Year-end report for Duni AB (publ) January 1 – December 31, 2021

Growth with margins under pressure

October 1 - December 31

• Net sales amounted to SEK 1,552 m (1,181), corresponding to a 31.4% increase in sales. Adjusted for exchange rate movements, net sales increased by 33.6%.
• Strong growth towards a weak fourth quarter of 2020.
• Earnings per share after dilution amounted to SEK 0.18 (0.73).
• New restrictions and pressure on margins from sharp increases in raw material and logistics costs affected the quarter.

January 1 – December 31

• Net sales amounted to SEK 5,061 m (4,501), corresponding to a 12.4% increase in sales. Adjusted for exchange rate movements, net sales increased by 14.4%.
• Earnings per share after dilution amounted to SEK 1.62 (0.05).
• The year has been clearly affected by restrictions, with high volatility between the quarters.
• BioPak business area with strong sales growth. Duni business area with good growth compared to 2020, but not yet at the same levels as before the pandemic. 

KEY FINANCIALS

SEK m	3 months Oct-Dec 2021	3 months Oct-Dec 2020	12 months Jan-Dec 2021	12 months Jan-Dec 2020
Net sales	1,552	1,181	5,061	4,501
Organic growth	31.5%	-21.3%	14.4%	-18.7%
Operating income 1)	110	51	279	149
Operating margin 1)	7.1%	4.3%	5.5%	3.3%
Income after financial items	43	47	133	7
Income after tax	9	35	77	4

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

CEO's comment

Continued clear correlation between restrictions and sales

Restrictions returned in the fourth quarter

After the restrictions in Europe had eased in the third quarter, we probably believed that a more normalized existence could be expected. But when the Omicron variant established itself during the fall, new restrictions were introduced in most of our markets, which once again affected hotels, restaurants and the tourism industry. In Austria, for example, this meant a 12-day lockdown in December. As previously during the pandemic, regulated opening hours and lockdowns in the fourth quarter had a direct, negative impact on our sales of napkins and table covers. During the pandemic, we identified a clear correlation between restrictions and reduced sales, primarily to hotels and restaurants. At the same time, we have learned that the need to socialize over food and drink is strong and, as restrictions are eased, demand increases rapidly. 

Group sales for the quarter amounted to SEK 1,552 m (1,181). At fixed exchange rates, this corresponds to a sales increase of 33.6%. The Duni business area was affected by another quarter of restrictions being reimposed. Nevertheless, sales increased by 36.9% compared with the fourth quarter of 2020. The BioPak business area continues to benefit from the growing market for take-away in both Europe and the rest of the world, and increased sales by 29.2%. 

Cost pressure on raw materials and sea freight

As in the previous quarter, the accelerating cost increases in most raw material components present both short-term and long-term challenges, with pressure on margins in this quarter as well. Price adjustments that were announced will be gradually implemented during the first quarter of 2022, thereby mitigating the effect of the cost increases going forward, although as always with some delay.

The continued shortage of containers from Asia presents challenges with long delivery times. During the quarter, we therefore decided to increase inventory levels for the most in-demand products in order to meet customer needs. This applies primarily to fiber-based products such as our salad bowls made of bagasse, a residual material from sugar cane extraction. We can thus see that we are well-positioned to meet increased demand in the coming quarters.

The Group’s operating income for the quarter amounted to SEK 110 m (51). The Duni business area increased operating income to SEK 84 m (1). The higher sales compared with the previous year provides strong operational leverage that contributes to the improvement in income. The BioPak business area’s operating income was SEK 26 m (49), which is mainly due to increased freight and energy costs, which are putting pressure on margins in the short term.

2021 – A roller coaster on the journey to a more sustainable future

Despite the continued progress of the pandemic throughout 2021, with periodic drops in demand and effects on sales, it was an active year within the Group. The transition to fossil-free biogas in the paper mill, the launch of fossil-free premium napkins and table covers, and collaboration with start-ups focused on the reuse of take-away solutions are just a few examples. During the fourth quarter, we were also pleased to receive a gold award from EcoVadis, which highlights the Group’s strong work on sustainability.

During the quarter, we updated our strategy, “Our Decade of Action”, and developed a clear purpose and vision for 2030 that will pervade all parts of the business in the coming years. We have also defined three sustainability goals – “circular at scale”, “going net zero” and “living the change” – which will result in our becoming completely circular with a net zero carbon footprint.

I can summarize my first year as President and CEO as having been both eventful and instructive. Despite the pandemic, we were able to grow by 14.4%, at fixed exchange rates, in 2021 and thus increased net sales by just over SEK 500 m. Operating income increased by SEK 130 m to SEK 279 m, but we still have some way to go to achieve the same levels as before the pandemic. The positive signals we see in the market when the restrictions are eased, combined with the positive energy in the organization, make me optimistic ahead of 2022.

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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)
Box 237
SE-201 22 Malmö
Phone: +46 (0)40 10 62 00

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

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The 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 represented in more than 40 markets. Duni has around 2,200 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 am CET on February 17, 2022