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Duni profit up on hygiene exit

March 20, 2014

Swedish tabletop and airlaid maker has reported its results for 2013. Sales increased 4.7%, when adjusted for exchange rates, to $581 million. Earnings per share ammountd to 86 cents.

Improvements were mainly attributable to strong Christmas sales and good capacity utilization at our production plants but is also due to underlying improvements in our business areas. Cash flow remains strong and, at the end of the quarter, the net debt was $75 million.
Following a slow start to the year, the sales trend has gradually strengthened. The new organization structure is contributing to more active working of the market and our position has strengthened on several markets and product segments. The take-away range is continuing to expand within Professional, while within Consumer we are winning an increasing number of customer contracts. This development is to be seen in light of continued weak general demand in several regions. The European HoReCa markets have retreated some percentage points and as yet there are no clear signs of any improvement. The consumer market is somewhat more stable.

At fixed exchange rates, Professional increased its quarterly sales by $5.5 million compared with last year. Net sales measured at fixed exchange rates were $116 million, with growth primarily due to the acquisition of Duni Song Seng. Sales outside Europe are continuing to grow by double digits, albeit from low levels. The improvement in Eastern and Southern Europe during the quarter is particularly pleasing. The tendency is that our position in these markets stabilize more and more. Operating income in the quarter increased to SEK $19.4 million and the operating margin was 16.6% (15.1%).

The Consumer business area showed a rate of growth of 11.8% in the quarter, with net sales at fixed exchange rates amounting to $33.8 million. This trend is a consequence of new contracts secured in 2012 and 2013, but is also due to positive Christmas sales. Operating income was $3.5 millionand the operating margin strengthened to 10.6% (9.6%).

Within the Tissue business area, the improvement is entirely due to the decision to phase out the external hygiene product sales. The decision to discontinue that business has facilitated a more efficient operation, at the same time as measures relating to the future closure are being implemented gradually. Net sales during the quarter amounted to $17.9 million and the operating income was about $300,000. Volumes during the quarter were on par with last year.

For the fourth quarter, sales increased 6.2% to reach$168 million while earnings per share increased significantly.

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