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Interim Report for Duni AB (publ) 1 January – 31 December 2010

Regulatory press release 16 Feb 2011 08:00
Improved operating margin of 14.8% for the quarter

1 January – 31 December 2010

  • Net sales amounted to SEK 3,971 m (4,220). Adjusted for exchange rate changes, net sales increased by 0.3%.
  • Earnings per share amounted, after dilution, to SEK 6.52 (7.15).
  • The Board proposes a dividend of SEK 3.50 (2.50) per share.

1 October – 31 December 2010

  • Net sales amounted to SEK 1,097 m (1,157). Adjusted for exchange rate changes, net sales increased by 1.6%.
  • Earnings per share amounted, after dilution, to SEK 2.49 (2.79).
  • The operating margin strengthened compared with the preceding year thanks to sound cost control and lower logistics expenses. Increased prices to compensate for higher raw materials costs have also made a positive contribution.

Key financials

12 months
12 months
3 months October -  December 3 months October -  December
SEK m 2010 2009 2010 2009
Net sales 3 971 4 220 1 097 1 157
Operating income 1) 435 436 163 167
Operating margin 1) 10.9% 10.3% 14.8% 14.4%
Income after financial items 418 444 163 166
Net income 306 336 117 131

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

CEO’s comments

“Duni ended the year with a strong quarter. Operating income for the final quarter was SEK 163 m, which at fixed exchange rates represents an improvement compared with last year. The operating margin for the quarter reached 14.8%, compared with 14.4% last year.

It is pleasing to note a significant improvement in earnings during the fourth quarter within the Retail business area. The Christmas season, which is absolutely crucial for the business area, went well. Combined with implemented price increases and sound cost control, an operating income of SEK 33 m (26) was achieved. Retail reports a definitely better operating margin for the full year of 4.6%, which signifies that we almost reached our target of 5%.

Within the Professional business area, volume growth increased during the quarter and reached just over 3%. The growth was generated primarily from Southern and Eastern Europe as well as the UK, where we gain market shares. We are currently increasing our marketing investments in Southern and, to a certain extent, Eastern Europe with the aim to further increase the rate of growth on those markets. Operating income for Professional declined somewhat from SEK 137 m to SEK 124 m, mainly explained by the stronger Swedish krona and higher costs for input materials than previous year.

The Tissue business area has had yet another tough quarter. Sales fell to SEK 109 m (134). The downturn is due primarily to weaker demand from the hygiene products sector and, to a minor extent, due to not completely resumed deliveries following the fire in June at a production plant in Skåpafors, Sweden. Intensified efforts are now made on the sales side and activities have also been put in place to improve productivity and create stability in the processes after the fire. Operating income improved somewhat to SEK 6 m (4). This is partly attributable to insurance compensation relating to the damage from the fire.

Duni improved its operating margin for the full year, from 10.3% to 10.9% despite the significantly higher prices for input materials and a stronger Swedish krona.

Even if there are some clouds on the horizon regarding economic stability in Europe, our assessment is that Duni's main markets will continue to grow in 2011," says Fredrik von Oelreich, President and CEO, Duni.