Duni — Interim / Quarterly Report 2011

Oct 26, 2011

Interim Report for Duni AB (publ) 1 January – 30 September 2011

(compared with the same period of the previous year)

26 October 2011

Stable development and strong cash flow

1 January – 30 September 2011

• Net sales amounted to SEK 2,744 m (2,873). Adjusted for exchange rate changes, net sales decreased by 0.4%.
• Earnings per share amounted, after dilution, to SEK 3.46 (4.02).

1 July – 30 September 2011

• Net sales amounted to SEK 917 m (943). Adjusted for exchange rate changes, net sales decreased by 1.6%.
• Earnings per share amounted, after dilution, to SEK 1.34 (1.54).
• Continued sales increase within Professional.

	9 months January­ September	9 months January­ September	3 months July­ September	3 months July­ September	12 months October­ September	12 months January­ December
SEK m	2011	2010	2011	2010	10/11	2010
Net sales	2 744	2 873	917	943	3 842	3 971
Operating income1)	253	272	98	103	416	435
Operating margin1)	9.2%	9.5%	10.7%	11.0%	10.8%	10,9%
Income after financial items	224	255	90	99	387	418
Net income	163	189	63	72	280	306

Key financials

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

CEO's comments

"Duni's sales at fixed exchange rates fell by 1.6% during the third quarter. This is attributable entirely to weak sales growth within Retail and Tissue. As regards Retail, this is due to the impact following the loss of most of the business with a major private label customer. Within Tissue, sales to the hygiene products sector weakened, while internal deliveries increased somewhat. Thanks to satisfactory capacity utilization combined with higher productivity, Tissue is reporting an improvement in income for the quarter.

In the Professional business area, sales increased by 3.7% at fixed exchange rates, equal to a volume increase of approximately 1%. Sales on certain mature main markets were somewhat weaker than in the

second quarter, but it is too early to draw any conclusions as to whether this is due to a generally weaker market or a phasing of orders. The focus on prioritized markets in eastern and southern Europe is creating continued solid growth, but increased sales and marketing expenses are affecting income.

In the quarter, Duni achieved an operating income of SEK 98 m and a stable operating margin of 10.7%. The SEK 5 m reduction in income was largely a consequence of weaker sales within Retail and the investments which are being made within Professional.

Cash flow has developed positively compared with last year, thanks to stable profitability combined with sound control of working capital. The capital expenditure level has been high, primarily due to investments in new technology for the production of new materials which, according to plan, are to be launched during the first quarter 2012.

We are now entering Duni's seasonally strongest quarter. The price increases that were gradually implemented during the third quarter are expected to have full impact in the fourth quarter. However, uncertainty concerning market conditions has increased since the summer. In the current situation, it is a question of carefully monitoring developments and being ready to take measures in the event we perceive a clear downturn in demand," says Fredrik von Oelreich, President and CEO, Duni.

___________________________________________________________________________________

Net sales amounted to SEK 2,744 m

During the period 1 January – 30 September, net sales fell by SEK 129 m compared with the same period last year, to SEK 2,744 m (2,873). Adjusted for exchange rate changes, net sales declined marginally by 0.4%. It is primarily the Tissue business area which experienced weak volume development, as a consequence of a decline in demand for hygiene products. On the other hand, internal deliveries increased and the product mix improved.

Net sales for the period 1 July – 30 September amounted to SEK 917 m (943). Adjusted for exchange rate changes, net sales declined by 1.6%. Professional continues to demonstrate growth in line with the first half of the year. As previously announced, Retail has now commenced the phasing out of a major private label customer, leading to a significant reduction in sales for the quarter.

