Arla Plast AB Interim Report January – June 2021

Report this content

DEMAND NORMALISED FOR PANDEMIC RELATED BARRIER PRODUCTS BUT STRONG FOR HOME AND GARDEN

APRIL – JUNE 2021

  • Sales volume amounted to 6,100 tonnes (7,200 tonnes).
  • Net sales declined by 6% to SEK 246.3 (260.8) million. Organic decline was 7%.
  • Operating profit declined by 38% to SEK 23.7 (38.5) million and adjusted operating profit by 31% to SEK 26.4 (38.5) million.
  • The operating margin decreased to 9.6% (14.8%) and the adjusted operating margin to 10.7% (14.8%). 
  • Profit for the period weakened by 37% to SEK 18.6 (29.2) million.
  • Earnings per share before dilution amouted to SEK 0.93 (1.46), and after dilution, to SEK 0.88 (1.46).
  • During the quarter the Arla Plast share was listed on Nasdaq Stockholm.

JANUARY – JUNE 2021

  • Sales volume amounted to 12,281 tonnes (12,707 tonnes).
  • Net sales was unchanged and amounted to SEK 465.2 (465.4) million, unchanged also organically.
  • Operating profit declined by 10% to SEK 51.3 (56.7) million, while the adjusted operating profit increased by 1% to SEK 57.3 (56.7) million.
  • The operating margin decreased to 11% (12.2%) and the adjusted operating margin increased to 12.3% (12.2%). 
  • Profit for the period weakened by 5% to SEK 40.5 (42.7) million.
  • Earnings per share, before dilution, amounted to SEK 2.02 (2.14) and after dilution to SEK 1.93 (2.14).
  • Net debt amounted to SEK 16.0 (-13.6) million at the end of the period, corresponding to 0.1 times (-0.1 times) EBITDA.

DEMAND NORMALISED FOR PANDEMIC RELATED BARRIERPRODUCTS BUT STRONG FOR HOME AND GARDEN

Market conditions
For us at Arla Plast, the pandemic meant new demand in the form of transparent barrier products, and our production facilities were busy during much of 2020 producing large volumes used for protection, related to the pandemic. As the world increasingly reverts to normal behavior in the wake of the pandemic, demand for transparent barrier products used for protection has also slowed during the second quarter. Instead, we have seen demand successively returning from manufacturing and construction, with homes and gardens being an especially strong theme during the quarter.           

The first half of 2021 has been marked by turbulence in the market for input materials for our industry. The result was lower supply and therefore higher prices.Higher input prices are largely compensated by higher prices to customers, this also applies to the opposite: when the prices of input materials fall then we lower prices. Price trends naturally affect both our and our customers' attitudes towards building or reducing inventory. The prices of input materials started to rise towards the end of 2020, and price increases have continued in the first half of 2021. Now we see supply increasing and stable prices against a downward trend.

The positive effect from the pandemic has diminished – despite this a good operating margin

In the second quarter, sales volumes in tonnes decreased by 15 percent, but compared to a very strong second quarter of 2020 and, as mentioned, affected by pandemic-related products. Net sales decreased by 6 percent to SEK 246.3 (260.8) million, and the organic decline was 7 percent. During the quarter, operating profit was charged with items affecting comparability in the amount of SEK 2.7 million related to costs to prepare the company for the IPO in May. Excluding these costs, the adjusted operating margin was 10.7 percent (14.8 percent). Positive impact from higher prices could not fully compensate for the lower volumes and negatively impacted currency effects.

Outlook

We now see that demand from application areas other than those driven by the pandemic, is gradually increasing, while demand for barrier products is greatly reduced. The general European economy is strong in both manufacturing and construction, but demand for our products is weighed down by the high price level and an unwillingness to buy more than necessary, since the prices of our products are expected to fall as the prices of input materials fall in the second half of 2021.

During the second quarter, the Arla Plast share was listed on Nasdaq Stockholm. The listing was preceded by intensive internal preparation work. The introduction is an important quality stamp for Arla Plast, and it is with great pleasure that we welcome all new shareholders.

Henrik Håkansson

President and CEO


For further information, please contact:

Henrik Håkansson, MD and Group CEO, +46 141 20 38 01
Monica Ljung, CFO, +46 141 20 38 02
Boel Sundvall, IR, +46 705 606018

This information is such information that Arla Plast AB is obliged to publish in accordance with the EU Market Abuse Regulation and the Swedish Securities Market Act.The information was published by the abovementioned contact persons on 12 August 2021 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, protective barriers (for COVID-19), suitcases, vehicle components and various construction-related areas of application. The company is headquartered in Borensberg, Sweden, and has production facilities in Borensberg and two in the Czech Republic. Arla Plast has around 260 employees and a turnover of just under SEK 900 million.

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