Ladies and gentlemen, welcome to the Duni Q4 Year-End Report. Today, I'm pleased to present President and CEO, Robert Dackeskog, and CFO, Magnus Carlsson. For the first part of this call, all participants will be in listen-only mode, and afterwards, there'll be a question and answer session. I will now hand over to Robert Dackeskog. Sir, please go ahead.
Thank you. Hello, welcome to our presentation today. We'll kick off here with what happened in the Q4 last year. As we all know, restrictions returned during the quarter, but not that hard like it was at the same period like last year. I think when we all were sitting here in October, we couldn't believe that a new variant would come, Omicron, and establish itself during the November, December here. That's been a bit of a surprise maybe to many. That meant, of course, more restrictions and lockdowns in some countries. I think in general, we see a really clear correlation between restrictions and reduced sales.
On the other hand, then in Q3 last year, we saw the opposite. Let's see if there was very clear correlation between that. Of course, for the future here, we believe that people need to socialize and then eat and drink and go out. As the restrictions easing, then of course, demand will come back as we saw in Q3. Our revenue are close to historic levels in Q4 here, driven a lot by the growth in business area BioPak and strong recovery in the retail sales. As we all know, raw material and sea freight are high, a record high, but are stabilizing. Of course, also energy prices continues upwards. If we look a little bit more closer to the Q4 highlights here, we had an increase of 34% versus last year in net sales.
That was despite rising COVID cases and new restrictions. We know lockdowns in, for example, Austria, where it was 12-day total lockdown, and also Germany, Holland had significant restrictions. The Business Area Duni sales grew significantly more than versus last year as the restrictions ended up being a bit less than last year. Positive there. BioPak growth continues in the fourth quarter as of course, takeaway is still growing and demand is very high there. We have taken a decision to increase our inventory to meet the challenges in delivery performance here for the quarter for Business Area BioPak.
If we look at the operating income, it has more than doubled, the significant increase in sales volumes for Duni area gives good leverage there. Both business areas, especially BioPak, is under strong margin pressure, especially due to container sea freights, but also some raw materials. We increasing the operating income here from SEK 51- SEK 110 in the quarter. If we look a little bit, summarizing the full year then, we had a strong growth for BioPak and a sales recovery for Duni versus 2020. There were heavy restrictions in the first five months of the year, of course, limiting a lot of restaurants and hotels to run business as usual, as we all know. That also enabled growth for the takeaway segment.
Of course, the restriction, as we said probably many times now, is the impact is high on the seat to table and was very low. In the end of May, it recovered really good. Of course, with the summer, everyone went out and so on. We see that the Q3 was when people are coming back, Duni, especially the business area, Duni is coming back. The BioPak area grew throughout the whole period, the whole year, actually. We had some problems with ensuring supplies, of course. As I said, in Q4, we're taking some steps to ensure that we have stock available, especially on the big sellers, of course. We have an improved operating margin despite the record cost levels.
Higher sales volumes, we have some loan government support and really strong cost control has strengthened the results. We see the increase in raw material and especially freight and then the container prices, electricity costs going up over the year. We are pushing for price increases, and they are initiated. They had a limited effect during the year, but we increase gradually during Q1 next year. Here we're ending up the full year on SEK 279 million in operating income versus SEK 149 million last year. Now we're handing over to Magnus Carlsson.
Thank you, Robert, and good morning, everyone. I will now go through our two business areas a little bit more in detail, starting with Business Area Duni, representing our products to set the table like napkins and table covers and so on. Fourth quarter ended as the year started, with new restrictions taking place all over Europe from mid-November. Like I said, a very important Christmas period with Christmas parties and Christmas dinners were once again canceled. Still, sales increase was quite broad, and that increased with almost 40% for the quarter.
That gives an indication that the restriction was not as bad as we saw in 2020. Another difference was that you were actually allowed to meet each other at home, and consequently, the retail channel experienced strong growth also if you compare to the pre-pandemic levels. As indicated in previous quarters, we have seen an accelerating and rising trend of raw materials costs, not least the energy costs in the fourth quarter, and this has been managed by price increases that only to a small degree had a positive effect in the quarter, but it should gradually positively impact the first quarter. Business Area Duni being vertically integrated with both converting factories and also paper mill are of course very dependent on the utilization ratio.
