Interim Report for Duni AB (publ) 1 January – 31 March 2014

Growth and improved earnings
1 January – 31 March 2014

  · Net sales amounted to SEK 921 m (852). Adjusted for exchange rate changes,
net sales increased by 5.2%.
  · Earnings per share, after dilution, amounted to SEK 1.09 (0.77).
  · Operating income increased by 24% at fixed exchange rates.
  · New segment reporting: three business areas have become five.

Key financials

SEK   m           3 months  3 months        12 months     12 months
                            January -March  April -March  January -December
                  January   2013            2013/2014     2013
                  -March
                  2014
Net sales         921       852             3 872         3 803
Operating income  73        55              404           385
1)
Operating margin  7.9%      6.4%            10.4%         10.1%
1)
Income after      69        49              371           350
financial items
Net income        51        36              282           267

1)        For bridge to EBIT, see the section entitled “Operating income - Non
-recurring items”.

CEO’s comments

“In accordance with previously communicated information, segment reporting
within Duni has been changed. As from the first quarter of 2014, the operations
are reported within five business areas: Table Top, Meal Service, Consumer, New
Markets, and Materials & Services.

The initial quarter of the year follows the trend set at the end of the
preceding year: growth in prioritized business areas and strengthened
profitability for Duni as a whole. Net sales for the quarter amounted to SEK 921
(852) m and grew by 5.2% at fixed exchange rates. Operating income increased to
SEK 73 (55) m, with an operating margin of 7.9% (6.4%). Cash flow remains strong
and the relatively low level of capital expenditures in the quarter contributed
to the net debt falling to SEK 454 (608) m by the end of the quarter.

Organic growth is one of Duni's most important objectives and, since the middle
of last year, we are growing within prioritized market and product segments. The
total European market is not increasing compared with last year, which means
that the increase in sales is driven by higher market shares.

Table Top business area; table top products for the HoReCa market. Within the
HoReCa market the full-service restaurants category has retreated to a certain
extent during the past year. In the quarter, the business area increased its net
sales to SEK 477 (450) m. Growth compared with the preceding year, at fixed
exchange rates, amounts to 2.4%. The operating income is SEK 64 (56) m, and the
operating margin increased to 13.3% (12.4%). A more effective market
organization and several successful product initiatives have generated new
customer contracts. In addition, targeted endeavors on markets in southern
Europe and within what we refer to as brand profiling for global customers have
yielded positive returns.

Meal Service business area; meal packaging for fresh, ready-to-eat meals,
catering and take-away. The market for ready-to-eat meals and take-away is
demonstrating somewhat stronger growth than the HoReCa market in general. The
business area is growing by 6.1%, at fixed exchange rates, and sales amounts to
SEK 123 (114) m. Meal Service is profitable on an annual basis, but the first
and third quarters are seasonally weaker than the second and fourth quarters.
Operating income amounts to SEK -1 (-3) m. Following a restructuring period, we
are witnessing the effects of a dedicated organization and sales to major
customer groups are increasing through a clearer offering. In addition, we are
seeing the gradual effects of endeavors within purchasing and product
innovation, which vouches for continued strong sales growth during the year.

Consumer business area; retail trade consumer products. Sales increased by 7.5%
compared with the preceding year, at fixed exchange rates. Since the end of
2012, and during 2013, several major customer contracts have been won, at the
same time as the Designs for Duni® concept is contributing to stronger growth
for premium products. Sales amounts to SEK 157 (140) m. Operating income reached
SEK 6 (-2) m, with an operating margin of 3.6% (-1.6%).

New Markets business area; Duni’s markets outside Europe. The business area is
responsible for, among other things, Duni in Singapore and Duni in Russia, as
well as export sales to South America, the Middle East and Australia. Export
sales are managed primarily through local agents, but on most of the markets
Duni supports the local operations with its own sales personnel. Sales amounts
to SEK 43 (21) m with an operating income of SEK -3 (0) m. Profitability for the
quarter has primarily been affected by the negative currency trend in
Russia.

Materials & Services business area; hygiene product sales as well as tissue
sales to external customers. Most of the business area’s revenues are generated
from external sales of hygiene products, i.e. from the business that Duni has
decided to discontinue as from the first quarter of 2015. Sales amount to SEK
120 (127) m and the operating income is SEK 7 (3) m. During 2014, revenues from
the business area will decline due to reduced volumes associated with the phase
-out of the hygiene products business.

Despite continued weak market growth, net invoicing is increasing in all
prioritized business areas. This is mainly due to an effective market
organization, with growth leading to increased capacity utilization in our
production units. The challenge going forward lies in continuing to adapt to
market demand through improvements in areas such as customer service, product
innovation, and delivery certainty”, says Thomas Gustafsson, President and CEO,
Duni.
Additional information is provided by:
Thomas Gustafsson, President and CEO, +46 40 10 62 00
Mats Lindroth, CFO, +46 40 10 62 00
Tina Andersson, Corporate Marketing & Communication Director, 0734-19 62 24
Duni is a leading supplier of attractive and convenient products for table
setting and take-away. The Duni brand is sold in more than 40 markets and enjoys
a number one position in Central and Northern Europe. Duni has some 1,900
employees in 18 countries, headquarters in Malmö and production units in Sweden,
Germany and Poland. Duni is listed on NASDAQ OMX Stockholm under the ticker name
“DUNI”. ISIN-code is SE 0000616716.