Net sales,	9 months January­	9 months January­	9 months January­	Change in	3 months July­	3 months July­	3 months July­	Change
currency effect	September	September	September	fixed	September	September	September	in fixed
	2011	20111)	2010	exchange	2011	20111)	2010	exchange
SEK m		recalculated		rates		recalculated		rates
Professional	2 016	2 111	2 025	4.3%	696	706	681	3.7%
Retail	403	427	458	­6.9%	110	111	138	­19.6%
Tissue	324	324	390	­16.8%	111	111	124	­10.5%
Duni	2 744	2 862	2 873	­0.4%	917	928	943	­1.6%

1) Reported net sales for 2011 recalculated at 2010 exchange rates.

Operating margin of 9.2%

When adjusted for non-recurring items, operating income (EBIT) for the period 1 January – 30 September amounted to SEK 253 m (272). The gross margin strengthened from 25.7% to 26.1%. The underlying operating margin for the Group was 9.2% (9.5%). Adjusted for exchange rate changes, operating income declined by SEK 8 m compared with last year. Income after financial items was SEK 224 m (255). Income after tax was SEK 163 m (189).

Despite increased raw materials costs, the gross margin has strengthened compared with last year, primarily as a consequence of compensatory price increases vis-à-vis customers, as well as lower logistics

expenses. Increased indirect expenses relating to market investments, primarily within Professional, have had an impact on operating income.

For the period 1 July – 30 September, operating income (EBIT) adjusted for non-recurring items amounted to SEK 98 m (103), while the gross margin improved to 27.1% (26.0%).

The operating margin weakened slightly to 10.7% (11.0%). Adjusted for exchange rate changes, operating income is SEK 6 m lower than last year. Income after financial items amounted to SEK 90 m (99). Income after tax was SEK 63 m (72).

Buying prices for traded goods, such as candles and plastic-based products, increased further during the third quarter and thereby squeezed the margins. However, the assessment is that these increases will level off during the coming quarters. In addition, the decline in volume within Retail has affected the operating margin to a certain extent.

	9 months	9 months	9 months	3 months	3 months	3 months
Underlying operating income,	January­	January­	January­	July­	July­	July­
currency effect	September	September	September	September	September	September
	2011	20111)	2010	2011	20111)	2010
SEK m		recalculated			recalculated
Professional	237	247	260	93	92	97
Retail	­3	­3	­1	­5	­6	­1
Tissue	20	20	13	10	10	7
Duni	253	264	272	98	97	103

1) Underlying operating income for 2011 recalculated at 2010 exchange rates.

Non-recurring items

Non-recurring items means restructuring costs as well as non-realized valuation effects of currency and energy derivatives due to the fact that hedge accounting is not applied in respect of these hedge instruments.

Reported income for the period 1 January – 30 September 2011 is affected by non-realized valuation effects of derivatives in the amount of SEK -9 m (-5). For further information see Note 3.

Non­recurring items SEK m	9 months January­ September 2011	9 months January­ September 2010	3 months July­ September 2011	3 months July­ September 2010	12 months October­ September 10/11	12 months January­ December 2010
Underlying operating income	253	272	98	103	416	435
Unrealized value changes, derivative instruments	­9	­5	0	­1	­2	1
Restructuring costs	0	0	0	0	0	0
Reported operating income	244	267	98	102	413	436

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 73% (70%) of Duni's net sales for the period 1 January – 30 September 2011.

The Retail business area (primarily focused on retail trade) accounted for 15% (16%) of net sales during the period.

The Tissue business area (airlaid and tissuebased material for tabletop products and hygiene applications) accounted for 12% (14%) 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

Split on Net sales between business areas

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 2.

Professional business area

Net sales for the period 1 January – 30 September amounted to SEK 2,016 m (2,025). At fixed exchange rates, this represents a sales increase of 4.3%. In percentage terms, southern and eastern Europe account for the strongest growth. A solid investment in these markets from a rather small base has resulted in strong growth, especially in Italy and Russia.

Operating income was SEK 237 m (260) and the operating margin was 11.7% (12.8%).

