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Bewi Invest AS
Quarterly Report • Nov 7, 2023
3556_rns_2023-11-07_240f6b97-2a4a-464a-b29d-f90db94f026d.pdf
Quarterly Report
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Q3 2023
Quarterly report
Contents
2
| Comments from the CEO | 3 |
|---|---|
| Highlights | 5 |
| Group | 5 |
| Segment | 7 |
| Financial review | 8 |
| APM | 20 |
| Financial statements | 25 |
| Consolidated condensed interim statement of income | 25 |
| Consolidated condensed interim statement of comprehensive income | 26 |
| Profit attributable to | 26 |
| Consolidated condensed interim statements of financial position | 27 |
| Consolidated condensed interim statements of changes in equity | 29 |
| Consolidated condensed interim statements of cash flows | 30 |
| Notes to the financial statements | ||
|---|---|---|
| Note 01 | General information | 31 |
| Note 02 | Accounting policies | 31 |
| Note 03 | Related party transactions | 32 |
| Note 04 | Segment information | 33 |
| Note 05 | Depreciation/amortisation and impairment of tangible and intangible fixed assets |
35 |
| Note 06 | The group's borrowings | 36 |
| Note 07 | Fair value and financial instruments | 37 |
| Note 08 | Net financial items | 38 |
| Note 9 | Shares in associates | 38 |
| Note 10 | Earnings per share | 39 |
| Note 11 | Five-year summary | 39 |
| Note 12 | Quarterly data | 40 |
Comments from the CEO
Delivering solid results with a strong operational cash flow in challenging markets
- Solid results for the insulation and packaging segments in challenging markets
- Lower group EBITDA for Q3 Y-o-Y mainly due to lower GAP for RAW
- Strong operational cash flow for Q3, cash position to be strengthened following real estate divestment
- Revised EBITDA outlook for the full year 2023 to approximately 115 million euro
- Long-term strategic and financial targets remain unchanged
We are very pleased with how the insulation segment has managed to improve its EBITDA margin
We have implemented comprehensive measures to adjust capacity and costs to the lower activity in the building and construction industry, resulting in improved profitability for the insulation segment despite the lower volumes.
Net sales came in at 267 million euro for the third quarter this year, in line with the 268 million euro reported for the same quarter last year. This includes growth from acquisitions while the lower activity in the building and construction industry resulted in a negative organic development.
Adjusted EBITDA was 24 million euro compared to 34 million euro for the corresponding quarter of 2022. Acquired entities contributed positively, while contribution from existing business was 16 million euro lower, of which close to 13 million euro was explained by lower EBITDA for RAW, mainly due to a lower GAP. The EBITDA for the quarter was somewhat behind
We remain confident in our strategy and the longterm potential for our solutions, supported by strong fundamentals
our expectations, as we had predicted a stronger quarter for the packaging and RAW segments. The packaging segment experiences a slowdown in the demand for industrial products, including protective packaging and technical components such as HVAC components. Still, the segment delivers solid results and the demand for food packaging remains stable and strong. The RAW segment experiences volatile raw material prices. This put pressure on the GAP for RAW in the beginning of the third quarter, while improving towards the end of the quarter and into the fourth quarter. For October, the EBITDA for RAW was in line with the EBITDA for the full third quarter.
We are very pleased with how the insulation segment has managed to improve its EBITDA margin from 7.9 for the third quarter last year to 8.9 per cent this quarter, given the significantly lower volumes. Excluding acquisitions, the segment had an EBITDA margin of 10.9 per cent, an impressive improvement resulting from lower raw material prices, successful price management and the capacity and cost measures implemented.
Throughout the quarter, we remained committed to our key priorities for building a robust platform to deliver on our long-term targets, while at the same time adapting to the current markets. The integration of acquired companies are progressing well, including cross selling of new solutions, extraction of synergies, and optimisation of the production footprint. This will continue to yield positive results going forward.
BEWI's organic growth initiatives are selected to support the company's strategic priorities within each segment. A couple of weeks ago, we opened our new state-of-the-art packaging facility at the island Hitra in Norway. Delivery of fish boxes to our customer Lerøy started in October and we look forward to gradually ramping up volumes and to supplying Mowi's new slaughterhouse as soon as they are ready for production. The new extruder in Etten-Leur in the Netherlands, which will start commercial production in December, will increase capacity of recycled material, offering customers solutions with lower CO2 footprint.
In September, we entered into an agreement with KMC Properties to divest the last part of the industrial real estate portfolio for 55 million euro, strengthening the balance sheet in line with previous communication.
We remain confident in our strategy and the longterm potential for our solutions, supported by strong fundamentals. We continuously evaluate strategic opportunities, aiming to deliver on our long-term targets, through creating robust platforms for further growth for our divisions.
Trondheim, Norway, 6 November 2023,
Christian Bekken, CEO BEWI ASA
Group highlights
(numbers in parenthesis refers to comparable figures for the corresponding period of 2022)
Third quarter of 2023
- Net sales of EUR 266.6 million (267.5), including a 24 per cent negative organic growth
- Adj. EBITDA of EUR 24.0 million (34.4)
- Strategic agreement for supply of raw material to the German insulation company Bachl, delivery started in September
- Further measures taken to adjust capacity to market conditions and improve profitability in the Nordic Insulation and Packaging businesses
- Agreements with KMC Properties for the divestment of real estate portfolio for approx. EUR 55 million
First nine months of 2023
- Net sales of EUR 852.6 million (774.7), up by 10 per cent with 22 per cent negative organic growth
- Adjusted EBITDA of EUR 83.7 million (109.2)
- Agreements for divestment of a total of 11 properties in Denmark, Finland, Germany, Belgium, and Poland
Net sales distribution across segments1
Despite weakened demand from the building and construction (B&C) industry the past year, the I&C segment accounts for an increasing share of the group's revenue due to the significant acquisitions completed in 2022. Overall, the share of net sales per segment for the third quarter is in line with the second quarter.
Adj. EBITDA distribution across segments2
EBITDA from the downstream segments account for a larger share of the group's EBITDA, both compared to last year and the previous quarter. This is mainly explained by lower GAP for segment RAW, lower raw material prices for downstream, but also by measures taken to improve profitability for the insulation business, mainly in the Nordics.
