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Introduction & Market Context
Duni Group (STO:DUNI) presented its Q2 2025 interim results on July 11, highlighting how the company is navigating persistent market challenges through strategic acquisitions and operational efficiency measures. The presentation revealed a business contending with weak consumer confidence and changing dining habits across its key European markets.
The company’s shares closed at SEK 95.5 on July 10, up 1.27% ahead of the results, but still trading significantly below its 52-week high of SEK 107.4, reflecting ongoing investor concerns about profitability in a challenging economic environment.
Market data presented by Duni shows a continued decline in the hotel and restaurant sector, with HoReCa visits in Germany falling by 4.8% in Q1. Consumer confidence across the EU remains below its long-term average, creating headwinds for the company’s core business.
As shown in the following consumer confidence indicator chart for the EU and Euro Area:
A particularly concerning trend for Duni is the shift in consumer behavior toward lower-cost dining options. The company’s presentation included data showing how consumers are trading down from fine dining to more affordable food service establishments:
Quarterly Performance Highlights
Duni Group reported net sales of SEK 1,884 million for Q2 2025, representing a marginal increase of 0.5% from SEK 1,875 million in Q2 2024. However, in fixed currencies, sales increased by 5.2%, primarily driven by acquisitions while organic growth declined by 3.8%.
Operating income decreased to SEK 121 million from SEK 135 million in the same period last year, resulting in an operating margin contraction to 6.4% from 7.2%. This 10.3% decline in operating income was attributed to lower volumes and negative mix effects in Europe.
The key financial metrics for the quarter are summarized in the following slide:
The company’s performance continues a trend observed in Q1 2025, when operating income fell to SEK 110 million from SEK 140 million year-over-year, with margins declining to 5.9%. The Q2 results show a slight sequential improvement in operating margin (from 5.9% to 6.4%) but remain below the previous year’s levels.
Management highlighted that continuous efficiency improvements and measures to reduce sales and marketing costs have been implemented to mitigate the impact of market weakness. The company also noted improved operational cash flow driven by lower inventory levels.
Segment Analysis
Duni Group’s two business areas showed divergent performance in Q2 2025. The Dining Solutions segment, which includes table setting products, demonstrated relative resilience with net sales increasing to SEK 1,138 million from SEK 1,069 million in Q2 2024. Operating income for this segment improved to SEK 99 million from SEK 93 million, maintaining an operating margin of 8.7%.
Despite this growth, volumes to the HoReCa market were slightly below last year, with a double-digit decline in the Retail segment. The company also reported continued negative mix effects and geopolitical headwinds in APAC and the Middle East that adversely affected volume and income.
In contrast, the Food Packaging (NYSE:PKG) Solutions segment faced more significant challenges. Net sales declined to SEK 746 million from SEK 806 million in the previous year, while operating income fell sharply to SEK 22 million from SEK 42 million. This resulted in an operating margin of just 3.0%, down from 5.1% in Q2 2024.
The presentation noted that Duniform, a sub-segment within Food Packaging Solutions, showed positive development in the quarter with strong performance in the Nordic region. The company also highlighted its strategic acquisition of LinePack Oy to strengthen the Duniform offering.
Strategic Initiatives & Outlook
Duni Group outlined several strategic initiatives aimed at improving performance amid challenging market conditions. A key focus is the restructuring of the sales and marketing organization, which is expected to deliver annual cost savings of approximately SEK 30 million from Q4 2025.
The company continues to emphasize sustainability as a core strategic pillar, with its "Decade of Action (WA:ACT) 2030" program targeting 100% circularity at scale and net-zero carbon emissions for Scope 1 and 2. Progress metrics show that the fossil plastic use index has reached 63 by the end of Q2 2025 (a reduction of 37%), while carbon intensity has reached index 38 (a reduction of 62%).
Duni Group’s long-term financial targets remain ambitious relative to current performance:
The gap between current performance (LTM sales growth of -0.8% and operating margin of 7.3%) and targets (sales growth >5% and operating margin >10%) highlights the challenges the company faces in the current economic environment.
Financial Position & Targets
Duni Group’s financial position shows increasing leverage, with net debt rising to SEK 1,708 million in July 2025 from SEK 915 million in December 2024 and SEK 1,058 million in July 2024. This increase in debt levels is likely related to the company’s acquisition strategy.
The income statement reveals the full extent of the profitability challenges, with year-to-date operating income of SEK 193 million compared to SEK 238 million in the same period last year. Net income has similarly declined to SEK 125 million from SEK 168 million.
Despite these challenges, the company’s operating cash flow has improved to SEK 115 million in Q2 2025 from SEK 76 million in Q2 2024, driven primarily by inventory reduction efforts. Year-to-date operating cash flow has turned positive at SEK 44 million compared to negative SEK 49 million in the previous year.
In summary, Duni Group’s Q2 2025 results reflect a company implementing strategic measures to offset challenging market conditions. While acquisitions have supported top-line growth, organic performance remains under pressure, and margin contraction continues to be a concern. The company’s focus on restructuring, efficiency improvements, and sustainability initiatives aims to position it for recovery when market conditions improve, but the gap between current performance and long-term targets remains substantial.
Full presentation:
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