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7/15/2020 7:45 AM

Interim report for Duni AB (publ) January 1 - June 30, 2020

Substantial initial volume decrease followed by gradual recovery

April 1–June 30

  • Net sales amounted to SEK 820 m (1,348), corresponding to a 39.2% decrease in sales. Adjusted for exchange rate movements, net sales decreased by 39.1%.
  • Earnings per share after dilution amounted to SEK -1.84 (1.41).
  • The volume decrease due to major restrictions and shutdowns in the hotel and restaurant sector in relation to Covid-19 is the main reason for lower income.
  • Sales recovered gradually from a 54% decrease in April to an 18% decrease in June.
  • Operating income gradually improved in the quarter, reaching break-even in June.
  • A powerful cost-cutting program aligned with the volume decrease has an alleviating effect.

January 1–June 30

  • Net sales amounted to SEK 2,069 m (2,612), corresponding to a 20.8% decrease in sales. Adjusted for
    exchange rate movements, net sales decreased by 21.2%.
  • Earnings per share after dilution amounted to SEK -1.41 (2.49).
  • A strong start to the year was reversed for the Duni segment when the Covid-19 restrictions were imposed in March. The BioPak segment’s income was stable.
  • The AGM on May 12 resolved that no dividends would be paid and that the amount at the disposal of the AGM would be carried forward.
  • New segment reporting as of January 1: two segments, Duni and BioPak, instead of the previous four business areas.
 

KEY FINANCIALS

SEK m

3 months
Apr-Jun
2020
3 months
Apr-Jun
2019
6 months
Jan-Jun

2020
6 months
Jan-Jun
2019
12 months
Jul-Jun
2019/2020
12 months
Jan-Dec
2019
Net sales 820 1,348 2,069 2,612 5,004 5,547
Organic growth -40.1% -2.1% -22.6% -0.9% -11.9% -0.5%
Organic pro forma growth 1) -39.4% 1.0% -22.1% 2.1% -9.6% 2.4%
Operating income 2) -92 111 -12 203 317 533
Operating margin 2) -11.2% 8.2% -0.6% 7.8% 6.3% 9.6%
Income after financial items  -120 86 -91 152 133 377
Income after tax -87 67 -65 119 89 273

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 25-26.

 

CEO's comment 

Covid-19 restrictions significantly decreased activity in the restaurant and hotel sector. This caused our sales to decrease by 39%, resulting in a loss for the quarter. As restrictions were eased and the impact of our cost-cutting program kicked in, we saw a gradual improvement in the quarter.

Covid-19 impact on the market

At the start of the second quarter, most countries had very strict Covid-19 restrictions in place, which significantly reduced activity in our key customer segments – hotels and restaurants. At the end of May and in June, the restrictions were gradually eased, and restaurants were allowed to open subject to restrictions such as social distancing and more extensive hygiene practices. The Duni Group’s product categories in retail grocery were also impacted negatively for reasons such as fewer social events but not to the same extent. On the positive side, many restaurants have transitioned to also offering take-away solutions, which caused this market to increase during the quarter.

Gradually improved sales performance in the quarter

Sales improved gradually, from a 54% decrease in April to an 18% decrease in June, largely performing at par with the market as a whole. At the start of the quarter, we saw a major drop in sales in the Duni segment’s hotel and restaurant sector, which gradually improved as restrictions were eased. Duni’s retail sector sales decreased while BioPak segment sales were stable, increasing in take-away but decreasing in eating & drinking.

Despite volatile volumes, we succeeded in maintaining satisfactory delivery capacity and customer service. We also transitioned to digital customer communications and processes to strengthen our market position in spite of travel and meeting restrictions in many countries. Finally, we have an offering that restaurant customers may like even more now. We have focused on the need to create a more hygienic restaurant experience with our various table cover and napkin solutions, and we are also strengthening restaurant offerings with solid take-away product concepts.From an overall perspective, we indicated in our Q1 reports that our Q2 sales were at risk of decreasing by more than half. Thanks to the easing of restrictions and our efforts to drive sales, we slightly outperformed that forecast with a 39% sales decrease at fixed exchange rates.

Cost-cutting program has had a direct effect

Operating income amounted to SEK -92 m (111) and improved gradually during the quarter, reaching break-even in June.

A cost-cutting program was introduced in March to adapt production capacity and spending to lower demand. The program had an immediate impact, cutting costs by SEK 157 m in the second quarter (including government support). As restrictions were eased and our sales and production increased, we began reducing the extent of the cost-cutting program.

Our efforts to ensure good hygiene practices within the company were very effective in the quarter as we did not have any confirmed Covid-19 cases in our organization, which is very good news.

Expected improvement as restrictions continue to be eased

There is great uncertainty concerning the continuing development of the Covid-19 situation and what impact this pandemic will have in both the short and long-term. We are looking ahead with various scenarios and plans, but today we can only hope that the spread of Covid-19 will begin to decline.

The Duni Group’s financial position and liquidity remain sound. Together with a strong organization and an offering well aligned with market needs, I look to the period ahead with confidence.

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For more information, please contact:

Johan Sundelin, President and CEO, +46 (0)40 10 62 00
Mats Lindroth, CFO, +46 (0)40 10 62 00
Helena Haglund, Group Accounting Manager, +46 (0)734 19 63 04

Duni AB (publ)
Box 237
SE-201 22 Malmö

Phone: +46 (0)40 10 62 00

www.duni.com
Company registration number: 556536-7488

 
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Duni Group is a leading supplier of attractive and functional products for table setting and takeaway. The Duni brand name is sold in more than 40 markets and enjoys a number one position in Central and Northern Europe. Duni Group has around 2,400 employees in 24 countries, its headquarters in Malmö and production units in Sweden, Germany, Poland, New Zealand and Thailand. Duni Group 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 am CET on July 15, 2020.