Duni — Interim / Quarterly Report 2010

Jul 16, 2010

Interim Report for Duni AB (publ) 1 January – 30 June 2010

(compared with the same period of the previous year)

16 July 2010

Improved operating income

1 January – 30 June 2010

• Net sales amounted to SEK 1,930 m (2,042). Adjusted for exchange rate changes, net sales increased by 0.7%.
• Earnings per share for continuing operations amounted, after dilution, to SEK 2.48 (2.24).

1 April – 30 June 2010

• Net sales amounted to SEK 970 m (1,035). Adjusted for exchange rate changes, net sales increased by 0.4%.
• Earnings per share for continuing operations amounted, after dilution, to SEK 1.40 (1.45).
• Strong operating margin of 9.4% (8.1%), primarily thanks to improved capacity utilization and lower costs.

	6 months January­ June	6 months January­ June	3 months April ­ June	3 months April ­ June	12 months July­ June	12 months January­ December
SEK m	2010	2009	2010	2009	09/10	2009
Net sales	1 930	2 042	970	1 035	4 109	4 220
Operating income1)	168	157	91	84	448	436
Operating margin1)	8.7%	7.7%	9.4%	8.1%	10.9%	10.3%
Income after financial items	156	144	90	94	456	444
Net income2)	117	105	66	68	347	336

Key financials

1) Underlying operating income; for link to reported operating income, see the section entitled "Non-recurring

items". 2) With respect to continuing operations.

CEO's comments

"Duni delivered a strong second quarter, particularly when set against the fact that pulp prices continued to increase sharply. Operating income increased by SEK 7 m compared with last year, to SEK 91 m. A number of factors contributed to the positive income trend. The primary factor was improved capacity utilization, particularly within Tissue. In addition, the full effect of the cost savings program has been achieved, which is reflected in both lower indirect costs as well as higher productivity. We have also succeeded in postponing some cost increases within purchasing to the third quarter.

The recovery within Professional has taken place at a somewhat higher pace than during the preceding quarter. In terms of volume, sales increased slightly more than 3% during the second quarter. Retail, on the other hand, experienced a weak quarter in terms of sales, with volume losses on several markets. However, it is important to emphasize that the operating margin continues to improve. We now have a healthier base, but going forward the focus is on gaining profitable market shares for Retail.

Duni is a leading supplier of attractive and convenient products for table setting and takeaway. The Duni brand is sold in more than 40 markets and enjoys a number one position in Central and Northern Europe. Duni has some 2,000 employees in 17 countries, headquarters in Malmö and production units in Sweden, Germany and Poland. Duni is listed on NASDAQ OMX Stockholm under the ticker name "DUNI". ISIN-code is SE 0000616716.

Sales in the Tissue business area increased by almost 1% during the quarter where a fire at the production plant in Dals Långed, Sweden, only had marginal impact. In total, Duni achieved sales of SEK 970 m in the second quarter, which at fixed exchange rates is largely unchanged compared with last year.

With our sights set on creating conditions for long-term growth, we have opened a sales office in Moscow during spring. We have also commenced the investments at the mill in Skåpafors, Sweden, which are aimed at further strengthening our leading position on the market for table setting products in the medium term.

General price increases will be implemented during the third quarter of the year in order to compensate for the substantial increases in prices of input materials. From a market perspective, we believe in a continued slow rate of recovery, among other things as a consequence of the cost-saving measures around Europe which are now being introduced," says Fredrik von Oelreich, President and CEO, Duni. ___________________________________________________________________________________

Net sales amounted to SEK 1,930 m

Net sales during the period 1 January – 30 June 2010 declined by SEK 112 m compared with the same period of last year, to SEK 1,930 m (2,042). Adjusted for exchange rate changes, net sales increased by 0.7%. Growth was primarily within Professional, while Retail continues its endeavors to improve the gross margin.

Net sales for the period 1 April – 30 June declined by SEK 65 m, to SEK 970 m (1,035). Adjusted for exchange rate changes, net sales increased by 0.4%. The weak growth is in line with the preceding quarter, which indicates a continued slow recovery within the HoReCa market.

