Hello, and welcome to the interim report for Q1. It's been, of course, a strange past year and so on, and we will come into that during the day. I will first kick off here by short highlights for the quarter. Of course, we had a significant increase of the sales in the business area during, and that definitely confirms that when all the restrictions are eased up and so on, we recover very quickly. We'll come back to that a bit more. We have a continued strong cost pressure, as we all know, with inflation in the world, and all the uncertainty that we are facing at the moment. We are mitigating by implemented price increases in the quarter.
We have during the quarter also support UNHCR, as well as sending trucks to the refugee camps in Poland for serving food and beverage at the border there. We also during the quarter have closed down our Russian entity in a very responsible way. We have during the past year and also in this quarter continued to work to reach our sustainability targets. We'll come back to that as well. Lately, we installed solar panels in our factory in Brämhult and electricity for our paper mill in Skoghall being supplied by Bra Miljöval wind, which is a huge step for us. The agenda here, Q1 summary, business areas. We're going through a little bit sustainability, financials, and then Q&A in the end.
Short summary of the Q1, we have had an increase of 55% of net sales, so SEK 1.4 billion. The operating income then ended up at SEK 51 million versus -0.1 last year, so an operating margin of 3.6%. A little bit comments around that then. Of course, all the restrictions that were placed in the Q4 last year, they continued into January, February, and I think especially in some countries, it's been still there in a way, Germany, Holland, which are two of our main markets, had eased up during the maybe late part of the quarter. I think Sweden is a special place in that we have a quite open environment and versus other countries.
If we then look at the business area, BioPak, it continues to grow, especially in Australia, as the demand here for takeaway and all the sustainable packaging is continuously and changing out plastic to sustainable packaging. We have an increase in our inventory to meet all the challenges of course, with the low performance in the business area of BioPak. The operating income then of course ended up on a high increase here, of course, versus last year, and especially coming from the Duni business area, that then doubles versus last year. We have a strong margin pressure that comes from still the sea freight cost of containers and so on, but we mitigate by price increases that we've been implementing during the quarter.
In this quarter, no government support was received if we compare them to last year where we got SEK 33 million in comparison. Yeah. Hand over to Magnus.
Thank you, Robert, and good morning, everyone. I will now go through our two business areas in more detail, and I'll start off with the business area Duni, representing our products like napkins and table covers and also candles. As already indicated in February when we presented the Q4 report, the initial part of the first quarter was very much characterized by restrictions in the whole retail industry. We also saw a gradual easing of the restrictions throughout the quarter. Consequently, the end of the quarter moves towards more of a normalization in demand. As a consequence, the sales almost doubled from a very weak first part of the quarter and increased. March, the month of March, was double versus January.
Overall, throughout the whole quarter, the sales almost doubled from SEK 400 million- SEK 800 million. This resulted in a profit improvement of more than SEK 100 million, from SEK -83 million- SEK 21 million. Quarter one is our seasonal weakest, but also the relative weak margin should be seen as a result that we are still not fully back to normalized levels in volumes for the full quarter. Again, as mentioned, the quarter as a whole is not back to what we can see as levels seen before the pandemic, but the improvement was clearly strengthened throughout the quarter, and we are therefore optimistic. Sweden, as Robert mentioned, has continuously been like an island in Europe, where the restrictions has been significantly lighter versus the rest of Europe.
Still, in the beginning of March, you had to show COVID pass and negative tests even to enter restaurants in Germany and Benelux. I think now in April, we can finally state that also here and consequently in all our markets, we are back now to some kind of normality with no real restrictions, and we are optimistic that we hopefully can see an end of this long period of pandemic. The war in Ukraine has accelerated raw materials and energy prices even further to extreme historical levels. As an indication that some of you might have seen, macro numbers that was published just some days ago in Germany indicate that an increase of 31% versus a year ago, and energy prices with 88%.
Although we successfully managed to increase prices during the quarter, new prices has been initiated, and we will see an effect in the third quarter to mitigate these margin pressure. If we move over to the BioPak segment, which is offering our sustainable food packaging, we continue to see a good growth of more than 20%. However, as indicated previously, the margins are reduced to around 5%, which is a lower level than we have seen before. This is directly linked to the extreme levels we now see in raw materials, and especially in sea freight. The result is therefore slightly down versus last year from SEK 43 million- SEK 31 million. Throughout the pandemic, we have seen how BioPak have complemented business area Duni with a reversed effect in volumes.
Strong growth when business area Duni had experienced weak demand from seated diners. However, we are confident that the need and demand for environmentally smart food packaging is strong. This is further supported by the immense need to shift out plastics in packaging. Although we see continuous healthy and firm growth, the margins in the last quarters have been impacted by the extreme cost levels, and price increases have gradually been implemented. We will see new ones to come back to the levels, as I said, where we need to be. Beginning of Q2 this year indicated lower cost levels on the sea freights, but maybe it's a bit too early to state the clear trend here.
Okay, we move into a little bit what we've been up to here in the past year, that we worked a little bit on updating our strategy. We have created a purpose for the company that is to inspire the world to give more than we take, to enable all people to enjoy good food, wellbeing, and togetherness today and for generations to come. We really want to be a purpose-led company. Why do we go to work every day? I think it's a really good direction. We also worked out the vision for 2030, and we call that our decade of action. That's the Duni Decade, yeah.
Looking at the UN Decade of Action, of course, and we have put some targets to 2030, and our vision in 2030 is that we have achieved full circularity, and we passionately lead our industry towards a world where we give more than we take. We care for our planet and our wellbeing. We create joyful, safe, and easy to use solutions for all people to embrace food togetherness and design. I think it's important here, we have the sustainability targets, of course, but also we have our business idea, and model is to be where we actually can create a joyful and get people in a good mood when they meet and so on in restaurants and on the go and all that.
