) being positively impacted by lower destocking effects (however, SM lost some 0.6% market share in Sweden and -3.8% in Norway). Other tobacco products’ performance was relatively stable (sales up +7%, but the margin was down by 90bp due to weak chewing tobacco and some more intensive competition in cigars). Lights continue to perform poorly (sales -9%, margin down -340bp) on tough comps and the weak Brazilian real. For the rest of the year, the group expects: Scandinavian snus as well as US moist snuff consumption to continue to grow as measured by the number of cans. In Scandinavia, the average net selling price per can is expected to decline slightly versus last year. For cigars, the market is expected to continue growing although competition will remain high.
19 Feb 16
Swedish Match released its FY & Q4 results. In Q4, sales grew organically 2% and +5% on reported figures. Operating profit was down organically by 4% (+1% on reported figures). For the FY, sales grew organically +2% and +9% on a reported basis. The operating profit was down 2% organically (+7% on reported figures). The operating margin contracted by 40bp. The full-year net profit was up +7%. The proposed dividend is SEK20.00 (SEK8.00 of ordinary dividend +SEK12.00 special dividend linked to the partial divestment in STG). Performance by division: - Snus & snuff organic sales were flat in Q4 and +2% for the FY. The operating margin was down 220bp in Q4 and down 340bp for the FY, affected by the weak Norwegian krone and a negative price/mix in Scandinavia. - Cigars and chewing tobacco performed strongly with revenue up +32% in Q4 and +35% for FY. The operating margin was down 150bp in Q4 (higher operating costs) and up 140bp for FY. The segment's performance was positively affected by the absence of tobacco buy-out programme fees, which have now expired. The results of division have been driven by strong cigars (+20% volumes in Q4), whereas chewing tobacco volumes and operating profit in local currencies declined. - Lights performed poorly in Q4 with a decline of 8% in sales and -240bp in the operating margin. On a FY basis, sales were flat and the operating margin contracted by 220bp. The weak performance was linked to the decline in the Brazilian real and lower matches volumes. - Other operations (distribution & corporate overheads) increased by 2.2% for FY. As a reminder, in February 2016, STG was listed on Nasdaq Copenhagen. Following this event, SM now owns 31.2% of STG. No profit was recognised in Q4 as SM is now reporting STG with a lag of one quarter.
Q3 shows some improvement in snus & snuff
04 Nov 15
Swedish Match reported its Q3 results. Sales grew by 10% on reported figures and by 4% in local currencies. The operating profit excluding JV & associates grew by 12% on reported figures and by 4% in local currencies. The operating margin was up 40bp to 26%. Profit for the period increased by 7% to SEK745m. By product, Snus & snuff sales were up 4.3% with the operating margin down by 230bp yoy due to lower margins in Scandinavia and higher costs for the expansion of snus (however, the margin progressed on a qoq basis: 42.4% vs. 40.4% in Q2 15). Cigars and chewing tobacco performed strongly with revenue up +32% whereas the operating margin progressed by 260bp, thanks to an outstanding performance by cigars which more than offset a weakness in chewing tobacco. Lights recorded -2% in sales and -90bp in the operating margin (however the operating margin improved on a qoq basis: 15.1% vs. 11.3% in Q2). Other operations (distribution & corporate overheads) increased by 5%. STG's share of the profit decreased to SEK87m (vs. SEK115m last year) due to the implemented restructuring costs in Q3.
Outperformance in the bag
24 Mar 17
IG Design has had a very good second half trading and has issued a year-end update indicating that numbers will exceed market estimates. We have lifted our FY17 and FY18 numbers by 8-10% at the pre-tax and EPS levels, following an 11% uplift to earnings with the interims. Particularly notable is the comment on strong cash flow, with the group reaching its target of average leverage less than 2.5x EBITDA two years ahead of plan. With the earnings and cash flow momentum, strong balance sheet and progressive dividend, there is good potential for further share price upside.
24 Mar 17
We note the share transaction yesterday, and think the stock will benefit from the increased liquidity. We continue to believe there is good valuation upside to the shares. However, we are terminating coverage of Watkins Jones from this morning and withdrawing our forecasts from the market.
Panmure Morning Note 20-03-2017
20 Mar 17
Today’s strong H1FY17 trading statement is encouraging on multiple levels; (1) H1FY17’s revenue growth of c.+23% to £32m indicates revenue growth running well above our forecast assumption of +15% for FY17 (August 2017); (2) the revenue growth continues to be broad-based across the two main brand groups (Focusrite and Novation) and all of TUNE’s global regions (USA, Europe, and RoW); (3) H1FY17’s constant currency revenue growth of c.+12% is a sequential acceleration from the c.+9.5% of H2FY16 and c.+5.5% of H1FY16; and (4) H1FY17’s net cash of £9.4m is well ahead of our forecast of £7.7m by August 2017, reflecting strong revenue/profit conversion combined with much improved w/c control. In short, we think there is excellent scope for our FY17 forecasts to be raised at the time of the H1FY17 results on May 3. We maintain our BUY.
20 Mar 17
Focusrite has positioned itself in a way that makes its shares a particularly attractive investment: leadership in a niche product area protected from general consumer swings; an international market structure that makes it relatively currency agnostic; a habit of profit over delivery; a strong and further strengthening balance sheet; and an undemanding valuation. This first half trading statement confirms every one of those points.