Net sales, currency effect	6 months January ­ June 2010	6 months January ­ June 20101)	6 months January ­ June 2009	Change in fixed exchange	3 months April ­ June 2010	3 months April ­ June 20101)	3 months April ­ June 2009	Change in fixed exchange
SEK m		recalculated		rates		recalculated		rates
Professional	1 344	1 446	1 411	2.5%	710	767	742	3.3%
Retail	320	344	374	­7.9%	136	147	169	­13.0%
Tissue	266	266	258	3.3%	125	125	124	0.8%
Duni	1 930	2 057	2 042	0.7%	970	1 039	1 035	0.4%

1) Reported net sales for 2010 recalculated at 2009 exchange rates.

Operating margin of 8.7%

Adjusted for non-recurring items, operating income (EBIT) for the period 1 January – 30 June 2010 increased by SEK 11 m, to SEK 168 m (157). The underlying operating margin for the Group thus increased from 7.7% to 8.7%. Adjusted for exchange rate changes, operating income increased by SEK 36 m compared with the preceding year.

Despite higher costs for input materials, thanks to normalized capacity utilization and a favorable product mix the gross margin from the preceding year was maintained at 25.6% (25.6%). Income after financial items amounted to SEK 156 m (144). Income after tax was SEK 117 m (105).

Adjusted for non-recurring items, operating income (EBIT) for the period 1 April – 30 June amounted to SEK 91 m (84). The gross margin weakened somewhat to 25.4% (26.0%). The significant increase in pulp prices has largely been offset by high capacity utilization within production and thereby lower production costs per unit. Duni has also succeeded in delaying until the third quarter a number of the anticipated cost increases, primarily relating to traded goods.

The operating margin during the quarter strengthened from 8.1% to 9.4%. The cost savings program which was implemented last year has contributed to the improvement in margin. Adjusted for exchange

rate changes, operating income increased by SEK 20 m. Income after financial items amounted to SEK 90 m (94). Income after tax was SEK 66 m (68).

As previously announced, a fire occurred at the plant in Dalsland, Sweden, which belongs to the subsidiary, Rexcell Tissue & Airlaid AB. This has affected operating income for the second quarter by slightly more than SEK 3 m, which represents the insurance deductible. Duni's assessment is that the insurance will cover the economic consequences of the stoppage in production. However, a smaller part of the investment requirements may be covered by Duni. Production has been interrupted since 16 June and is estimated to be up and running again at the turn of the month July-August. Actions have been taken and only limited disruptions of deliveries are therefore expected.

Underlying operating income, currency effect	6 months January ­ June	6 months January ­ June 20101)	6 months January ­ June	3 months April ­ June	3 months April ­ June 20101)	3 months April ­ June
SEK m	2010	recalculated	2009	2010	recalculated	2009
Professional	163	185	161	94	106	96
Retail	1	3	­8	­7	­7	­10
Tissue	5	6	3	5	5	­2
Duni	168	193	157	91	104	84

1) Underlying operating income for 2010 recalculated at 2009 exchange rates.

Non-recurring items

Non-recurring items refers to restructuring expenses as well as non-realized valuation effects of derivatives due to the fact that hedge accounting is not applied.

Reported income for the period 1 January – 30 June 2010 is affected by non-realized valuation effects of derivatives in the amount of SEK -4 m (23) and restructuring costs of SEK 0 m (-1). For further information, see Note 4.

Non­recurring items SEK m	6 months January ­ June 2010	6 months January – June 2009	3 months April ­ June 2010	3 months April ­ June 2009	12 months July ­ June 09/10	12 months January ­ December 2009
Underlying operating income	168	157	91	84	448	436
Unrealized value changes, derivative instruments	­4	23	­1	25	27	54
Restructuring costs	0	­1	0	­1	0	­2
Reported operating income	165	178	91	108	474	488

Reporting of operating segments

Duni's operations are divided into three segments, referred to as business areas.

The Professional business area (sales to hotels, restaurants and catering companies) accounted for 70% (69%) of Duni's net sales for the period 1 January – 30 June 2010.

The Retail business area (primarily focused on retail trade) accounted for 16% (18%) of net sales during the period.

The Tissue business area (airlaid and tissue-based material for tabletop products and hygiene applications) accounted for 14% (13%) of sales to external customers during the period.

The Professional and Retail business areas have, to a large extent, a common product range. Design and packaging solutions are, however, adapted to suit the different sales channels. Production and support functions are shared to a large degree by the business areas.