Net sales for the period 1 July – 30 September increased by SEK 15 m, to SEK 696 m (681). At fixed exchange rates, this represents an increase in sales of 3.7%. Thanks to the market investments initiated at the beginning of the year, southern

Sales - Geographical split, Professional

and eastern Europe is demonstrating strong growth despite increasing economic uncertainty. Duni's important German market is demonstrating stability, albeit that growth is not as strong as in the preceding quarter.

Operating income declined to SEK 93 m (97), with an operating margin of 13.3% (14.3%). This is, among other, due to the increased investments in sales and marketing. Costs for traded goods have increased since the preceding quarter, with the full impact being felt on the gross margin for the third quarter. Price increases vis-à-vis customers were gradually implemented during the quarter in order to compensate for these increased costs.

Net Sales Professional, SEK m	9 months January­ September 2011	9 months January­ September 20111) recalculated	9 months January­ September 2010	3 months July­ September 2011	3 months July­ September 20111) recalculated	3 months July­ September 2010	12 months October­ September 10/11	12 months January­ December 2010
Nordic region	456	456	463	152	152	152	638	645
Central Europe	1 194	1 263	1 208	417	424	412	1 646	1 660
Southern & Eastern Europe	346	370	333	119	122	111	464	451
Rest of the World	21	22	20	8	8	6	28	27
Total	2 016	2 111	2 025	696	706	681	2 774	2 783

1) Reported net sales for 2011 recalculated at 2010 exchange rates.

Retail business area

Net sales for the period 1 January – 30 September amounted to SEK 403 m (458), corresponding to a fall in sales of 6.9% at fixed exchange rates. So far this year the retail sector has generally been weak, with lower volumes within, particularly, the non-food sector, a factor which also affects Duni. Operating income was SEK -3 m (-1). The operating margin weakened to -0.8% (-0.2%).

Sales – Geographical split, Retail

Net sales for the period 1 July – 30 September were SEK 110 m (138). At fixed exchange rates, this represents a

decrease in sales of 19.6%. Largely speaking, the sales decrease is attributable to the loss of a major private label customer. Besides this loss, Retail encounters some growth in its major markets, which – since the retail sector demonstrates generally weak development – entails increased market shares.

Operating income was SEK -5 m (-1) and the operating margin was -4.4% (-1.0%). The third quarter is traditionally Retail's weakest and the fall in income compared with last year is a logical effect of the decline in sales. The gross margin has developed favorably and costs continue to be low, but not to such an extent as to compensate in full for lower sales in the quarter.

	9 months January­ September	9 months January­ September	9 months January­ September	3 months July­ September	3 months July September	3 months July­ September	12 months October­ September	12 months January­ December
Net Sales	2011	20111)	2010	2011	20111)	2010	10/11	2010
Retail, SEK m		recalculated			recalculated
Nordic region	57	57	66	16	16	18	85	94
Central Europe	325	346	363	90	91	108	505	543
Southern & Eastern
Europe	21	22	30	4	4	12	43	52
Rest of the World	1	1	0	0	0	0	1	0
Total	403	427	458	110	111	138	634	689

1) Reported net sales for 2011 recalculated at 2010 exchange rates.

Tissue business area

External net sales for the period 1 January – 30 September amounted to SEK 324 m (390). The lower external sales is primarily attributable to major customers within the hygiene products sector. At the same time, Duni has increased priority on internal production.

Operating income was SEK 20 m (13). The operating margin increased to 6.1% (3.2%). Thanks to major work with continious improvments in the production process, as well as a positive

Sales mix, Tissue Internal 57% (50) External 43% (50)

development of the product mix, Tissue increased its income compared with last year, despite weaker demand from the hygiene products sector.

Net sales for the period 1 July – 30 September amounted to SEK 111 m (124). Operating income was SEK 10 m (7) and the operating margin increased to 9.2% (5.8%). The third quarter has been characterized by higher productivity combined with lower energy costs. A stable pulp price after a longer period of increases affects the gross margin positively.

