Duni Ab · OMXSTO:DUNI
Duni Ab — Q1 2008 Earnings Presentation
29 slides from Duni Ab's earnings presentation, April 2008
Slide 1: Q1 2008 Presentation
Q1 2008 Presentation www.duni.com 1
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Duni AB (the “Company”) solely for use at this investor presentation and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. By attending the meeting where this prese
Slide 3: Duni enhances atmosphere and brings convenience
“Duni enhances atmosphere and brings convenience to any eating and drinking occasion by providing inspiring and innovative products and concepts” 3
Slide 4: Contents
Contents 2008 Q1 highlights Market dynamics Business areas Financials 4
Slide 5: 2008 Q1 Highlights
2008 Q1 Highlights • Net sales increased with 5% to SEK 969m • Operating profit amounted to SEK 86m (78) • Operating margin amounted to 8.9% (8.5%) • Professional continues to drive group revenues and earnings - Solid growth in Germany - Double digit growth in Southern region • Retail’s net sales im
Slide 6: Share Price Development
Share Price Development Share price per 24/04/08 Ownership structure per 31/03/08 Name # of shares % Duni Holding AB, EQT Partners AB 18 258 644 38,85% Mellby Gård Investerings AB 11 404 500 24,27% SEB Investment Management 3 095 187 6,59% Livförsäkringsaktiebolaget 1 157 800 2,46% Cominvest 1 104 9
Slide 7: Duni – the European Market Leader for Table Top Solutions
Duni – the European Market Leader for Table Top Solutions Duni Duni Key Key financials financials Table Top Full year 2007 Tissue 13% ∙ Sales: SEK 4.0 billion (+5.9%) Professional Retail 67% 20% ∙ EBIT: SEK 394 million (277) ∙ EBIT margin: 9.9% (8.7%) ¹ Manufactured Q1 2008 Napkins Plates Table cove
Slide 8: Attractive and Large Addressable Market
Attractive and Large Addressable Market European European disposable disposable table table top top market market European European airlaid airlaid market market Eating and drinking supplements Focus areas for Duni Other 10% 12% Napkins 30% Hygiene wipes 10% Food packaging 21% Table top 14% Feminine
Slide 9: The European Market Leader – Above 2x Relative Market Share
The European Market Leader – Above 2x Relative Market Share #1 #1 in in European European Table Table Top Top Premium Premium positioning positioning Market shares 19% 8% 8% 8% 5% 4% 3% 300 Linen1) 250 -2006 tissue table top sales (MEUR) 200 Duni Premium Tissuebased products 150 Karto Papstar SCA 10
Slide 10: 2008 Market Outlook
2008 Market Outlook HORECA market growing in line or slightly above GDP • Positive eating out trend • Continued strong growth in take-away sector Retail growth in line with GDP • Private label stagnating Raw material prices and costs of certain traded goods continue to increase • Pulp • Energy Chang
Slide 11: Business Areas
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Slide 12: Professional – Solid Performance
Professional – Solid Performance Sales Sales and and EBIT EBIT 11 Geographical Geographical split split –– sales sales Q1 Q1 2008 2008 MSEK 3,000 14% Net Sales - Professional Q1 2008 Q1 2007 Growth 12% Nordic region 152 151 1% 2,500 Central Europe 372 352 6% 10% Southern & Eastern Europe 98 88 11% 2
Slide 13: Professional - Unique Way to Market
Professional - Unique Way to Market Duni Duni Professional’s Professional’s market market model model Benefits Benefits of of market market model model ∙ ~250 sales reps and KAMs with approx. End Customers 250,000 customer visits per year ∙ Effectively acts as a barrier to entry Direct Sales Feedbac
Slide 14: Professional - Key Activities 2008
Professional - Key Activities 2008 Price increases implemented New Products driving growth • New premium range: Elegance, DuniSilk+, Duniletto • Eating & Drinking: Biodegradable range, Shatterproof • Duni FoodSolutions: New sealing machine, New salad box Commercial Excellence • Implement Duni route-
Slide 15: Retail – Turnaround
Retail – Turnaround Sales Sales and and EBIT EBIT 11 Geographical Geographical split split –– sales sales Q1 Q1 2008 2008 MSEK 900 -+6% Net Sales - Retail Q1 2008 Q1 2007 Growth -+4% 850 Nordic region 35 34 3% Central Europe 155 159 -3% +2% Southern & Eastern Europe 3 2 50% 800 Rest of the World 0 0
