Duni (DUNI) Q1 2025 earnings summary

Executive summary

• Net sales grew 7.4%–8% year-over-year to SEK 1,863m, with growth driven by both acquisitions and organic gains, despite subdued European demand and negative currency effects.

• Operating income declined to SEK 110m (from SEK 140m), mainly due to SEK 15m–50m negative currency effects and higher costs in Food Packaging Solutions.

• Maintained a strong financial position after the Poppies acquisition, with ongoing transformation of sales and marketing to improve efficiency.

• The acquisition of Poppies Europe was consolidated into Dining Solutions from February, contributing SEK 77m to sales and SEK 4m to operating income.

• Dedicated teams were established to drive sales and marketing transformation.

Financial highlights

• Net sales increased by SEK 128m to SEK 1,863m, a 7.4%–7.7% growth at fixed exchange rates compared to Q1 2024.

• Operating margin dropped to 5.9% from 8.1% last year, mainly due to currency effects and higher inventory costs.

• Net income declined from SEK 83m to SEK 63m, with EPS at 1.35 (down from 1.66).

• Interest-bearing net debt increased to SEK 1,586m (from SEK 921m), mainly due to the Poppies acquisition.

• Cash flow from operating activities was SEK -166m (improved from SEK -183m); total cash flow including investments was SEK -582m.

Outlook and guidance

• Market remains soft with weak consumer spending, especially in the HoReCa sector; recovery depends on lower interest rates, higher disposable income, and geopolitical stability.

• Cost reduction expected as inventory levels are brought down; positive trends already visible late in the quarter.

• Price increases initiated in Q1 are expected to gradually support margins.

• Long-term growth expected from sustainability trends and the plastic-to-fiber shift.

• Company targets >5% organic growth and >10% operating margin over the business cycle.