Cash flow

The Group's operating cash flow for the period 1 January – 30 September was SEK 185 m (62). The strong cash flow is attributable primarily to an improved working capital. The inventory value was SEK 534 m

(506). Accounts receivable increased by SEK 60 m, to SEK 670 m (610). Accounts payable increased by SEK 45 m, to SEK 315 m (270).

The cash flow including investments amounted to SEK 10 m (-111). Duni is continuing to invest for growth; net capital expenditures for the period amounted to SEK 177 m (178), which is a historically high capital expenditure level. Most of the investments are focused on production plants, primarily in Sweden and Germany. Depreciation for the period amounted to SEK 80 m (79).

The Group's interest-bearing net debt on 30 September 2011 was SEK 755 m, compared with SEK 785 m on 30 September 2010 and SEK 582 m on 31 December 2010.

Financial net

The financial net for the period 1 January – 30 September amounted to SEK -20 m (-12). Interest rates are somewhat higher than last year. The financial net has been affected by negative realized and unrealized exchange rate results which, for the same period last year, were positive.

Taxes

The total reported tax expense for the period 1 January – 30 September was SEK 61 m (66), yielding an effective tax rate of 27.2% (25.9%). The tax expense for the year includes adjustments from previous periods of SEK -2.4 m (1.2). The deferred tax asset relating to loss carry-forwards was utilized in the amount of SEK 30 m (27).

Earnings per share

The earnings per share before and after dilution amounted to SEK 3.46 (4.02).

Duni's share

As per 30 September 2011 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 are Mellby Gård Investerings AB (29.99%), Polaris Capital Management, LLC (10.58%) and Lannebo fonder (9.22%).

Personnel

On 30 September 2011 there were 1,907 (1,924) employees. 817 (832) 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. Fluctuations in prices of raw materials and energy constitute an operational risk which may have a material impact on Duni's operating income.

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 2010.

Since 2007, Duni's long-term financing has been secured through financing agreements valid until November 2012. Duni has no significant changes in contingent liabilities since 31 December 2010.

Transactions with related parties

No transactions with related parties took place during the third quarter of 2011.

Major events since 30 September

No significant events have occurred after the balance sheet date.

Interim reports Quarter IV 15 February 2012

Annual General Meeting 2012

Duni AB's annual general meeting will be held in Malmö on 3 May 2012 at 3pm. For further information, see Duni's website.

The Parent Company

Net sales for the period 1 January – 30 September 2011 amounted to SEK 825 m (850). Income after financial items was SEK -15 m (217). The parent company will receive dividends from subsidiaries during the fourth quarter.

Net debt amounted to SEK -228 m (-221), of which a net asset of SEK 940 m (972) relates to subsidiaries. Net investments amounted to SEK 35 m (18).

Accounting principles

This interim report for the Group 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, 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 2010. There is no non-controlling interest in Duni.

7

Information in the report

The information is such that Duni AB (publ) is to publish in accordance with the Swedish Securities Markets Act and/or the Financial Instruments Trading Act. The information will be submitted for publication on 26 October at 8.00 AM CET.

The interim report will be presented on Wednesday, 26 October 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://webeventservices.reg.meeting-strem.com/duni20111026

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.

Malmö, 25 October 2011

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 Helena Haglund, Group Accounting Manager, +46 734 19 63 04

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

Review report

We have reviewed this report for the period 1 January to 30 September 2011 for Duni AB (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Malmö, 25 October 2011

