Interim report January - March 2024

Strong result and increased operating margin starts the year

JANUARY – MARCH 2024

• Net sales amounted to SEK 247.8 million (251.0), a decrease by 1%.
• Operating profit amounted to SEK 35.8 million (15.6), an increase by 129%.
• The operating margin increased to 14.4% (6.2).
• Profit for the period amounted to SEK 27.3 million (13.4), an increase by 104%.
• Earnings per share, before dilution, amounted to SEK 1.30 (0,67) and after dilution to SEK 1.30 (0.64).
• Net debt amounted to SEK -106.6 million (59.6) by the end of the period, which corresponds to -0.6 times (0.6) EBITDA.
• Cash flow from operating activities amounted to SEK 27.3 million (20.9).

Market

The reduced demand which we noted at the end of the previous year turned into a positive development during the first quarter, with market volumes increasing compared to the same period last year. The demand in Germany is still generally weak, including demand from applications linked to the construction industry, such as energy solutions. However, we see good demand from several other markets and sectors, especially applications for our high-optical products and niched projects. Our perception is that our market share is stable and unchanged.

Prices of raw materials, which directly affect net sales, have begun to rise, and with expectations of further price increases, several of our customers have chosen to fill-up their inventories. As a result, sales have temporarily increased.

Strong result despite of lower net sales

Our net sales decreased by 1% compared to the same quarter previous year primarily due to the relatively low raw material prices. However, the low price levels have been compensated by a favorable product mix with a higher proportion of special products compared to the same period last year. There is also a positive currency effect during the period.

During the first quarter of 2024, the operating profit amounted to SEK 35.8 million, representing a significant increase compared to the same period last year and one of the best quarters in our history. The main reason is a gross margin of 25.9%, which is a result of both a favorable customer and product mix and efficient production with high material utilization rates. Some seasonal inventory buildup has been produced in the Czech Republic, which has had a positive impact on profit. In anticipation of upcoming modernization in the Czech Republic, a machine which is going to be replaced has been written down by SEK 6.8 million.

We are pleased with the cash flow, which has improved compared to the same period last year thanks to the strong result.

Outlook

We observe deliberate capacity-limiting measures from some of the European raw material suppliers, resulting in certain allocations and ongoing price increases, which is a dynamic common to the industry and one that we, as before, will navigate through.

We are pleased to announce at the end of April the acquisition of Nudec S.A. in Spain. We have added a well-managed family company with skilled employees and a strong position in southern Europe to the Group. It is a strategically important acquisition where we see our combined customer offering as a great way to enhance value for our customers. A challenging yet very exciting time lies ahead of Arla Plast.

Christian Krichau

President and CEO

For further information, please contact:

Christian Krichau, President and CEO, +46 141-20 38 58
Monica Ljung, CFO, +46 141-20 38 02

Forward-looking information

Some statements in this report are forward-looking and the actual outcome may be significantly different. In addition to the factors specifically highlighted, other factors may have a material impact on the actual outcome. Such factors include, but are not limited to, the general economic situation, changes in exchange rates and interest rates, political developments, the impact of competing products and their prices, disruptions in the supply of raw materials.

This information is such information that Arla Plast AB is obliged to publish in accordance with the EU Market Abuse Regulation and the Securities Markets Act. The information was published by the abovementioned contact persons on April 25, 2024 at 8:00 am CET.

About Arla Plast

Arla Plast is a producer and supplier of extruded sheets made of technical plastics. The plastic sheets are made of polycarbonate (PC), acrylonitrile butadiene styrene (ABS), glycol-modified polyethylene terephthalate (PETG) and polymethyl methacrylate (PMMA) and have a large number of areas of application, such as safety products, machine guards, ice hockey rinks, greenhouses, pool covers, sound walls, suitcases, automotive components and various construction-related areas of application. The company is headquartered in Borensberg, Sweden, and has a total of three production facilities in Sweden and the Czech Republic and a distribution unit in Germany. Arla Plast has a turnover of more than SEK 1,000 million, has approximately 250 employees and delivers to more than 700 customers in over 45 countries.

More information about Arla Plast is available at www.arlaplastgroup.com.