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Duni Presentation Aktiespararna Halmstad 2008-11-26

Duni Presentation Aktiespararna Halmstad 2008-11-26. www.duni.com. Disclaimer. 40.

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Duni Presentation Aktiespararna Halmstad 2008-11-26

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  1. Duni Presentation Aktiespararna Halmstad 2008-11-26 www.duni.com

  2. Disclaimer 40 • 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 presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. • This presentation is not for presentation or transmission into the United States or to any U.S. person, as that term is defined under Regulation S promulgated under the Securities Act of 1933, as amended. • This presentation contains various forward-looking statements that reflect management’s current views with respect to future events and financial and operational performance. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,” “estimate,” “should,” “could,” “aim,” “target,” “might,” or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Company’s control and may cause actual results or performance to differ materially from those expressed or implied from such forward-looking statements. These risks include but are not limited to the Company’s ability to operate profitably, maintain its competitive position, to promote and improve its reputation and the awareness of the brands in its portfolio, to successfully operate its growth strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company operates, and other risks. • The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. • No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document 2

  3. “Duni enhances atmosphere and brings convenience to any eating and drinking occasion by providing inspiring and innovative products and concepts”

  4. Contents • Market overview • Business areas • Professional • Retail • Tissue • Financials

  5. Duni – the European Market Leader for Table Top Solutions Duni Key financials Table Top Tissue 14% Full year 2007 • Sales: SEK 4.0 billion (+5.9%) • EBIT: SEK 394 million (277) • EBIT margin: 9.9% (8.7%) ¹ Jan – Sep 2008 • Sales: SEK 3.0 billion (+3.3%) • EBIT: SEK 260 million (248) • EBIT margin: 8.8% (8.7%) Professional 68% Retail 18% Manufactured Napkins Plates Table coverings Candles Meal service Eating & Drinking (glasses, cups, plates, cutlery) Traded 5 ¹ Excluding non-recurring items

  6. Share Price and Ownership Structure Ownership structure per 30/09/08 Share price OMX Mid Cap ”Sällanköps- varor” Index Duni

  7. Attractive and Large Addressable Market 40 European disposable table top market European airlaid market Focus areas for Duni • Addressable market of EUR 4 bn • ~2/3 of market is in the professional customer segment • Addressable market of approx. EUR 0.4 bn (production value) • Largest part of feminine hygiene is premium quality 7 7 Source: B Kay tissue, Duni management

  8. 300 250 200 • 2006 tissue table top sales (MEUR) 150 100 50 0 Duni Georgia Karto- SCA Kimberly Papstar Metsä Pacific group Clark Tissue The European Market Leader – Above 2x Relative Market Share Premium positioning #1 in European Table Top Market shares 19% 8% 8% 8% 5% 4% 3% Linen1) Duni Premium Karto Papstar Tissuebased products SCA GP KC Commodity Metsä Narrow Wide Product range/ concepts 1) The linen market is characterized by a large number of small and regional players Source: Company reports and management estimates

  9. Market Outlook HORECA market growing in line or slightly above GDP • Positive eating-out trend • Continued strong growth in take-away sector Retail growth in line with GDP • Private label over-represented in our category • Discount stores and private label more in focus in a weaker economy Higher uncertainty • GDP forecasts revised downwards Raw material prices and costs of certain traded goods may have peaked • Energy • Transport • Pulp (USD/SEK) Changing eating habits

  10. Food spending outside home (as a percentage of whole food budget) 50 50 40 30 35 % 20 5 5 10 0 Poland Czech Germany USA Eating Out Trend Source: BROG Media Biznes

  11. Business Areas

  12. Professional –Stable Development 40 Geographical split – sales 2007 Sales and EBIT 1 MSEK 3,000 14% 12% 2,500 10% 2,000 8% 1,500 6% 1,000 4% Continued stable sales growth • 4% annual growth since 2000 Solid EBIT margin, further improving 500 2% 0 0% 2005 2006 2007 LTM Sales EBIT margin 1) Excluding non-recurring costs and market valuation of derivatives 12

