10/22/2020 7:45 AM
Interim Report for Duni AB (publ) January 1–September 30, 2020
|SEK m||3 months
|Organic pro forma growth 1)||-7.9%||3.1%||-17.3%||2.4%||-12.3%||2.4%|
|Operating income 2)||110||130||98||334||297||533|
|Operating margin 2)||8.8%||9.5%||3.0%||8.4%||6.1%||9.6%|
|Income after financial items||69||106||-40||258||79||377|
|Income after tax||48||81||-31||200||42||273|
1) Currency-adjusted growth including acquisitions, which are compared with the previous year’s pro forma figures.
2) For key financials, definitions and reconciliation of alternative key financials, see pages 26-27.
The negative impact of Covid-19 decreased in the third quarter of the year. Combined with the actions taken, this resulted in a significant improvement in Duni Group’s operating income compared with the second quarter.
The social restrictions related to Covid-19, which were imposed by authorities across the world in mid-March, led to an almost total shutdown of hotel and restaurant business in most of Duni’s markets. This had a strong negative impact on the Duni Group’s sales and income, especially in the napkin and table cover product groups where we are vertically integrated. This shutdown lasted until mid-May, after which the restrictions were eased somewhat, resulting in increased demand. In spite of the recovery and an extensive cost-cutting program totaling SEK 157 m, the Duni Group’s sales decreased by 39% and operating income fell to SEK -92 m in Q2.
The recovery that began in the second quarter continued into the third. The social restrictions continue to have a negative impact on the Duni Group but to a significantly lesser extent than in the second quarter. Increased restaurant demand for table top products that contribute to a better hygiene have also had a positive impact on sales. Nevertheless, napkin and table cover sales still remain at a significantly lower level in historical terms, but cost absorption in production for the quarter is at a satisfactory level due in part to increased external sales from our paper mill. The BioPak segment performed well in terms of sales and income.
The cost-cutting program initiated to alleviate the negative impact of Covid-19 continued to have a positive impact on income during the quarter. Given that production capacity utilization was higher in the third quarter, the impact of short-time work was lower than in the second quarter. The cost-cutting program’s impact on income in the quarter amounted to approximately SEK 60 m.
The impact of increased sales in both the Duni segment and the BioPak segment along with the cost-cutting program led to an operating income increase from the second quarter by more than SEK 200 m to SEK 110 m (130). The Group’s financial position improved, with SEK 1,538 m in net debt, which is down SEK 262 m year-on-year.
Restrictions due to Covid-19 have a significant impact on the Duni Group’s sales. Therefore, the level of uncertainty heading into the fourth quarter is high. However, it is encouraging to see that, despite continued social restrictions, we have achieved a strong improvement in income with timely measures from our organization. Therefore, in spite of the continued uncertainty, we look to the future with confidence.
For more information, please contact:
Mats Lindroth, acting President and CEO, +46 (0)40-10 62 00
Helena Haglund, Group Accounting Manager, +46 (0)734 19 63 04
Duni AB (publ)
SE-201 22 Malmö
Phone: +46 (40)10 62 00
Company registration number: 556536-7488
Duni Group is a market leader in attractive, sustainable and convenient products for table setting and take-away. The Group markets and sells two brands, Duni and BioPak, which are represented in more than 40 markets. Duni has around 2,400 employees in 24 countries, its headquarters in Malmö and production units in Sweden, Germany, Poland, New Zealand and Thailand. Duni is listed on the NASDAQ Stockholm under the ticker name “DUNI”. Its ISIN code is SE0000616716. This information is information that Duni AB is obligated to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:45 CET on October 22, 2020.