Upload
buck-davidson
View
219
Download
2
Tags:
Embed Size (px)
Citation preview
1
Duni Presentation Aktiespararna Halmstad 2008-11-26
www.duni.com
22
Disclaimer 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
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
55
Table TopTissue
14%Professional68%
Retail18%
Duni – the European Market Leader for Table Top Solutions
Key financialsKey financials
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%)
Man
ufa
ctu
red
Tra
ded
Napkins Plates Table coverings
Eating & Drinking (glasses, cups, plates, cutlery)
Candles Meal service
¹ Excluding non-recurring items
DuniDuni
6
Share Price and Ownership Structure
Ownership structure per 30/09/08
Duni OMX Mid Cap
”Sällanköps- varor” Index
Share price
Name Shares %Mellby Gård Investerings AB 14 094 500 29,99%PolarisCapital Fund Ltd, USA 4 276 800 9,10%Lannebo Fonder 3 619 300 7,70%SEB Investment Management, SE 3 590 287 7,64%Cominvest, DE 2 403 300 5,11%Livförsäkringsaktiebolaget (Skandia Liv), SE 2 171 200 4,62%Odin Fonder 2 074 800 4,41%JP Morgan Chase Bank, UK 1 509 400 3,21%Svenskt Näringsliv, SE 1 400 000 2,98%SSB CL Omnibus AC, USA 1 371 700 2,92%
Total 36 511 287 77,69%
777
Attractive and Large Addressable Market
Source: B Kay tissue, Duni management
Table covers6%
Food packaging21%
Eating and drinking supplements
10%
Napkins30%
Candles33%
Feminine hygiene64%
Table top14%
Hygiene wipes10%
Other12%
• Addressable market of EUR 4 bn
• ~2/3 of market is in the professional customer segment
• 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
• Addressable market of approx. EUR 0.4 bn (production value)
• Largest part of feminine hygiene is premium quality
European disposable table top marketEuropean disposable table top market European airlaid marketEuropean airlaid market
Focus areas for Duni
8
#1 in European Table Top#1 in European Table Top Premium positioningPremium positioning
The European Market Leader – Above 2x Relative Market Share
1) The linen market is characterized by a large number of small and regional players
Source: Company reports and management estimates
Market shares 19% 8% 8% 8% 5% 4% 3%
Narrow Wide
Co
mm
od
ity
Pre
miu
mL
inen
1)
Product range/ concepts
Tis
sueb
ased
pro
du
cts
Duni
GP
PapstarKarto
SCA
KC
Metsä
0
50
100
150
200
250
300
Duni Georgia
Pacific
Karto-
group
SCA Kimberly
Clark
Papstar Metsä
Tissue
- 200
6 tis
sue
tabl
e to
p sa
les
(ME
UR
)
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
10Source: BROG Media Biznes
Eating Out Trend
5 5
35
50
0
10
20
30
40
50
%
Poland Czech Germany USA
Food spending outside home (as a percentage of whole food budget)
11
Business Areas
1212
Professional – Stable Development
0
500
1,000
1,500
2,000
2,500
3,000
2005 2006 20070%
2%
4%
6%
8%
10%
12%
14%
Sales EBIT margin
MSEK
1) Excluding non-recurring costs and market valuation of derivatives
Sales and EBIT 1Sales and EBIT 1
LTM
Continued stable sales growth
• 4% annual growth since 2000
Solid EBIT margin, further improving
Continued stable sales growth
• 4% annual growth since 2000
Solid EBIT margin, further improving
Geographical split – sales 2007Geographical split – sales 2007
Nordic25%
Central58%
South & East 16%
Other1%
131313
Professional - Unique Way to Market
End Customers
Direct Sales
Wholesalers
Cash & carry
Duni Sales ForceContinuous contacts, sampling promotions and
other educational and marketing support
Feedback on trends, market sentiment, etc.