I think we have been successfully able to mitigate the negative effects from the lower volumes, and at the same time, we have ensured that we get satisfying operational leverage when we have seen the volume coming back. If we jump over to BioPak segment of business area, which is offering sustainable food packaging, we have seen a strong growth throughout the whole year and also in the fourth quarter, growing almost 30%. It is clear that BioPak is boosted by the lockdowns and restrictions versus normal sit-down restaurants. The underlying demand for sustainable food packaging solutions, consists mainly of fiber solutions, is huge. I think BioPak contributes to the shifts from plastic solutions product by product.
For every quarter that we're now moving forward, the share of these innovative, sustainable products increases, and consequently, that in itself contributes to the growth. Unfortunately, the margin were negatively influenced by the increase of raw materials, not least, as Robert mentioned, the sharp increase in logistics costs that fully impacted the quarter. As for the Business Area Duni, BioPak has initiated price increases already during the third quarter, but only with a gradual effect in the fourth quarter, and we should see an acceleration now moving into 2022 of these price increases. Some of the price increases are significant to compensate for the costs, and we spend quite an effort in finding the best solutions for the different needs.
We feel confident that there is a fundamental understanding that sustainable solutions in general is more expensive than plastic solutions, although we continue to work hard with cost reductions as well. If we move over to next page, and as stated by Robert, the year has clearly been a roller coaster in terms of restrictions and lockdowns, heavily influencing all our markets in Europe but also outside. As we speak, you can see on the map to the right, showing data from Google Mobility, in the retail and recreation area, and we have seen a very strong correlation towards Business Area Duni. As you might see, we are still around minus 20% on the levels before pandemic, but the numbers are improving week by week.
We see more and more countries releasing their restrictions or at least indicating a date when they will be released. That is very much linked to the graph to the right, showing intensive care units and the pressure on hospitals. Germany, which is a very important market for us, was one of the last countries to set a date just some days ago, where the German authorities indicate that during March, the restrictions valid for restaurants and hotels will be removed, and that opens up for a normalization and of course, a prerequisite for the whole HoReCa segment to come back to volumes we have seen before the pandemic. Already I think in the third quarter, we indicated that the cost pressure will be severe going forward, and that is the main challenge for us at the moment.
Unfortunately, this turned out to be very true, and the focus on price increases initiated mid last year will of course be very, very important for us. This is represented by two graphs, the Drewry Index showing the extreme levels on containers from Asia, which has a high impact on BioPak. To the right, the general inflation, which has increased quite dramatically in the last quarter. We feel that there is an understanding and acceptance of price increases from our customers, although we are working hard to find the best solution for each and every customer and their budgets.
If we leave that area and moving into the financials, looking on the income statement, although 2021 is far from a normal year for us and still heavily impacted by the pandemic, the operating income doubled from previous year, and that is valid both for the quarter as for the whole year. Operating income ended on SEK 110 million in the fourth quarter. However, if you're looking on the EBIT, the outcome is more on par with previous year. The difference relates mainly to restructuring program in Singapore, where we decided to accelerate our journey towards a fully sustainable portfolio, and that resulted in a close down of our company Duni Song Seng mainly selling non-sustainable products, and we merge that with the remaining part with our other company, BioPak Singapore.
The cost is mainly a write-down of goodwill and customer relations of SEK 33 million, and another SEK 12 million of various write-downs in inventory and also stock-related costs to clarify. We move over to the business areas. As we have mentioned, BioPak continues to show strong growth. That's very important, again in the fourth quarter negatively influenced by the severe cost increase. For the overall result ended almost SEK 200 million for the full year, and that is a profit improvement by 30%. Business Area Duni has gradually indicated an improvement on a rolling 12-month curve. It's going upwards, although operating income is naturally not close to the levels we have seen pre-pandemic. Moving over to the operational cash flow, it's positive for the fourth quarter and the full year.