  13. Professional - Unique Way to Market 40 Duni Professional’s market model Benefits of market model • ~250 sales reps and KAMs with approx. 250,000 customer visits per year • Effectively acts as a barrier to entry • Solidifies customer relations – push and pull • Enables constant monitoring of market trends • Closeness to market and customers are the key success factors 13 13

  14. Professional - Growing East ● Current Duni customer ● Potential customer Czech Republic Serbia/ Montenegro Belarus Croatia Bulgaria Russia Slovenia Hungary Macedonia Slovakia Romania Poland Ukraine ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Customers are expanding East and Duni is growing with its customers

  15. Duni in Metro Germany

  16. Duni in Metro Germany

  17. Retail– Turnaround 40 Sales and EBIT 1 Geographical split – sales 2007 MSEK 900 • +6% • +4% 850 +2% 800 • 0% 750 • 2% 700 • 4% Improved profitability prioritized over sales growth Duni brand & premium in focus Tougher market conditions 650 • 6% 600 • 0% LTM 2005 2006 2007 Sales EBIT margin 1) Excluding non-recurring costs and market valuation of derivatives 17

  18. Retail – Changing Market Trends 40 The Brand / private label pendulum Duni opportunity • Brands are being re-introduced in retail stores • Non-food category is a key growth driver for retailers • Table top of particular importance • Leverage on Duni’s brand recognition • Private label development stagnating in Sweden: 17,1% value and 23,8% volume(Source:GfK 2007) Today Branded: Late 1990s 50/50 Private label: Peak 2004/05 • Retailers moving from private label to branded and premium gives opportunity for Duni 18 18

  19. Category Management

  20. Tissue Sales mix 2007 Sales and EBIT 1 MSEK 650 14% 12% 600 External 10% 49% 550 Internal 51% 8% 500 6% 450 4% 400 Tissue in-house provides competitive advantage Healthy underlying growth in hygiene sector 2% 350 0% LTM 2005 2006 2007 Sales EBIT margin 1) Excluding non-recurring costs and market valuation of derivatives

  21. Financials 21

  22. 2008 Q3 Highlights • Net sales increased with 0.7% to SEK 973 m • Operating profit amounted to SEK 83 m (97) • Includes market valuation of derivatives SEK -18 m (3) • Operating margin amounted to 8.5% (10.0%) • Excluding market valuation of derivatives 10.5% (9.8%) • Continued growth in Professional and improved underlying margins • Good development in Central Europe • Healthy growth in Duni FoodSolutions • Weaker sales development in Retail • Mainly UK and Nordics • Slight improvement of underlying profit margin • Tissue sales and underlying margin stable

  23. Top-Line Growth in Professional 40 LTM Sales Sales growth MSEK MSEK 4 100 1 150 1 100 4 050 1 050 4 000 1 000 3 950 950 3 900 900 3 850 850 Q4 Q1 Q2 Q3 Quarter Rolling 12 months • Professional continue to demonstrate healthy development • Weak sales in Retail; stepping out of private label contracts and tougher market conditions • Transition towards new generation of products 23

  24. Underlying Margin Expansion 40 Operating profit (MSEK) Operating margin MSEK 400 10% 9% 350 8% 300 • 7% 250 6% 200 5% 4% 150 3% 100 2% 50 1% 0 0% LTM 2005 2006 2007 EBIT margin Reported Non recurring items • Total margin impacted by market valuation of derivatives -9 MSEK (2) • Increased underlying profit in Professional and Retail, Tissue is stable. 24 ¹ Excluding non-recurring items ² Excluding market valuation of derivatives

  25. Income Statement 40 25

  26. Balance Sheet

  27. Financial Targets 40 LTM Sales growth > 5% 2.7% - • Organic growth of 5% over a business cycle • Consider acquisitions to reach new markets or to strengthen current market positions EBIT margin > 10% • Top-line growth – premium focus • Improvements in manufacturing and sourcing 9.9% Dividend payout ratio 40+% • Board target at least 40% of net profit 1,80 kr/share (2008) 27

  28. Duni – Summary 40 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 potential for long-term shareholder returns 28

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