07/13/2012 06:00 AM

Interim Report for Duni AB (publ) 1 January – 30 June 2012

Improved operating income in the quarter

1 January – 30 June 2012

• Net sales amounted to SEK 1 790 m (1 827). Adjusted for exchange rate changes, net sales fell by 2.1%.
• Earnings per share, after dilution, amounted to SEK 1.97 (2.12).
• Stable sales in an uncertain economic climate.

1 April – 30 June 2012

• Net sales amounted to SEK 934 m (960). Adjusted for exchange rate changes, net sales fell by 2.7%.
• Earnings per share, after dilution, amounted to SEK 1.19 (1.25).
• Improved operating margin within the Professional and Consumer business areas.
• The new, more market oriented organization implemented.

Key financials

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

CEO’s comments

“During the second quarter, Duni's sales performance continued to reflect the weak economy in Europe. Sales were 2.7% lower at fixed exchange rates.

The Professional business area achieved sales of SEK 699 m, representing a decline of 2.2% at fixed exchange rates. This reflects a somewhat weaker trend in Germany than during the first quarter of the year, especially within the cash and carry segment. In addition, we lost rather important sales in the UK; however, these related to a couple of volume contracts with weak profitability. In other respects, the trend in Professional was characterized by stability, with a continued shift in the mix towards premium products. Our new premium tablecover, Evolin®, is growing on a conservative market, but had only a marginal impact on sales during the quarter.

The Consumer business area experienced a clear improvement during the second quarter compared with the weak first quarter. Sales were SEK 126 m, which is 7.2% lower than last year. The drop in sales is related to the loss of the big international private label-contract during 2011. Beyond this we are witnessing an overall improvement, particularly on the important German market. In light of the fact that the impact of a number of new contracts will be felt during the second half of the year, we believe that Consumer will enjoy a positive trend during the rest of the year.

During the second quarter, business area Tissue achieved sales of SEK 109 m, which was the same as last year. Capacity utilization has improved compared with the preceding quarter, but production was affected by trial runs and the running in of new equipment.

In total, Duni posted an operating income of SEK 90 m, compared with SEK 88 m last year. This represents an operating margin of 9.6% (9.1%). The improvement in income is mainly due to an improved gross margin resulting from the price increases carried out last year, combined with relative stability in raw materials prices.

1 April saw the launch of the new organizational structure which is aimed at creating a clearer focus on the various lines of business and providing improved conditions for growth. During the quarter, the recruitments resulting from the organizational change were also finalized. 

In the coming quarters, the European sovereign debt crisis may have the effect of curbing economic growth. Thus, we anticipate, and are prepared for, continued uncertainty as regards demand on the market”, says Fredrik von Oelreich, President and CEO, Duni.