Proposed Legal and Tax Structure Consequences for integrated IT structure in Europe

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Duni Presentation SEB Nordic Seminar, January 7-8
2009
www.duni.com
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Disclaimer
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• 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
  managements 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 Companys
  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 Companys 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 persons officers or employees accepts any
  liability whatsoever arising directly or
  indirectly from the use of this document

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Duni enhances atmosphere and brings convenience
to any eating and drinking occasion by providing
inspiring and innovative products and concepts
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Contents

• Market overview
• Business areas
• Professional
• Retail
• Tissue
• Financials
• Summary

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Duni the European Market Leader for Table Top
Solutions
Key financials
Duni
Table Top
Tissue 14

• 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)

Professional 68
Retail 18
Manufactured
Napkins Plates
Table coverings
Candles
Meal service
Eating Drinking (glasses, cups, plates, cutlery)
Traded
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¹ Excluding non-recurring items
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Attractive and Large Addressable Market
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European disposable table top market
European airlaid market
Focus areas for Duni

• 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

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Source B Kay tissue, Duni management
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The European Market Leader Above 2x Relative
Market Share
1 in European Table Top
Premium positioning
Market shares
19
8
8
8
5
4
3
Linen1)
Duni
Premium
Papstar
Karto
Tissuebased products
SCA
GP
KC
Commodity
Metsä
Narrow
Wide
Product range/ concepts
1) The linen market is characterized by a large
number of small and regional players Source
Company reports and management estimates
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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 have peaked and started to decline
• Energy
• Transport
• Pulp (USD/SEK)

Changing eating habits
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Value 2000-2007 (million )1), Commercial Food
Service
CAG (Annual Average Rate of Change)
2.36
2.81
3.56
2.90
4.17
1) Foodservice Annual Count and Expenditures
Tracking 2008 Hotels Gambling,
Restaurants/Bars/Cafés, QSR Coffee Stores,
Leisure Total
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Number of Meals 2000-2007 (million)1), Commercial
Food Service
CAG (Annual Average Rate of Change)
1.89
0.64
1.87
1.77
2.49
1) Foodservice Annual Count and Expenditures
Tracking 2008 Hotels Gambling,
Restaurants/Bars/Cafés, QSR Coffee Stores,
Leisure Total
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Eating Out Trend
Source BROG Media Biznes
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Focus 2009

• Control and monitoring of cost saving initiatives
• Continue to rationalize and optimize
  manufacturing footprint
• Further improve on logistic costs
• Indirect cost structure
• Procurement opportunities
• Capitalize on new product launches
• Premium Table Top Improved Dunilin, Sensia,
  Duniletto Slim
• Eating Drinking Amuse-Bouche, Biodegradable
  range
• Duni FoodSolutions New sealing machine, Sous
  scellage
• Trading capital focus
• Strengthen presence in growth markets
• Drive commercial excellence
• Monitor acquisition possibilities

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Business Areas
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Professional Stable Development
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Geographical split sales 2007
Sales and EBIT 1
MSEK
3,000
14
12
2,500
10
2,000
8
1,500
6
1,000
4

• Continued stable sales growth
• 4 annual growth since 2000
• Solid EBIT margin, further improving

500
2
0
0
2005
2006
2007
LTM
Sales
EBIT margin
1) Excluding non-recurring costs and market
valuation of derivatives
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Dunis Unique Direct approach to End-customers
50
40
10
250 sales men 70 customer service representatives
Wholesalers
Cash Carry
Duni direct
Fragmented market1)
45,000 hotels
150,000 restaurants
13,000 caterers
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1) Estimated number of customers using Dunis
products
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Fragmented end markets exemplified by Germany
Restaurants by size (sales MEUR)
Hotels by size (sales MEUR)
KAM direct
Wholesaler or CC
CC
4,912 restaurants account for 43 of sales
875 hotels account for 43 of sales
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Growing with key customers- Metro Germany
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New Premium Napkin
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Sensia Duniletto Slim
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Amuse-bouche

• Small bite size eating concept for nouvelle
  cuisine
• For banquets, receptions etc
• Used mainly in France, Benelux and Switzerland
• Unique Duni range developed in corporation with
  our customers
• Growing segment

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Retail Turnaround
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Sales and EBIT 1
Geographical split sales 2007
MSEK
900

• 6

• 4

850
2
800

• 0

750

• 2

700

• 4

Improved profitability prioritized over sales
growth Duni brand premium in focus Tougher
market conditions
650

• 6

600

• 0

LTM
2005
2006
2007
Sales
EBIT margin
1) Excluding non-recurring costs and market
valuation of derivatives
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Retail Changing Market Trends
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Duni opportunity
The Brand / private label pendulum

• 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 Dunis brand recognition
• Private label development stagnating in Sweden
  17,1 value and 23,8 volume (SourceGfK 2007)

Today
Branded Late 1990s
Private label Peak 2004/05
50/50

• Retailers moving from private label to branded
  and premium gives opportunity for Duni

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Key retail customers
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UK
Germany
Benelux
Nordics
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Category Management
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Tissue
Sales mix 2007
Sales and EBIT 1
MSEK
650
14
12
600
External
10
49
550
Internal
51
8
500
6
450
4
400
Tissue in-house provides competitive advantage
Healthy underlying growth in hygiene sector
2
350
0
LTM
2005
2006
2007
Sales
EBIT margin
1) Excluding non-recurring costs and market
valuation of derivatives
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Financials
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Top-Line Growth in Professional
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LTM Sales
Sales growth
MSEK
MSEK
4 100
1 150
1 100
4 050
1 050
4 000
1 000
3 950
950
3 900
900
3 850
850
Q4
Q1
Q2
Q3
Quarter
Rolling 12 months

• 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

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Underlying Margin Expansion
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Operating profit (MSEK)
Operating margin
MSEK
400
10
9
350
8
300

• 7

250
6
200
5
4
150
3
100
2
50
1
0
0
2005
2006
2007
LTM
EBIT margin
Reported
Non recurring items

• Total margin impacted by market valuation of
  derivatives -9 MSEK (2)
• Increased underlying profit in Professional and
  Retail, Tissue is stable.

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¹ Excluding non-recurring items ² Excluding
market valuation of derivatives
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Limited Sensitivity to Major Input Materials
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COGS breakdown (approximate)
Sensitivity analysis
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EBIT impact
100
Energy, 4
Pulp, 11
90

• Energy 1 SEK 1 million
• Pulp 1 SEK 4 million
• Freight 1 SEK 2 million
• Price 1 SEK 40 million

Freight
80
warehouse cost,
70
15
60
Traded goods, 19
50
40
Other material
cost, 24
30
20
Production costs, 27
10
0

• Unique business model in Professional enables
  price leadership to mitigate any swings in cost
  base

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Income Statement
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Balance Sheet
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Simplified Cash Flow Profile
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• Continuing businesses excluding disposals.
• Cancellation of factoring contracts amounting to
  97 MSEK

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Financial Targets
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LTM
Sales growth gt 5
2.7 -

• Organic growth of 5 over a business cycle
• Consider acquisitions to reach new markets or to
  strengthen current market positions

EBIT margin gt 10

• Top-line growth premium focus
• Improvements in manufacturing, sourcing and
  logistics

9.9
Dividend payout ratio 40

• Board target at least 40 of net profit

1,80 kr/share (2008)
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Duni Summary
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Focused centered on the European professional
segment with high profitability and favourable
underlying market trends
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
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