SWEDISH MATCH RESULTS PRESENTATION Q2 2017

DISCLAIMER

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The information contained in this presentation has not been independently verified and is subject to change without notice and neither Swedish Match, nor an affiliate thereof or any other party is under any obligation to update or keep current the information contained herein. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of Swedish Match or any other party (or any of their respective members, directors, officers, employees or any other person) as to the accuracy, completeness or fairness of the information or opinions contained in this presentation, and any reliance you place on such information or opinions will be at your sole risk. Neither Swedish Match nor any other party (or any of their respective members, directors, officers, employees or any other person) accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising directly or indirectly in connection therewith.

By attending a meeting where this presentation is presented, or by reading the presentation, you acknowledge that you will be solely responsible for your own assessment of the potential investment, the market and market position of Swedish Match and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of Swedish Match and its business. This presentation may contain certain forward-looking statements that reflect Swedish Match’s current views or expectations with respect to future events and financial and operational performance. Although Swedish Match believes that these statements are based on reasonable assumptions and expectations, Swedish Match cannot give any assurances that such statements will materialize. Because these forward-looking statements involve known and unknown risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statement. The forward-looking statements speak only as at the date of the presentation and Swedish Match undertakes no obligation to update such forward-looking statements.

This presentation contains market data and industry forecasts, including information related to the sizes of the markets in which Swedish Match and its subsidiaries participates. The information has been extracted from a number of sources. Although Swedish Match regards these sources as reliable, the information contained in them has not been independently verified and therefore no assurance can be given that this information is accurate and complete. In addition to the above, certain data in the presentation is also derived from estimates made by Swedish Match. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice.

o Sales increased by 8 percent to 4,214 MSEK (3,920) for the second quarter. In local currencies, sales increased by 4 percent.

o Operating profit from product areas1) increased by 8 percent to 1,091 MSEK (1,008) for the second quarter. In local currencies, operating profit from product areas increased by 4 percent.

o Operating profit amounted to 1,091 MSEK (1,061) for the second quarter.

o Profit for the period amounted to 812 MSEK (752) for the second quarter.

o Earnings per share amounted to 4.49 SEK (4.01) for the second quarter. Earnings per share excluding a dividend from STG in 2017 and share of net profit in STG in 2016 amounted to 4.18 SEK (3.72).

o The outlook has been updated based on the developments during the first six months.

Q2 – HEADLINE BULLETS

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1) Operating profit for Swedish Match product areas, which excludes larger one-time items and share of net profit in STG.

SNUS AND MOIST SNUFF: Q2 COMMENTARY

Growth in both sales and operating profit driven by the US o Scandinavian shipments up 1 percent

- Underlying volumes are estimated to be up by 1 percent (adjusted for calendar effects). - Higher volumes for premium pouches in Sweden, and pouches in Norway.

o Scandinavia snus sales and operating profit up - Price increases in Norway (Jan) and in Sweden (May), volumes up, stronger NOK vs. SEK. - Absorption of the 2017 excise tax increase in Sweden during April and part of May.

o US moist snuff operating profit down in local currency on lower sales - Sales down on lower volumes, partially offset by improved price/mix.

o Lower operating loss for snus and nicotine pouches outside Scandinavia - Snus/ZYN sales (primarily in the US) up on higher volumes and higher realized pricing.

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MSEK Q2-2017 Q2-2016 chg H1-2017 H1-2016 chg July 2016-

June 2017 Full year

2016 chg

Sales 1,406 1,338 5 2,699 2,584 4 5,392 5,277 2 Operating profit 590 557 6 1,122 1,078 4 2,240 2,197 2 Operating margin, % 42.0 41.7 41.6 41.7 41.5 41.6

SCANDINAVIAN NEW PRODUCT ACTIVITY (JANUARY – JUNE)

Sweden o Kaliber+ in stores from January. o Kronan packaging and product upgrade. o G.3 VOLT Super Strong in wider distribution from

June. o Göteborgs Rapé White Strong from April. o ZYN in Swedish Match snus stores. Norway o Line extension of G.3 Super Slim pouch product in

stores from February. o Göteborgs Rapé Slim in stores from February. o G.3 VOLT Super Strong in stores from March. o G.4 in stores from May.

