Duni Group Q2 2025 presentation: Acquisitions offset market weakness as margins slip

Introduction & Market Context

Duni Group’s Q2 2025 presentation revealed how the company is navigating a challenging economic environment, with acquisitions helping to offset weak organic growth. The company reported net sales of SEK 1,884 million, a slight increase from SEK 1,875 million in the same period last year, while operating income declined to SEK 121 million from SEK 135 million, resulting in a compressed operating margin of 6.4% compared to 7.2% in Q2 2024.

The presentation highlighted persistent headwinds in the European hospitality sector, particularly in Germany, Duni’s largest market, where hotel and restaurant visits declined by 4.8% in Q1 with no signs of structural recovery on the horizon.

As shown in the following chart illustrating consumer confidence and hospitality industry turnover:

CEO Robert Dackeskog noted, "Weak market and economic conditions pressured demand and volumes, though the quarter ended stronger than it began." This challenging environment has prompted consumers to trade down to less expensive dining options, creating negative mix effects as customers place lower priority on premium products.

Quarterly Performance Highlights

Despite the challenging environment, Duni Group achieved 5.2% sales growth in fixed currencies, primarily driven by recent acquisitions, while organic growth declined by 3.8%. The company’s key financial metrics for the quarter show the impact of market conditions on profitability:

The performance varied significantly between Duni’s two business segments. Dining Solutions, which includes the company’s tableware products, showed resilience with net sales increasing to SEK 1,138 million from SEK 1,069 million, and operating income rising to SEK 99 million from SEK 93 million, maintaining an operating margin of 8.7%.

In contrast, Food Packaging Solutions struggled, with net sales declining to SEK 746 million from SEK 806 million and operating income falling to SEK 22 million from SEK 42 million. This resulted in a significant drop in operating margin to 3.0% from 5.1% in the previous year.

Strategic Initiatives

In response to market challenges, Duni Group has implemented several strategic measures. The company restructured its sales and marketing organization as planned, including integrating sales teams with approximately 10% staff reduction. This initiative is expected to deliver annual cost savings of approximately SEK 30 million from Q4 2025.

The company is also pursuing growth through acquisitions, including the strategic majority acquisition of Finnish LinePack Oy to strengthen its Duniform offer in the Nordics. Recent acquisitions within Dining Solutions (Poppies & SETI) contributed SEK 21 million to operating income during the quarter.

Sustainability remains a core focus, with Duni Group outlining its "Decade of Action 2030" strategy centered on three key pillars:

The company has made progress toward its sustainability goals, reducing virgin fossil plastic use by 37% compared to 2019 and decreasing carbon intensity by 62% in Scope 1 and 2 emissions. Duni Group has also achieved EcoVadis Gold level certification with a score of 79, placing it in the top 3% of companies evaluated.

Looking ahead, the company’s growth strategy focuses on becoming "A Trusted Sustainability Leader in our Industry by 2030" through three strategic priorities:

Detailed Financial Analysis

A closer examination of Duni Group’s income statement reveals the financial impact of current market conditions:

The business area breakdown further illustrates the divergent performance between segments:

Despite challenges, Duni Group improved its operating cash flow to SEK 115 million from SEK 76 million in Q2 2024, primarily driven by lower inventory levels. However, the company’s financial position shows increased leverage, with net debt rising to SEK 1,708 million from SEK 1,058 million in July 2024, and the net debt to equity ratio increasing to 44% from 26%.

Forward-Looking Statements

Duni Group maintains ambitious financial targets despite current headwinds, aiming for organic sales growth exceeding 5% over a business cycle and an operating margin above 10%. However, the company’s last twelve months performance falls short of these targets, with -0.8% growth at fixed exchange rates and a 7.3% operating margin.

The company’s dividend policy targets a payout ratio of at least 40% of net profit, with the 2024 dividend set at SEK 5.00 per share, representing 91% of reported net profit or 66% when adjusted for restructuring costs.

According to Investing.com data, Duni’s stock closed at SEK 94.9 on October 14, 2025, down 1.16% and trading within its 52-week range of SEK 86.9 to SEK 105. The market reaction reflects investor concerns about the company’s compressed margins and challenging market conditions, though the stock maintains a healthy 5.33% dividend yield.

As the company summarized in its presentation, while weak market conditions persist, recent acquisitions have had a positive impact, and operational improvements including the restructured sales organization and improved cash flow position the company to navigate the current environment while preparing for eventual market recovery.

Full presentation:

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