Consolidated key figures4
| Amounts in million EUR (except percentage) | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Net sales | 266.6 | 267.5 | 852.6 | 774.7 | 1 050.4 |
| Operating income (EBIT) | 3.7 | 21.1 | 27.7 | 78.7 | 68.0 |
| EBITDA | 22.1 | 32.9 | 79.7 | 111.2 | 115.2 |
| EBITDA margin (%) | 8.3% | 12.3% | 9.3% | 14.4% | 11.0% |
| Adj. EBITDA | 24.0 | 34.4 | 83.7 | 109.2 | 133.6 |
| Adj. EBITDA margin (%) | 9.0% | 12.9% | 9.8% | 14.1% | 12.7% |
| Items affecting comparability | -2.0 | -1.5 | -4.0 | 2.0 | -18.3 |
| Adj. EBITA | 8.8 | 24.7 | 41.0 | 83.0 | 96.1 |
| Adj. EBITA margin (%) | 3.3% | 9.2% | 4.8% | 10.7% | 9.1% |
| Net profit/loss for the period | -8.3 | 10.0 | -6.1 | 43.1 | 35.4 |
| Earnings per share, adj. (EUR) | -0.02 | 0.09 | -0.02 | 0.32 | 0.32 |
| Capital Expenditure (CAPEX) | -12.6 | -8.9 | -40.1 | -23.3 | -43.7 |
| Return on average capital employed (ROCE)% | 5.9% | 19.3% | 5.9% | 19.3% | 15.3% |
| Total number of outstanding shares | 191 722 290 | 159 277 992 | 191 722 290 | 159 277 992 | 191 347 992 |
1 Based on total net sales for segments for Q3 2023
2 Based on total adj. EBITDA for segments for Q3 2023
3 Based on sales from external customers for Q3 2023
4 See definitions of alternative performance measures not defined by IFRS
Net sales distribution across countries3
Norway, Germany, and the Netherlands are the group's three largest markets. In Norway, EPS boxes and traded products to the food industry are the most important products, while insulation solutions are key in Germany and the Netherlands. Following the acquisitions of Jablite and Jackon in 2022, the UK has grown to be a considerable market for BEWI.
Segment highlights
Net sales down by 22 per cent from Q3 2022, mainly due to lower sales prices. Given the tough market conditions, RAW has managed to uphold volumes, with only 8 per cent organic decrease from Q3 last year.
Adj. EBITDA decreased by 77 per cent mainly due to lower GAP, in addition to higher fixed costs related to ramp-up of the new extruder.
Adj. EBITDA EUR million
Net sales increased by 42 per cent from Q3 2022, explained by acquisitions. Due to the low activity in the building and construction industry, underlying volumes have dropped significantly resulted in a negative organic growth.
Adj. EBITDA improved by 60 per cent from Q3 2022, resulting in a margin of 8.9 per cent. The segment has managed to demonstrate a margin improvement throughout 2023, following effective measures to reduce capacity and costs, combined with successful price management and lower raw material prices. Net sales EUR million
Adj. EBITDA EUR million
RAW Insulation & Construction (I&C) Packaging & Components (P&C) Circular
Net sales decreased by 9 per cent since Q3 2022, including a negative organic growth of 13 per cent as a result of lower volumes of traded goods, partly offset by increased volumes within the automotive business. As expected, volumes of fish boxes had a positive development from the previous quarter.
Adj. EBITDA decreased by 11 per cent, mainly explained by the same factors as net sales.
Q3-22 Q4-22 Q1-23 Q2-23 Q3-23
Adj. EBITDA EUR million
Net sales were down by 26 per cent, mainly due to lower volumes as well as sales prices. Internal sales have significantly increased in 2023, following increased use of recycled material in BEWI's downstream units.
Adj. EBITDA decreased from EUR 0.9 million last year to a negative EUR 0.7 million for Q3 this year.
Adj. EBITDA EUR million
12.4
BEWI Q3 2023 report
Financial review
(Information in parentheses refers to the corresponding periods the previous year).
Profit and loss
Third quarter of 2023
Net sales amounted to EUR 266.6 million for the third quarter of 2023 (267.5), a decrease of 0.3 per cent. The contribution from the existing business (organic) was negative 24.2 per cent, while the net effect of acquisitions and divestments was 26.1 per cent. Currency effects had a negative impact of 2.2 per cent.
The majority of the growth from acquisitions is attributable to Jackon. The negative organic growth is mainly explained by the lower demand from the building and construction industry, impacting volumes for segments RAW and Insulation & Construction (I&C), combined with lower raw material prices resulting in lower sales prices.
Adjusted EBITDA came in at EUR 24.0 million for the quarter (34.4), representing a decrease of 30.2 per cent. The organic growth was negative 45.5 per cent, while acquisitions and divestments contributed with a positive net 17.3 per cent. Currency had a negative effect of 1.9 per cent.
The majority of the negative organic growth is explained by lower volumes and margins for segment RAW, which had historically high prices and margins for the corresponding quarter last year.
Following reduced raw material prices, combined with good price management and measures implemented to reduce costs, margins have shifted from upstream to downstream segments. The positive development in the downstream segments is mainly driven by the Nordic Insulation business.
The adjusted EBITDA margin was 9.0 per cent for the quarter (12.9). The decrease in margin compared to the corresponding quarter of 2022, is mainly explained by the negative organic growth for RAW.
For more information on the development in net sales and EBITDA, see explanations under each segment and the revenue and EBITDA bridges.
Operating income (EBIT) was EUR 3.7 million for the quarter (21.1). The lower EBIT is, in addition to the lower EBITDA, partly explained by higher depreciations and amortisations in acquired companies.
Net financial items amounted to a negative EUR 11.3 million for the quarter (-5.8). The higher financial expenses are mainly explained by increased interest rates and increased interest-bearing debt following the acquisitions. The period was negatively impacted by a EUR 0.5 million fair value adjustment of shares in the listed real estate company KMC Properties ASA (-1.0), see Note 8 to the accounts for more details.