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SCANDINAVIA – UNDERLYING VOLUMES AND SWEDISH MATCH PRICE/MIX EFFECT

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* Based on Nielsen and Swedish Match estimates (adjusted for hoarding).

Total Scandinavian snus by quarter versus same quarter prior year

-5.8%

Q3-15 Q1-17 Q2-17

+0.8%

+2.2%

-1.1%

+2.7%

+0.5%

Q4-16

+4.9%

-1.7%

+2.9%

Q3-16

+2.5%

+0.5%

+3.5%

Q2-16

+0.2%

+2.8%

+5.0%

Q1-16

-3.4%

+3.9%

+6.1%

Q4-15

-4.8%

+4.2%

+5.5% +4.8%

+6.6%

Q2-15

-4.9%

+1.1%

+3.4% +2.2%

Industry volume growth* Swedish Match volume growth* Swedish Match price/mix effect

2015 2016 2017

SWEDEN – SNUS CATEGORY DEVELOPMENT

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2014 2015 2016

Volume and retail value year on year growth (Nielsen)

Source: Nielsen, DVH+SVH excl. tobacconists (including nicotine free).

-1%

0%

1%

2%

3%

4%

5%

6%

7%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017

Volume Retail value

2017

SWEDEN – MARKET SHARE DYNAMICS – VOLUME SHARES

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95.0% 90.0%

70.0% 65.0% 60.0% 55.0% 50.0% 45.0% 40.0% 35.0%

0.0%

65.6%

Swedish Match market share of total market

65.7% 66.5%

67.1% 67.9%

68.0%

Swedish Match share of premium segment

91.6% 92.0%

92.4%

92.4% 93.1%

93.1%

Swedish Match share of value price segment

36.5% 36.5% 37.1%

37.4% 38.5%

39.2%

Value price segment share of market

47.2% 47.4% 46.9%

45.9% 46.2%

46.5%

Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016

Source: Nielsen, DVH+SVH excl. tobacconists (including nicotine free).

NORWAY – SNUS CATEGORY DEVELOPMENT

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Volume and retail value year on year growth (Nielsen)

Source: Nielsen, DVH+KBS.

0%

2%

4%

6%

8%

10%

12%

14%

2014 2015 2016 H1 2017

Volume Retail value

NORWAY – TOTAL SNUS VOLUME SHARES

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Volume share development, 4-weeks isolated

56,7%

53,6%

51,7%

41,3% 43,7%

43,2%

34%

38%

42%

46%

50%

54%

58%

62%

Swedish Match Imperial BAT

1,9% 2,4% 4,6%

0%

4%

8%

Competitor 1 Competitor 2

Source: Nielsen, 4-week data, DVH+KBS. Circles indicate same period prior years.

NORWAY – SWEDISH MATCH MARKET SHARE DEVELOPMENT

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-1,9% -2,2%

-3,0% -2,8% -2,6% -2,8% -2,4% -2,6% -2,6%

-2,2% -1,8% -1,7% -1,5% -1,4%

-1,2% -1,1%

-0,8% -0,9%

-0,8% -0,9%

-0,9% -1,0% -1,1%

-1,0%

-1,0% -0,9%

-0,8% -0,8%

-5,0%

-4,0%

-3,0%

-2,0%

-1,0%

0,0%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017

Swedish Match share loss due to portion snus Swedish Match share loss due to loose snus (including mix)

Change in Swedish Match volume market share y-o-y by format; percentage points of total market

2014 2015 2017 2016

Source: Nielsen, DVH+KBS.

