Arla Plast extrudes technical plastic sheet from six plants (Sweden, Czech Republic, Spain, Finland) into construction, transport and industrial end-markets. It is a clean, understandable converter: polymer cost pass-through drives revenue, and profitability swings with raw-material prices and capacity utilisation. Adjusted ROIC of 14% on a tight, excess-cash-adjusted capital base beats the 8% WACC, giving positive economic profit of +SEK 35M — real if cyclical value creation.
The catch is timing: Q1 2026 revenue fell 17% with the operating margin down to 6.0% as construction and automotive demand stays weak, and the reverse-DCF says the SEK 40.95 price already embeds roughly the company's value. The balance sheet (net cash, 69% equity ratio, two self-funded deals) is the real quality here — not the entry valuation.
Capitalising adjusted NOPAT of SEK 81.2M at WACC−g and adding SEK 37.4M net cash over 20.98M shares: zero-growth fair value ~SEK 50 (+22%), but the cycle argues against a flat perpetuity — at a -2% perpetual decline fair value is ~SEK 40, i.e. the market is pricing mild structural erosion. Haircutting the optimistic perpetuity for cyclicality gives a base around SEK 46.
Base SEK 46 (+12%) on stabilising volumes and normalised ~8% margins; bull SEK 58 if high-optical mix and Aikolon synergies lift margins through-cycle; bear SEK 34 if construction/automotive demand and raw-material disruption keep margins near the 6% Q1 level.
The market pays today’s enterprise value for roughly -14.3% NOPAT growth over 5 years. The business earns 14% on capital against a 8% cost of capital (spread +6.1 pp); the no-growth value is SEK 58/share (141% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | SEK 58 | +0% | +42% | 30% | High-optical mix + Aikolon synergies lift margins |
| Base | SEK 46 | -9% | +12% | 45% | Volumes stabilise; ~8% normalised margin |
| Bear | SEK 34 | -22% | -17% | 25% | Construction/auto demand + raw-material disruption keep margin near 6% |
| Prob-weighted | SEK 47 | — | +14% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 77 | 85 | 90 | 98 | 104 | 120 |
| 7.25% | 66 | 71 | 75 | 81 | 86 | 98 |
| 8.00% (base) | 58 | 62 | 65 | 69 | 73 | 81 |
| 8.75% | 51 | 55 | 57 | 60 | 63 | 69 |
| 9.50% | 46 | 49 | 51 | 53 | 55 | 60 |
Green = fair value above the current price of SEK 40.95. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Adj ROIC 14% vs WACC 8%, EP +SEK 35M — genuine, if modest, value creation, corroborated by the company's own 13.2% ROCE.
Net cash SEK 37M, equity/assets 69%, two acquisitions self-funded — optionality and downside protection.
Growing premium high-optical share (Aikolon coating/lamination) supports gross margin and moves the group up the value chain.
Polymer cost moves flow through revenue and gross profit; falling prices cut the top line but the gross margin has held ~22.5%.
Cash-rich balance sheet allows opportunistic, bargain-priced deals (Aikolon bought below net-asset value, +11.2M badwill).
Arla Plast is a well-run, cash-rich small-cap converter that earns above its cost of capital, but it is trading at roughly its reverse-DCF value just as revenue and margins roll over. The quality is in the balance sheet, not the entry price. HOLD, medium conviction; base SEK 46 (+12%).
A conviction upgrade needs evidence of volume/margin stabilisation and visible Aikolon synergies; a pullback toward the bear case (~SEK 34) would make the above-WACC returns genuinely cheap.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
NOPAT adjustments: FY2025 nettot av jamforelsestorande poster +4.8 MSEK (bolagets egen siffra), ligger helt i FY-delen av LTM (varken Q1 2025 eller Q1 2026 hade sadana poster). Bestar huvudsakligen av en vinst fran forvarv till lagt pris (negativ goodwill/badwill) +11.2 MSEK bokad som ovrig rorelseintakt i Q4 2025 vid forvarvet av Aikolon Oy, MINUS transaktionskostnader -3.7 MSEK, minus ovriga smaposter ca -2.7. Vi NORMALISERAR genom att ta bort nettot (-4.8 pretax) eftersom badwill-vinsten ar en icke-operativ engangspost. IFRS 16: lease-rantan ligger redan under EBIT, ingen NOPAT-addback.
Post-tax add-backs: Ingen nedskrivning 2025 (goodwill-provning av Alphaplex GmbH 10.8 MSEK gav inget nedskrivningsbehov; 2024 hade -5.3 goodwillnedskrivning men det ar utanfor LTM-fonstret).
Company add-backs we reject: PPA-avskrivning FY2025 = avskrivning varumarke 0.7 + kundrelationer 2.1 = 2.8 MSEK (Not 17). mttssn lagger INTE tillbaka detta. SBC: aktierelaterat incitamentsprogram finns men ingen materiell IFRS 2-kostnad sarredovisad; satt till 0.
Invested capital: BS-snapshot: total_equity/cash fran Borsdata Q1 2026 (703.1 / 174.0). interest_bearing_debt = skulder till kreditinstitut 60.3 MSEK (FY2025-12-31 redovisat varde, Not 27 - basta tillgangliga; Q1-rapporten ar 2-sidig utan BS). accumulated_oci = omrakningsreserv 40.5 MSEK (enda OCI-komponenten i eget kapital; ingen separat sakrings- eller pensionsomvarderingsreserv) per FY2025-12-31, anvand som Q1-proxy. Leasingskuld 81.5 MSEK EXKLUDERAS ur IC (ROU 81.6 = ~21% av PPE+ROU 382; produktionsfastigheterna AGS huvudsakligen). NCI = 0 (alla dotterbolag 100% agda).
Pages read — FY: [1, 2, 5, 17, 18, 19, 26, 27, 28, 37] · Q: [1, 2]
How the mttssn view has evolved — each prior dated note is preserved.