Interim report January – September 2024

Fri, Nov 08, 2024 08:00 CET

Stronger market position and increased profit

July – September 2024

Net sales amounted to SEK 392.0 million (262.9), an increase of 49%.
Net sales for comparable segments decreased by SEK 26.3 million, a decrease of 10%.
Operating profit amounted to SEK 32.2 million (28.0), an increase of 15%.
The operating margin decreased to 8.2% (10.7).
The profit for the period amounted to SEK 25.9 million (20.8), an increase of 25%.
Earnings per share, before dilution, amounted to SEK 1.24 (1.03) and after dilution to SEK 1.24 (0.99).
Cash flow from operating activities amounted to SEK -7.3 million (43.7).

January – September 2024

Net sales amounted to SEK 1,035.7 million (788.5), an increase of 31%.
Net sales for comparable segments decreased by SEK 39.8 million, a decrease of 5%.
Operating profit amounted to SEK 93.8 million (75.6), an increase of 24%.
The operating margin decreased to 9.1% (9.6).
The profit for the period amounted to SEK 69.7 million (57.8), an increase of 21%.
Earnings per share, before dilution, amounted to SEK 3.32 (2.87) and after dilution to SEK 3.32 (2.76).
The net debt amounted to SEK 70.4 million (-8.8) at the end of the period, equivalent to 0.4 times (-0.1) EBITDA.
Cash flow from operating activities amounted to SEK 58.0 million (86.9).

Significantly higher net sales, higher profit and a temporary buildup of raw material inventory characterize the third quarter of 2024.

Market

We are experiencing a cautious market with a volume that, in our assessment, is in line with the corresponding period last year. Demand within the construction and automotive industries continues to be relatively weak. Positively, we see sustained demand in other sectors, especially within industry and industrial projects. This trend has been evident both in segment Czech Republic and segment Sweden.

Overall, the volume is significantly higher, influenced by the acquisition carried out during the second quarter of 2024. Through the acquisition of Nudec S.A.U., our product and customer portfolio has been strengthened and we have a considerably stronger market position in Central and Southern Europe.

The raw material prices, which affect both net sales and gross profit, continued to increase during the third quarter but are at a lower level than in the comparison quarter. Price competition towards customers has increased, which is a consequence of a reserved market combined with increasing raw material prices.

Customers within distribution have been cautious during the period, which is a result of the increased purchases made during the first quarter of the year, this is most evident in segment Spain.

Increased net sales

Net sales increased by 49%, which is an effect of the additional net sales from segment Spain. In the comparable segments, the lower sales are primarily due to raw material prices being on average lower during the quarter compared to the same period last year.

We now see a positive diversification in our product and customer portfolio through the increased share of PETG and PMMA as a result of the acquisition of Nudec S.A.U.

During the third quarter of 2024, the operating profit amounted to SEK 32.2 million, which is an increase compared to the same period last year. We have had a strong focus on maintaining margins during a period of increasing raw material prices. Our margins in the quarter are slightly lower compared to the same period last year, which was one of the strongest quarters in the company's history. For segment Spain the margins are weaker than for the comparable segments.

During the quarter, there was a temporary build-up of inventory, which has significantly affected the cash flow from operating activities, making it negative for the first time in a long time. The cash flow is affected by a larger raw material inventory in terms of volume as well as increased raw material prices compared to the second quarter and the full year of 2024.

Outlook

Entering the year's final quarter, we see a stable but reserved market. Some customer groups show a speculative buying behavior, which is highly influenced by the raw material price development. So far, raw material prices have had an upward trend, but the future is difficult to assess.

Our long-term planning includes investments in several production units over the coming years. This involves investments and development of both personnel and machinery. In segment Spain, work continues to align operations with other segments and thereby increase efficiency. At the same time, planning of a new warehouse and production facility continues in Sweden. In the Czech Republic, modernization of the machinery and improvements in production flows are ongoing.

We acknowledge the importance of being in the lead of development to be able to deliver the highest quality of extruded plastic sheets in the market.

Christian Krichau

President and CEO

For further information, please contact:

Christian Krichau, President and CEO, +46 141-20 38 58

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. The information was published by the abovementioned contact persons on November 8, 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 four production facilities in Sweden, the Czech Republic and Spain and a distribution unit in Germany. Arla Plast has a turnover of more than SEK 1,100 million, has approximately 390 employees and delivers to more than 700 customers in over 45 countries.

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