Duni management team, which decides upon the allocation of resources within Duni and evaluates results from the business operations, is the highest executive decision-making body in Duni. Duni controls the business areas on the underlying operating income, after shared costs have been allocated to each business area. For further information, see Note 3.

Split between business areas

Professional business area

Net sales for the period 1 January – 30 June 2010 declined by SEK 67 m, to SEK 1,344 m (1,411). At fixed exchange rates, this represents an increase in sales of 2.5%. Despite a relatively weak market, the business area is stable and shows a degree of growth.

Operating income was SEK 163 m (161), with an increased operating margin of 12.1% (11.4%). Margin was positively affected by, in particular, increased capacity utilization and sound cost control. Within Professional, an initiative has been launched to increase the rate of growth on some selected markets. These include the UK, where growth has been particularly strong during the quarter, however with initially low profitability.

Net sales for the period 1 April – 30 June declined by SEK 32 m, to SEK 710 m (742). At fixed exchange rates, this represents a sales increase of 3.3%. Growth in Central Europe, with Germany as the dominant market, has strengthened somewhat from a weak first quarter.

Sales - Geographical split, Professional

Operating income fell to SEK 94 m (96), with an operating margin of 13.2% (12.9%).

Net Sales Professional, SEK m	6 months January­ June 2010	6 months January – June 20101) recalculated	6 months January­ June 2009	3 months April ­ June 2010	3 months April – June 20101) recalculated	3 months April­ June 2009	12 months July­ June 09/10	12 months January­ December 2009
Nordic region	311	312	308	166	166	164	642	639
Central Europe	796	877	860	414	459	442	1 691	1 755
Southern & Eastern Europe	223	243	230	123	135	129	460	467
Rest of the World	13	15	12	6	7	6	25	24
Total	1 344	1 446	1 411	710	767	742	2 818	2 885

1) Reported net sales for 2010 recalculated at 2009 exchange rates.

Retail business area

Net sales for the period 1 January – 30 June 2010 declined by SEK 54 m, to SEK 320 m (374), equivalent to a decrease in sales of 7.9% at fixed exchange rates. The weak sales are due to a weak market, intense competition and the discontinuation of unprofitable customer contracts.

Operating income increased to SEK 1 m (-8). The operating margin increased to 0.2% (-2.1%). Despite the significant decline in volume, Retail has strengthened its margin compared with last year

Sales – Geographical split, Retail

thanks to sound cost control and improved product and customer mix. The structural adjustment renders possible favorable conditions for improvements in margin in conjunction with growth.

Net sales for the period 1 April – 30 June amounted to SEK 136 m (169). At fixed exchange rates this corresponds to a decrease in sales of 13.0%. Seasonally, the second quarter is the weakest in terms of volume, while at the same time Retail has experienced an unfavorable phasing of certain customer contracts. Operating income was SEK -7 m (-10) and the operating margin was -5.4% (-6.2%).

Net Sales – Retail	6 months January­ June 2010	6 months January – June 20101)	6 months January­ June 2009	3 months April ­ June 2010	3 months April – June 20101)	3 months April ­ June 2009	12 months July­ June 09/10	12 months January­ December 2009
SEK m		recalculated			recalculated
Nordic region	48	48	55	22	22	28	109	116
Central Europe	255	278	312	105	116	136	586	643
Southern & Eastern Europe	18	18	6	9	9	4	44	32
Rest of the World	0	0	1	0	0	1	1	2
Total	320	344	374	136	147	169	739	792

1) Reported net sales for 2010 recalculated at 2009 exchange rates.

Tissue business area

Net sales for the period 1 January – 30 June 2010 increased by 3.1%, to SEK 266 m (258).

Operating income increased to SEK 5 m (3). The operating margin was 2.0% (1.3%). Production volume within hygiene products has normalized compared with the preceding year, with resulting significant positive effects which have mitigated the consequences of the high cost level for input materials.

Net sales for the period 1 April – 30 June were SEK 125 m (124). The operating income was SEK 5 m (-2) and the operating margin was 3.8% (-1.5%). The strong increase in costs of input materials which characterized 2010 has partly been compensated by price adjustments, at the same time as Tissue has enjoyed a favorable trend in productivity.

Cash flow

The Group's operating cash flow for the period 1 January – 30 June 2010 amounted to SEK 30 m (170). Inventory levels have stabilized on a low level and the increase in the operating working capital since the beginning of the year can be explained by a normal development as a consequence of seasonal variations.