Taxes amounted to a negative EUR 0.7 million (-5.2).
Net profit for the third quarter of 2023 ended at negative EUR 8.3 million (10.0).
First nine months of 2023
Net sales increased to EUR 852.6 million for the first nine months of 2023 (774.7), corresponding to an increase of 10.1 per cent, of which 36.2 per cent was driven by acquisitions, while existing business (organic) contributed a negative 22.1 per cent following lower volumes and prices.
Adjusted EBITDA ended at EUR 83.7 million for the first nine months of 2023 (109.2), a decrease of 23.3 per cent from 2022, of which 21.4 per cent relates to acquisitions and a negative 42.5 per cent to organic growth.
Operating income (EBIT) came in at EUR 27.7 million for the period (78.7).
Net financial items amounted to a negative EUR 31.0 million for the first nine months of 2023 (-18.9). The period was negatively impacted by a EUR 2.7 million fair value adjustment of shares in a listed real estate company (-3.5).
Taxes amounted to a negative EUR 2.8 million for the first nine months (-16.7).
Net profit for the first nine months of 2023 was negative EUR 6.1 million (43.1).
Reduced GAP in the quarter, volumes continue to be impacted by low activity in the building and construction industry
Market development
The building and construction industry is the most important end market for segment RAW, including BEWI's downstream segment Insulation & Construction. The industry has seen a significant downturn the past year, impacting volumes for the segment in all regions.
The competition in the market is currently strong, and producers of the EPS raw material are running at reduced capacity. Customers are cautious, resulting in low volume visibility for the rest of the year.
Styrene price and market price for EPS decreased 25-30 per cent compared to the third quarter of 2022. Compared to the previous quarter, the styrene price increased approx. 5 per cent and the market price for EPS decreased approx. 5 per cent.
Operational review
Strategic partnership
In September 2023, BEWI entered into a strategic partnership with the German insulation company Karl Bachl Group ("Bachl"). Under the agreement, BEWI will supply Bachl with EPS raw material, including recycled EPS.
Delivery of raw material started in September 2023, with gradual ramp-up towards the end of 2024.
New extruder in Etten-Leur
In the fourth quarter of 2021, investments into a new twin screw extrusion line at the RAW production site in Etten-Leur started. The new extrusion line will increase production capacity with 25 to 30 thousand tonnes of white and grey EPS, including recycled content grades. Commissioning of the plant is ongoing and commercial volumes will be produced from December 2023.
In preparation for operation of the new extruder, segment RAW has strengthened its organisation, impacting fixed cost for the segment.
Mass balance certified
BEWI's raw material production facilities in Etten-Leur in the Netherlands and Porvoo in Finland are certified through the REDcert+ scheme, a certification solution for the chemical industry enabling more sustainable material flows. The core aspect for REDcert+ certification is the successfully proven REDcert+ mass balance approach, enabling BEWI to allocate recycled material into selected products, based on customer preferences.
Based on the mass balance principle, RAW will expand its product range in November, offering various products with virgin, recycled and/or mass balanced content white and grey EPS.
Segment RAW develops and produces white and grey expanded polystyrene (EPS), various grades of recycled EPS, as well as Biofoam, a fully bio-based particle foam. The raw material is sold internally and externally for production of end products. Raw material is produced at 3 facilities located in Finland, the Netherlands, and Germany.
Financial review
Acquisitions affecting comparability
Jackon was consolidated into BEWI's accounts from 1 November 2022.
Third quarter of 2023
Net sales for segment RAW amounted to EUR 81.8 million for the quarter (104.5), a decrease of 21.7 per cent since the corresponding quarter of 2022. The acquisition of Jackon contributed to 16.6 per cent growth. Lower volumes and sales prices contributed to a negative organic growth of 38.3 per cent, of which approx. 20 and 80 per cent from volumes and sales prices respectively. The lower volumes are mainly attributable to the lower activity in the building and construction industry. Market price for EPS was approx. 30 per cent lower than for the third quarter last year.
Adjusted EBITDA came in at EUR 3.3 million for the third quarter of 2023 (14.7), of which Jackon contributed with EUR 1.1 million. Thus, the negative organic growth was EUR 12.5 million, of which close to 90 per cent was explained by lower GAP.
The lower EBITDA is mainly a result of lower GAP (styrene gross margin), as well as higher fixed cost for the segment related to ramp up of personnel to prepare for operation of the new extruder.
In the third quarter last year, the GAP was historically high, driven by a strong market sentiment and an upgoing raw material price trend. This year, the market sentiment has been slow and the raw material prices have trended downwards, thus creating the opposite effect.
First nine months of 2023
Net sales for the first nine months of 2023 were EUR 260.8 million (330.4) for segment RAW, a decrease of 21.1 per cent from the same period last year explained by lower sales prices and volumes.
Adjusted EBITDA ended at EUR 17.3 million for the first nine months of the year (50.5).
| Amounts in million EUR | |||||
|---|---|---|---|---|---|
| (except percentage) | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
| Net sales | 81.8 | 104.5 | 260.8 | 330.4 | 418.0 |
| Of which internal | 31.3 | 35.4 | 102.3 | 107.2 | 142.0 |
| Of which external | 50.5 | 69.1 | 158.4 | 223.1 | 276.0 |
| Net operating expenses | -78.5 | -89.8 | -243.5 | -279.8 | -361.0 |
| Adjusted EBITDA | 3.3 | 14.7 | 17.3 | 50.5 | 57.0 |
| Adjusted EBITDA % | 4.1% | 14.1% | 6.6% | 15.3% | 13.6% |
| Items affecting comparability | - | 0.0 | - | 0.1 | -17.0 |
| EBITDA | 3.3 | 14.7 | 17.3 | 50.6 | 40.0 |
| Depreciations | -1.4 | -1.4 | -3.9 | -3.3 | -4.3 |
| CAPEX | -3.1 | -2.2 | -8.8 | -3.2 | -6.8 |
| Number of employees | 282 | 196 | 282 | 196 | 270 |
in Q3 2023
of total adj. EBITDA2 in Q3 2023
1 Based on total net sales for operating segments 2 Based on total adj. EBITDA for operating segments
Segment Insulation & Construction (I&C)
Strong result in challenging market conditions
Market development
Like segment RAW, the I&C segment is primarily exposed to the building and construction industry, where the activity has been significantly reduced the past year. All BEWI's operating markets experienced lower demand compared to the third quarter of 2022, with the UK and Iberia least impacted. The downturn in Germany and the Netherlands accelerated in the second quarter this year, with the sharpest drop in the German market. Volumes are 20 to 50 per cent lower than for the same quarter last year, with large variations across regions.
