Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Duni AB (FRA:2DU, Financial) reported its second-best third quarter in the company's history, demonstrating strong financial performance despite challenging market conditions.
- The company maintained a low net debt and strong financial position, providing a solid foundation for future investments and growth.
- Duni AB (FRA:2DU) successfully acquired the Slovenian company Seti, enhancing its market presence in Southeast Europe.
- A strategic partnership with CEVA Logistics was announced to modernize and consolidate logistics operations in Germany, which is expected to improve efficiency and reduce CO2 emissions.
- The company continues to invest in sustainability initiatives, including collaborations for plastic-free food packaging and energy-efficient improvements in its paper mills.
Negative Points
- The HoReCa market, particularly in Germany, is experiencing a decline, with consumer visits and demand remaining below pre-pandemic levels.
- Duni AB (FRA:2DU) reported a 1.3% decline in total sales for the quarter, with organic growth at minus 5%, reflecting weaker consumer purchasing power.
- Operating income and margins were impacted by lower sales volumes and increased costs of raw materials and sea freight.
- The dining solutions segment saw a 7.7% drop in sales, partly due to price reductions in the competitive retail segment.
- High storage costs and inventory levels, particularly in the APAC region, have negatively affected profitability in the food packaging solutions segment.
Q & A Highlights
Q: Can you provide an overview of Duni AB's financial performance for Q3 2024?
A: Robert Dackeskog, President and CEO, highlighted that Duni AB had a strong quarter, achieving the second-best third quarter in the company's history. The group net sales amounted to 1.9 billion, representing a 1.3% decline in fixed currencies, with organic growth at minus 5%. The operating margin was 7.9%, impacted by lower sales volumes and higher costs of raw materials and sea freight.
Q: How has the acquisition of Seti impacted Duni AB's operations?
A: Magnus Carlsson, CFO, explained that the acquisition of a 70% stake in Seti, a Slovenia-based company, has expanded Duni's reach in Southeast Europe. Seti's annual sales are approximately 100 million, with profitability in line with Duni's dining solutions business area. The acquisition has been consolidated into the group since September 1st.
Q: What are the main challenges Duni AB is facing in the HoReCa market?
A: Robert Dackeskog noted that the HoReCa market, particularly in Germany, is still volatile and declining. The number of visits to restaurants has not recovered to pre-pandemic levels, and the market is down 10% to 15% in volume. The VAT increase in Germany and inflation have also contributed to the challenges.
Q: How is Duni AB addressing sustainability in its operations?
A: Robert Dackeskog emphasized Duni's commitment to sustainability, mentioning the cooperation with Notpla for plastic-free food packaging made from seaweed-coated kraft paperboard. The company is also investing in energy-efficient systems and CO2-neutral logistics solutions to support its net-zero goals.
Q: What are the financial targets and outlook for Duni AB?
A: Magnus Carlsson stated that the organic growth stands at minus 5.6%, with the operating margin at 8.2% on a rolling 12-month basis, slightly below the 10% target. The dividend is set to SEK 5, exceeding the target of distributing more than 40% of net income. Despite current challenges, the company remains confident in the long-term growth of the HoReCa market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
