Year-end Report for Duni AB (publ) January 1 - December 31 2019 - Seite 3

³⁾ For the impact of IFRS 16 Leases as of January 1, 2019, see Note 1.

 

CEO's comments

2019 operating income improved by SEK 103 m

"The Group's new strategy, margin program and falling pulp prices have been three of the greatest positive factors driving the gradual improvement in operating income over each quarter in 2019. The single biggest negative impact on earnings has been increased logistics costs. When summarizing the year, operating income improved by SEK 103 m. We also exhibited pro forma growth of over 2.4% driven by the strong sales performance of sustainable packaging. We are now entering 2020 with a strong confidence in our strategy and our business plans.

Strong increase in operating income for Q4

Operating income for Q4 increased by SEK 62 m to SEK 199 m (137). This resulted in an operating margin of 12.8% (9.4%). The main reasons for this improved income are cost-cutting activities and the continuing decline of pulp prices. In addition, income was impacted negatively by rising logistics costs and weak income in Singapore and New Zealand.

Operating cash flow was record-high for both the full year and the quarter, totaling SEK 665 m and SEK 369 m respectively. The reasons for this strong cash flow are the improvement in EBIT, limited investments and activities to improve inventories and working capital. This cash flow improved the Group's financial position during the year with the net debt (excluding lease liability) decreasing from SEK 1,490 m in December 2018 to SEK 1,354 m in December 2019.

Sustainable packaging now growing at over 30%

Organic pro forma growth for the quarter amounted to 1.8%. Sustainable packaging solutions in the take-away market remains the largest growth driver with growth at over 30%. This product segment now accounts for approximately SEK 1 000 m in net sales. The acquisitions of BioPak in Australia/New Zealand, Biopac in the UK and Horizons Supply continued to perform well in this segment. Sales of plastic articles and table covers continue to decline.

Change in income reporting for 2020

This final report of income by business area in the current reporting structure shows that all four business areas saw improved income in the quarter. Sales development varies more. New Markets is experiencing strong growth, Meal Service is growing, Table Top is exhibiting stable sales growth while Consumer is on the decline.