Duni Ab · OMXSTO:DUNI
Duni Ab — FY2007 Earnings Presentation
40 slides from Duni Ab's earnings presentation, Feb 20, 2008
Slide 1: Year-end report 2007
Year-end report 2007 20 FEBRUARY 2008 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 mission statement
“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 • 2007 highlights • Quarter 4 highlights • Duni in brief • 2008 market outlook • Professional • Retail • Tissue • Financial review 4
Slide 5: 2007 Highlights
2007 Highlights The sale of the flight catering business, deSter, was completed in March Continued high growth within Professional • Double digit growth in Southern and Eastern Europe • Sales within the take-away segment developed favorably • Expansion in new regions together with big clients Retail
Slide 6: Q4 Highlights
Q4 Highlights Duni was listed on OMX Nordic Exchange 14th November Slower growth, but underlying momentum remains intact • Phasing • Retail UK • New approach to seasonal returns Strong margin improvement 6
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 Napkins Plates Table coverings Q4
Slide 8: 2008 Market Outlook
2008 Market Outlook HORECA market growing in line or slightly above GDP • 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 Changing eating habits 8
Slide 9: Duni Professional
Duni Professional 9
Slide 10: Professional - Overview
Professional - Overview Geographical Geographical split split –– sales sales 2007 2007 Product Product mix mix –– 2007 2007 East Serving Others South 5% products 1% Nordic 11% 18% 25% Candles 4% West Napkins 19% 49% Tablecovers 28% Central 40% 10 10
Slide 11: Professional – strong financials and track record
Professional – strong financials and track record Sales Sales and EBIT 11 and EBIT Continued Continued stable stable sales sales growth growth MSEK 3,000 14% ••4% 4% annual annual growth growth since since 2000 2000 2,500 12% Solid Solid EBIT EBIT margin, margin, further further improving improving
Slide 12: 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 13: New innovation developed in 2007
• A new innovation developed in 2007 – a Duni worldwide patent. • Feels like linen – an elegant shimmer and linen embossing • Made from ecofriendly „no chlorine“ bleached cellulose and is 100% recycable. • 11 color alternatives. 13
Slide 14: Duniletto
Duniletto™ • A cutlery bag + premium XL sized napkin in one! • A premium Sacchetto alternative • Offers variety in a growing product sub-category (=premium) • Easy to use + dispose • Creates a premium table athmosphere 14
Slide 15: Growing East through established customer relationships
Growing East through established customer relationships Montenegro Macedonia Republic Slovenia Bulgaria Hungary Romania Belarus Slovakia Croatia Serbia/ Ukraine Russia Czech Poland ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Custome
Slide 16: Duni in Metro Germany
? | 4 : fe "|= a 2 s- e ei | 4) Ll / ig Duni in Metro Germany
Slide 17: Duni Retail
Duni Retail 17
Slide 18: Retail - Overview
Retail - Overview Geographical Geographical split split –– sales sales 2007 2007 Product Product mix mix –– 2007 2007 Others Other 12% 15% UK Central Napkins 16% 38% E&D 43% 18% Candles Benelux 3% 15% Nordic TC 21% 19% 18 18
Slide 19: Retail – turnaround
Retail – turnaround Sales Sales and EBIT 11 and EBIT Retail Retail back back on on growth growth path path MSEK 900 -+6% Break-even Break-even reached reached -+4% 850 +2% 800 -0% 750 -2% 700 -4% 650 -6% 600 - -0% -2005 -2006 -2007 -Sales -EBIT margin 1) Excluding non-recurring costs 19
Slide 20: 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 21: Branded sales % of net sales
Branded sales % of net sales Branded sales % of net sales 120% 98,1% 100% 96% 96,6% 91,1% 90,5% 82% 78,5% 80% 76% 77,1% 77,1% 76,2% 75% 73,7% 73% 72,2% 67% FY 2005 60% 56,2% FY 2006 53,5% FY 2007 40% 20% 0% Nordics Germany Benelux UK Switzerland - excl IKEA 68% Branded – 32% Private Label 21
Slide 22: 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 23: Category Management
Category Management Example from ICA Kvantum that buys directly from Duni, using our concept. Sales in these stores increased dramatically last year. 23
Slide 24: Duni Tissue
Duni Tissue 24
Slide 25: Tissue – Manufacturer and complementary business area
Tissue – Manufacturer and complementary business area Sales Sales mix mix 2007 2007 Product Product lines lines PRODUCT PRODUCT LINE LINE PRODUCT PRODUCT LINE LINE TISSUE TISSUE AIRLAID AIRLAID Tissue Tissue Mill Mill Dals Dals Långed Långed Skåpafors Skåpafors -External -49% -Internal -51% Napkin T
Slide 26: 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 • Increase prices R & D a
Slide 27: Duni Financial Review
Duni Financial Review 27
Slide 28: Momentum in top-line growth
Momentum in top-line growth LTM LTM Sales Sales Sales Sales growth growth 4 000 1 200 2006 2007 H2 2007 Q4 2007 3 950 1 000 Professional 5.7% 6.3% 6.6% 2.6% Rolling, SEK m 800 3 900 SEK m 600 Retail -6.2% 4.2% -0.5% -5.0% 3 850 400 3 800 200 Tissue 4.5% 6.9% 4.2% 7.9% 3 750 0 Total 2.9% 5.9% 4.7% 1.