Most of the segment's products and solutions can be used for both newbuilds and renovations. Currently, approximately 25 per cent of the sales are sold to renovation. The share is lower in the Nordics and higher in other European markets.
Operational review
Insulation Benelux
In 2022, Jackon initiated an investment in a new production line for production of construction boards in Belgium. The production serves the European market, as well as the UK. The new production line will more than double current capacity. Production is expected to start in the fourth quarter of 2023.
Capacity and cost adjustments
In 2023, BEWI has implemented significant measures in its Nordic insulation business. This has included adjusting capacity, reducing costs, and improving price management, resulting in an improved EBITDA margin for the segment.
As part of the capacity adjustments, BEWI's facilities in Norrköping and Skurup have been temporarily closed, and since the end of 2022, the segment has reduced its number of employees by more than 100.
BEWI will continue to optimise its production footprint, adjusting costs and capacity to the market conditions.
Synergy realisation from the combination with Jackon is progressing according to plan in all business units within the segment. In addition, the segment has identified several areas for cross border sales.
Segment I&C develops and manufactures an extensive range of insulation products for the building and construction industry, as well as infrastructure projects. The products are primarily composed of expanded polystyrene (EPS) and extruded polystyrene (XPS). BEWI's insulation solutions are produced at 28 facilities in 11 countries. In addition, BEWI has minority interests in 5 facilities in France and 6 facilities in Germany.
Segment Insulation & Construction (I&C)
Financial review
Acquisitions affecting comparability
Jablite was consolidated from 1 June, BalPol from 1 September, Jackon from 1 November and Aislenvas from 31 December 2022.
Third quarter of 2023
Net sales came in at EUR 113.1 million for the quarter (79.8), an increase of 41.8 per cent. Acquisitions contributed with 81.9 per cent growth, while lower volumes and sales prices contributed to a negative organic growth of 33.3 per cent.
Adjusted EBITDA ended at EUR 10.1 million for the quarter (6.3), an increase of 60.2 per cent. Acquisitions contributed with EUR 4.6 million growth, while the contribution from the existing business was negative with EUR 0.5 million, explained by the drop in volumes due to a challenging market.
Excluding acquisitions, the adjusted EBITDA margin increased from 7.9 per cent for the third quarter last year to 10.9 per cent this quarter. The improvement comes from reduced raw material prices and the measures implemented in the Nordic insulation business as described above, compensating for the lower volumes and lower contribution from associated companies. The EBITDA margin for acquired entities was 7.0 per cent, negatively impacted by the results from the German business, amounting to approximately 22 per cent of the segments total sales but only with a slightly positive EBITDA contribution.
Items affecting comparability for the quarter include a provision of EUR 1.9 million, related to measures initiated, including personnel and other contractual costs following idle capacity in Sweden.
For further details, see the revenue and EBITDA bridges.
First nine months of 2023
Net sales amounted to EUR 358.5 million for the first nine months of 2023 (227.4), an increase of 57.6 per cent. Acquisitions contributed with 96.1 per cent growth, while lower volumes and sales prices contributed to a negative organic growth of 31.7 per cent.
Adjusted EBITDA amounted to EUR 30.7 million (23.6). This represents an increase of 29.9 per cent. Acquisitions contributed with a growth of 53.5 per cent, while the existing business (organic) was down by 18.9 per cent.
| Amounts in million EUR | |||||
|---|---|---|---|---|---|
| (except percentage) | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
| Net sales | 113.1 | 79.8 | 358.5 | 227.4 | 333.9 |
| Of which internal | 0.8 | 0.8 | 1.7 | 3.3 | 4.0 |
| Of which external | 112.3 | 78.9 | 356.7 | 224.1 | 329.9 |
| Net operating expenses | -103.0 | -73.5 | -327.8 | -203.8 | -302.8 |
| Adjusted EBITDA | 10.1 | 6.3 | 30.7 | 23.6 | 31.1 |
| Adjusted EBITDA % | 8.9% | 7.9% | 8.6% | 10.4% | 9.3% |
| Items affecting comparability | -1.9 | -0.8 | -3.6 | 6.5 | 2.5 |
| EBITDA | 8.1 | 5.5 | 27.0 | 30.1 | 33.6 |
| Depreciations | -6.9 | -2.6 | -19.4 | -7.0 | -11.3 |
| CAPEX | -3.1 | -0.9 | -10.5 | -3.7 | -9.8 |
| Number of employees | 1 343 | 701 | 1 343 | 701 | 1 451 |
in Q3 2023
of total net sales1 in Q3 2023
Benelux 23% Other 29% of total adj. EBITDA2
1 Based on total net sales for operating segments 2 Based on total adj. EBITDA for operating segments Based on segment's Q3 2023 net sales and customer location
Solid results from sales of fish boxes and automotive components
Market development
For the third quarter of 2023, sales to food packaging accounted for 56 per cent of the segment sales, where the seafood industry is the most important end-market and EPS boxes for transportation of fresh fish are the largest product segment. During the first half of 2023, slaughter volumes were low, but the volumes increased in the third quarter and are expected to remain solid for the fourth quarter.
In addition to the fish boxes, BEWI sells traded food packaging products. In the third quarter last year, BEWI stopped all sales to Russian fishing vessels operating in Norwegian harbours following the Norwegian authorities' position. These volumes have not yet been fully replaced.
Sales of components to the automotive industry have steadily increased since the challenges related to the shortage of electronic components started to ease last year. Volumes were up by 23 per cent for the first nine months of 2023 compared to the same period of 2022.