However, behind last year, there are mainly two reasons for that. First, we have an increase in the accounts receivable, more of a phasing between periods when the sales indicated high volatility, we see these effects. However, the outstanding days has been kept stable in the period, and also we do not see any high bad debt losses at all. The other reason, and more important, is the inventory. More than half of this quite big increase comes from higher purchase costs. But we also have increased the stock in BioPak to ensure a high deliver performance going forward. That has been a challenge for the whole industry, and we need to ensure that we get a competitive advantage here and can solve the customer needs and deliver the products.
Looking on our financial position, and in our balance sheet, the net debt has been kept stable versus last year, although a year with high volatility. As just mentioned, inventory is part of the increase, but we also have other effects of low CapEx and so on, keeping the debt stable. Return on capital employed, excluding goodwill, has strengthened and is now up to 14% and clearly moving in the right direction. Finally, our financial targets, and we are able to deliver on the growth target, clearly above. However, of course, that is explained by a weak 2020. The operating margin is still behind our target and very much linked to business area Duni and the lower levels we have seen throughout the year.
Also consequently, the proposal from the board is that there should be no dividend paid for the year 2021. With this, I hand over to Robert for final comments.
During the quarter, we updated our strategy, and we call it our decade of action. We work to develop a very clear purpose and a vision for 2030. We'll be fit for the future, and that's really important, so we have worked really hard with that. During the year, actually, we also got a gold medal from EcoVadis sustainability rating, which is great and something we're working more and more on. We want to even go to the next level, of course, in that. We have defined three sustainability goals for 2030. It's becoming circular at scale, it's going net zero, and leading the change.
During the year, we started to work on a lot of things, and we are, for example, becoming circular at scale. We are switching from plastic to paper packaging for Duni products. We are starting that now. We have investment in the reuse solutions with Relevo, and also partnering up with &Repeat for collection systems. With going net zero, we have committed now to a net zero goal for scope one and two by 2030. We have switched to renewable electricity in our European operations factories. We have also started to use biogas in our paper mill at Skåpafors, which is fantastic. We are working a lot on becoming a trusted sustainability leader, and we have signed a UN Global Compact.
We are working with a lot, of course, in code of conduct audits at all main suppliers and so on. A lot of work with developing the whole sustainability agenda in Duni as well. This is what we're looking forward to and targeting. We're hoping now, of course, we said that, and maybe not to speculate too much about the future, but at the moment, it feels great that most countries have taken the decision to remove restrictions, and Germany especially is now also opening up here in March.
That feels great. We hope we don't get a sixth variant, of course, here. That's maybe the main thing for us. All right. That's it from us. Thank you. We'll go over to questions.
Our first question is from Gustav Hagéus of SEB. Please go ahead.
Thank you, operator. Good morning, guys. Thanks for taking my question. Starting off with sort of the volume recovery scenario for the Duni segment. There's a listed company called Electrolux Professional selling equipment to restaurants and hotels, as I'm sure you're aware, and they have been guiding for full volume recovery to 2019 level this year. I assume your end markets are quite similar. My first question, I guess, is do you see also a scenario where you can see a full volume recovery versus 2019 baseline already this year? That's my first question. Thank you.
Thank you. I think we might be a bit different from them, but still, I think we are very dependent on the restrictions. Of course, if it opens up, really, that's the main thing. I think, as we've seen, the correlation between restriction and our sales is very tight. I think it's all about that, actually. That's the key here for us, that the restaurants opening up, and especially then, as you say, also it's the business area of Duni here. It's napkins, it's table covering and all that. Especially if you look at table covering, events is very important in that part. Weddings, everything. If that really takes off here, I think there's one. A lot of people have maybe not been able to get married.
That's a hope. But I think answer is the restriction is the key here, actually. That's what we probably yeah see. Yeah.
Okay. In a scenario then, if volumes were to recover to 2019, say it's this year or sort of mid-half this year, there's also a pricing component to sort of factor in when thinking about what is your normalized revenue for the Duni segment. You made SEK 3.8 billion in revenues, if I recall correctly, 2019. Is it fair to assume that on a like-for-like basis, factoring price mix, since then, you're more like at SEK 4.2 billion or a little bit more than that in sort of normalized sales when and if volumes recover in the Duni segment specifically now?