Inventory value in Swedish krona is unchanged compared with the same period last year, SEK 449 m (448). Accounts receivable have declined by SEK 71 m to SEK 651 m (722).

Cash flow including investing activities amounted to SEK -100 m (116). Duni's net investments amounted to SEK 130 m (54), an increase compared with the preceding year which is explained by the investment in a biofuel boiler and purchase of a previously operationally-leased machine at the paper mill in Skåpafors. Depreciation and write-downs for the period amounted to SEK 52 m (50).

The Group's interest-bearing net debt as of 30 June 2010 is SEK 799 m, compared with SEK 1,066 m as of 30 June 2009 and SEK 631 m as of 31 December 2009. The increase in the net debt from the low level at the end of last year is mainly due to a seasonal increase in operational working capital as well as the planned high level of investment.

Financial net

The financial net for the period 1 January – 30 June 2010 was SEK -9 m (-34). External interest expenses are lower than last year thanks to a reduced indebtedness and lower market interest rates. The financial net is affected by somewhat positive realized and unrealized changes in value which, for the same period last year, were strongly negative.

Taxes

The total reported tax expense for the period 1 January – 30 June 2010 was SEK 39 m (39), yielding an effective tax rate of 25.1% (27.0%). The tax expense for the year includes adjustments from previous periods of SEK 2.2 m (1.6). The deferred tax asset relating to loss carry-forwards was utilized in the amount of SEK 15 m (5).

Earnings per share

The period's earnings per share for continuing operations before and after dilution amounted to SEK 2.48 (2.24).

Duni's share

As per 30 June 2010 the share capital amounted to SEK 58,748,790 divided into 46,999,032 shares, each with a quotient value of SEK 1.25.

Shareholders

Duni is listed on NASDAQ OMX Stockholm under the ticker name "DUNI". Duni's three largest shareholders, as per 30 June 2010, are Mellby Gård Investerings AB (29.99%), Polaris Capital Management, LLC (10.31%) and Swedbank Robur fonder (7.08%).

Personnel

On 30 June 2010 there were 1,907 (1,892) employees. 826 (788) of the employees were engaged in production. Duni's production units are located in Bramsche in Germany, Poznan in Poland, and Bengtsfors in Sweden.

Acquisitions

No acquisitions were carried out during the period.

New establishment

No new establishments were carried out during the period.

Risk factors for Duni

A number of risk factors may affect Duni's operations in terms of both operational and financial risks. Operational risks are normally handled by each operating unit and financial risks are managed by the Group's Treasury department, which is included as a unit within the Parent Company.

Operational risks

Duni is exposed to a number of operational risks which it is important to manage. The development of attractive product ranges, particularly the Christmas collection, is extremely important in order for Duni to achieve good sales and income growth. Duni addresses this issue by constantly developing its range. Approximately 25% of the collection is replaced each year in response to, and to create new, trends. A weaker economy over an extended period of time in Europe might lead to fewer restaurant visits, reduced consumption at consumer level and increased price competition, which may affect volumes and gross margins.

Control and management of fluctuations in prices of raw materials and energy have a major impact on Duni's competitiveness. Due to the fact that hedge accounting is not applied, Duni has an increased accounting exposure, as unrealized profits or losses related to derivative instruments are accounted for in the income statement.

Financial risks

Duni's finance management and its handling of financial risks are regulated by a finance policy adopted by the Board of Directors. The Group divides its financial risks between currency risks, interest rate risks, credit risks, financing and liquidity risks. These risks are controlled in an overall risk management policy which focuses on unforeseen events on the financial markets and endeavors to minimize potential adverse effects on the Group's financial results. The risks for the Group are in all essential respects also related to the Parent Company. Duni's management of financial risks is described in greater detail in the Annual Report as per 31 December 2009.

Since 2007, Duni's long-term financing has been secured through financing agreements valid until 2012. Duni has no significant changes in contingent liabilities since 31 December 2009.

Transactions with related parties

No transactions with related parties took place during the second quarter of 2010.

Major events since 30 June

No significant events have occurred after the balance sheet date.

Interim reports

Quarter III 27 October 2010 Quarter IV 16 February 2011

Duni's Board

At the Annual General Meeting held on 5 May 2010, all members of Duni's Board of Directors were reelected. Anders Bülow was re-elected as Chairman of the Board.

