Stable gross margin and positive cash flow in a challenging market
JANUARY - MARch 2026
- Net sales amounted to SEK 325.5 million (392.1), a decrease of 17%.
- Operating profit amounted to SEK 19.4 million (28.8), a decrease of 33%.
- The operating margin amounted to 6.0% (7.3).
- Profit for the period amounted to SEK 15.1 million (20.6), a decrease of 27%.
- Earnings per share, before dilution, amounted to SEK 0.72 (0.98) and after dilution to SEK 0.72 (0.98).
- The net cash amounted to SEK 37.4 million (24.5) at the end of the period, equivalent to 0.2 times (0.1) EBITDA.
- Cash flow from operating activities amounted to SEK 13.6 million (16.5).
Stable gross margin and positive cash flow despite lower volumes and net sales concludes a challenging first quarter of 2026.
Market
Arla Plast delivered a first quarter with a maintained gross margin despite lower net sales and increased price competition during a period characterized by global disturbances.
We experienced during the initial months of the quarter a hesitant market which in our perception, measured in volumes, was similar to the comparison quarter. At the end of the quarter demand increased, driven rather by the geopolitical events than underlying market demand.
Demand from construction and automotive industry continued to be slightly weak. We had a stable demand within industrial projects, this development was clearly noticeable in segment East Europe as well as segment North Europe. We noted a slightly lower demand for our premium products within the high-optical product range. Our assessment indicates that this is a temporary excess stock adjustment at customers.
Raw material prices, which affect both net sales and gross margin, reached its lowest level in the middle of the first quarter and were at that point lower than in the comparison quarter. At the end of the quarter prices increased heavily, impacted by the ongoing conflict in the Middle East.
Stable gross margin despite lower volumes
During the first quarter the net sales decreased by 17% compared to the same quarter previous year, mainly due to lower raw material prices and reduced sales volume. The ongoing repositioning within segment West and South Europe has, as expected, led to decreased volumes and net sales. This reposition is necessary to strengthen long-term profitability and improve the quality of our business.
Our gross margin for the quarter reached 22.5% (22.8), which was slightly lower than in the comparison quarter. Increased price competition due to lower raw material prices affected negatively. A favorable product mix and positive currency effect affected positively. An important highlight is that segment West and South Europe strengthened the gross margin despite considerably lower sales volume.
During the first quarter our operating profit amounted to SEK 19.4 million (28.8), a decrease compared to the corresponding quarter previous year. Operating margin amounted to 6.0% (7.3).
The results for the Group were mainly affected by our latest acquisition, Aikolon Oy, as expected an irregular order intake and lower utilization of capacity affected the result. Lower raw material prices, combined with generally lower sales volume, also affected the result negatively.
During the quarter our inventory increased modestly, which was an effect of a planned seasonal stock build-up. Over the past years we have efficiently managed our working capital, which has strengthened our financial position, and enabled two acquisitions solely financed with our own funds.
Cash flow from operating activities continues to be positive and at the end of the quarter we had a net cash of SEK 34.7 million (24.5).
Outlook
During the quarter, together with our latest acquisition Aikolon Oy, we have developed our product portfolio by further processing high-optical sheets. As planned, we have extended our reach with our own end product, which is in line with our strategy.
Through our strong financial position we now have ongoing investment projects in all our operations within the segments. Our improvement projects start with a better working environment and product quality which will lay the foundation for increased efficiency and competitiveness. We see working environment, product quality and efficiency strongly connected. A good working environment contributes to higher product quality which drives efficiency and profitable production.
A restructuring program is ongoing in our operations in Finland with a goal to strengthen customer relations, increase the profitability and enable long term competitiveness. The program contains changes in production, new investments and structural cost reductions. Among other activities we will consolidate our two production units.
For the second quarter we encounter an extremely turbulent raw material situation and increased uncertainty in the market due to the crisis in the Middle East. We experience disruptions in production and constrained material supply from our main suppliers. However, this is a dynamic associated with our industry which we will, as before, navigate ourselves through.
Market conditions forward are difficult to predict. Within some customer groups we see increased order volumes, which in our view is a result of increasing raw material prices and speculation rather than an underlying market demand.
We expect a continued turbulent environment where we carefully must monitor developments to be able to act quickly if market conditions are changed. We have indications of continued increased raw material prices driven by the conflict in the Middle East, rather than an underlying demand from the market. In times like this, the strength of our diversified customer and product portfolio becomes particularly important.
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 April 29, 2026 at 8:00 am CET.
About Arla Plast
Arla Plast (publ) is a leading manufacturer and supplier of extruded sheets in technical plastics with a wide range of applications areas such as safety products, machine guards, ice hockey rinks, greenhouses, pool covers, sound walls, suitcases, automotive components and other construction-related applications. The company has its headquarters in Borensberg and has today a total of six production facilities in Sweden, the Czech Republic, Spain and Finland as well as a distribution unit in Germany. Arla Plast has a turnover of more than SEK 1,400 million, has approximately 400 employees and delivers to more than 1 200 customers in over 50 countries. Arla Plast was founded in 1969 and is listed on Nasdaq Stockholm in the Small Cap segment. Read more at www.arlaplastgroup.com.