Slide 29: Margin Expansion
Margin Expansion Operating Operating profit profit (MSEK) (MSEK) Operating Operating margin margin MSEK 2006 2007 Q4 2006 Q4 2007 400 10% 9% 350 Professional 11.7% 12.9% 13.4% 15.5% 8% 300 -7% Retail -0.9% 0.6% 4.5% 7.5% 250 6% 200 5% Tissue 8.5% 8.9% 8.2% 9.6% 4% 150 3% Non- 100 recurring -1.3% 0.0
Slide 30: Income Statement
Income Statement 2005 2006 2007 Net sales 3,656 3,762 3,985 Cost of goods sold -2,829 -2,812 -2,948 Gross profit 827 950 1,037 Gross margin 22.6% 25.3% 26.0% Selling expenses -510 -459 -446 Adminstrative expenses -185 -219 -208 Research and development expenses 0 -6 -13 Other operating income 20 44
Slide 31: Balance Sheet
Balance Sheet (SEK in millions) 31/12/2007 31/12/2007 Intangible assets 1,228 Shareholders’ equity 1,416 Tangible assets 433 Interest bearing debt 1,092 Financial fixed assets 398 Pension liabilities 200 Inventory 500 Other long term liabilities 19 Accounts receivable 546 Accounts payable 305 Other
Slide 32: Simplified cash flow profile
Simplified cash flow profile (SEK million) 2005 2006 2007 Q4 2007 Operating profit 119 277 393 145 Depreciation 82 82 89 24 Change in operating working capital1) 17 -32 20 167 Inventory -21 26 -24 61 Accounts receivable -61 8 14 98 Accounts payable 98 -66 30 8 Capex -73 -130 -132 -55 Operating cash
Slide 33: Financial targets
Financial targets Full year 2007 ∙ Organic growth of 5% over a business cycle 5.9% Sales Sales growth growth >> 5% 5% ∙ Consider acquisitions to reach new markets or to - strengthen current market positions ∙ Top-line growth EBIT 9.9% EBIT margin margin >> 10% 10% ∙ Improvements in manufacturing and
Slide 34: 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
Slide 35: Back-up slides
Back-up slides corn
Slide 36: Tabletop and foodservice concepts for professional customers
Duni - Tabletop and foodservice concepts for professional customers at… • Restaurants • Hotels • Cafés • Bars and pubs • Catering • Events ….and their end-users 36
Slide 37: Food Solutions concepts for professional customers
Duni - Food Solutions concepts for professional customers at… Take-out restaurants Grocery stores • in Deli-counters • for HMR Catering Central kitchens who pre-pack food • Primarily DuniForm, the food distribution system which includes machinery as well as plastic containers for food ….and their en
Slide 38: Tabletop concepts for private households through retailers
Duni - Tabletop and foodservice concepts for private households through retailers… …when having • friends for dinner • family meal • children’s party • picnic • or barbecue… … or simply want to add style and being convenient 38
Slide 39: A selection of our customers
A selection of our customers 39
Slide 40: Senior management team with relevant experience
Senior management team with relevant experience President Fredrik von Oelreich CFO Corporate Development Johan Malmqvist Mats Lindroth Marketing Supply Chain & IS Oyvind Forland Lars-Erik Ewertz Sales Professional Sales Professional Sales Retail Converting & Rexcell Tissue & Nordic, West & South Cen