The Parent Company

Net sales for the period 1 January – 30 June 2010 amounted to SEK 561 m (558). Income after financial items was SEK 215 m (506). The figure for last year includes extra dividends from subsidiaries.

Net debt amounted to SEK -181 m (78), of which a net asset of SEK 946 m (932) relates to subsidiaries. Other receivables have increased due to increased lending to subsidiaries. Net investments amounted to SEK 11 m (10).

Group structure and reporting

During 2006 and at the beginning of 2007, Duni completed the work of concentrating its operations to its core business, in principle corresponding to the former Duni Europe. In order to facilitate a relevant comparison between the years, only the new Group structure is reported in full and designated in this report as "continuing operations". In December 2008, the provision for capital gains on the sale of Duni Americas was settled and thus Duni will continue to maintain the concept "continuing operations" up to and including the interim report for the period 1 January – 30 September 2010. There is no noncontrolling interest in Duni.

Accounting principles

This interim report has been prepared in accordance with IAS 34 and the Swedish Annual Accounts Act. The Parent Company's financial statements are prepared in accordance with RFR 2.3, Reporting for Legal Entities, and the Swedish Annual Accounts Act. The accounting principles applied are those described in the annual report as per 31 December 2009.

Information in the report

The information is such that Duni is obliged to publish pursuant to the Securities Market Act. The information will be disclosed to the media for publication at 8.00 AM CET on 16 July.

The interim report will be presented on Friday, 16 July at 10.00 AM CET at a telephone conference which also can be followed via the web. To participate in the telephone conference, please dial +46 (0)8 5052 0110. To follow the presentation via the web, please visit this link:

http://events.webeventservices.com/duni/2010/07/16/

This report has been prepared in both a Swedish and an English version. In the event of any discrepancy between the two, the Swedish version shall apply.

This report has not been the subject of an audit by the Company's auditors.

Report from the Board and the CEO

The Board and the CEO certify that this report provides a true and fair view of the Group's financial position and results and describes the material risks and uncertainties facing the Group and the companies included in the Group.

Malmö, 15 July 2010

Anders Bulow, Chairman of the Board

Tomas Gustafsson, Board Member Pia Rudengren, Board Member

Sanna Suvanto-Harsaae, Board Member Magnus Yngen, Board member

Fredrik von Oelreich, President and CEO

Additional information is provided by:

Fredrik von Oelreich, President and CEO, +46 40 10 62 00 Mats Lindroth, CFO, +46 40 10 62 00 Fredrik Wahrolén, Marketing and Communications Manager, +46 734 19 62 07

Duni AB (publ) Box 237 201 22 Malmö Tel.: +46 40 10 62 00 www.duni.com Registration no: 556536-7488

Consolidated Income Statements

	6 months January ­	6 months January ­	3 months April ­	3 months April ­	12 months July	12 months January
SEK m (Note 1)	June 2010	June 2009	June 2010	June 2009	June 09/10	December 2009
Net Sales	1 930	2 042	970	1 035	4 109	4 220
Cost of goods sold	­1 436	­1 520	­724	­766	­2 970	­3 054
Gross profit	494	522	246	269	1 139	1 166
Selling expenses	­228	­245	­107	­119	­466	­482
Administrative expenses	­87	­96	­42	­52	­175	­184
Research and development expenses	­11	­12	­5	­6	­27	­29
Other operating incomes (Note 4)	39	51	16	24	95	107
Other operating expenses (Note 4)	­42	­41	­18	­8	­92	­90
Operating income (Note 3)	165	178	91	108	474	488
Financial income	1	2	0	0	1	2
Financial expenses, etc.	­9	­35	­2	­14	­19	­45
Net financial items	­9	­34	­1	­14	­18	­43
Income after financial items	156	144	90	94	456	444
Income tax	­39	­39	­24	­26	­109	­108
Net Income	117	105	66	68	347	336
Income attributable to:
Equity holders of the Parent Company	117	105	66	68	347	336
Earnings per share, attributable to equity holders of the Parent Company, SEK
Before and after dilution Average number of shares before and after	2.48	2.24	1.40	1.45	7.39	7.15
dilution (´000)	46 999	46 999	46 999	46 999	46 999	46 999

Statement of comprehensive income

SEK m	6 months January ­ June 2010	6 months January ­ June 2009	3 months April ­ June 2010	3 months April ­ June 2009	12 months July­ June 09/10	12 months January­ December 2009
Net income of the period	117	105	66	68	347	336
Comprehensive income Exchange rate differences ­ translation of subsidiaries	5	­13	1	5	12	­6
Comprehensive income of the period	5	­13	1	5	12	­6
Sum of comprehensive income of the period Comprehensive income of the period attributable to:	122	92	67	73	359	330
Equity holders of the Parent Company	122	92	67	73	359	330

Comprehensive income consists of translation differences with no tax effects.

