Increased net sales after acquisition and strong cash flow
April - JUNe 2024 • Net sales amounted to SEK 395.9 million (274.6), an increase of 44%.• Net sales for comparable segments decreased by SEK 10.4 million, a decrease by 4%. • Operating profit amounted to SEK 25.8 million (32.0), a decrease by 19%. • The operating margin decreased to 6.5% (11.6). • Non-recuring costs are included in the operating profit with SEK -9.0 million. In the comparing quarter electricity grant of SEK 5.5 million was received. • The profit for the period amounted to SEK 16.5 million (23.7), a decrease of 30%. • Earnings per share, before dilution, amounted to SEK 0.79 (1.18) and after dilution to SEK 0.79 (1.13). • Cash flow from operating activities amounted to SEK 38.0 million (22.4). JANUARy - JUNe 2024 • Net sales amounted to SEK 643.7 million (525.6), an increase of 22%.• Net sales for comparable segments decreased by SEK 13.6 million, a decrease by 3%. • Operating profit amounted to SEK 61.6 million (47.6), an increase of 29%. • The operating margin increased to 9.6% (9.1). • The profit for the period amounted to SEK 43.8 million (37.0), an increase of 18%. • Earnings per share, before dilution, amounted to SEK 2.09 (1.85) and after dilution to SEK 2.09 (1.76). • The net debt amounted to SEK 65.2 million (63.1) at the end of the period, equivalent to 0.4 times (0.6) EBITDA. • Cash flow from operating activities amounted to SEK 65.3 million (43.3). Significantly increased net sales due to the acquisition of Nudec in Spain. Improved operating profit excluding non-recurring items. Increased raw material prices, but at a lower level than the previous year. Market The increasing demand observed during the first quarter slowed down in the second quarter. Our perception is that the market volumes are level with the comparison period. Demand in the construction industry remained generally weak, and the expected seasonal effect did not occur. Demand from the automotive industry is weakened, while we have good demand in several other sectors, particularly in industry and industrial projects where special products have performed strongly. This trend has been evident in the segment Sweden, Czech Republic and Germany. Our perception is that our market share remains unchanged. Raw material prices, which affect both net sales and gross profit, continued to increase during the second quarter, but are still significantly lower than in the comparison quarter. In the situation of rising raw material prices, price competition with customers has increased. We see that several customers in the distribution channel are choosing to increase their inventory levels in anticipation of further price increases, this trend is especially noticeable in the PMMA product area. Through the acquisition of Nudec, we expand our reach and position in Europe and we now also have a strong foothold in Central and Southern Europe. Nudec's competence in PMMA complements and strengthens our product portfolio, positioning us as a significant player in the market. Increased Net Sales and Write-Downs Our net sales increased by 44% to SEK 395.9 million, due to the acquisition of Nudec. Net sales were negatively impacted by the lower raw material prices compared to the previous year. We see continued increased competition in the ABS product area, which is an effect of the weaker demand from the automotive industry. At the same time, we are strengthening our position in TPC, PMMA and PETG with Nudec. In the second quarter of 2024, the operating profit amounted to SEK 25.8 million, which is lower than the previous year. The quarter has been charged with transaction costs for the acquisition and write-downs in segment Czech Republic, while in the second quarter of the previous year, we received a government grant for electricity costs in segment Sweden. Excluding these non-recurring items, the result is considerably stronger than the comparison period. Segment Sweden and Czech Republic continue to show stability. The margins in segment Germany have strengthened significantly. The gross margin is, as expected, slightly weaker than last year due to the lower margins in Nudec, which is part of segment Spain. We have already begun planning the improvement measures which were identified before the acquisition. Our perception is that this will lead to profitability well in line with our financial targets in the medium long term. Cash flow remains strong and is highly prioritized. Despite a minor seasonal build-up of inventory ahead of the holiday season, we have managed the working capital well. It is through the strong cash flows of recent years that we have been able to finance the acquisition of Nudec solely with our own funds and still maintain a relatively low net debt. Outlook We find the market demand somewhat more stable than last year. Raw material prices are on an upward trend, although the fluctuation so far has been more less volatile than in recent years. With our now wider customer offering, both in terms of products and geography, we see ourselves as well-positioned in Europe. Major investments, including warehouse expansion and machinery investments in segment Sweden, as well as machinery investments in segment Czech Republic, are proceeding according to plan. We are also reviewing machinery and buildings at Nudec to optimize, streamline and strengthen margins to match those we now see in our other production units. With the combined expertise and commitment of our employees, we see good prospects for moving forward on a stable foundation. 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 and the Securities Markets Act. The information was published by the abovementioned contact person on August 16, 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. |
