Consumer business area
Strong growth and strategically important acquisition
The Consumer business area supplies consumer products to, primarily, the retail trade in Europe. Customers consist of grocery retail chains, as well as other channels such as various specialty stores, for example, garden centers, home furnishing stores, and DIY stores. As from June 2014, the acquired German company Paper+Design is included in the business area.
Net sales amounted to SEK 889 (603) m. At fixed exchange rates, this represents an increase in sales of 40.1%. The acquisition of Paper+Design has laid the groundwork for offering a stronger product range, including smaller runs of unique customized products.
Operating income was SEK 54 (13) m and the operating margin was 6.1% (2.2%). The business area accounted for 21% (16%) of Duni’s net sales for the period.
The business area’s strategy in brief:
- Duni shall be the natural business partner for Europe’s grocery retail trade.
- Drive the category together with the grocery retail trade based on a customer and consumer perspective.
- Through a high level of flexibility and service offering, to be a part of the customer’s business model, both within the trade’s private labels and Duni’s own brand.
The most important event in 2014 was the acquisition of Paper+Design. At the same time, sales grew by 14% in the rest of the business area. The Nordic region experienced extremely strong growth in sales of 32%. Together with improved efficiency in the organization, profitability has increased significantly. Germany exhibited marginal growth, while the Benelux countries and the UK were stable. Consumer enjoyed great success within the retail trade’s private labels in 2014. This trend shows that sales of private label products, in tandem with our own premium segment products, with attractive designs and customized solutions, creates potential for improved profitability.
Priorities for profitable growth
Duni is increasingly working with private label customers and a number of major contracts were signed in 2014, primarily in the Nordic region. In order to develop and access new geographic markets, focus has been placed on France and Poland. Poland developed well during the year, not least in terms of profitability.
Consumer’s change in strategy involves gradually focusing on premium products. Designs for Duni®, a unique concept in which Duni develops specially designed products in cooperation with well-known designers, was created in 2013 in order to strengthen the Duni brand as an innovative player. The concept is contributing to greater profitability, positioning Duni as a leader within design, and supporting the business area’s endeavours to create Goodfoodmood®. During 2014, the business area continued to invest in the concept, with well-known designers such as Hanna Werning from Sweden, Melli Mello from the Netherlands, and the Finnish design company Vallila. In 2015, Duni will work together with Glööckler and Graziela Preiser, both from Germany.
More people eating outside the home
The overall pan-European food trend in recent years has been that increasing numbers of people are eating outside the home more frequently. In addition, food products are moving from the grocery store to other points of purchase. Although the total market has stagnated or even declined slightly, it is still extremely large and the business area is working on finding and developing new channels for reaching the end consumer. The acquisition of Paper+Design constitutes an important part of this strategy.
Paper+Design complements and strengthens
The German company Paper+Design was acquired towards the end of the second quarter of 2014. The company enjoys a strong position in the premium segment for designed napkins, particularly on the consumer market. The products are sold mainly through specialty stores such as garden centers, office supplies stores, florists and home furnishing stores, thereby complementing Duni’s sales channels. Approximately 50% of sales are exported to more than 80 markets outside Germany, the most important of which are North America, Scandinavia, France and Switzerland.
Paper+Design is based in Wolkenstein in eastern Germany, has approximately 210 employees, and recorded sales in 2014 of SEK 354 m, of which SEK 204 m since Duni took over the business on June 11. The operating margin is approximately 20%. The products mainly comprise design paper napkins, manufactured in-house.
The company supplies napkins with high-quality printing and a wealth of design prints to choose from. Paper+Design produces between 500 and 600 new design prints each year and carries a total portfolio of approximately 6,000 design prints. The acquisition of Paper+Design provides possibilities for synergies, for example within purchasing, materials know-how, and market collaboration.
Rapid integration
During the second half of the year, integration with Duni has taken place rapidly, for example regarding purchasing, and this will be intensified in 2015. On the sales side, there are a number of markets where synergies have been identified. The strategy is to retain the strengths of both Paper+Design and Duni and realize as many synergies as possible in the form of purchasing, materials know-how and collaboration on certain markets.
“The acquisition of Paper+Design fits in extremely well with Duni’s consumer offering and strengthens us in many areas. First and foremost, its strength within specialty stores complements our market channels. In addition, their high-level design skills contribute to Duni’s efficiency and breadth in our total offering.”
Robert Dackeskog, Director business area Consumer
Customer categories
Grocery retail trade