PricewaterhouseCoopers AB

………………………

Eva Carlsvi Authorised Public Accountant

Consolidated Income Statements

	9 months January September	9 months January September	3 months July September	3 months July September	12 months October September	12 months January­ December
SEK m (Note 1)	2011	2010	2011	2010	10/11	2010
Net Sales	2 744	2 873	917	943	3 842	3 971
Cost of goods sold	­2 028	­2 134	­669	­698	­2 814	­2 919
Gross profit	716	739	248	245	1 028	1 052
Selling expenses	­332	­328	­105	­99	­439	­434
Administrative expenses	­128	­129	­43	­43	­173	­174
Research and development expenses	­21	­16	­7	­5	­29	­25
Other operating incomes (Note 3)	49	54	17	15	129	134
Other operating expenses (Note 3)	­40	­54	­13	­11	­103	­117
Operating income (Note 2)	244	267	98	102	413	436
Financial income	2	1	1	0	2	1
Financial expenses, etc.	­22	­13	­9	­3	­28	­19
Net financial items	­20	­12	­8	­3	­26	­18
Income after financial items	224	255	90	99	387	418
Income tax	­61	­66	­26	­27	­107	­112
Net Income	163	189	63	72	280	306
Income attributable to:
Equity holders of the Parent Company	163	189	63	72	280	306
Earnings per share, attributable to equity holders of the Parent Company, SEK
Before and after dilution Average number of shares before and after	3.46 46 999	4.02	1.34	1.54 46 999	5.96	6.52
dilution (´000)		46 999	46 999		46 999	46 999

Statement of Comprehensive Income

SEK m	9 months January September 2011	9 months January September 2010	3 months July­ September 2011	3 months July­ September 2010	12 months October­ September 10/11	12 months January­ December 2010
Net income of the period	163	189	63	72	280	306
Comprehensive income, net after tax:
Exchange rate differences ­ translation of subsidiaries	­11	11	­6	6	­9	13
Cash flow hedge	0	­	0	­	0	­
Comprehensive income of the period, net after tax:	­11	11	­6	6	­9	13
Sum of comprehensive income of the period	152	200	57	78	271	319
Comprehensive income of the period attributable to:
Equity holders of the Parent Company	152	200	57	78	271	319

Consolidated Quarterly Income Statements in brief

SEK m	2011			2010			2009
Quarter	Jul­ Sep	Apr­ Jun	Jan Mar	Oct­ Dec	Jul Sep	Apr­ Jun	Jan­ Mar	Oct­ Dec
Net Sales	917	960	867	1 097	943	970	960	1 157
Cost of goods sold	­669	­720	­640	­785	­698	­724	­712	­800
Gross profit	248	241	227	312	245	246	248	357
Selling expenses	­105	­110	­118	­107	­99	­107	­121	­128
Administrative expenses	­43	­43	­42	­45	­43	­42	­45	­43
Research and development expenses	­7	­7	­6	­9	­5	­5	­6	­10
Other operating incomes	17	19	13	80	15	16	23	9
Other operating expenses	­13	­14	­13	­62	­11	­18	­25	­12
Operating income	98	86	61	169	102	91	74	173
Financial income	1	1	1	0	0	0	0	0
Financial expenses etc.	­9	­7	­6	­6	­3	­2	­8	­7
Net financial items	­8	­7	­6	­6	­3	­1	­8	­7
Income after financial items	90	79	55	163	99	90	66	166
Income tax	­26	­20	­15	­46	­27	­24	­15	­35
Net Income	63	59	41	117	72	66	51	131

Consolidated Balance Sheets in brief

SEK m	30 September 2011	31 December 2010	30 September 2010
ASSETS
Goodwill	1 199	1 199	1 199
Other intangible fixed assets	46	44	41
Tangible fixed assets	682	588	562
Financial fixed assets	257	289	301
Total fixed assets	2 184	2 120	2 103
Inventories	534	437	506
Accounts receivable	670	634	610
Other operating receivables	163	174	208
Cash and cash equivalents	127	122	84
Total current assets	1 492	1 367	1 407
TOTAL ASSETS	3 677	3 487	3 510
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	1 979	1 991	1 872
Long­term loans	706	530	695
Other long­term liabilities	221	211	207
Total long­term liabilities	927	741	902
Accounts payable	315	315	270
Other short­term liabilities	455	440	466
Total short­term liabilities	770	755	736
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	3 677	3 487	3 510