Slide 16: Retail – Key Success Factors
Retail – Key Success Factors The The Brand Brand // private private label label pendulum pendulum Duni Duni opportunity opportunity Brands are being re-introduced in retail stores Non-food category is a key growth Today driver for retailers Table top of particular importance Branded: 50/50 Pri
Slide 17: Retail - Key Activities 2008
Retail - Key Activities 2008 Price increases implemented Commercial Excellence • Nordic momentum: ICA, Coop SE, Norgesgruppen, Axfood • Extend Category Management in Germany. Real & Markhauf • UK business regain: Restructuring, Brand & Premium focus • Centralized marketing including assortment manag
Slide 18: Category Management
Category Management — ys se ica:
Slide 19: Tissue
Tissue Sales Sales and and EBIT EBIT 11 Sales Sales mix mix Q1 Q1 2008 2008 MSEK 650 14% 12% 600 Internal 10% 47% 550 External 53% 8% 500 6% 450 4% 400 2% Tissue Tissue in-house in-house provides provides competitive competitive 350 0% LTM advantage advantage 2005 2006 2007 Sales EBIT margin Strong
Slide 20: Tissue - Key Activities 2008
Tissue - Key Activities 2008 Cost Reduction • Increased efficiency • Reduce energy consumption/ton • Procurement initiatives Increase output supported with limited investments Sales Growth Tissue • Package solutions with airlaid, new customers Airlaid • Extend customer base • Increased prices R & D
Slide 21: Financials
Financials 21
Slide 22: Momentum in Top-Line Growth
Momentum in Top-Line Growth LTM LTM Sales Sales Sales Sales growth growth MSEK MSEK 2006 2007 Q1 2007 Q1 2008 4 050 1 150 4 000 1 100 Professional 5.7% 6.3% 6.4% 5.3% 1 050 3 950 Retail -6.2% 4.2% 19.5% -1.3% 1 000 3 900 950 Tissue 4.5% 6.9% 5.6% 12.7% 3 850 900 Total 2.9% 5.9% 8.8% 5.0% 3 800 850 Q
Slide 23: Margin Expansion
Margin Expansion Operating Operating profit profit (MSEK) (MSEK) Operating Operating margin margin MSEK 2006 2007 Q1 2007 Q1 2008 400 10% 9% 350 Professional 11.7% 12.9% 10.5% 10.9% 8% 300 -7% Retail -0.9% 0.6% 1.4% 2.0% 250 6% 200 5% Tissue 8.5% 8.9% 9.7% 9.6% 4% 150 Non- 3% recurring -1.3% 0.0% 0.
Slide 24: Limited Sensitivity to Major Input Materials
Limited Sensitivity to Major Input Materials COGS COGS breakdown breakdown (approximate) (approximate) Sensitivity Sensitivity analysis analysis 100% Energy, 4% Δ EBIT impact 90% Pulp, 12% 80% Freight & ∙ Energy 1% SEK 1 million warehouse cost, 70% 16% 60% Traded goods, 21% ∙ Pulp 1% SEK 4 million 5
Slide 25: Income Statement
Income Statement 2005 2006 2007 LTM Net sales 3,656 3,762 3,985 4,030 Cost of goods sold -2,829 -2,812 -2,948 -2,966 Gross profit 827 950 1,037 1,064 Gross margin 22.6% 25.3% 26.0% 26.4% Selling expenses -510 -459 -446 -456 Adminstrative expenses -185 -219 -208 -208 Research and development expenses
Slide 26: Balance Sheet
Balance Sheet (SEK in millions) 31/03/2008 31/03/2008 Intangible assets 1,231 Shareholders’ equity 1,449 Tangible assets 432 Interest bearing debt 1,042 Financial fixed assets 389 Pension liabilities 200 Inventory 556 Other long term liabilities 20 Accounts receivable 520 Accounts payable 295 Other
Slide 27: Simplified Cash Flow Profile
Simplified Cash Flow Profile (SEK million) 2006 2007 Q1 2007 Q1 2008 Operating profit 277 393 78 86 Depreciation 82 89 21 25 Change in operating working capital1) -32 20 -89 -42 Inventory 26 -24 -58 -58 Accounts receivable 8 14 -21 20 Accounts payable -66 30 -10 -4 Other operating working capital -7
Slide 28: Financial Targets
Financial Targets LTM ∙ Organic growth of 5% over a business cycle 5.1% Sales Sales growth growth >> 5% 5% ∙ Consider acquisitions to reach new markets or to - strengthen current market positions ∙ Top-line growth EBIT 10.0% EBIT margin margin >> 10% 10% ∙ Improvements in manufacturing and sourcing
Slide 29: Duni – Investment Opportunity
Duni – Investment Opportunity Focused – centered on the European professional segment, which has always been profitable Unique business model – based on strong sales force that enables growth and premium pricing Return driven – strong cash flow, organic growth and add-on opportunities create the pot