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Interim Report for Duni AB (publ) 1 January – 30 September 2011

Regulatory press release 26 Oct 2011 08:00
Stable development and strong cash flow

1 January – 30 September 2011

  • Net sales amounted to SEK 2,744 m (2,873). Adjusted for exchange rate changes, net sales decreased by 0.4%.
  • Earnings per share amounted, after dilution, to SEK 3.46 (4.02).

1 July – 30 September 2011

  • Net sales amounted to SEK 917 m (943). Adjusted for exchange rate changes, net sales decreased by 1.6%.
  • Earnings per share amounted, after dilution, to SEK 1.34 (1.54).
  • Continued sales increase within Professional.

Key financials

months July-September
months July-September
12 months
SEK m201120102011201010/112010
Net sales2 7442 8739179433 8423 971
Operating income 1)25327298103416435
Operating margin 1)9.2%9.5%10.7%11.0%10.8%10,9%
Income after financial items2242559099387418
Net income1631896372280306

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

CEO’s comments

"Duni's sales at fixed exchange rates fell by 1.6% during the third quarter. This is attributable entirely to weak sales growth within Retail and Tissue. As regards Retail, this is due to the impact following the loss of most of the business with a major private label customer. Within Tissue, sales to the hygiene products sector weakened, while internal deliveries increased somewhat. Thanks to satisfactory capacity utilization combined with higher productivity, Tissue is reporting an improvement in income for the quarter.

In the Professional business area, sales increased by 3.7% at fixed exchange rates, equal to a volume increase of approximately 1%. Sales on certain mature main markets were somewhat weaker than in the second quarter, but it is too early to draw any conclusions as to whether this is due to a generally weaker market or a phasing of orders. The focus on prioritized markets in eastern and southern Europe is creating continued solid growth, but increased sales and marketing expenses are affecting income.

In the quarter, Duni achieved an operating income of SEK 98 m and a stable operating margin of 10.7%. The SEK 5 m reduction in income was largely a consequence of weaker sales within Retail and the investments which are being made within Professional.

Cash flow has developed positively compared with last year, thanks to stable profitability combined with sound control of working capital. The capital expenditure level has been high, primarily due to investments in new technology for the production of new materials which, according to plan, are to be launched during the first quarter 2012.

We are now entering Duni's seasonally strongest quarter. The price increases that were gradually implemented during the third quarter are expected to have full impact in the fourth quarter. However, uncertainty concerning market conditions has increased since the summer. In the current situation, it is a question of carefully monitoring developments and being ready to take measures in the event we perceive a clear downturn in demand," says Fredrik von Oelreich, President and CEO, Duni.