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