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 2010	59	1 681	36	13	0	1 789
Sum of comprehensive income of the period	­	­	11	­	189	200
Dividend paid to shareholders	­	­	­	­	­117	­117
Closing balance 30 September 2010	59	1 681	47	13	72	1 872
Sum of comprehensive income of the period	­	­	2	­	117	119
Closing balance 31 December 2010	59	1 681	49	13	189	1 991
Sum of comprehensive income of the
period	­	­	­11	­	163	152
Dividend paid to shareholders	­	­	­	­	­164	­164
Closing balance 30 September 2011	59	1 681	38	13	188	1 979

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 September	1 January 30 September
SEK m	2011	2010
Current operation
Operating income	244	267
Adjustment for items not included in cash flow etc	73	84
Paid interest and tax	­59	­37
Change in working capital	­74	­252
Cash flow from operations	185	62
Investments
Acquisition of fixed assets	­180	­181
Sales of fixed assets	3	3
Change in interest­bearing receivables	2	4
Cash flow from investments	­175	­173
Financing
Taken up loans1)	125	136
Amortization of debt1)	­37	­102
Dividend paid	­164	­117
Change in borrowing	71	53
Cash flow from financing	­5	­30
Cash flow from the period	5	­142
Liquid funds, opening balance	122	230
Exchange difference, cash and cash equivalents	0	­4
Cash and cash equivalents, closing balance	127	84

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 30 September	1 January 30 September
	2011	2010
Net Sales, SEK m	2 744	2 873
Gross Profit, SEK m	716	739
EBIT1), SEK m	253	272
EBITDA1), SEK m	333	351
Net debt	755	785
Number of Employees	1 907	1 924
Sales growth	­4.5%	­6.2%
Gross margin	26.1%	25.7%
EBIT1) margin	9.2%	9.5%
EBITDA1) margin	12.1%	12.2%
Return on capital employed1) 2)	16.8%	18.6%
Net debt/equity ratio	38.1%	41.9%
Net debt/EBITDA 1) 2)	1.45	1.44

1) Calculated based on underlying operating income.

2) Calculated based on the last twelve months.

Parent Company Income Statements in brief

	9 months	9 months	3 months	3 months
	January­ September	January­ September	July­ September	July­ September
SEK m (Note 1)	2011	2010	2011	2010
Net Sales	825	850	276	289
Cost of goods sold	­739	­750	­242	­251
Gross profit	85	100	35	38
Selling expenses	­82	­84	­24	­22
Administrative expenses	­101	­94	­30	­32
Research and development expenses	­10	­9	­4	­2
Other operating incomes	173	185	60	56
Other operating expenses	­124	­151	­42	­45
Operating income	­58	­52	­5	­8
Revenue from participations in Group Companies	39	251	5	10
Other interest revenue and similar income	22	16	8	6
Interest expenses and similar expenses	­19	3	­7	­5
Net financial items	43	270	6	11
Income after financial items	­15	217	1	3
Taxes on income for the period	­6	­11	­6	­5
Net income for the period	­21	206	­5	­2

Parent Company Statement of Comprehensive Income

	9 months	9 months	3 months	3 months
	January­	January­	July­	July
	September	September	September	September
SEK m	2011	2010	2011	2010
Net income of the period
Comprehensive income, net after tax:	­21	206	­5	­2
Exchange rate differences ­ translation of subsidiaries	3	0	1	1
Cash flow hedge	0	­	0	­
Comprehensive income of the period, net after tax	3	0	1	1
Sum of comprehensive income of the period	­18	206	­4	­1
Comprehensive income of the period attributable to:
Equity holders of the Parent Company	­18	206	­4	­1