The price increase will drive growth in general, of course. You have the volume parameter. Price increase will be quite substantial. We need to do that. As Robert said, if we're seeing restrictions being lifted, there is no reason to think that we should come back also from a volume perspective to more normal levels. You can add the price effect on that. That is our main scenario.
From sort of the price increases you've implemented, 2020, 2021 and into 2022, are we at a 10% higher level now on the price mix versus 2019 in the Duni? Or is it a bigger number than that? I'm just trying to think what your normalized revenue would be, going forward. Is it fair to assume 10% or something like in that magnitude versus 2019?
It's a very limited effect in 2020 and 2021 from price increases. The main part comes in 2022. The number you're referring to is maybe on the high part, but not too off, I would say.
Okay. That brings me to a number in a normalized situation, depending on where BioPak grows, of around a normalized revenue then of closer to SEK 7.6 billion on the top line. That's my number. You don't need to comment. On... I guess another parameter is the earnings power. If I recall correctly, 2018 and 2019, pre-pandemic, weren't great years for Duni. You had several ongoing issues, and you also initiated several cost programs. What I'm trying to understand now is what is the normalized margin you think post-pandemic? You did sort of 9% EBIT margin 2019, 2020, but before that you did more like 11, 12%. Do you think that you're coming out of this pandemic leaner with ability to have sort of in the range of 12% margins?
Is 2018 and 2019 a better reference point of your underlying earnings power, do you think, in a normalized world?
I think if you add on 2018, which was not a very good year, and if you look on 2019, which were a record year, you get some kind of an average. We do have positive trends working in our favor. We have strong purchasing power. We have been able to compensate quite well. On the other hand, we have some negative trends on the table covers, and we're not growing equally as much in some of the high margin areas or geographies. It's ups and downs. If you take an average maybe on the 2018, 2019, that's maybe where a sustainable long level, a long-term level. But we are optimistic, and we are doing a lot of both cost reductions and price compensation measures to strengthen our margins, for sure.
2018 wasn't a record year in terms of margin, was it? It was a record year in terms of earnings, but margins were not to the level that we saw.
True.
I'm specifically asking about the margin.
Yeah. I would say it has gone down in the Business Area Duni, and will it likely to go up again? I'm careful of speculating in that. The reason why it went down in 2019 margin-wise for the group is very much the mix effect to BioPak, which has a lower effect. It is likely down for Business Area Duni as well, mainly due to the reasons of losing on table covers its share, which is a high-margin product for us.
Okay. Sort of thinking about the evolution then of your business model throughout the pandemic, has your way of working with clients and selling product changed? I'm thinking maybe less traveling salespeople and more online or digital sales. Is there sort of cost potential as you see it going forward as your model has evolved during the pandemic? If you could talk a little bit about that'd be interesting, thanks.
Yeah. I think it changed definitely. It might be that when we go back now, it's a need of course to meet and greet in that sense also. I think for the future it's that we maybe need to change our way of working. We need to focus a lot more on the digitalization and we have our customer experience and customer journey, how we work there with the customers more digital of course, but also focusing on sustainability, I think. There might be a shift maybe where the resources are going, but of course, we need to also be more efficient in that. I think that's what we're seeing, a bit of a change.
I think there we see that it's possible to actually do business more digital, and so on. It also, the customers are asking for maybe also buy products in a much simpler way also, and we are launching in Switzerland, for example, our CX solution there. There's this really good start there.
Yeah.
I think there will be a shift. I think in the beginning here, there is a need to meet also as in the old days probably.
Okay. Is there margin potential you think in this shift, the way you conduct business in a post-pandemic world from your less salespeople maybe or?
Hopefully that's the target. However, moving from maybe physical resources and cost to digital is not necessarily meaning lower cost. It could mean higher efficiency per sales euro, so to say. That is clearly the target, so over longer term to be more efficient and costs taking down the cost. Yeah.
