Interim report January – March 2023

IMPROVED MARGINS AND STRONG CASH FLOW

JANUARY – MARCH 2023

• Sales volume amounted to 4,892 tonnes (4,941 tonnes) a decline by 1%.
• Net sales amounted to SEK 251.0 (226.7) million, an increase by 11%. Organically there was no change in net sales.
• Operating profit amounted to SEK 15.6 (11.4) million, an increase by 36%.
• The operating margin increased to 6.2% (5.0%).
• Profit for the period amounted to SEK 13.4 (8.8) million, an increase by 52%.
• Earnings per share before dilution amounted to SEK 0.67 (0.44), and after dilution, to SEK 0.64 (0.42).
• Net debt amounted to SEK 59.6 (50.4) million at the end of the period, 0.6 times (0.5 times) EBITDA.
• The cash flow from operating activities increased to SEK 20.9 million (SEK 1.0 million).

Market conditions

The volumes continued to decline during the first quarter of 2023 for the entire industry, although at a lower rate than in 2022. Our understanding is that we maintain our market position. A decline is apparent in the application area construction, while certain other areas have made a slight recovery. Toward the end of the quarter we have seen indicators that the demand from customers in the distribution chain have increased.

Raw material prices started to decline during the last quarter of 2022 and continued to decline somewhat during the first quarter. We are experiencing production disruptions and a limited material availability by our main suppliers, which is making the price development difficult to assess.

Improved margins and strong cash flow

Arla Plast´s volumes decreased by 1 per cent. Net sales increased by 11 per cent, as a result of the acquisition of Alphaplex in 2022 and exchange rate effects. The gross margin was positively affected mainly by a favorable product mix, but also by a high degree of material utilization. The gross margin increased to 19.9 per cent (15.2). The operating profit increased by 36 per cent to SEK 15.6 (11.4) million, mainly driven by the improved gross margin. The operating margin increased to 6.2 per cent (5.0). The cash flow improved due to the higher operating profit and less operating capital tied up, mainly related to inventory.

Sustainability

In line with our ambitions to reduce our environmental footprint and to increase our supplier responsibility, we have during the quarter, initiated several activities of which one is to increase the circularity. The activities have led to an increased recycling of material in the supplier chain which will have an impact on the carbon footprint going forward.

Outlook

The market conditions are challenging and difficult to assess. The uncertainty is still great with low demand from several application areas such as the construction sector but have partially returned from other sectors. The situation regarding availability and price development of raw materials is difficult to assess. We have a large and well diversified customer- and product portfolio with a well spread risk to multiple industries and markets, which is extra important in times such as this.

We are continuing our long-term ambitions of developing our business. The focus is to integrate sustainability within the entire business, integrate the acquisition of Alphaplex, to work with efficiency measures and to strengthen the organization.

Christian Krichau

President and CEO

For further information, please contact:

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

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 above mentioned contact persons on 9 May 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), 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, 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 950 million and has approximately 250 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.