Interim Report for Duni AB (publ) 1 January – 30 June 2017 - Correction
Correction regarding consolidated ”Cost of Goods sold” in the quarter.
In the Consolidated Income Statements and in the Consolidated Quarterly Income Statements in brief has ”Cost of Goods sold” has been incorrectly reported for the quarter April-June 2017. The correct amount is SEK -800 m, although SEK -780 m was reported. The Gross Profit of SEK 302 m and the Gross Margin of 27.4% have been correctly reported and commented on.
Strong growth and acquisition in New Zealand
1 April – 30 June
- Net sales amounted to SEK 1,101 m (1,013). Adjusted for exchange rate movements, net sales increased by 5.3%.
- Earnings per share after dilution amounted to SEK 1.54 (1.54).
- Duni strengthened its presence in Asia and Oceania by acquiring Sharp Serviettes in New Zealand on 3 May.
- Solid growth in Table Top business area.
1 January – 30 June
- Net sales amounted to SEK 2,106 m (1,973). Adjusted for exchange rate movements, net sales increased by 4.3%.
- Earnings per share after dilution amounted to SEK 2.75 (2.69).
- Raw material prices remained at high levels, putting pressure on the gross margin.
- Income improved as a result of increased volumes and high capacity utilization.
- SEK 55 m investment in a logistics property in Germany.
Key financials
| SEK m | 3 months April- June 2017 |
3 months April-June 2016 |
6 months January- June 2017 |
6 months January- June 2016 |
12 months July-June 2016/ 2017 |
12 months January-December 2016 |
| Net sales | 1,101 | 1,013 | 2,106 | 1,973 | 4,404 | 4,271 |
| Operating income 1) | 110 | 108 | 199 | 194 | 507 | 502 |
| Operating margin 1) | 10.0% | 10.6% | 9.4% | 9.8% | 11.5% | 11.8% |
| Income after financial items | 98 | 94 | 176 | 167 | 450 | 441 |
| Net income | 73 | 72 | 132 | 127 | 339 | 334 |
1) For bridge to EBIT, see the section entitled “Operating income”.
CEO’s comments
“Sales for the quarter increased by SEK 88 m, corresponding to 8.7% in comparison to last year. Adjusted for exchange rate movements, sales for the quarter increased by 5.3%. The growth was mainly generated from the higher organic growth in Table Top, the acquisitions in New Markets and continuing market share gains in the take-away segment within Meal Service.
Net sales for the quarter amounted to SEK 1,101 m (1,013) and organic growth, adjusted for currency and acquisition effects, strengthened to 2.6%. The operating income increased to SEK 110 m (108). However, in line with the information disclosed in the previous interim report, the gross margin for the quarter was weighed down by the raw material price increases. These cost increases will largely be compensated in the market during the third quarter. Operating cash flow for the period was SEK 95 m (39) and, in addition to normal maintenance investments, the cash flow for the period and net debt were impacted by the acquisition of Sharp Serviettes in New Zealand. Net debt at the end of the period amounted to SEK 1,109 m (920).
Sharp Serviettes commands a leading position as a manufacturer and distributor of table setting products in the New Zealand market. The company reported sales of approximately SEK 60 m last year and exhibited strong sales growth over the past years. The acquisition of Sharp Serviettes makes Duni a market leader in New Zealand while strengthening our presence in the highly prioritized markets in Asia and Oceania. Sharp Serviettes, along with Terinex Siam and Duni Song Seng, form a strong platform for a greater presence in Australia as well.
The Table Top business area grew by 6.9% in the quarter, and we see a strong trend in many major sales regions. The trend in Southern Europe remains strong while demand in central Europe has stabilized. Net sales increased to SEK 605 m (566), and the sales activities initiated as a result of the weak sales trend early in 2016 are now contributing to better performance. Operating income increased to SEK 95 m (87) and the operating margin strengthened to 15.7% (15.4%).
The Meal Service business area continues to grow faster than the market, reaching a growth rate of 7.5% in the quarter in relation to last year. Investments in expanded sales resources are proceeding, and the transition of the business area’s assortment to more environmentally conscious products is fully in line with customer demands. Net sales reached SEK 194 m (180) and operating income was SEK 15 m (19). Income was impacted negatively by increased purchase prices for plastic-based products.
The Consumer business area’s net sales amounted to SEK 211 m (213) and operating income decreased to SEK -6 m (-1). Lower sales and a more disadvantageous product mix in Germany played a part in the decrease in income. The European consumer market is volatile and a relatively high share of the sales volume is linked to contract production. We are now looking into ways to strengthen our offering in order to raise efficiency and better adapt to customer demands.
The New Markets business area increased its net sales to SEK 78 m (42) and operating income to SEK 5 m (2). The business area’s performance is mainly driven by acquisitions but we also see a better sales trend in our export markets. Terinex Siam and Sharp Serviettes, which primarily engaged in domestic distribution, are now being integrated into Duni’s Asian sales and distribution structure. We therefore see favorable conditions for expanding exports to nearby markets.
The quarter’s overall growth is satisfactory and we succeeded in balancing the raw material price challenge. The cost increase will be compensated in the third quarter, and, in light of the improved sales trend over the past months, we head into the more intense fall season with a certain degree of confidence,” says Thomas Gustafsson, President and CEO, Duni.
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Additional information is provided by:
Thomas Gustafsson, 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
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Duni is a leading supplier of attractive and convenient products for table setting and take-away. The Duni brand name is sold in more than 40 markets and enjoys a number one position in Central and Northern Europe. Duni has some 2,300 employees in 23 countries, headquarter in Malmö and production units in Sweden, Germany, Poland, Thailand and New Zealand. Duni is listed on NASDAQ Stockholm under the ticker name “DUNI”. ISIN-code is SE0000616716.
This information is information that Duni AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 7.45 CET on 14 July 2017.
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