Other industrial products sold from this segment include protective packaging and technical components, of which the latter includes components to heating-, ventilation-, and air-condition (HVAC) systems as well as other components. Volumes of industrial products are currently impacted by the slowdown in the building and
construction industry, as well as the slowdown in many other industries in Europe.
Operational review
Packaging, Norway
BEWI has developed a new packaging facility on the Jøsnøya island, Hitra, Norway. Production of fish boxes commenced in October 2023, with gradual ramp-up of volumes the coming months.
Paper packaging, Denmark
BEWI is experiencing increased demand for paper-based packaging solutions and expects this market to be fast growing. The group is therefore investing in expanding its production capacity at its facility in Thorsøe, Denmark, currently producing protective paper packaging (honeycomb structure). The project is expected to double the production capacity, with estimated completion in 2024.
Capacity and cost adjustment
As part of ongoing capacity and cost adjustments, BEWI has decided to consolidate the production footprint in Sweden and Denmark, an optimization made possible by the acquisition of Jackon. The facilities in Täby, Sweden, and Holeby, Denmark, will consequently be closed, and production transferred into other facilities.
Jointly owned Packaging facilities 1 499 dedicated employees
Segment P&C develops and manufactures packaging solutions, and technical components for customers in many industrial sectors, including boxes for transportation of fresh fish, protective packaging for pharmaceuticals and electronics, and automotive components. The material is mainly composed of expanded polystyrene (EPS), expanded polypropylene (EPP), or fibre. In addition, the company sells traded products for food packaging. The solutions are produced at 35 facilities in 9 countries.
Financial review
Acquisitions affecting comparability
Trondhjems Eskefabrikk was consolidated from 1 May, Styropack (packaging part of Jablite) from 1 June, and Jackon from 1 November 2022.
Third quarter of 2023
Net sales amounted to EUR 93.6 million for the third quarter of 2023 (103.4), a decrease of 9.4 per cent. Acquisitions contributed with 7.9 per cent growth and currency had a negative effect of 4.8 per cent. Sales from existing business (organic) declined by 12.5 per cent. Lower volumes of traded products as well as a slowdown in the HVAC market had a negative impact on sales, while the Automotive business continue to grow.
Adjusted EBITDA amounted to EUR 12.4 million for the third quarter this year (13.9), down by 11.0 per cent, of which organic growth was 10.0 per cent. Currency effects impacted the segment's EBITDA with a negative EUR 0.8 million or negative 6.0 per cent. The negative organic growth is mainly explained by the lower volumes.
The automotive business continued to deliver a strong result in the third quarter, showing good improvement from last year.
Following the announced measures initiated, a provision of EUR 0.6 million has been made for the third quarter of 2023, related to personnel and other contractual costs following idle capacity, in Sweden and Denmark.
Acquired companies contributed with healthy EBITDA margins.
First nine months of 2023
Net sales amounted to EUR 303.1 million (287.5), an increase of 5.4 per cent. Acquisitions contributed with 14.6 per cent and the organic growth was negative 4.0 per cent for the period. Currency had a negative effect of 5.2 per cent.
Adjusted EBITDA amounted to EUR 40.5 million (35.1), up by 15.4 per cent, including an organic growth of 2.8 per cent mainly explained by higher sales and lower material cost. The adjusted EBITDA also include a negative currency impact of EUR 2.1 million, corresponding to a 6.1 per cent reduction.
| Amounts in million EUR | |||||
|---|---|---|---|---|---|
| (except percentage) | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
| Net sales | 93.6 | 103.4 | 303.1 | 287.5 | 391.9 |
| Of which internal | 0.7 | 2.3 | 2.5 | 8.1 | 10.0 |
| Of which external | 93.0 | 101.1 | 300.5 | 279.5 | 381.9 |
| Net operating expenses | -81.3 | -89.5 | -262.6 | -252.4 | -343.6 |
| Adjusted EBITDA | 12.4 | 13.9 | 40.5 | 35.1 | 48.3 |
| Adjusted EBITDA % | 13.2% | 13.4% | 13.4% | 12.2% | 12.3% |
| Items affecting comparability | -0.6 | 0.0 | -0.7 | 2.0 | 4.9 |
| EBITDA | 11.8 | 13.9 | 39.8 | 37.0 | 53.3 |
| Depreciations | -6.2 | -5.0 | -17.3 | -14.2 | -19.7 |
| CAPEX | -4.4 | -3.6 | -13.7 | -9.4 | -19.2 |
| Number of employees | 1 499 | 1 340 | 1 499 | 1 340 | 1 459 |
2 Based on total adj. EBITDA for operating segments
Market development
Segment Circular's key strategic priority is currently to secure waste streams, i.e., focusing on increasing the collected volumes of material for recycling. The market is fragmented and immature, and prices for recycled material correlate with prices of the virgin raw material.
Currently, the demand for recycled material is impacted by the low activity in the building and construction industry, as well as decreased prices for virgin raw material.
The supply chain for Circular is longer than for the other segments, and thus the segment is more sensitive to volatile raw material prices.
Operational review Collected EPS for recycling
For the first nine months of 2023, BEWI collected 20 838 tonnes of EPS for recycling (15 099), an increase of 38 per cent, mainly explained by the acquisition of Berga last year. The company targets an annual collection of 60 000 tonnes EPS for recycling by the end of 2026.
In addition to the targeted collection, BEWI aims to steadily increase its own consumption of recycled materials, offering its customers more environmentally friendly solutions and reduce the company's CO2 emissions.
The group is investing in increased extruder capacity, enabling more recycled content in its products and a strengthening of Circular's offering of granulated material. Following start-up of RAW's new extrusion line in the fourth quarter this year, providing more recycled feedstock, the company will also invest in expanding its pelletizer technology in Circular.
Converting Norrköping facility to new Circular hub
BEWI's insulation facility in Norrköping has been temporarily closed and is planned to be converted to a Circular facility.
The Norrköping facility has a strategic location, close to highways E4 and E22, enabling efficient transportation to – and from BEWI's Nordic downstream facilities, as well as other Nordic customer. The facility will become the centre for Circular's Nordic business.