A few more if I may. BioPak obviously has been a great beneficiary of takeaway and lockdowns in restaurant, but I assume there are also some negatives in terms of less fairs, musical festivals, what have you. Could you try to make an effort to sort of quantify how big of a what's the net impact to your organic growth number this year from the pandemic? What do you think is a more normalized growth trajectory when you think about 2022 and onward?
It's a good but tricky question to answer. If you look before the pandemic, there were various objective investigations showing that sustainable food packaging is growing with average 15%-20% per year. That's also what we experienced. Now we have seen higher levels during the pandemic. In that case, you could say that half of the growth has been boosted by the pandemic effect. It is a bit of speculation. There are changes in the way we are you know ordering food that is in favor for the BioPak model also after pandemic, which we of course hope will further trigger growth. To give you an idea of the shares here.
I think we talked about that previously. There's a lot of work to do now to switch from plastic to more bio packaging in a lot of countries, and I think we have a big opportunity in a country like Germany where our sales in Duni AB, Duni is very high, and in the BioPak area it's lower. There is also a part that we see that it's a good way maybe to increase that growth that was before in a way. I think the takeaway market will, I mean, if you look maybe 10 years ahead or whatever, grow that part.
Of course it's the number that it's a hard one to step in. Yeah.
Okay. In terms of channel inventories, when the demand sort of picks up fully here, I recognize that you have raised your inventories, but what about your channel partners and your customers? Do they have intermediate inventories of your products that need to sort of run through before they will order new ones? Will there be an immediate response, with a pickup in demand for going to restaurants and so forth for your products?
We try to stay very close to our customers. There's no full transparency on that, but we are ready to deliver. We have learned from the pandemic levels that the order intake usually follows very well the restrictions. When they are eased, our customers tend to place orders for us. We estimate that would be the case as well here.
Yeah, like it was in Q3.
Yeah.
Yeah.
We see a strong rebound, I mean, for business there then, yeah.
Very limited inventories in layers.
Yeah.
Yeah. Okay.
The phasing should not be long. They need to order yesterday's assumption, yeah.
Yeah. Okay. Lastly from me, thanks for taking all these questions, but I recognize that you have divested or walked out of parts of your business now in BioPak in Singapore due to the fact they didn't fit in your green profile there. Could you give us an update on what your best assumption is of share of sustainable products now within BioPak specifically and within the company? I appreciate that it's a bit of a definition game, but still, any number would be helpful. Thanks.
Yeah. I think, I mean, we, in a way, we went out from Duni Song Seng, which was actually the company we first bought in Asia, which was in a way the entry to getting to Asia. I think without Duni Song Seng, we wouldn't have been BioPak today. They were in plastics. What we've done is in a way we're removing the plastic there and of course then moving over into focusing on the BioPak products. That's what's happening in Asia. Our share, I think, if you say it's like SEK 200 million, so it's 5%-5% of the total. In BioPak, especially here in Europe, we have a product called Duniform, of course, which is sealable packaging.
We have vacuum pack, and they're there today. We're, you know, everyone is looking into getting into a barrier that actually can take. Maybe if you buy crayfish, for example, today in the country, you get this pack, they put the crayfish in. Of course, if you have that in a not solid-thin packaging, you will end up having that in your, you know, in your car when you go home or whatever. That's an area where we still have some plastic. We have put in targets now to reduce and put in targets, yeah, for every year, a way to reduce that part. Actually, this year, we're launching really nice Duniform in fiber solutions as well. We are on the move there.
I'm not sure if I understood your question, the last question, Gustav. Can you repeat that one so we answer?
If you could provide us with an update on the share of product you consider to be environmentally friendly as a percentage of your sales, both within BioPak, but perhaps more importantly, of your total sales? That'd be helpful. Thanks.
No, non-environmentally friendly, you said?
Either or. I mean, I can
Okay.
Yeah.
I assume that.
No, I think we, I'll describe it like this, that the, of course, this changes from quarter to quarter, linked to demands from customers as well, from legislation, and we try to be in the forefront. It is clearly less than 50%. It's even less than that, maybe 20, 10%. It's very different to say because some products work very well in Germany, some might not work in Sweden, for instance, depending on national legislation. We are trying to safeguard the whole portfolio rapidly to fit for every market, basically. It's becoming less and less that share.
