Stable Result - hesitant market
For Arla Plast, the pandemic meant new demand in the form of transparent barrier products, which are used as protection in stores as well as within the health care sector. The production facilities were busy producing large volumes of these products, which were delivered during 2020. As the world increasingly reverts to normal behavior in the wake of the pandemic, demand for transparent barrier products used for protection slowed down during 2021. During the second quarter 2021, demand begun to return from other applications, such as from manufacturing and construction, continuing during the third quarter. Demand from some applications, is however still hesitant due to the general uncertainty as well as changed prerequisite in the market.
The first half of 2021 was marked by turbulence in the market for input materials. During the summer we started to see signs of improvement regarding the supply and a stop for price increases of raw material. Surprisingly the prices, however, continued to increase slightly during the third quarter. The expected price decrease for input material is therefore still ahead of us.
Higher net sales and good operating margin
During the third quarter sales volume in tonnes decreased by 15 percent, but compared to a very strong third quarter of 2020 which was influenced by the demand for pandemic-related products. Net sales increased, despite volume decline, by 7 percent to SEK 222.0 (207.3) million, and the organic increase was 10 percent. Price adjustments in order to meet the higher prices for input material together with changed product mix affected positively net sales. Operating margin continued to be good and amounted to 11.1 percent (10.5 percent).
The general European economy is still strong, however the uncertainty has increased, especially within the manufacturing industry. The players in market act cautiously due to uncertainty regarding high prices, semiconductor problems and transportation disturbances. Players within our value chain try to keep inventories at a low levels. Demand for our products is hampered due to high price levels and an unwillingness to buy more than necessary. Our feeling is that our customers are waiting to build inventory and are expecting prices for input material coming down and that the prices for our products will follow the same path.
After the end of the reporting period, 1 November, an agreement was made with the former CEO, Henrik Håkansson of his resignment. The background was a lack of consensus between the Board and Henrik Håkansson regarding the management of the Company. Henrik Håkansson left immediately and Christian Krichau was appointed interim CEO. The recruitment for a permanent solution has commenced. The Company's strategy stands unchanged and Arla Plast continues to act according to its long term agenda with sustainable and profitable growth.
Kenneth Synnersten Christian Krichau
Chairman of the Board Interim CEO
For further information, please contact:
Christian Krichau, Interim 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.The information was published by the abovementioned contact persons on 11 November 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.