US – SWEDISH MATCH MOIST SNUFF MARKET SHARE

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9,8% 9,1%

8,6%

9,7% 9,0%

9,6%

8,3%

9,9%

8,8% 8,9% 8,2%

9,2% 8,7% 9,0%

7,2%

9,3%

8,1%

0%

2%

4%

6%

8%

10%

12%

Source: Industry estimates, Swedish Match direct sales, and CMPP.

Market share based on shipments

2014 2015 2016 2017 2013

0

2

4

6

8

10

12

14

16

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US – SWEDISH MATCH’S MOIST SNUFF POUCH VOLUMES BY QUARTER

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2014 2015 2016 2017

Swedish Match’s moist snuff pouch volumes by rolling four quarters

Million cans

0

2

4

6

8

10

SNUS AND NICOTINE POUCH VOLUMES OUTSIDE SCANDINAVIA

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Swedish Match’s shipments of snus and nicotine pouches outside of Scandinavia by rolling four quarters

2014 2015 2016 2017 2012 2013

Million cans

REGULATORY / SCIENTIFIC NEWS

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o Norway – plain packaging - Effective July 1, 2017 for all new products launched after that date. - All snus products to have plain packaging at retail from July 1, 2018. - Not applicable to e-cigarettes, chewing tobacco, cigars or pipe tobacco. - Green surfaces, only name in Helvetica with specified font size and no logos. - Swedish Match on July 7 filed for a temporary injunction.

- Not proportionate. - Not appropriate for the protection of public health.

o Large study dismissing causal relationship between snus and pancreatic cancer published in International Journal of Cancer - Based on a joint analysis of nine Swedish cohort studies (including the Construction Worker Cohort study) with 424,000 male

participants. - The authors concluded that, in contrast to smoking, “Swedish snus does not appear to be implicated in the development of

pancreatic cancer among men”.

o US – MRTP - Swedish Match to conduct further consumer research to support revised claim(s).

o Challenge to EU snus ban referred to the ECJ - Swedish Match expects a ruling by the ECJ in the first half of 2018 at the earliest.

Continued strong volume growth for cigars, US chewing volumes down o Strong growth in sales and operating profit for cigars

- Cigar volumes up 19% with solid growth for both natural leaf and HTL. - Volume growth led by natural leaf cigars. - Operating profit increased in local currency, despite new FDA fees of 2.5 MUSD.

o Chewing tobacco in the US remained challenging, volumes down 9% - Sales and profits down on lower volumes. - Volumes negatively impacted by enactment of Pennsylvania state excise tax in the beginning of October. - Higher average prices only partly offset the effect of lower volumes.

o Chew bags, now in several European countries - June launch in Germany, following earlier launches in Denmark, Slovenia, Czech Republic. - Currently no shipments to Switzerland, due to unclear regulation.

OTHER TOBACCO PRODUCTS (OTP): Q2 COMMENTARY

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MSEK Q2-2017 Q2-2016 chg H1-2017 H1-2016 chg July 2016-

June 2017 Full year

2016 chg

Sales 1,252 1,031 21 2,373 2,026 17 4,630 4,283 8 Operating profit 496 425 17 923 825 12 1,804 1,705 6 Operating margin, % 39.6 41.2 38.9 40.7 39.0 39.8

0

50

100

150

200

250

300

350

400

450Natural leaf HTL

US – SWEDISH MATCH CIGAR VOLUMES BY QUARTER AND FORMAT

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Mass market cigar shipments

2014 2015 2016 2017

Million sticks

US – DEVELOPMENT OF SWEDISH MATCH CHEWING TOBACCO VOLUMES

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-6,8% -6,9% -5,1% -4,9% -5,9% -9,2% -5,1%

-10%

-9%

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%2011 2012 2013 2014 2015 2016 H1 2017

Average -6.3%

Shipment volume percentage change year on year, Swedish Match brands*

* On reported basis. Excludes Co-Pack volumes.