Consolidated Quarterly Income Statements in brief

SEK m	2010			2009			2008
	Apr ­	Jan	Oct­	Jul	Apr­	Jan­	Oct­	Jul­
Quarter	Jun	Mar	Dec	Sep	Jun	Mar	Dec	Sep
Net Sales	970	960	1 157	1 021	1 035	1 007	1 145	973
Cost of goods sold	­724	­712	­800	­734	­766	­755	­848	­715
Gross profit	246	248	357	287	269	252	297	258
Selling expenses	­107	­121	­128	­109	­119	­126	­119	­104
Administrative expenses	­42	­45	­3	­45	­52	­45	­51	­47
Research and development expenses	­5	­6	­10	­6	­6	­6	­6	­5
Other operating incomes	16	23	9	48	24	27	14	7
Other operating expenses	­18	­25	­12	­38	­8	­32	­69	­26
Operating income	91	74	173	137	108	70	66	83
Financial income	0	0	0	0	0	1	3	2
Financial expenses etc.	­2	­8	­7	­3	­14	­21	­30	­14
Net financial items	­1	­8	­7	­3	­14	­20	­27	­12
Income after financial items	90	66	166	134	94	50	39	72
Income tax	­24	­15	­35	­35	­26	­13	­3	­19
Net income, continuing operations	66	51	131	100	68	37	36	53
Net income, discontinued
operations	­	­	­	­	­	­	6	­
Net Income	66	51	131	100	68	37	42	53

Duni AB (publ) • Box 237 • 201 22 Malmö • Sweden • Visiting address Östra Varvsgatan 9 A • Tel +46 40 10 62 00 • Fax +46 40 39 66 30 www.duni.com • Registration no: 556536-7488 11

Consolidated Balance Sheets in brief

SEK m	30 June 2010	31 December 2009	30 June 2009
ASSETS
Goodwill	1 199	1 199	1 199
Other intangible fixed assets	32	29	34
Tangible fixed assets	559	510	499
Financial fixed assets	318	336	355
Total fixed assets	2 108	2 074	2 087
Inventories	449	382	448
Accounts receivable	651	640	722
Other operating receivables	147	163	153
Cash and cash equivalents	89	230	135
Total current assets	1 337	1 415	1 458
TOTAL ASSETS	3 445	3 489	3 545
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	1 794	1 789	1 551
Long­term loans	712	682	1 002
Other long­term liabilities	208	216	227
Total long­term liabilities	920	898	1 229
Accounts payable	283	344	275
Other short­term liabilities	448	458	490
Total short­term liabilities	731	802	765
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES	3 445	3 489	3 545

Change in the Group's shareholders' equity

		Attributable to equity holders of the parent company
SEK m	Share capital	Other injected capital	Reserves	Fair value reserve 1)	Loss carried forward incl. net income for the period	TOTAL EQUITY
Opening balance 1 January 2009	59	1 681	42	13	­251	1 544
Sum of comprehensive income of the period	­	­	­13	­	105	92
Dividend paid to shareholders	­	­	­	­	­85	­85
Closing balance 30 June 2009	59	1 681	29	13	­231	1 551
Sum of comprehensive income of the period	­	­	7	­	231	238
Closing balance 31 December 2009	59	1 681	36	13	0	1 789
Sum of comprehensive income of the period	­	­	5	­	117	122
Dividend paid to shareholders	­	­	­	­	­117	­117
Closing balance 30 June 2010	59	1 681	41	13	0	1 794

1) Fair value reserve means a reappraisal of land in accordance with earlier accounting principles. The reappraised value is adopted as the acquisition value in accordance with the transition rules in IFRS 1.

