SATISFACTORY RESULTS IN A CONTINUED CHALLENGING MARKET

When we put the first half of 2022 behind us, we see a market climate that is radically different from the one we had a year ago. The aftermath of the pandemic, with inflationary pressures, supply chain disruptions and rising interest rates, worsened by the war in Europe, has affected the world economy. For us, this means that we see a general restraint in demand from most of the application areas where our products are used. The high price picture and the general economy have a strong impact and create uncertainty in the market. In the short term, higher freight rates and higher costs for energy have had a negative impact on our cost structure. We have a long-term view of our business and a strong financial position and focus on our overall strategy.

After the end of the quarter, we acquired Alphaplex GmbH in Germany. With this acquisition, we strengthen our presence in the important German market. The acquisition also supports our ambition to increase our presence in Austria and Switzerland and advances our position in the value chain.

Our view is that volumes continue to fall for the entire industry in Europe but that we maintain our market position. The decline in volume is largely due to the fact that demand for pandemic-related barrier products has slowed down while application areas such as the travel and automotive industries have not fully recovered. Throughout 2021, we had a turbulent commodity situation with sharply rising prices that almost doubled during the year. The trend has continued in the first half of 2022 and is affected by the war in Ukraine, where sharply rising gas prices and uncertainty in the world economy have a major impact on the cost situation. Raw material prices have continued to rise, albeit at a slower pace than in the first quarter. In the situation of rising raw material prices and falling demand, price competition has continued.

Historically high raw material prices - weaker margins

Arla Plast's volumes declined by 12 percent and net sales increased by 8 percent in the second quarter. The high raw material prices, currencies and product mix had a positive impact on net sales. The gross margin declined to 14.3 percent (20.5) and the adjusted operating margin to 5.0 percent (10.7). Price competition due to a fall in demand, combined with historically high raw material prices, has led to weaker gross margins. Higher energy prices and higher freight costs had a negative impact on margins.

The uncertainty is high, and we are in a challenging period. However, our financial position is strong and our ambition is to continue develop our organization and customer offering. We have continued our work to strengthen our marketing and sales organization where the acquisition of Alphaplex means an increased local presence in Germany, enables added value and strengthens our sustainability ambitions. We are proud of our sustainability work and will now intensify this work. Among other things, we will strengthen our ambition to achieve increased circularity in the value chain and thereby help us and our customers on the journey towards a lower climate footprint.

I have great confidence in our ability to be flexible and handle challenges and opportunities in the best of ways, as we have shown many times before. Together with dedicated employees, we work strategically and long-term towards our objectives, both the financial and sustainability goals.

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

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 and the Swedish Securities Market Act. The information was published by the abovementioned contact persons on 18 August2022 at 8:00 am CET.

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 more than SEK 900 million.

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

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