Product innovation, feedback on
product portfolio
Flexibility towards customers, ability
to react fast to changing demand, customer loyalty
Barrier to entry towards
competitors
Duni Professional’s market modelDuni Professional’s market model Benefits of market modelBenefits 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• Closeness to market and customers are the key success factors
14
Professional - Growing East
Ru
ssia
Cro
atia
Hu
ng
ary
Mac
edo
nia
Ukr
ain
e
Slo
vaki
a
Ser
bia
/ M
on
ten
egro
Cze
ch
Rep
ub
lic
Slo
ven
ia
Po
lan
d
Bu
lgar
ia
Bel
aru
s
Ro
man
ia
● ● ● ●
● ● ● ● ● ● ● ●
● ● ● ● ● ● ●
●
●
●
●
● ● ●
●
● ● ● ●
● ● ●
● ● ●
●● ● ● ●
● ● ●
●
●
●
● ●●
●
●
● Current Duni customer ● Potential customer
● ●
●
Customers are expanding East and Duni is growing with its customersCustomers are expanding East and Duni is growing with its customers
15
Duni in Metro Germany
16
Duni in Metro Germany
1717
Retail – Turnaround
1) Excluding non-recurring costs and market valuation of derivatives
600
650
700
750
800
850
900
2005 2006 2007
-0%
-6%
-4%
-2%
-0%
+2%
-+4%
-+6%
Sales EBIT margin
MSEK
Sales and EBIT 1Sales and EBIT 1
LTM
Improved profitability prioritized over sales
growth
Duni brand & premium in focus
Tougher market conditions
Improved profitability prioritized over sales
growth
Duni brand & premium in focus
Tougher market conditions
& SouthEast1%
Central78%
Nordic21%
Geographical split – sales 2007Geographical split – sales 2007
181818
Retail – Changing Market Trends
Branded:
Late 1990s
Private label:
Peak 2004/05
50/50
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
Duni opportunityDuni opportunityThe Brand / private label pendulumThe Brand / private label pendulum
• Retailers moving from private label to branded and premium gives opportunity for Duni• Retailers moving from private label to branded and premium gives opportunity for Duni
19
Category Management
20
Tissue
Sales mix 2007Sales mix 2007
350
400
450
500
550
600
650
2005 2006 2007
0%
2%
4%
6%
8%
10%
12%
14%
Sales EBIT margin
MSEK
Sales and EBIT 1Sales and EBIT 1
LTM
1) Excluding non-recurring costs and market valuation of derivatives
Tissue in-house provides competitive advantage Healthy underlying growth in hygiene sector
Tissue in-house provides competitive advantage Healthy underlying growth in hygiene sector
External49%
Internal51%
2121
Financials
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
2323
Top-Line Growth in Professional
2006 20072007 9m
2008 9m
Professional 5.7% 6.3% 7.7% 5.1%
Retail -6.2% 4.2% 9.5% -3.0%
Tissue 4.5% 6.9% 6.5% 3.2%
Total 2.9% 5.9% 7.9% 3.3%
• 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
LTM SalesLTM Sales Sales growthSales growth
3 850
3 900
3 950
4 000
4 050
4 100
Q4
Q1
Q2
Q3
850
900
950
1 000
1 050
1 100
1 150
Quarter Rolling 12 months
MSEK MSEK
24
• Total margin impacted by market valuation of derivatives -9 MSEK (2)• Increased underlying profit in Professional and Retail, Tissue is stable.
24
Underlying Margin Expansion
2006 2007²2007 9m²
2008 9m²
Professional 11.7% 12.9% 11.9% 12.2%
Retail -0.9% 0.6% -2.9% -1.9%
Tissue 8.5% 8.9% 8.5% 7.9%
Non-recurring/ derivatives
-1.3% 0.0% 0.1% -0.3%
Total 8.7%¹ 9.9% 8.6% 9.1%0
50
100
150
200
250
300
350
400
2005 2006 2007
0%
1%
2%
3%
4%
5%
6%
-7%
8%
9%
10%
Reported Non recurring items EBIT margin
MSEK
¹ Excluding non-recurring items
² Excluding market valuation of derivatives
Operating profit (MSEK)Operating profit (MSEK) Operating marginOperating margin
LTM
2525
Income Statement
2005 2006 2007 LTM
Net sales 3,656 3,762 3,985 4,078
Cost of goods sold -2,829 -2,812 -2,948 -2,980
Gross profit 827 950 1,037 1,098
Gross margin 22.6% 25.3% 26.0% 26.9%
Selling expenses
Adminstrative expenses
Research and development expenses
Other operating income
Other operating expenses
-510
-185
0
20
-33
-459
-219
-6
44
-33
-446
-208
-13
57
-33
-461
-209
-20
54
-58
Reported operating profit 119 277 394 404
Operating margin 3.3% 7.4% 9.9% 9.9%
Non-recurring items 131 50 0 0
Operating profit (excl. non recurring items)
250 327 394 404
Operating margin (excl. non recurring items)
6.8% 8.7% 9.9% 9.9%
26
(SEK in millions) 30/09/2008 30/09/2008
Intangible assets 1,226 Shareholders’ equity 1,484
Tangible assets 456 Interest bearing debt 1,188
Financial fixed assets 375 Pension liabilities 205
Inventory 619 Other long term liabilities 19
Accounts receivable 700 Accounts payable 285
Other current receivables 180 Other current liabilities 468
Cash & cash equivalents 93
Total assets 3,649 Total equity and liabilities 3,649
ROCE 17% Net debt 1,311
ROCE (w/o goodwill) 33% Net debt / equity 88%
Net debt / EBITDA 2.6x
Balance Sheet
2727
Financial Targets
∙ Organic growth of 5% over a business cycle
∙ Consider acquisitions to reach new markets or to strengthen current market positions
Sales growth > 5%Sales growth > 5%
EBIT margin > 10%EBIT margin > 10%∙ Top-line growth – premium focus
∙ Improvements in manufacturing and sourcing
Dividend payout ratio 40+%
Dividend payout ratio 40+%
∙ Board target at least 40% of net profit
2.7%
-
9.9%
LTM
(2008)
2828
Duni – Summary
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