Consolidated Cash Flow Statement

	1 January­ 30 June	1 January 30 June
SEK m	2010	2009
Current operation
Operating income	165	178
Adjustment for items not included in cash flow etc	60	2
Paid interest and tax	­16	­71
Change in working capital	­179	61
Cash flow from operations	30	170
Investments
Acquisition of fixed assets	­134	­54
Sales of fixed assets	2	0
Change in interest­bearing receivables	3	1
Cash flow from investments	­130	­54
Financing
Taken up loans1)	136	952
Amortization of debt1)	­102	­1 113
Dividend paid	­117	­85
Change in borrowing	45	15
Cash flow from financing	­39	­230
Cash flow from the period	­138	­113
Liquid funds, opening balance	230	249
Exchange difference, cash and cash equivalents	­2	­1
Cash and cash equivalents, closing balance	89	135

1) Loans and amortizations, within the credit facility, are reported gross for duration above 3 months according to IAS 7.

Key ratios in brief

	1 January­	1 January
	30 June	30 June
	2010	2009
Net Sales, SEK m	1 930	2 042
Gross Profit, SEK m	494	522
EBIT1), SEK m	168	157
EBITDA1), SEK m	221	206
Net debt	799	1 066
Number of Employees	1 907	1 892
Sales growth	­5.5%	3.1%
Gross margin	25.6%	25.6%
EBIT1) margin	8.7%	7.7%
EBITDA1) margin	11.4%	10.1%
Return on capital employed1)	19.6%	17.8%
Net debt/equity ratio	44.5%	68.7%
Net debt/EBITDA 1)	1.45	2.13

1) Calculated based on underlying operating income.

Parent Company Income Statements in brief

SEK m (Note 1)	6 months January­ June 2010	6 months January ­ June 2009	3 months April ­ June 2010	3 months April­ June 2009
Net Sales	561	558	295	294
Cost of goods sold	­499	­505	­256	­265
Gross profit	63	53	39	29
Selling expenses	­62	­58	­29	­30
Administrative expenses	­62	­70	­30	­37
Research and development expenses	­6	­6	­3	­3
Other operating incomes	129	142	65	82
Other operating expenses	­106	­103	­52	­54
Operating income	­44	­42	­11	­13
Revenue from participations in Group Companies	241	547	241	126
Other interest revenue and similar income	10	18	5	10
Interest expenses and similar expenses	7	­17	5	­11
Net financial items	258	548	251	125
Income after financial items	215	506	240	112
Taxes on income for the period	­7	­2	­7	­2
Net income for the period	208	504	234	110

Parent Company Balance Sheets in Brief

	30 June	31 December	30 June
SEK m	2010	2009	2009
ASSETS
Goodwill	649	699	749
Other intangible fixed assets	32	29	34
Total intangible fixed assets	681	728	783
Tangible fixed assets	65	67	60
Financial fixed assets	1 052	1 070	1 083
Total fixed assets	1 799	1 865	1 926
Inventories	101	86	102
Accounts receivable	113	104	123
Other operating receivables	1 076	843	1 133
Cash and bank	35	179	89
Total current assets	1 324	1 212	1 447
TOTAL ASSETS	3 123	3 077	3 373
SHAREHOLDERS' EQUITY AND LIABILITIES
Total restricted shareholders equity	84	83	84
Total unrestricted shareholders equity	1 977	1 868	1 844
Shareholders' equity1)	2 061	1 951	1 928
Provisions	111	113	113
Long­term financial liabilities	651	668	988
Total long­term liabilities	651	668	988
Accounts payable	41	73	56
Other short­term liabilities	259	272	288
Total short­term liabilities	300	345	344
TOTAL SHAREHOLDERS' EQUITY, PROVISIONS AND
LIABILITIES	3 123	3 077	3 373

1) Shareholders' equity also includes Group contributions received from Rexcell Tissue & Airlaid AB.

Definitions

Cost of goods sold: Cost of goods sold including production and logistic costs.

Gross margin: Gross profit as a percentage of net sales.

EBIT: Operating income.

EBIT margin: EBIT as a percentage of net sales.

EBITA: Operating income adjusted for impairment of fixed assets.

EBITA margin: EBITA as a percentage of net sales.

EBITDA: Operating income before depreciation and impairment of fixed assets.

EBITDA margin: EBITDA as a percentage of net sales.

Capital employed: Non-interest bearing fixed assets and current assets, excluding deferred tax assets, less non-interest bearing liabilities.

Return on capital employed: Operating income as a percentage of capital employed.