We work out that and put down a lot of targets for that. Three initiatives then is that we're gonna becoming circular at scale in 2030, going net zero in 2030 for the net carbon emission for Scope 1 and 2. We're gonna living the change to become a trusted sustainability. I'll come a little bit into that in details here. We also measure as an overall target here an index carbon intensity index scope of Scope 1 and 2, and that is tons of carbon per ton self-produced product. We have a base year of 2019, where we have an index of 100, and we put a goal in 2025 of 40. Actually, we worked really hard on this.
In order, we moved over to renewable energy, and the biggest shift here is for our Skåpafors factory, of course. Just to get some ideas here, we had 45,000 tons of carbon emissions in 2019, and now in 2021, we were down to 27,000, and now we are tracking at 21,000 for 2022. Little bit busy slide here, the next one. These are the three areas we are focusing on, where we put goal for 2030, and also we have an interim target for 2025, and what activities we are following. This, we're gonna follow every quarter and of course every year, some goals will be more easy to follow per year.
If we just take a couple of examples, becoming circular at scale, there we need to for 2025, and if we take the shorter term here, it's reduction of virgin fossil-based plastic in single use product by 50% towards 2019. Today, we have 5%, so we're gonna have 2.5% in 2025. We need a large number of end-of-life solutions, so looking at circularity here, going from take, make, dispose logic to more closed loop. We also look at FSC certified products then for 2025, working on that. Then we have going at zero zero vision for this under the Scope 1 and 2, of course, doing a lot of activities there.
We have activities to be approved on the Science Based Targets initiative, and we're gonna have a 60% reduction in carbon intensity within, as I mentioned before, 2019 as the base year. Then leading the change is that we're gonna become a trusted sustainability leader in our industry, and there we're looking at maybe more measurable part is looking at the EcoVadis system where we're gonna achieve 75 points in 2025. It's a way to measure that as you probably know. Activities according to this in the different parts. As I mentioned in going ahead here, for example, we move to renewable electricity in our paper mill in Skoghall, and that makes a huge difference of course.
Lots of great initiatives here and what we're working towards is fantastic, I think.
Thank you, Robert. Just some comments on the market outlook. It has of course been extremely difficult to predict the future in the last two years, and I think these graphs shows the extreme volatility between the months and the quarters. The graph to the left show how many restaurants that is taking orders, and coming from a level around 60% in the beginning of Q1, and that has increased to March to current level of 90%. In other words, we're reaching a normalization. The graph to the right shows the seated diners as walk in and reservations, and where you can see a clear improvement from the end of February. We're both looking on both graphs, it's Germany.
They basically triangulate the same pattern that Q1 indicated a gradual progress towards normalization, and as we speak, a good level. Looking at some of the financials, we can jump to the income statement. We see that we have a clear improvement in the gross margin, improved significantly from the previous year. Still not back to the levels we want to see versus the historical average. The inflation on almost all cost components is still accelerating further and, of course, very much linked to the war in Ukraine. I said a couple of times now, we are confident that we are able to cover this and we're in a good position for further price increases, having the best products in the market.
The unique situation is of course always associated with risks, but we think this is manageable. You can also see that the indirect cost has increased and explained by very low levels last year, supported by governmental support. We have accelerated investments in sustainability as Robert just talked about, but also in our digitalization to secure our position of having the most attractive offer and efficient way to the market on all platforms, including online. Operating margin increased by 8 percentage points, but the roads towards further strengthening of the margins should be supported by additional price increases, but also improved absorption in production and further efficiency gains. If we're looking on very quickly on the business areas to sum up, you can see significant growth both in Duni and in BioPak.
It's very positive, but as mentioned, full focus is now on the margins and due to the accelerating inflation, further price increases are initiated that should bring us back to the levels where we want to be and align with our financial targets. The cash flow is normally negative for the first quarter being a seasonal weakest one for Duni. However, as you can see, inventory is up quite significantly, and this is for two reasons. First, it is the result from higher costs for our products, but it's also a deliberate way to secure our deliveries, especially in BioPak, which has been a challenge for the whole industry, I think, in the last two years. The supply chain situation, especially from Asia, has been very fragile. A little bit on our financial position, it continues to be good.
Net debt has increased in the last quarters, but the ratio towards our EBITDA decreases. Also, as you can see, return on capital employed, excluding goodwill, continues to increase and is now on a level of 16%. Finally, as you can see, looking on our financial targets and the outcome, we have now a very strong growth, of course, from lower levels coming through the pandemic, but it's clearly above the level of 5%. BioPak continues to be the growth engine within Duni Group. I state that several times our margins suffer from the extreme cost levels that we have seen, but will be mitigated by further price increases. We should also see, as I said, a positive effect in better absorption in our production units, especially for Business Area Duni.
Finally, as we already indicated, there is a recommendation from the board not to have any dividends for the year of 2021. With this, I hand over to Robert for final comments.
Yeah. Thank you. Yeah. It's been a change of course, versus last year, which is very positive, I think. Hopefully we are seeing the last of the pandemic now and not returning to that. I think that's. We all hope for that and we get a really good spring and summer here, which is a good season for Duni Group in general. Yeah. With that, I leave open for questions.
Thank you. Ladies and gentlemen, if you wish to ask for audio question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There'll be a brief pause while any questions are being registered. There are no further questions at this time, so I'll return the conference back to you.
Okay, great. Yeah. If no further questions then, we end the call here and, yeah, we look forward to a bright year here. Thank you.