Note 8 – Restructuring costs – allocation to restructuring reserve

Accounting principles

Provisions for restructuring costs and any legal claims are recognized when the Group has a legal or informal obligation as a consequence of earlier events, it is likely that an outflow of resources will be required to settle the obligation, and the amount can be calculated in a reliable manner.

Significant estimates and judgments

The provision for restructuring reserve is calculated on the basis of agreements following negotiations with trade unions and other interested parties. The amount of the provision is calculated on the basis of assumptions about the timing of the recognition of the cost and the estimated cost of salaries, termination benefits and other obligations arising from termination.

Restructuring expenses amount to SEK 10 (48) million.

Large parts of the business in Duni Song Seng, Singapore, do not fit into the updated strategy due to the fact that most of the product range consists of non-sustainable products and packaging. As a result, the decision has been made to close down the company Duni Song Seng in 2022. Duni Group has two operating companies in Singapore; Duni Song Seng and BioPak Sustainable Solutions. Sales, warehousing and distribution in the sustainable packaging solutions segment will be taken over by the BioPak company, after which Duni Song Seng will be closed down. This affects 13 people.

The cost of the closure and merger with the BioPak company has been taken as a restructuring cost and amounts to SEK 12 million. These include lease termination, inventory depreciation, personnel-related costs and IT costs. In connection with this, goodwill from the acquisition of the company of SEK 27 million and remaining intangible assets such as customer relations were impaired by SEK 6 million. A temporary deferred tax liability of SEK 12 million has therefore been reversed and reported as deferred tax income.

The restructuring cost in 2020 was mainly related to a reorganization to the current structure with two business areas, SEK 30 million. The program will result in annual savings of SEK 20 million, with full effect from the second half of 2020. The organization was then strengthened by creating two business areas with effect from January 1, 2021, resulting in additional restructuring costs in December 2020 of SEK 9 million. This will lead to additional savings of around SEK 10 million, creating space to reinvest in key areas such as sustainability and digitalization. In addition, a restructuring cost for severance compensation to the outgoing CEO was charged in the amount of SEK 9 million.

Restructuring costs by function:

Group Parent Company
SEK m 2021 2020 2021 2020
  Koncernen Moderbolaget
MSEK 2021 2020 2021 2020
Cost of goods sold Kostnad för sålda varor 3 2 – –
Selling expenses Försäljningskostnader 2 31 – 10
Administrative expenses Administrationskostnader 5 13 1 13
Other operating expenses Övriga rörelsekostnader – 2 – 2
Total restructuring expenses Total omstruktureringskostnad 10 48 1 26

Restructuring costs by function

Group Parent Company
SEK m 2021 2020 2021 2020
  Koncernen Moderbolaget
MSEK 2021 2020 2021 2020
Cost of goods sold Kostnad för sålda varor 3 2 – –
Selling expenses Försäljningskostnader 2 31 – 10
Administrative expenses Administrationskostnader 5 13 1 13
Other operating expenses Övriga rörelsekostnader – 2 – 2
Total restructuring expenses Total omstruktureringskostnad 10 48 1 26

Allocation to restructuring reserve

Group Parent Company
SEK m 2021 2020 2021 2020
  Koncernen Moderbolaget
MSEK 2021 2020 2021 2020
Opening balance, restructuring reserve Ingående balans omstruktureringsreserv 26 11 16 1
Utilized reserves Utnyttjade reserver -20 -33 -12 -10
Reversal of reserve Återföring av reserv – 0 – 0
Allocations for the year Årets avsättningar 13 48 1 26
Closing balance, restructuring reserve Utgående balans omstruktureringsreserv 19 26 5 16
Of which short-term Varav kort del 18 25 4 15