Parent Company Balance Sheets in Brief

	30 September	31 December	30 September
SEK m	2011	2010	2010
ASSETS
Goodwill	525	599	624
Other intangible fixed assets	38	38	41
Total intangible fixed assets	563	637	665
Tangible fixed assets	80	63	57
Financial fixed assets	1 001	1 031	1 041
Total fixed assets	1 644	1 731	1 763
Inventories	110	103	123
Accounts receivable	110	96	104
Other operating receivables	1 104	1 026	1 126
Cash and bank	85	65	31
Total current assets	1 409	1 290	1 384
TOTAL ASSETS	3 052	3 021	3 147
SHAREHOLDERS' EQUITY AND LIABILITIES
Total restricted shareholders equity	83	83	83
Total unrestricted shareholders equity	1 878	1 994	1 990
Shareholders' equity	1 961	2 077	2 073
Provisions	115	109	110
Long­term financial liabilities	686	510	678
Total long­term liabilities	686	510	678
Accounts payable	58	52	41
Other short­term liabilities	233	273	244
Total short­term liabilities	291	325	285
TOTAL SHAREHOLDERS' EQUITY, PROVISIONS AND
LIABILITIES	3 052	3 021	3 147

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 2011 are calculated at exchange rates for 2010.

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.

Private label: Products marketed under customer's own label.

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, Reporting for Legal Entities, and the Annual Accounts Act. The accounting principles are the same as in the Annual Report as per 31 December 2010.

Note 2 • Segment reporting, SEK m

January - September

2011­01­01 – 2011­09­30	Professional	Retail	Tissue	Group's Total
Total net sales	2 016	403	755	3 175
Net sales from other segments	­	­	431	431
Net sales from external customers	2 016	403	324	2 744
Underlying operating income	237	­3	20	253
Non­recurring items	­	­	­	­9
Operating income	­	­	­	244
Net financial items	­	­	­	­20
Income after financial items	­	­	­	224

2010­01­01 – 2010­09­30	Professional	Retail	Tissue	Group's Total
Total net sales	2 025	458	787	3 270
Net sales from other segments	­	­	397	397
Net sales from external customers	2 025	458	390	2 873
Underlying operating income	260	­1	13	272
Non­recurring items	­	­	­	­5
Operating income	­	­	­	267
Net financial items	­	­	­	­12
Income after financial items	­	­	­	255

July - September

2011­07­01 – 2011­09­30	Professional	Retail	Tissue	Group's Total
Total net sales	696	110	254	1 060
Net sales from other segments	­	­	143	143
Net sales from external customers	696	110	111	917
Underlying operating income	93	­5	10	98
Non­recurring items	­	­	­	0
Operating income	­	­	­	98
Net financial items	­	­	­	­8
Income after financial items	­	­	­	90

2010­07­01 – 2010­09­30	Professional	Retail	Tissue	Group's Total
Total net sales	681	138	264	1 083
Net sales from other segments	­	­	140	140
Net sales from external customers	681	138	124	943
Underlying operating income	97	­1	7	103
Non­recurring items	­	­	­	­1
Operating income	­	­	­	102
Net financial items	­	­	­	­3
Income after financial items	­	­	­	99

No significant changes have taken place in the assets of the segments compared with the annual report as per 31 December 2010.

Note 3 • 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.

	9 months	9 months	3 months	3 months	12 months	12 months
	January­	January­	July­	July­	October­	January­
Derivative instruments	September	September	September	September	September	December
SEK m	2011	2010	2011	2010	10/11	2010
Other operating incomes	0	1	0	­1	7	8
Other operating expenses	­9	­6	0	0	­9	­6
Total	­9	­5	0	­1	­2	1
	9 months	9 months	3 months	3 months	12 months	12 months
	January­	January­	July–	July–	October­	January­
Restructuring cost	September	September	September	September	September	December
SEK m	2011	2010	2011	2010	10/11	2010
Cost of goods sold	­	0	­	0	0	0
Selling expenses	­	­	­	­	0	1
Other operating expenses	0	­	0	­	0	­1