Polygiene Group reported its losses in the second quarter expanded while sales decreased 12 percent. The Swedish maker of antimicrobial fabric treatments blamed its underperformance on U.S. trade policy.
Sales in the quarter ended June 30 amounted to SEK 31.9 million ($3.4 mm), down 12.2 percent from SEK 36.4 million a year ago. The loss in the was SEK 3.13 million against a loss of SEK 1.37 million a year ago.
Gross margins for the period were 63.0 percent, down from 65.2 percent. EBITDA amounted to a loss of SEK 1.2 million against positive EBITDA of SEK 2.6 million a year ago.
In the half, sales improved 2.7 percent to SEK 73.4 million from SEK 71.4 million. The net loss totaled SEK 20.0 million against earnings of SEK 7.7 million. EBITDA was reduced to SEK 1.93 million from SEK 7.4 billion.
Ulrika Björk, CEO Polygiene Group, said in commentary, “The past quarter has been marked by market uncertainty and challenges, largely due to tariffs and trade policy measures initiated by the United States. These developments have significantly impacted on global trade and industrial production, which in turn has affected Polygiene Group’s operations. As stated in our previous report, our performance is closely linked to that of our customers, and the most notable consequence has been a more cautious approach in the market. Several customers have chosen to pause ongoing projects while renegotiating pricing with suppliers, primarily in China. This has led to delays in planned production, or in some cases, complete standstills. As an integrated part of our customers’ products, we are significantly affected by these delays.
“Global uncertainty has prompted many companies to begin relocating production to countries with lower import tariff s, resulting in a temporary decline in demand for our products. As a global company, Polygiene Group already has an established infrastructure in place to support our customers in these new regions.
“Net sales for the period amounted to SEK 31.9 (36.4), corresponding to a currency-adjusted decline of 5.2 percent. The unfavorable development of the USD exchange rate had a significant negative effect on sales. Given the current business climate, this performance is in line with the broader market, and year-to-date sales remain positive. The negative operating result is mainly explained by lower net sales combined with negative currency effects and customer mix, which weakened the gross margin. Adjusted for negative currency conversion effects, the company essentially reported a breakeven EBITDA, primarily as a result of continued strong cost control during the quarter. Cash flow was negative at SEK 12.6, mainly due to the dividend payout, tax debts paid and inventory build-up.
“Both segments have been affected by the current trade environment, although Addmaster has been impacted more severely compared to Polygiene, which has managed to offset some of the effects through a higher share of distributor sales. In close dialogue with our customers, a consistent message is emerging, inventory levels throughout the value chain remain high due to declining demand since April. Many are delaying decisions until the situation stabilizes, especially companies with exposure to the U.S., though general caution is also evident. Price negotiations are ongoing throughout the supply chain in an eff ort to mitigate the net effect of the new tariffs. In the textile sector, our customers report significant pricing pressure on factories and even threats to move entire production lines to countries less affected by trade barriers. This complex and time-consuming process has, in many cases, led to lower or delayed production volumes during the quarter.
“Despite a challenging quarter, dominated by trade conflicts and an uncertain business climate, there are several positive developments to highlight. The ShedGuard innovation project continues to progress as planned, and results from Phase 2 are promising. In collaboration with the University of Manchester, we have identified several textiles that consistently demonstrate positive outcomes. As a result, we have offered commercial agreements to a select group of partners and are now awaiting their responses.
“Our latest technology, StayCool, launched in March, has already resulted in over 80 ongoing discussions with potential customers, half of whom have already started testing. To date, multiple customers have already decided to incorporate StayCool into their SS27 collections, which translates into production and sales during autumn 2026.
“We remain in a climate of global uncertainty. Trade tensions and geopolitical developments continue to affect trade flows and pose short-term challenges for both our customers and ourselves. However, it is important to be clear: this is a temporary setback – not a long-term shift. Our strategy remains firm, and our long-term objectives are unchanged. We are closely monitoring developments and maintaining active dialogue with our customers to ensure that we are well positioned when the market recovers. While the timing of a rebound is difficult to predict, we believe that the current situation will soon begin to ease. In the meantime, we remain focused on ongoing projects and the long-term development of our business. A temporary downturn does not change the fundamentals of our scalable business model.”
