• Revenue: Net sales increased by SEK 128 million to SEK 1.863 billion, a growth of 7.7% at fixed exchange rates.
• Operating Income: Decreased from SEK 140 million to SEK 110 million, with a margin of 5.9% compared to 8.1% last year.
• Currency Effects: Negative impact of SEK 25 million due to the strengthening of the Swedish krona against the Euro.
• Dining Solutions Sales: Increased to SEK 1.1 billion, with an operating income of SEK 102 million and a margin of 9.1%.
• Food Packaging Solutions Sales: Increased by 6% to SEK 745 million, but profit dropped to SEK 7 million, resulting in a 1% margin.
• Net Income: Declined from SEK 83 million to SEK 63 million.
• Inventory Levels: High inventory levels in Australia burdened income by approximately SEK 20 million.
• Dividend Proposal: SEK 5 per share, corresponding to 66% of net income adjusted for restructuring costs.

• Warning! GuruFocus has detected 3 Warning Sign with SKFRY.

Release Date: April 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Duni AB (FRA:2DU) achieved growth of almost 8% in Q1 2025 despite weak demand in the European market.
• Both acquisitions and organic growth contributed positively to the company's development in the first quarter.
• The company maintained a strong financial position even after the acquisition of Poppies.
• Duni AB (FRA:2DU) initiated a transformation of its sales and marketing organization to improve efficiency and strengthen customer focus.
• There is strong momentum outside of Europe, with continued growth in premium napkins, LED lighting, and sustainable product offerings like Bio Dunisoft.

Negative Points

• Operating income was negatively impacted by currency effects, with a SEK 25 million difference due to the strengthening of the Swedish krona against the Euro.
• The European Food Service market remains down compared to pre-COVID levels, affecting consumer confidence and spending.
• The Food Packaging Solutions segment saw a significant drop in profit due to high inventory levels and lower volumes in the European takeaway segment.
• The company faces intense competition and a dynamic regulatory landscape related to packaging, sustainability, and waste management.
• Operating margin decreased to 5.9% from 8.1% last year, with a notable decline in net income from SEK 83 million to SEK 63 million.

Q & A Highlights

Q: Can you elaborate on the main factors impacting Duni AB's operating income this quarter? A: Robert Dackeskog, President and CEO, explained that the operating income was significantly impacted by negative currency effects, particularly due to the strengthening of the Swedish krona against the Euro. This resulted in a SEK 25 million negative currency effect, which was a major contributor to the SEK 30 million decline in operating income compared to the previous year.

Q: How did the acquisition of Poppies affect Duni AB's financial position? A: Magnus Carlsson, CFO, stated that despite the acquisition of Poppies, Duni AB maintained a strong financial position. The acquisition has already started to show positive effects, with synergies expected to be realized from the second quarter onwards, particularly through the integration of the U.K. production facility.

Q: What are the key challenges faced by Duni AB's Food Packaging Solutions segment? A: Magnus Carlsson highlighted that the Food Packaging Solutions segment faced challenges due to high inventory levels outside of Europe and a decline in volumes within the European takeaway segment. These issues, coupled with intense competition and regulatory uncertainties, led to a significant drop in profit for the segment.

Q: How is Duni AB addressing the impact of currency fluctuations? A: Magnus Carlsson explained that Duni AB is exposed to currency movements, particularly the U.S. dollar versus the Australian dollar, which affects their BioPak operations. The company is focusing on improving demand planning and collaborating closely with customers to mitigate these effects. Additionally, they are working on reducing inventory levels to lower costs.

Q: What strategic priorities is Duni AB focusing on for future growth? A: Robert Dackeskog outlined three strategic priorities: increasing innovative offerings to customers, growing their position in Europe and Asia Pacific, and enhancing operational efficiency while enabling regional differentiation. These priorities are aimed at achieving profitable growth and value creation, with a focus on sustainability and expanding into high-growth categories.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.