LIGHTS: Q2 COMMENTARY

Sales and operating profit down on lower volumes o Sales declined by 5%

- Volume declines for both matches (-19%) and lighters (-15%). - Sales decline partly offset by increased sales for complementary products and positive currency effects.

o Continued growth for complementary products in Brazil - Growth in both sales and operating profit. - Favorable currency effects.

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MSEK Q2-2017 Q2-2016 chg H1-2017 H1-2016 chg July 2016-

June 2017 Full year

2016 chg

Sales 302 318 -5 642 621 3 1,334 1,314 2 Operating profit 37 54 -32 97 96 1 220 219 0 Operating margin, % 12.2 17.0 15.1 15.5 16.5 16.7

DEVELOPMENT OF THE FINANCE NET

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Net finance cost by quarter

-160

-140

-120

-100

-80

-60

-40

-20

0

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017

Net finance cost Net interest expense excluding costs relating to the repurchase of bond loansMSEK

0

500

1 000

1 500

2 000

2 500

3 000

2017 2018 2019 2020 2021 2022 2023 2024 2028

Interest bearing liabilities Bond loans issued during Q2 2017 Bond loans issued after June 30, 2017

MATURITY PROFILE OF INTEREST BEARING LIABILITIES

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MSEK

CASH FLOW (SIX MONTHS)

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o Positive cash flow from operating activities, when adjusted for STG - Cash flow from operating activities was 1,781 MSEK (1,872). - The dividend received from STG of 191 MSEK during the Q2 2016 (31.1% ownership) was recognized as cash flow

from operating activities in prior year period. - Adjusted for the dividend received from STG in the prior year, the cash flow from operating activities increased by 100

MSEK. o Positive net cash flow from investing activities

- Swedish Match received 1,355 MSEK from the partial divestment of STG in January and another 107 MSEK of additional purchase price payments relating to a parcel of land sold in 2007.

- Cash flow from investing activities also include a dividend of 65 MSEK from STG received during the second quarter of 2017 (based on a 9.1 percent ownership).

o Investments in property, plant and equipment, and intangible assets decreased to 178 MSEK (347) - For the full year, investments in property, plant and equipment are expected to be in line with prior year.

o Share buybacks - Share repurchases of 4.8 million shares for 1,392 MSEK up to June 30. - From July 1, 2017 to July 20, 2017, 446,000 shares repurchased for 131 MSEK.

UPDATED OUTLOOK STATEMENT (CHANGES NOTED IN ITALICS)

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For 2017, on a full year basis, we expect Scandinavian snus as well as US moist snuff consumption to grow as measured in number of cans. In Scandinavia, we expect the growth to be more modest than in 2016. We expect the level of competitive activity in the Scandinavian snus market to continue to be high. For cigars in the US, Swedish Match expects the market to continue to grow during the remainder of 2017 but to remain highly competitive. Swedish Match continues to have the ambition to grow cigar volumes but note that the second half of 2016 was strong for cigar shipments. The year on year comparison for cost of goods for cigars will be adversely impacted by the FDA user fees through the third quarter of 2017. We expect the US chewing tobacco market to continue to decline. Swedish Match will continue to invest in growth for snus and nicotine pouches outside Scandinavia. We expect continued growth in volumes and sales. The operating loss for snus and nicotine pouches outside Scandinavia is now expected to be lower than in 2016. The decision to invest in additional ZYN production capacity will predominantly affect capital expenditures in 2018. The effective corporate tax rate in 2017, excluding associated companies, dividend from STG and non-taxable larger one-time items, is expected to be similar to 2016, assuming no changes to current tax regimes. There are currently general expectations that there will be a US corporate income tax reform. Due to the uncertain outcome and structure of such reform, Swedish Match makes no projections to whether the impact would be positive or negative for the Company. The Company remains committed to returning cash not needed in operations to shareholders.