02/18/2009 08:00 AM
Interim report for Duni AB (publ) 1 January – 31 December 2008
Continued improvement in the underlying profitability.
1 January – 31 December 2008
• Net sales increased by 2.9% to SEK 4,099 m (3,985).
• Operating income¹ increased by 4.8% to SEK 414 m (395).
• Operating margin¹ increased from 9.9% to 10.1%.
• The core business, Professional, continued to demonstrate solid growth.
• Income after financial items amounted to SEK 251 m (196).
• Income after tax for the continuing operations amounted to SEK 191 m (99).
• Earnings per share for the continuing operations amounted, after dilution, to SEK 4.06 (2.09).
• The Board proposes a dividend of SEK 1.80 (1.80) per share.
1 October – 31 December 2008
• Net sales increased by 1.9% to SEK 1,145 m (1,124).
• Operating income² is in line with the preceding year, SEK 145 m (148).
• Income after tax for the continuing operations amounted to SEK 36 m (58).
• Earnings per share for the continuing operations amounted, after dilution, to SEK 0.76 (1.23).
¹ Before restructuring costs of SEK 41 m (0) and before an unrealized valuation effect of derivatives of SEK -48 m (-1) due to the non-application of hedge accounting.
² Before restructuring costs of SEK 41 m (0) and before an unrealized valuation effect of derivatives of SEK -39 m (-3) due to the non-application of hedge accounting.
“In light of the severe slowdown in the economy which have been noted, Duni's sales and income have developed well during the fourth quarter. This is particularly positive taking into account the fact that the fourth quarter is traditionally Duni's strongest which historically has accounted for approximately 35 % of operating income.
Duni's reported net sales during the fourth quarter have been positively affected by the weaker Swedish krona. The currency effect during the quarter amounts to approximately 5% of net sales. The decline in sales measured in fixed exchange rates is approximately 3% and is attributable to the Retail and Tissue business areas, while Professional kept up well and, in total, reached the same sales as last year. Within Professional, the German market has enjoyed a continued healthy development, as have several other important markets in central Europe. At the same time, the weakened economy has continued to influence the total demand on Duni's products. A lower activity level during the quarter has also been noted in eastern Europe.
Duni today has a lean operating platform thanks to the fact that, in recent years, we have rationalized the Group’s production structure and created uniform and centralized support functions for cost-efficient business support. Under current business conditions, further rationalization measures have been initiated, among other things continued optimization of the Group's production resources. These planned and partially implemented measures resulted in restructuring costs totalling SEK 41 m, which affected the fourth quarter. The full impact of these measures is expected by the end of the first half of 2009, with annual savings of about SEK 50 m.
For the full year of 2008 we note a somewhat improved operating margin and an operating income before non-recurring items of SEK 414 m. Adjusted for the weaker Swedish krona this means an unchanged operating income compared with SEK 395 m last year. The result increased during the first half of the year but also reached a satisfactory level during the volatile autumn months. The Group also delivered a strong cash flow for the year.
It appears that the general economic situation will weaken further and we expect 2009 to be a tough year. In light of this trend we have taken measures at an early stage and stand prepared to take further action if the market development so requires. Historically, Duni has proven to be slightly less sensitive to the business cycle than the Horeca sector as a whole," says Fredrik von Oelreich, CEO, Duni.