Interim Report for Duni AB (publ) 1 January – 31 March 2011

Increased market investments for growth

1 January – 31 March 2011

• Net sales amounted to SEK 867 m (960). Adjusted for exchange rate changes, net sales decreased by 3.1%.
• Earnings per share amounted, after dilution, to SEK 0.86 (1.09).
• Operating income has been affected by increased market investments.

Key financials

1)  Underlying operating income; for link to reported operating income, see the section entitled "Non-recurring items".

CEO’s comments

“The result for the first quarter fell slightly short of our objectives in terms of sales and profitability. Sales fell by almost 10% compared with last year, largely due to the stronger Swedish krona; however, sales were 3% lower also when measured at fixed exchange rates.

It is primarily the Tissue business area which has performed weakly, with lower deliveries to the hygiene products sector and weaker sales generally in the wake of the fire at one of the paper mills in June last year. Nevertheless, capacity utilization has been at a high level when internal deliveries are included. Earnings within Tissue have improved thanks to higher productivity combined with price increases.

The Retail business area has experienced weaker sales as a consequence of lower private label volumes. In addition, we lost certain volumes in the Nordic region and in Germany. On the other hand, we have successfully defended our market shares on the premium range and are witnessing a continued improvement in the product mix. All in all, we are largely maintaining profitability within Retail when measured at fixed exchange rates.

In our main area, Professional, sales increased by almost 3% at fixed exchange rates. Taking into consideration the price increases carried out last year, this means that volumes are largely unchanged. Even if we see a positive trend on certain markets, such as Sweden and our growth markets, the HoReCa market in Germany has not performed as well as the economy in general. Operating income within Professional decreased as a consequence of the somewhat weaker volume development in mature markets, and partly due to the increased investments we are making to stimulate growth on prioritized markets. We also note that the prices of traded goods increased during the quarter, and we estimate that our most important input materials will continue to experience inflationary pressure.

In total, Duni’s operating income for the quarter, measured at fixed exchange rates, fell by SEK 3 m, to SEK 74 (77) m. This corresponds to an operating margin of 8.0%, compared with 8.1% last year.

Our expectation for the full year is that the recovery on the HoReCa market will continue in most parts of Europe, which will create conditions for volume growth. As a consequence of the trend of increasing costs for traded goods and input materials, it may become necessary to increase our own prices,” says Fredrik von Oelreich, President and CEO, Duni.

Fredrik von Oelreich, President and CEO, +46 40 10 62 00
Mats Lindroth, CFO, +46 40 10 62 00
Helena Haglund, Group Accounting Manager, +46 734 19 63 04

Duni is a leading supplier of attractive and convenient products for table setting and takeaway. The Duni brand is sold in more than 40 markets and enjoys a number one position in Central and Northern Europe. Duni has some 2,000 employees in 17 countries, headquarters in Malmö and production units in Sweden, Germany and Poland. Duni is listed on NASDAQ OMX Stockholm under the ticker name “DUNI”. ISIN-code is SE 0000616716.

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