Interim report January – September 2022

HIGHER NET SALES BUT LOWER VOLUMES – CONTINUED CHALLENGING MARKET

JULY– SEPTEMBER 2022

• Sales volume amounted to 3,817 tonnes (4,862 tonnes) a decline by 21%.
• Net sales amounted to SEK 232.0 million (SEK 222.0 million), an increase by 5%. The organic increase was 1%.
• Operating profit amounted to SEK 10.8 million (SEK 24.7 million), a decline by 56%. The adjusted operating profit amounted to SEK 12.0 million (SEK 24.8 million), a decline by 52%.
• The operating margin declined to 4.7% (11.1%) and adjusted operating margin declined to 5.2% (11.2%).
• Profit for the period amounted to SEK 7.6 million (SEK 19.2 million), a decline by 60%.
• Earnings per share before dilution amounted to SEK 0.38 (SEK 0.96), and after dilution to SEK 0.36 (SEK 0.91).
• The cash flow from operating activities amounted to SEK 52.9 million (SEK -23.8 million).
• During the quarter Alphaplex GmbH in Germany was acquired and is consolidated as of August.

JANUARY – SEPTEMBER 2022

• Sales volume amounted to 14,533 tonnes (17,143 tonnes) a decline by 15%.
• Net sales amounted to SEK 725.7 million (SEK 687.2 million), an increase by 6%. The organic increase was 3%.
• Operating profit amounted to SEK 35.7 million (SEK 76.0 million), a decline by 53%. The adjusted operating profit amounted to SEK 36.9 million (SEK 82.1 million), a decline by 55%.
• The operating margin declined to 4.9% (11.1%) and adjusted operating margin declined to 5.1% (11.9%).
• Profit for the period amounted to SEK 25.8 million (SEK 59.7 million), a decline by 57%
• Earnings per share before dilution amounted to SEK 1.29 (SEK 2.98), and after dilution to SEK 1.23 (SEK 2.84).
• Net debt amounted to SEK 108.0 million (SEK 63.1 million) at the end of the period, 1.3 times (0.4 times) EBITDA.
• Equity/assets ratio amounted to 59.0% (67.7%).

Our view is that we are maintaining our market position in a sharply weakening European market. The entire industry is characterized by the weak economy with declining demand combined with higher production capacity compared with previous year. The higher production capacity applies particularly for the TPC and MWPC product areas and is a result of the pandemic-related demand, motivating the industry to implement investments and efficiency measures. In the current market situation, this has contributed to increased volume and price competition.

The price picture for raw materials is volatile with great uncertainty about the development. The market indicates continued high inventories at the distribution level.

Third quarter

Sales volumes decreased by 21 percent to 3,817 tonnes (4,862 tonnes) while net sales increased by 5 per cent to SEK 232.0 million (SEK 222 million). Organically, the increase was 1 percent. The gross margin was negatively impacted mainly by high raw material prices and by under absorption of fixed costs due to the lower production volume. The lower production volume is in turn due to the weak demand in combination with a reduction of our inventory. The adjusted operating margin decreased to 5.2 percent (11.2 percent). As part of adapting to market conditions, we have implemented personnel redundancies. Costs for this amounted to SEK 1.6 million in the quarter and was charged to operating profit.

Outlook

We have a strong financial position, and our internal focus is on continuing to develop our organization, primarily within the marketing and sales organization. Our view is that we are well positioned with our customer offering as we offer more specific and more customized products than many companies within our industry. We are proud of our sustainability work which is now further intensified. The objective is to increase the use of recycled materials to help our customers reduce their climate footprint as well as our own. We are of course reviewing our costs, among other things, there has been a certain reduction in the workforce both in Sweden and in the Czech Republic. This has been possible mainly through natural departures, which we have not replaced. At the beginning of the year, we had a total of 262 employees, reduced to 242 before acquisitions at the end of September.

With the acquisition of Alphaplex GmbH, we have added presence in the for us important German market and the objective is also to strengthen our sales in Austria and Switzerland. The integration of the acquisition is going according to plan. We continue to face challenging times; there are many indications that raw material prices should go down, but so far we have not yet seen any certain signs of this. In a weaker economy, the strength of our well-diversified customer and product portfolio become even more important.

Christian Krichau

President and CEO

For further information, please contact:

Christian Krichau, President and CEO, +46 141 20 38 01
Monica Ljung, CFO, +46 141 20 38 02
Boel Sundvall, IR, +46 705 606018

Forward-looking information
Certain statements in this report are forward-looking and the actual outcome may be significantly different. In addition to the specific mentioned factors, other factors may have material impact on the actual outcome. Such factors include, but are not limited to, the general economic climate, exchange-rate fluctuations and changes in interest rates, political developments, the impact of competing products and the prices of such products, interruptions to the access to raw materials. 

This information is such information that Arla Plast AB is obliged to publish in accordance with the EU Market Abuse Regulation. The information was published by the abovementioned contact persons on 10 November 2022 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) and glycol-modified polyethylene terephthalate (PETG) and have a
large number of areas of application, such as safety products, machine guards, ice hockey rinks, greenhouses, pool covers,
sound walls, suitcases, vehicle 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. Arla Plast has a turnover of more than SEK 900 million and has approximately 260 employees and delivers to more than 700 customers in over 45 countries. In 2022, Arla Plast completed its first acquisition by acquiring Alphaplex GmbH in Germany.

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