Interim Report January - June 2001

- Sales increased 25 percent to 6,564 MSEK (5,265)
- Operating income increased 18 percent to 1,046 MSEK (886)
- Profit before tax was 930 MSEK (827)
- EPS increased to 1.69 (1.24), an increase of 36 percent
- EBITDA increased to 1,357 MSEK (1,134)
- Total shares outstanding as of June 30, 2001 amounted to 358.5 million compared with 362.9 million as of March, 2001

Swedish Match sales increased by 25 percent, of which acquisitions accounted for 11 percentage points, in the first half of 2001 versus the same period last year. Higher currency rates, primarily a higher dollar rate, has effected sales positively by 6 percentage points. Organic sales growth amounted to 8 percent. All product areas exhibited sales gains. Cigars, pipe tobacco, lighters, and snuff show the largest increases.

Operating income grew by 18 percent to 1,046 MSEK, with gains primarily from cigars, matches, pipe tobacco, and lighters. Snuff margins have been impacted by increased costs due to product development and launches of new products, primarily in the US and India.

Net financial expenses increased to -116 MSEK (-59) mainly due to the redemption program, repurchase of shares, and the acquisitions of General Cigar, and the pipe tobacco business in South Africa.

Earnings per share during the first six months increased to 1.69 SEK (1.24). Earnings per share during the second quarter increased by 37 percent to 0.89 (0.65).

At the General Meeting of Shareholders on April 24, 2001 a prolonging of the mandate to repurchase up to 10 percent of the total amount of outstanding shares was resolved. It was also resolved that the share capital be reduced by 36 MSEK through the cancellation of 15,000,000 shares. The reduction of the share capital of the company is expected to be completed prior to year end.

Number of outstanding shares as per June 30 was 358.5 million.