Segment Circular is responsible for BEWI's collection and recycling of used material. The segment offers different solutions for waste management and a range of recycled materials. BEWI targets to collect 60 000 tonnes of EPS for recycling by the end of 2026, which is approximately the volume BEWI puts into end markets with a lifetime less than one year. As of 30 September 2023, BEWI operated 7 recycling facilities in 6 countries.
Financial review
Acquisitions affecting comparability
Berga Recycling was consolidated from 1 June 2022 and Inoplast from 31 December 2022.
Third quarter of 2023
Net sales for segment Circular amounted to EUR 13.6 million for the third quarter of 2023 (18.3), a decrease of 25.9 per cent. Acquisitions, contributed with a growth of 10.7 per cent, while the organic growth was a negative 35.1 per cent, explained by lower volumes as well as lower sales prices. Currency had a negative effect of 1.5 per cent.
Adjusted EBITDA amounted to a negative EUR 0.7 million for the quarter (0.9). The reduction compared to the third quarter last year is mainly explained by lower sales prices, resulting in less net sales as well as the negative contribution from Berga.
First nine months of 2023
Net sales for the first nine months of 2023 came in at EUR 45.6 million (47.9), down by 5.0 per cent from the same period last year. Acquisitions contributed with 13.2 per cent growth, while the organic growth was negative 15.4 per cent and currency had a negative impact of 2.7 per cent.
Adjusted EBITDA was negative EUR 1.2 million for the first nine months (3.9).
For the first nine months of 2023, internal sales were EUR 8.9 million (0.2), a significant increase from last year.
| Amounts in million EUR | |||||
|---|---|---|---|---|---|
| (except percentage) | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
| Net sales | 13.6 | 18.3 | 45.6 | 47.9 | 63.1 |
| Of which internal | 2.8 | 0.0 | 8.9 | 0.2 | 0.7 |
| Of which external | 10.8 | 18.3 | 36.7 | 47.8 | 62.4 |
| Net operating expenses | -14.3 | -17.4 | -46.8 | -44.1 | -60.6 |
| Adjusted EBITDA | -0.7 | 0.9 | -1.2 | 3.9 | 2.5 |
| Adjusted EBITDA % | -5.4% | 4.8% | -2.6% | 8.1% | 3.9% |
| Items affecting comparability | -0.0 | -0.2 | -0.0 | -1.0 | 0.1 |
| EBITDA | -0.7 | 0.6 | -1.2 | 2.9 | 2.6 |
| Depreciations | -0.6 | -0.5 | -1.7 | -1.2 | -1.7 |
| CAPEX | -0.7 | -0.5 | -1.6 | -1.6 | -1.8 |
| Number of employees | 112 | 117 | 112 | 117 | 109 |
5%
-3%
of total net sales1 in Q3 2023
of total adj. EBITDA2 in Q3 2023
1 Based on total net sales for operating segments 2 Based on total adj. EBITDA for operating segments
Corporate costs
Revenues and costs related to group functions that do not belong to any specific business segment are booked as unallocated corporate costs.
For the third quarter of 2023, the unallocated contribution to adjusted EBITDA amounted to a negative EUR 1.0 million (-1.3). For the first nine months of 2023, the contribution was negative EUR 3.5 million (-3.9).
Financial position and liquidity
Consolidated financial position
Total assets amounted to EUR 1 304.5 million on 30 September 2023, compared to EUR 1 300.7 million at year-end 2022.
Total equity was EUR 427.8 million on 30 September 2023, down from EUR 429.8 million at the end of last year.
Net debt amounted to EUR 562.9 million at the end of the third quarter of 2023 (367.1 excluding IFRS 16), compared to EUR 550.7 million at the end of 2022 (382.3 excluding IFRS 16).
Cash and cash equivalents were EUR 43.1 million on
30 September 2023, compared to EUR 47.5 million at year-end 2022.
Consolidated cash flow
Cash flow from operating activities amounted to EUR 14.2 million for the third quarter of 2023 (16.8), including a decrease in working capital of EUR 3.5 million (increase of 12.1).
Lower results and higher interest rates had a negative effect on cash flow from operating activities. This was however largely offset by a positive cash flow from change in working capital, partly due to the timing of styrene payments and partly due to the lower volumes this year. Cash flow from working capital was also negatively impacted by an instalment of the payment related to the settlement agreement with the European Commission from 2022.
For the first nine months of 2023, cash flow from operating activities amounted to EUR 47.7 million (27.6), including an increase in working capital of EUR 9.2 million (increase of 50.9). The period was positively impacted by the settlement of currency swaps, offsetting the negative impact from higher interest rates. Working capital followed normal seasonal pattern but came in substantially better than the same period last year. This was on account of the steep price increases witnessed in 2022, combined with the effect from lower volumes this year and the timing of styrene payments. The partial payments in
2023 related to the settlement agreement with the European Commission from last year, had a negative effect on the cash flow from working capital.
Cash flow used for investing activities amounted to a negative EUR 12.4 million for the third quarter of 2023 (-23.4). Capital expenditures were higher than for the same period of 2022 (see separate section below), driven by specific projects and capital expenditures in acquired companies. Cash flow from investing activities in the third quarter of 2022 was negatively impacted by the BalPol acquisition.
For the first nine months of 2023, cash flow from investing activities amounted to a negative EUR 21.7 million (-96.2). Capital expenditures were higher than for the same period of 2022, driven by the same factors as for the quarter. The period was positively impacted by the divestment of four properties in Finland and Denmark, which resulted in a net cash inflow of EUR 17.7 million. Last year noted a substantial cash outflow from acquisitions.
The group's main organic growth initiatives are described under each segment.
Cash flow from financing activities was negative EUR 2.0 million for the third quarter of 2023 (-1.3).
For the first nine months of 2023, cash flow from financing activities amounted to a negative EUR 29.4 million (-4.3). During the period, external borrowings and utilised overdraft facilities in the former Jackon group were settled. This was mainly financed through additional draw-down of BEWI's credit facilities.
Capital expenditures (CAPEX)
For the third quarter of 2023, CAPEX totaled EUR 12.5 million (8.9). Of this, EUR 4.9 million was attributable to greenfield projects and other customer specific projects, as well as the investment into a new ERP system. Selected key projects are described under each segment.
