07/16/2010 06:00 AM

Interim Report for Duni AB (publ) 1 January – 30 June 2010

​Improved operating income

1 January – 30 June 2010

• Net sales amounted to SEK 1,930 m (2,042). Adjusted for exchange rate changes, net sales increased by 0.7%.
• Earnings per share for continuing operations amounted, after dilution, to SEK 2.48 (2.24).

1 April – 30 June 2010

• Net sales amounted to SEK 970 m (1,035). Adjusted for exchange rate changes, net sales increased by 0.4%.
• Earnings per share for continuing operations amounted, after dilution, to SEK 1.40 (1.45).
• Strong operating margin of 9.4% (8.1%), primarily thanks to improved capacity utilization and lower costs.            

Key financials

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

CEO’s comments

"Duni delivered a strong second quarter, particularly when set against the fact that pulp prices continued to increase sharply. Operating income increased by SEK 7 m compared with last year, to SEK 91 m. A number of factors contributed to the positive income trend. The primary factor was improved capacity utilization, particularly within Tissue. In addition, the full effect of the cost savings program has been achieved, which is reflected in both lower indirect costs as well as higher productivity. We have also succeeded in postponing some cost increases within purchasing to the third quarter.

The recovery within Professional has taken place at a somewhat higher pace than during the preceding quarter. In terms of volume, sales increased slightly more than 3% during the second quarter. Retail, on the other hand, experienced a weak quarter in terms of sales, with volume losses on several markets. However, it is important to emphasize that the operating margin continues to improve. We now have a healthier base, but going forward the focus is on gaining profitable market shares for Retail.

Sales in the Tissue business area increased by almost 1% during the quarter where a fire at the production plant in Dals Långed, Sweden, only had marginal impact. In total, Duni achieved sales of SEK 970 m in the second quarter, which at fixed exchange rates is largely unchanged compared with last year.

With our sights set on creating conditions for long-term growth, we have opened a sales office in Moscow during spring. We have also commenced the investments at the mill in Skåpafors, Sweden, which are aimed at further strengthening our leading position on the market for table setting products in the medium term.

General price increases will be implemented during the third quarter of the year in order to compensate for the substantial increases in prices of input materials. From a market perspective, we believe in a continued slow rate of recovery, among other things as a consequence of the cost-saving measures around Europe which are now being introduced," says Fredrik von Oelreich, President and CEO, Duni.