Interim Report January 1 – June 30, 2024

April 1 – June 30

• Net sales amounted to SEK 1,875 m (1,936), corresponding to a 3.1% decrease in sales. At fixed exchange rates, net sales decreased by 4.2%.
• The gross profit amounted to SEK 453 m (440), an improvement due to high production efficiency and focus on profitable customer contracts.
• Operating income amounted to SEK 135 m (170).
• The comparative period was exceptionally strong after eased restrictions and, in addition, an extraordinary gov- ernment electricity subsidy received of SEK 20 million.
• Continued low net debt and a strong financial position.
• Innovative and sustainable launches in cooperation with Liplid and Notpla. Bagass products were recognized at the Environmental Packaging Award.

 1) For reconciliation of alternative key financials, definition of key financials and glossary, see pages 27-28.
 

Stable quarter meets particularly high comparative figures

Although exceptionally high comparative figures, net sales and profit are the next best in a second quarter in the history of the Company. The comparative period included positive effects on virtually all markets after lessening of the COVID-19 pandemic restrictions, and a govern- ment electricity subsidy of SEK 20 m.

The general demand to eat and drink outside the home is still strong, but high interest rates and high costs are restraining consumption. The Group’s net sales decreased by SEK 60 m to SEK 1,875 m (1,936). At fixed exchange rates, this corresponds to a 4.2% decrease. The decrease can be explained by the reduced consumption, which in turn has affected the majority of our markets and customer segments. Additionally, we are facing particularly high comparison figures following the end of the pandemic restrictions, which had significant impacts on all product catego- ries and markets. Consequently, the first half of 2023 was exceptionally strong. Finally, selective price decreases have had an negative impact on revenue compared to the same period last year, with the purpose of maintaining relevance in price-sensi- tive customer segments. We saw reduced demand, particularly in Germany, but a more positive development in Poland and some of the Nordic countries.

Net sales and profit are the next best in a second quarter in the history of the Company. Also, for the comparative period, a non-recurring item of SEK 20 m in government electricity subsi- dies was included. Operating income amounted to SEK 135 m (170), with an operating margin of 7.2% (8.8%). The past three years have shown significant volatility in our cost components such as pulp and sea freight. After reaching historically high levels at the end of 2022, they fell back during the first half of 2023, only to rise again over the past two to three quarters. Consequently, we are once again seeing increasing costs for these components, and it is crucial that we can respond quickly to customers during both upturns and downturns. Although challenges in the phasing of price and cost, gross margin has increased from 22.7 % till 24.1 %. High production efficiency, focus on profitable contracts, as well as termination of certain volume contracts, have resulted in a better product portfolio mix. In addition, measures taken for the inventory situation in Europe have contributed positively to the gross margin.

Napkins drive sales in Dining Solutions
Net sales for the quarter decreased by SEK 78 m and amounted to SEK 1,069 m (1,148). At fixed exchange rates, this corresponded to a decrease in sales of 8.5%. Sales remained strong in the Group’s largest product category, napkins, while they decreased in table covers and traditional candles. The focus in the business operations has been to strengthen the gross margin, and this is why we have terminated certain volume contracts, which has resulted in a better mix in our portfolio. At the same time, the increasing prices of pulp had a negative impact on the business area’s operating income and operating margin. Operating income in the quarter amounted to SEK 93 m (134), and the operating margin was 8.7% (11.6%).

Improved margin in Food Packaging Solutions
Net sales for the quarter increased by SEK 18 m and amounted to SEK 806 m (788). At fixed exchange rates, this corresponds to a sales increase of 2.1%, which is mainly driven by increased demand for environmentally sound products. Sales growth is driven in general by the demand for environmentally adapted products. Volumes in the Pacific region remain positive, while increasing costs for sea freight and warehousing in the region had a negative impact on the business area’s operating income and operating margin. The improvement in the operating margin should be seen against the backdrop of a strong recovery in the margin in Europe, driven by measures to achieve more efficient warehousing and lower product costs. Operating income in the quarter amounted to SEK 42 m (36), and the operating margin was 5.1% (4.6%).

Strong market position
The quarter also included several major events – with an impact on us and on society at large. Taylor Swift’s concerts in Stockholm, Sweden Rock and the European Football Championships in Germany all used innovative products from Duni Group during the second quarter. The driving force behind this is the ambition of artists and organizers to create sustainable and circular events. This is a development that we have seen emerge, especially in recent years. We see here that our market position and our investments in sustainable offerings give us increasing relevance and competitive advantage. Based on this, and together with a strong financial position that gives us room to maneu- ver, we look forward with interest to a lively autumn!

Robert Dackeskog,
President and CEO,
Duni Group.

For additional information, please contact:
Magnus Carlsson, EVP Finance/CFO
+46 (0)40-10 62 00
magnus.carlsson@duni.com
Katja Margell, IR and Communications Director,
+46 (0)76-819 83 26
katja.margell@duni.com

Duni AB (publ) Box 237
201 22 Malmö

Phone: +46 (0)40-10 62 00
www.dunigroup.com
Company registration number: 556536-7488
 

Duni Group is a market leader in attractive, environmentally sound and functional products for table setting and take-away. The Group markets and sells two brands, Duni and BioPak, which are repre- sented in more than 40 markets. Duni has around 2,400 employees spread out across 22 countries, with its headquarters in Malmö and production sites in Sweden, Germany, Poland 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, on July 12, 2024 at 14:00 CET.