2/12/2021 7:45 AM
Recovery stopped by new restrictions
|Organic pro forma growth 1)||-21.3%||1.8%||-18.4%||2.4%|
|Operating income 2)||51||199||149||533|
|Operating margin 2)||4.3%||12.8%||3.3%||9.6%|
|Income after financial items||47||118||7||377|
|Income after tax||35||73||4||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 27-28.
As previously announced, the Duni Group’s sales and operating income were heavily impacted by stricter restrictions to slow down the spread of Covid-19. Sales decreased in the quarter by 21.8% at fixed exchange rates, and operating income amounted to SEK 51 m (199).
At the start of the fourth quarter, the global Covid-19 infection rate accelerated and the pandemic entered a second wave. The restrictions in our key European markets increased rapidly, and Duni’s primary sectors, hotels and restaurants, were almost all completely closed or running very limited operations during the quarter.
Sales for the quarter decreased overall by 21.8%, totaling SEK 1,181 m (1,558). This decline impacted Duni Group’s business differently. The Duni segment, which focuses on the set table in sectors including hotels and restaurants, lost 36.4% of its sales from the year before. The BioPak segment, which focuses on take-away solutions, increased it sales by 12.3% year-on-year. The lower sales have a direct impact on operating income, which amounted to SEK 51 m (199) for the quarter.
Sales for the full year 2020 were down 17.7% at fixed exchange rates, totaling SEK 4,501 m (5,547), with the Duni segment losing 30.5% of its annual revenue and the BioPak segment increasing its annual sales by 10.5%.
Back in the early spring, the Duni Group launched a Covid-19-related cost-cutting program to adapt production capacity and costs to lower demand. Overall, we cut costs, including government assistance, by approximately SEK 270 m. The program also included risk controls for items associated with volatility in demand, inventories and accounts receivable. As a result, these activities helped lower net debt, which decreased during the year to SEK 1,324 m (1,546).
As a result of the restrictions, restaurants have had to transition from table service to take-away solutions. This transition is the reason why global demand for take-away products is on the rise. The shortage of container capacity from Asia has been a challenge in the latter part of the year. This has resulted in both longer delivery times and higher logistics costs for the Asia-produced part of our take-away product range, for both Europe and Australia.
In addition to take-away items, we see, in general, a clear increase in demand for environmentally-sound products and products that create a more hygienic restaurant experience. We also see demand in the grocery sector, which offers serving products for home use, remaining relatively stable.
At the start of 2020, we completed a reorganization process in which Duni and BioPak formed two market segments. In the fourth quarter, we took another step by rationalizing Duni and BioPak into Business Areas with responsibility for their entire value chains effective January 1, 2021. The reason for this change is to strengthen both ownership and strategic growth in each customer segment.
Although uncertainty regarding the pandemic is high and it's difficult to predict when we will return to a more normal situation at this time, I look to the future with great confidence. What we have learned during the year is that we still have a need to spend time together, eat good food and travel, and the Duni Group’s readiness to meet an increase in demand once the restrictions are eased is better than ever. For now, cost controls, risk minimization and, most of all, focus on helping our customers are at the top of our agenda.
Being back with the Duni Group and getting to lead this company that is so dear to me is both inspiring and gratifying but also a challenge. The past year has put pressure on our customers, placed high demands on our employees and forced us to make many difficult decisions. Uncertainty remains very high as the restrictions, intended to slow down Covid-19 infection rates, are still significant in most of our key markets. I now hope to see a normalization that will allow me to help to continue Duni Group’s historically solid growth,” says Robert Dackeskog, President and CEO, Duni Group.
For more information, please contact:
Robert Dackeskog, President and CEO, +46 (0)40 10 62 00
Magnus Carlsson, CFO, +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 (0)40 10 62 00
Company registration number: 556536-7488