Return on shareholders' equity: Net income as a percentage of shareholders' equity.

Number of employees: The number of employees at end of period.

Currency adjusted: Figures adjusted for changes in exchange rates. Figures for 2010 are calculated at exchange rates for 2009.

Earnings per share: Net income divided by the average number of shares.

Net Interest-bearing debt: Interest-bearing liabilities and pensions less cash and cash equivalents and interest-bearing receivables.

HoReCa: Abbreviation for hotels, restaurants and catering.

Notes

Note 1 • Accounting and valuation principles

Since January 1, 2005, Duni applies International Financial Reporting Standards (IFRS) as adopted by the European Union. For transition effects see notes 45 and 46 in the Annual Report of 30 June 2007.

This interim report has been prepared in accordance with IAS 34, Interim Reporting. The consolidated financial statements have been prepared in accordance with IFRS as adopted by the EU and with the related reference to Chapter 9 of the Annual Accounts Act. The parent company's financial statements are prepared in accordance with RFR 2.3, Reporting for Legal Entities, and the Annual Accounts Act. The accounting principles are the same as in the Annual Report as per 31 December 2009.

Note 2 • Divested business

The American businesses, Duni Corporation and Duni Supply Corporation, were sold in August 2006. Final capital gains from the sale were adjusted by SEK 6 m in December 2008 and amounted in total to SEK 131 m.

Note 3 • Segment reporting, SEK m

January - June

2010­01­01 – 2010­06­30	Professional	Retail	Tissue	Group's Total
Total net sales	1 344	320	523	2 187
Net sales from other segments	­	­	257	257
Net sales from external customers	1 344	320	266	1 930
Underlying operating income	163	1	5	168
Non­recurring items	­	­	­	­4
Operating income	­	­	­	165
Net financial items	­	­	­	­9
Income after financial items	­	­	­	156

2009­01­01 – 2009­06­30	Professional	Retail	Tissue	Group's Total
Total net sales	1 411	374	494	2 278
Net sales from other segments	­	­	236	236
Net sales from external customers	1 411	374	258	2 042
Underlying operating income	161	­8	3	157
Non­recurring items	­	­	­	22
Operating income	­	­	­	178
Net financial items	­	­	­	­34
Income after financial items	­	­	­	144

April - June

2010­04­01 – 2010­06­30	Professional	Retail	Tissue	Group's Total
Total net sales	710	136	264	1 110
Net sales from other segments	­	­	139	139
Net sales from external customers	710	136	125	970
Underlying operating income	94	­7	5	91
Non­recurring items	­	­	­	­1
Operating income	­	­	­	91
Net financial items	­	­	­	­1
Income after financial items	­	­	­	90

2009­04­01 – 2009­06­30	Professional	Retail	Tissue	Group's Total
Total net sales	742	169	232	1 143
Net sales from other segments	­	­	108	108
Net sales from external customers	742	169	124	1 035
Underlying operating income	96	­10	­2	84
Non­recurring items	­	­	­	24
Operating income	­	­	­	108
Net financial items	­	­	­	­14
Income after financial items	­	­	­	94

The increase in investments compared with the preceding year relates primarily to the Tissue business area. In other respects, no significant changes have taken place in the assets of the segments compared with the annual report as per 31 December 2009.

Note 4 • Non-recurring items

Duni considers restructuring cost and unrealized valuation effects on derivative instruments, due to nonapplication of hedge accounting, as non-recurring items. Presented below is a specification of the lines on which these items are included in the consolidated income statement.

Derivative instruments SEK m	6 months January­ June 2010	6 months January­ June 2009	3 months April ­ June 2010	3 months April­ June 2009	12 months July ­ June 09/10	12 months January ­ December 2009
Other operating incomes	2	28	1	26	31	57
Other operating expenses	­6	­6	­2	­2	­3	­3
Total	­4	23	­1	25	27	54

Restructuring cost SEK m	6 months January­ June 2010	6 months January­ June 2009	3 months April – June 2010	3 months April – June 2009	12 months July­ June 09/10	12 months January­ December 2009
Cost of goods sold	0	­1	0	­1	0	­1
Selling expenses	­	­	­	­	­	­1
Administrative expenses	­	­	­	­	­	­
Other operating expenses	­	­	­	­	­	­
Total	0	­1	0	­1	0	­2