For the first nine months of 2023, CAPEX totaled EUR 40.1 million (23.3), of which EUR 17.5 million was attributable to greenfield projects and other specific projects.
BEWI has an announced annual target for investments (CAPEX) of 2.5 per cent of net sales excluding greenfield projects, customer specific initiatives and ICT investments. Excluding the above-mentioned initiatives, CAPEX for the third quarter and the first nine months of the year was in line with this target.
Return on capital employed (ROCE)
Average return on capital employed was 5.9 per cent (19.3 per cent) for the third quarter of 2023 (see details on Alternative Performance Measures (APM)).
The average capital employed increased significantly during in 2022, following the transactions completed in that year. This is not yet reflected in a similar growth in rolling 12 months EBITA. All synergies identified are furthermore not yet visible in the income statement.
Organisation
As of 30 September 2023, BEWI had 3 290 employees, up from 2 416 employees at the end of September last year, mainly due the acquisitions completed in the fourth quarter of 2022, but down from 3 356 on 31 December 2022.
Important events in the third quarter of 2023
Growth initiatives have a high priority for BEWI. The company invests in organic growth and has a strong pipeline of M&A opportunities.
Key organic growth projects are described under each segment.
BEWI's M&A priorities are mainly within the following categories:
- Strengthening of market positions
- Broadening product offering
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- Geographic expansion
- Recycling consolidation
In 2022, BEWI completed seven acquisitions, adding approximately EUR 600 million in annual sales and approximately 1 200 new employees. Given the significance of the acquisitions, combined with the current market conditions, the company's key priorities are now to integrate the new entities, including extracting synergies, and adjusting cost and capacity to the market demand. Still, the company has a strong pipeline of M&A opportunities and expects to continue to grow through strategic transactions.
Divestment of industrial real estate portfolio
On 30 June 2022, BEWI announced that it had entered an agreement with KMC Properties ASA for the sale of an industrial real estate portfolio, valued at up to NOK 2.0 billion.
In November 2022, the first part of the transaction was completed, including the properties in Norway and Sweden valued at approximately NOK 900 million.
On 31 March 2023, divestment of additional four properties located in Finland and Denmark valued at close to NOK 350 million was completed.
Finally, on 30 September 2023, BEWI and KMC
Properties announced that the parties had entered into an agreement for the remaining part of the real estate portfolio, including seven properties for approximately EUR 55 million.
ICT
BEWI has started the implementation of a new modern IT platform, including an ERP system. Blueprints have been developed and the system will be implemented gradually throughout the group's segments and operating units.
Synergy realisation from combination with Jackon
On 19 October 2022, BEWI completed its acquisition of Jackon, and the company was consolidated into BEWI's accounts from 1 November 2022.
Prior to completion of the acquisition of Jackon, BEWI launched a synergy target of EUR 15 million. In May 2023, following close collaboration with Jackon since closing, BEWI raised the target announcing that the company had identified potential synergies to be extracted by the end of 2024 of more than EUR 30 million. The new target was based on normalised volumes.
At the end of the third quarter, BEWI was on track with the integration of – and realisation of synergies from acquired companies, including Jackon. Optimising the production footprint has been an
important part of the work to integrate Jackon, especially in the Nordic insulation business, where the group has the most overlapping production capacity, combined with the most challenging market conditions.
Share information
As of 30 September 2023, the total number of shares outstanding in BEWI ASA was 191 722 290, each with a par value of NOK 1. Each share entitles to one vote.
In the third quarter, the BEWI share traded between NOK 27.95 and NOK 44.45 per share, with a closing price of NOK 29.8 on 30 September 2023.
Outlook
BEW has a diversified and integrated business model, from production of raw materials and end-products to collection and recycling of used products and materials. The group's two largest end-markets are the seafood - and the building and construction industry, where it supplies packaging and insulation solutions respectively.
Since the second half of 2022, the activity in the residential part of the building and construction industry has declined significantly. The Nordic and Baltic regions were hit first, while Germany and the Netherlands had a more modest slowdown before the downturn accelerated in the second quarter this year. The activity in this industry is expected to remain low for the rest of 2023, impacting volumes for the group's segments. However, despite the lower volumes, BEWI expects further profitability improvements from measures implemented in its downstream divisions.
Currently, most industries across Europe are experiencing headwinds, resulting in lower volumes
for BEWI's industrial products, including technical components and protective packaging. In addition, volumes of traded products for food packaging are lower than previously predicted. Volumes sold of EPS fish boxes and automotive components are expected to remain solid for the rest of the year.
As communicated in the report for the second quarter this year, BEWI is experiencing high uncertainty and low visibility related to volumes and prices. Customers are cautious and raw material prices are volatile, and the largest uncertainty is related to the
results for segment RAW. This makes it difficult to predict the company's results. Based on the current market outlook, BEWI expects an adjusted EBITDA of around EUR 115 million for the full year 2023.
BEWI remains confident in the long-term potential for its solutions and markets, supported by strong fundamentals, such as the need to improve energy efficiency in buildings and preserving food, although the timing of the market recovery is uncertain. The company maintains its key priorities to secure a strong platform for long-term growth, including
continuously adjusting capacity and costs to the current market conditions and extracting synergies from integrating acquired companies. Ongoing – and recently completed investment projects will strengthen the group's market position and contribute to organic growth. The financial position will be strengthened by divestment of real estate, reduced CAPEX, and initiatives to optimise the group's working capital.
Trondheim, 6 November 2023
The board of directors and CEO of BEWI ASA
Gunnar Syvertsen Chair of the Board
Anne-Lise Aukner Director
Rik Dobbelaere Director
Andreas Akselsen Director
Kristina Schauman Director
Pernille Skarstein Christensen Director
Christian Bekken CEO
BEWI Q3 2023 report
relevant for the group as it presents the EPS generated by the actual operations of the group.
