Year-end report 2022

IMPROVED PROFIT IN QUARTER DESPITE LOWER VOLUMES

OCTOBER – DECEMBER 2022

• Sales volume amounted to 4,124 tonnes (5,503 tonnes) a decline by 25%.
• Net sales amounted to SEK 232.0 million (SEK 240.3 million), a decline by 3%. The organic decline was 17%.
• Operating profit amounted to SEK 11.3 million (SEK 10.2 million), an increase by 11%.
• The adjusted operating profit amounted to SEK 10.9 million (SEK 10.2 million), an increase by 10%.
• The operating margin and adjusted operating margin increased to 4.9% (4.2%).
• Profit for the period amounted to SEK 8.6 million (SEK 8.4 million).
• Earnings per share before dilution amounted to SEK 0.43 (SEK 0.42), and after dilution to SEK 0.41 (SEK 0.40).
• The cash flow from operating activities amounted to SEK 51.3 million (SEK 27.1 million).

JANUARY – DECEMBER 2022

• Sales volume amounted to 18,657 tonnes (22,646 tonnes) a decline by 18%.
• Net sales amounted to SEK 957.8 million (SEK 927.5 million), an increase by 3%. The organic decrease was 3%.
• Operating profit amounted to SEK 47.0 million (SEK 86.2 million), a decline by 45%. The adjusted operating profit amounted to SEK 48.2 million (SEK 92.3 million), a decline by 48%.
• The operating margin declined to 4.9% (9.3%) and adjusted operating margin declined to 5.0% (10.0%).
• Profit for the period amounted to SEK 34.4 million (SEK 68.1 million), a decline by 49%.
• Earnings per share before dilution amounted to SEK 1.72 (SEK 3.41), and after dilution to SEK 1.64 (SEK 3.25).
• Net debt amounted to SEK 76.7 million (SEK 44.5 million) at the end of the period, 0.9 times (0.4 times) EBITDA.
• The Board proposes a dividend of SEK 1.00 SEK per share, equivalent to 58 percent of net profit.

The market

The volumes on the market started to decrease already during the last quarter of 2021. The decline was strengthened by the invasion of Ukraine and thereafter the weakened economy, to remain during the whole year. Our view is that Arla Plast maintained its market position.

During 2022 the turbulent raw material situation, which started already during 2021, continued with increased prices. Though, at the end of the year the raw material prices started to decrease gradually, at the same time as our market indicates lower stock volumes in distribution.

Higher margins but lower net sales during the fourth quarter

During the fourth quarter the volumes declined with 25 percent compared to the same period last year and the net sales declined with 3 percent. Alphaplex was consolidated for the full fourth quarter and contributed with SEK 21 million to the net sales. The raw materials prices continued to be high during the period but at the end of the period a decrease could be noted. The efficiency measures taken earlier this year together with a positive product mix increased the gross margin to 16.8 percent (14.6 percent) and the adjusted operating margin to 4.9 (4.2) percent.

Full year

During 2022 the volumes decreased for Arla Plast by 18.0 percent due to lowered demand in the whole business. Net sales increased with 3.0 percent whereof the acquisition of Alphaplex in August contributed with SEK 34 million. The gross margin was mainly affected negatively by high raw material prices and by under absorbtion of fixed costs as a result of the lower production volume. The adjusted operating margin declined to 5.0 percent (10.0 percent).

During the year we have continued to streamline our production, strengthen our sales organization and we have taken a number of improvement measures within the organization. Within sustainability we have taken a big step by targeting our most important initiatives within the area. We have also completed our first acquisition and with this strengthened our presence at the important German market, which also supports our ambition of increased presence in Austria and Switzerland.

Outlook

We have a strong financial position and we continue the efficiency work and develop our organization. Our view is that we are well positioned with our customer offering as we offer specific and customized products. We are proud of our sustainability work which has been additionally intensified. At the end of the year we have noted indications of declining raw material prices and also that the distribution has started to replenish their stock. We have also noted an increased interest from certain areas in our market but the uncertainty remains high.

The Board proposes to the AGM a dividend of SEK 1.0 per share (SEK 1.50), which corresponds to 58 percent of the fiscal year profit per share. The dividend policy of Arla Plast states as a long term goal a dividend of 30-50 percent of the net profit for the fiscal year. The proposal is based on the company’s high solvency, good cash flow and long-term dividend capacity but also based the overall uncertainness which currently affects the development of market and economy.

Christian Krichau

President and CEO

For further information, please contact:

Christian Krichau, VD och koncernchef, 0141-20 38 01
Monica Ljung, CFO, 0141-20 38 02
Boel Sundvall, IR, 0705-606018

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 and the Securities Markets Act. The information was published by the abovementioned contact persons on 17 February 2023 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