Sorry, to be clear, 25% of your combined sales relate to pro-products that you consider to be less environmentally friendly, and 75%
For BioPak and for the total group, it's maybe more like 5%-10%, I would say. It's in the plastic area where there is plastic that might be. They're not forbidden, but they are not in our definition seen as sustainable.
Of the total group, 5%.
It's quite small. It's very small.
5%? Yeah. Okay. Great. Okay, cool. I appreciate all those questions. Thank you.
Thank you. Yeah.
Thank you.
Thank you for asking. Yeah.
Thank you. Our next question is from Karri Rinta of Handelsbanken. Please go ahead.
Yeah, thank you very much. I have a few follow-ups on pricing and then, a few follow-ups on the different geographies. Starting with pricing, we thank you for the indication of what kind of magnitude we're discussing when you talk about price increases, that it could be up to 10%. The way you implement this, is this as you usually do it, i.e., increases list prices or prices that you have agreed upon with your customers? Or is there any element of sort of energy-related surcharges that you can put in place faster, and then maybe they go away once energy prices come down? I guess the question is that, are you implementing these price increases as you always do?
We try to do it in a manner that protects the customer and of course also mitigate the effects we have seen from our side on the costs. That means that we are discussing customer by customer, product by product. Some experience high levels of price increase, some very low. Some parties related, we have seen extreme levels on freights and also in some raw materials, and there is a certain aspect of the variable part in this. We feel confident that we will be able to come through, and we feel confident that we will be able to maintain a main part of this over time.
Okay. We're talking when it comes to this delay that it takes for it to start to have an impact on you. Are we still talking about, I don't know, one quarter? Is there any difference between Duni and BioPak in this respect in terms of the length of the delay?
They have a similar approach in the way we are going to the customer in timing. We are working very hard now in the first quarter to gradually increase the prices. When we reach the end of this quarter, we should have come through to a high degree, still some parts left. Absolutely the main part is implemented throughout Q1. That's the ambition for sure.
Yeah. All right. That's helpful then.
For both businesses.
Good. A little bit about different geographies and markets. You have discussed Germany, and as you say, Germany is a big customer for the Duni division, but less so for BioPak. Now when restrictions are relaxed, you should sort of get a big, definitely a bigger uplift in Duni than any potential slowdown that you might see in BioPak when we talk specifically about Germany. You mentioned that restrictions are being lifted in March. Does that mean that if we compare first quarter with the fourth quarter, that there are more restrictions in Germany in the first quarter compared to fourth quarter? Or how do you see that situation?
I would say that for Germany specifically, it's relatively the same up until March, at least. If you look throughout Europe, it's slightly better situation. We see Denmark being first out early February, lifting the restrictions. We know the situation in Sweden, and the Nordic area basically lifted in February. Looking on Q1 Europe compared to Q4, I think it is relatively similar situation because at the end of Q4, we had quite hard restrictions, as that was the start of Q1, which is now gradually being lifted also in Germany in March, as you say. Yeah.
Yeah, I think because you had to have your COVID pass to enter a restaurant, and it changed to three, you needed three shots in order to get in without taking a test. I think November, December, January, February is pretty similar in that sense.
Yeah.
Of course, Q4 is a high quarter for us in that sense. It's a lot of Christmas markets that were canceled in December.
All right. About the 'cause some related companies have discussed that during these exceptional times, it has maybe been a bit more difficult to push the renewable product because they have been maybe more expensive and more difficult to get their hands on. With these price increases that you're now putting through, are you sensing any sort of increased pushback from your customers or the argument that but these traditional solutions are so much more, so much cheaper that why should we switch to BioPak? Is that an issue?
Yeah. In general, I think actually our customers are really into sustainability, and I think especially in the countries maybe we operate in our biggest market, it's really high on the agenda. I think there is an understanding for that, definitely. I think everyone is working now towards the whole sustainability agenda. That comparison, maybe it's more about the general than the increase in terms of especially from Asia with the container prices and all that that has increased a lot on certain products and so on. It's more about that than the product in itself. I feel that it's not about sustainability or not, actually.
