Interim Report for Duni AB (publ) 1 January - 31 March 2011

Interim Report for Duni AB (publ) 1 January - 31 March 2011

Increased market investments for growth

1 January - 31 March 2011

  · Net sales amounted to SEK 867 m (960). Adjusted for exchange rate
changes, net sales decreased by 3.1%.
  · Earnings per share amounted, after dilution, to SEK 0.86 (1.09).
  · Operating income has been affected by increased market investments.

Key financials

                              3 months         3 months         12
months       12 months
                              January - March  January - March   April -
March  January -December
SEK m                         2011             2010            
2010/2011       2010
Net sales                     867              960              3 877   
       3 971
Operating income 1)           67               77               425     
       435
Operating margin 1)           7.8%             8.1%             10.9%   
       10.9%
Income after financial items  55               66               408     
       418
Net income                    41               51               296     
       306

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

CEO's comments

“The result for the first quarter fell slightly short of our objectives
in terms of sales and profitability. Sales fell by almost 10% compared
with last year, largely due to the stronger Swedish krona; however,
sales were 3% lower also when measured at fixed exchange rates.

It is primarily the Tissue business area which has performed weakly,
with lower deliveries to the hygiene products sector and weaker sales
generally in the wake of the fire at one of the paper mills in June last
year. Nevertheless, capacity utilization has been at a high level when
internal deliveries are included. Earnings within Tissue have improved
thanks to higher productivity combined with price increases.

The Retail business area has experienced weaker sales as a consequence
of lower private label volumes. In addition, we lost certain volumes in
the Nordic region and in Germany. On the other hand, we have
successfully defended our market shares on the premium range and are
witnessing a continued improvement in the product mix. All in all, we
are largely maintaining profitability within Retail when measured at
fixed exchange rates.

In our main area, Professional, sales increased by almost 3% at fixed
exchange rates. Taking into consideration the price increases carried
out last year, this means that volumes are largely unchanged. Even if we
see a positive trend on certain markets, such as Sweden and our growth
markets, the HoReCa market in Germany has not performed as well as the
economy in general. Operating income within Professional decreased as a
consequence of the somewhat weaker volume development in mature markets,
and partly due to the increased investments we are making to stimulate
growth on prioritized markets. We also note that the prices of traded
goods increased during the quarter, and we estimate that our most
important input materials will continue to experience inflationary
pressure.

In total, Duni's operating income for the quarter, measured at fixed
exchange rates, fell by SEK 3 m, to SEK 74 (77) m. This corresponds to
an operating margin of 8.0%, compared with 8.1% last year.

Our expectation for the full year is that the recovery on the HoReCa
market will continue in most parts of Europe, which will create
conditions for volume growth. As a consequence of the trend of
increasing costs for traded goods and input materials, it may become
necessary to increase our own prices,” says Fredrik von Oelreich,
President and CEO, Duni.

 

Fredrik von Oelreich, 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