Interim report for Duni AB (publ) 1 January – 31 December 2008 ...

measures relate, primarily, to production
optimization between the German and Polish
conversion plants. Duni estimates that these
restructuring costs will lead to annual savings of
approximately SEK 50 m. These will have a
gradual effect in 2009, with the full impact
during the second half of the year.
Other operating costs include a non-realized
valuation effect of electricity and currency
derivatives of SEK 39 m (3) for the period
1 October – 31 December.
Excluding both the effect of restructuring
costs and non-realized valuation effects of
derivatives, operating income would have
amounted to SEK 145 m (148). For further
information, see Note 6.
Business area reporting
Duni's operations are divided into three business
areas.
The Professional business area (sales to hotels,
restaurants and catering companies) accounted
for 68% of Duni's net sales during the period
1 January – 31 December 2008.
The Retail business area, primarily focused on
sales to the retail trade, accounted for 19% of
net sales during the period.
The Tissue business area (production of soft
paper for table-top products and hygiene
articles) accounted for 13% of sales to external
customers during the period.
The Professional and Retail business areas
have, to a large extent, a common product range.
Design and packaging solutions are, however,
adapted to suit different sales channels.
Production and support functions are shared to
a large degree by the business areas. Duni has
chosen to report the results for the business
areas on an EBIT-level, after allocation of
common costs, excluding non-recurring items,
over the respective business areas.
Professional business area
Net sales increased by 4.9% to SEK 2,771 m
(2,641) for the period 1 January – 31 December.
With unchanged exchange rates from the
preceding year, the net sales for the year would
have been SEK 66 m lower.
Professional thereby accounted for the
Group's entire growth. This, combined with an
improved product mix and Duni's success in
offsetting increased raw materials costs by
means of price increases, led to an improved
operating margin. An increased share of net sales
of premium products has been achieved through
a successful product range development which
includes a number of new products and
concepts launched during the year.
Operating income increased to SEK 368 m
(342). The operating margin was 13.3% (12.9%).
Net sales for the period 1 October –
31 December increased by 4.4% to SEK 753 m
(721). Operating income increased to SEK 122
m (113), with an operating margin of 16.2%
(15.5%). See also Note 5.
Retail business area
Net sales declined by SEK 23 m to SEK 777 m
(800) for the period 1 January – 31 December
2008. With unchanged exchange rates from the
preceding year, net sales for the year would have
been SEK 17 m lower. Operating income
increased to SEK 11 m (5). The operating
margin was 1.5% (0.6%).
Within Retail, the trend of weaker sales
compared with the corresponding period of last
year is continuing. However, thanks to a
strengthened gross margin, profitability
improved somewhat. In the Nordic region, Duni
has lost some of the listings at several major
customers, but as regards both the quarter and
the full year the Nordic region's result clearly
improved thanks to a focus on more profitable
customers and improved mix combined with
necessary price increases. The German market
has developed well during the year and Duni's
new category setup has been successful.
Net sales for the period 1 October –
31 December were SEK 261 m (268). Operating
income increased from SEK 20 m to SEK 21 m
and the operating margin was 8.1% (7.5%). See
also Note 5.
Tissue business area
Net sales increased by 1.3% to SEK 551 m (544)
for the period 1 January - 31 December 2008.
Operating income declined to SEK 35 m (49).
The operating margin was 6.3% (9.0%). It is
primarily higher energy prices which explain the
lower result compared to last year.
Net sales for the period 1 October –
31 December were SEK 131 m (135). The
operating income was SEK 2 m (13) and the
operating margin was 1.3% (9.6%). In the
quarter, sales of high-quality soft paper, so-called
airlaid, have developed weaker than expected. As
a consequence, we have been forced to adapt
production, which is the main reason for the
weaker result for the business area during the
quarter. Sales of standard soft paper have
increased, but these products account for only a
small portion of external deliveries. Volumes of
3 2