No, as you say, uncertain, I think the understanding and acceptance customer want to move into this area. Of course, having these quite dramatic price increases as the industry has in itself, that is related to risks, and we're carefully following them. There is always other competitors trying to take market share, so we need to watch out for sure.
Yeah.
Okay. Final geography related question. I see that if I look at the BioPak and sales by geography, I see that the rest of the world had really strong fourth quarter. Is that all Australia or Australia, New Zealand, and how was the level of restrictions there in the fourth quarter?
It is absolutely the main part is Australia, New Zealand, and in the fourth quarter, they lifted the restrictions, very little influence by that in the fourth quarter. So, basically, I would say throughout the whole pandemic, they also been in and out from lockdowns and restrictions, but they maintained a very good growth throughout this whole period, which gives you maybe some guidance on the strengths of the offer also outside the restrictions.
Yeah.
All right. Good. Finally about the dividend. I understand that the board. I guess the way to ask is that should there be a fantastic recovery in volumes on your earnings this year? Is there any scope that the board might come back during the year and restate dividend at some point during the calendar year 2022? Or is the decision to not pay out the dividend more related to your balance sheet and maybe to the or your debt repayment schedule and the government support that you have received?
Yeah. I think the current suggestion then from the board to the AGM here is not then to any. It's hard. Of course, it comes in, but that's the proposal at the moment to the AGM. That's, I think, where we stand at the moment.
Yeah. No, you could add to that that Duni is very much linked and associated having a dividend yield, high dividend yield historically, and that's important for the company identity. Of course, that's a board question, but it's when we're coming back to normalization, of course there will be. Dividend is an important part for us, and it's one of our financial targets. It's definitely something that I'm sure will be discussed.
As a CFO, having full visibility into your covenants and debt repayment, and so is it even theoretically possible from your perspective, or would you recommend, or would you be against it reinstating it during the calendar year 2022?
I cannot specifically say something of that, since the uncertainty is still quite high on when and how we are progressing after the pandemic. Of course, we are working very disciplined with our headroom and our priorities on how to prioritize dividend against other areas or where we can utilize on our cash flow. As I said, I know that dividend is an important part, but I'm also sure that there will not be any risk-taking of implementing maybe dividend too early. That's how I see it, strict from my personal point of view.
All right. Fair enough. Thank you very much.
Thank you.
Thank you.
Thank you. We have a follow-up question from Gustav Hagéus. Please go ahead.
Thanks. Yeah. A follow-up, sort of related to Karri's question on the balance sheet, a little bit in a way. I'm thinking about M&A. If you could comment on sort of where you see the market progressing now and how you can calculate sort of cash flows throughout the year in your discussions with banks. Is there financial room you think this year to do any constructive M&A? If you could talk a little bit about the landscape. I assume some of your smaller peers have struggled a bit throughout the pandemic and maybe might be open for being acquired. Historically, you've been quite active in M&A, especially within the BioPak segment. If you could elaborate a little bit on where you see those opportunities going forward.
Yeah, of course, during the pandemic, we have had a smaller headroom to be active in the M&A on the traditional M&A, I would say. As you say, we have done at least one every year. We actually did a smaller minority stakes in startups, and I think that will be a very important part for us, and it's not only linked to the headroom we have, it's linked to the strategic options of moving quite fast in certain areas. Yes, we will continue seeing that area as very important for us in the M&A agenda.
Once the headroom is lifted in close accordance with the prioritization of the investments and so on, we will come back to the possibility of doing more normal acquisitions, let's say, that will support our growth in both businesses, I think.
Okay. Yeah. Those were all my questions. Thank you.
Thank you.
Thank you.
Thank you.
Just as a reminder, if you wish to ask a question, that's zero one on your telephone keypad. There'll be a brief pause while we register any further questions. There are no further questions at this time, so I'll hand back over to our speakers.
Thank you for today, and, yeah, see you soon again. Thank you. Bye-bye.