Interim Report for Duni AB (publ) 1 January – 30 September 2018
Margins under pressure from higher pulp prices – efficiency program initiated
1 july – 30 september
- Net sales amounted to SEK 1,190 m (1,082). Adjusted for exchange rate movements, net sales increased by 2.7%. Organic growth for the quarter was 0.8%.
- Earnings per share after dilution amounted to SEK 1.39 (1.68).
- Price increases to compensate for rising raw materials prices have been implemented and further price increases have been initiated.
1 january – 30 september
- Net sales amounted to SEK 3,467 m (3,188). Adjusted for exchange rate movements, net sales increased by 3.7%.
- Earnings per share after dilution amounted to SEK 4.00 (4.44).
- Pulp prices continued to rise during Q3, with an increase of more than 40% in euro terms during the past 12 months.
Events after the end of the period
- On 15 October, Duni acquired 75% of the shares in BioPak Pty Ltd in Australia and New Zealand.
- Duni has launched a cost efficiency program of indirect costs, leading to restructuring costs of around SEK 30 m in Q4. The fully implemented program is estimated to give annual savings of approximately SEK 30 m.
Key Financials
| SEK m | 3 months Jul-Sep 2018 |
3 months Jul-Sep 2017 |
9 months Jan-Sep 2018 |
9 months Jan-Sep 2017 |
12 months Oct-Sep 2017/2018 |
12 months Jan-Dec 2017 |
| Net sales | 1,190 | 1,082 | 3,467 | 3,188 | 4,721 | 4,441 |
| Operating income1) | 107 | 123 | 293 | 322 | 463 | 491 |
| Operating margin1) | 9.0% | 11.4% | 8.5% | 10.1% | 9.8% | 11.1% |
| Income after financial items | 90 | 108 | 254 | 284 | 409 | 439 |
| Net income | 66 | 80 | 191 | 212 | 313 | 334 |
1)For key financials and reconciliation of alternative key financials, see pages 27-28.
CEO’S COMMENTS
“Net sales increased by 10% from SEK 1,082 m to SEK 1,190 m in Q3. Adjusted for exchange rate movements, net sales increased by 2.7% and organic growth amounted to 0.8%. Operating income was SEK 107 m (123). The lower result is a consequence of continuously increasing pulp prices during the quarter. Pulp prices have increased by more than 40% during the last 12 months.
The Table Top and Consumer business areas were both affected negatively by the high pulp prices during the period. For New Markets, costs related to the restructuring activities in Singapore had an impact on the result. In the Meal Service business area, both growth and operating income increased during the quarter, driven by the continually strong performance of the ecoecho® range.
Program to strengthen margins
In order to improve results, and to release resources for investment in an improved customer experience, Duni is now undertaking three major initiatives to improve margins:
- As announced before summer, further price increase will take effect during Q1 2019.
- We are now initiating a cost efficiency program of the indirect costs. This program will include personnel reductions and, as a consequence, restructuring costs of around SEK 30 m which are mainly expected to have an impact in Q4 2018. The annual savings related to the program, once fully implemented during the second half of 2019, are estimated at approximately SEK 30 m.
- We have started a major optimization of the logistics flow, which will result in significant positive effects during 2019 and 2020, for both costs and the environment.
A new strategy for a more customer-oriented and sustainable Duni
The objective with Duni’s new strategy is to be a more customer-oriented and sustainable company. This includes increasing investments in digital customer experiences, development of organic products and a more customer-oriented offering. We will also seek to achieve further organic growth, as well as growth throughout acquisitions, in Asia and Oceania.
Acquisition of rapidly growing packaging company, with focus on sustainability
As of 15 October, Duni acquired 75% of BioPak Pty Ltd in Australia and New Zealand. With sales of around SEK 385 m, the company is a rapidly expanding market leader for sustainable disposable packaging and exhibit an annual historical growth above 20%. The acquisition of BioPak is in line with our strategy, since it strengthens our position within the prioritized product area of sustainable packaging, and also in the growth region of Asia and Oceania.
Looking forward, in Q4 Duni will still be affected negatively by the high pulp prices, since the price increases we have announced will not begin to have an effect until during Q1 2019,” says Johan Sundelin, President and CEO, Duni.
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For additional information please contact:
Johan Sundelin, 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 AB (publ)
Box 237
SE-201 22 Malmö
Telephone: +46 40 10 62 00
www.duni.com
Business registration number: 556536-7488
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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 around 2,500 employees in 24 countries, headquarters in Malmö, Sweden, and production units in Sweden, Germany, Poland, Thailand and New Zealand. Duni is listed on NASDAQ Stockholm under the ticker name “DUNI”. The 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 07:45 CET on 18 October 2018.
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