Definitions of alternative performance measures not defined by IFRS
| Organic growth | Organic growth is defined as growth in net sales for the reporting period compared to the same period last year, excluding the impact of currency and acquisitions. It is a key ratio as it shows the underlying sales growth. |
Adjusted (adj.) EBITDA |
Normalised earnings before interest, tax, depreciation, and amortisation (i.e., items affecting com parability and deviations are added back). Adjusted EBITDA is a key performance indicator that the group considers relevant for understanding earnings adjusted for items that affect comparability. |
|---|---|---|---|
| EBITDA | Earnings before interest, tax, depreciation, and amortisation. EBITDA is a key performance indicator that the group considers relevant for understanding the generation of profit before investments in fixed assets. |
Adjusted (adj.) EBITDA margin |
Normalised EBITDA before items affecting comparability as a percentage of net sales. The adjusted EBITDA margin is a key performance indicator that the group considers relevant for understanding the profitability of the business and for making comparisons with other companies. |
| EBITDA margin | EBITDA as a percentage of net sales. The EBITDA margin is a key performance indicator that the group considers relevant for understanding the profitability of the business and for making com parisons with other companies. |
Adjusted (adj.) EBITA |
Normalised earnings before interest, tax, and amortisations (i.e., items affecting comparability and deviations are added back). EBITA is a key performance indicator that the group considers relevant, as it facilitates comparisons of profitability over time independent of corporate tax rates and financing structures but including depreciations of fixed assets used in production to generate the profits of the group. |
| EBITA | Earnings before interest, tax, and amortisations. EBITA is a key performance indicator that the group considers relevant, as it facilitates comparisons of profitability over time independent of corporate tax rates and financing structures but including depreciations of fixed assets used in production to generate the profits of the group. |
Adjusted (adj.) EBITA margin |
Normalised EBITA before items affecting comparability as a percentage of sales. The EBITA margin is a key performance indicator that the group considers relevant for understanding the profitability of the business and for making comparisons with other companies. |
| EBITA margin | EBITA as a percentage of sales. The EBITA margin is a key performance indicator that the group considers relevant for understanding the profitability of the business and for making comparisons with other companies. |
ROCE | Return on average capital employed. ROCE is a key performance indicator that the group considers relevant for measuring how well the group is generating profits from its capital in use. ROCE is calculated as rolling 12 months adjusted EBITA as a percentage of average capital employed during |
| EBIT | Earnings before interest and tax. EBIT is a key performance indicator that the group considers relevant, as it facilitates comparisons of profitability over time independent of corporate tax rates and financing structures. Depreciations are included, however, which is a measure of resource |
the same period. Capital employed is defined as total equity plus net debt, and the average is calculated with each quarter during the measurement period as a measuring point. |
|
| Items affecting | consumption necessary for generating the result. Items affecting comparability include costs related to the planned IPO, transaction costs related |
Net debt | Interest-bearing liabilities excluding obligations relating to employee benefits, minus cash and cash equivalents. Net debt is a key performance indicator that is relevant both for the group's calculation of covenants based on this indicator and because it indicates the group's financing needs. |
| comparability | to acquired acquisition of entitiescompanies, including the release of negative goodwill from acquisitions, severance costs and other normalisations such as divestment of real estate, closing of facilities, unscheduled raw material production stops and other. |
Adjusted (adj.) EPS | Earnings per share (EPS) adjusted for items affecting comparability, depreciations/amortisations attributable to fair adjustments in business combinations and fair value adjustments in financial items, Including tax on those items. Adjusted EPS is a key performance indicator considered |
Reconciliation alternative performance measures
Alternative performance measures not defined by IFRS
| million EUR (except percentage) | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Operating income (EBIT) | 3.7 | 21.1 | 27.7 | 78.7 | 68.0 |
| Amortisations | 3.1 | 2.1 | 9.3 | 6.3 | 9.7 |
| EBITA | 6.8 | 23.2 | 36.9 | 85.0 | 77.7 |
| Items affecting comparability | 2.0 | 1.5 | 4.0 | -2.0 | 18.3 |
| Adjusted EBITA | 8.8 | 24.7 | 41.0 | 83.0 | 96.1 |
| EBITA | 6.8 | 23.2 | 36.9 | 85.0 | 77.7 |
| Depreciations | 15.2 | 9.7 | 42.7 | 26.2 | 37.5 |
| EBITDA | 22.1 | 32.9 | 79.7 | 111.2 | 115.2 |
| Items affecting comparability | 2.0 | 1.5 | 4.0 | -2.0 | 18.3 |
| Adjusted EBITDA | 24.0 | 34.4 | 83.7 | 109.2 | 133.6 |
| Adjusted EBITA Rolling 12 months | 54.0 | 100.6 | 54.0 | 100.6 | 96.1 |
| Average capital employed | 916.6 | 520.6 | 916.6 | 520.6 | 629.1 |
| Return on average capital employed (ROCE)% | 5.9% | 19.3% | 5.9% | 19.3% | 15.3% |
Items affecting comparability
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Severance, integration and restructuring costs | -2.4 | -0.6 | -3.9 | -0.9 | -1.6 |
| Transaction costs | -0.2 | -1.1 | -0.5 | -6.9 | -9.2 |
| Capital gains/losses from sale of fixed assets | -0.0 | 0.2 | -0.2 | 0.1 | 2.3 |
| Capital gain/losses from sale of subsidiary & adjustment | |||||
| purchase price | 0.6 | - | 0.6 | - | -3.3 |
| Capital gain from sale of associated company | - | - | - | 9.7 | 10.7 |
| Settlement agreement – European Commission | - | - | - | - | -17.2 |
| Total | -2.0 | -1.5 | -4.0 | 2.0 | -18.3 |
APM
Adjusted EPS
| million EUR (except average number of shares) | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 | |
|---|---|---|---|---|---|---|
| Profit attributable to the parent company shareholders |
-8.7 | 10.3 | -8.4 | 43.4 | 34.4 | |
| Reversing adjustment items before tax | ||||||
| Items affecting comparability | 2.0 | 1.5 | 4.0 | -2.1 | 18.3 | |
| Depreciations/amortisations attributable to fair value adjustments in business combinations |
3.6 | 2.5 | 10.9 | 7.7 | 11.2 | |
| Fair value changes in financial items | 0.5 | 1.0 | 2.7 | 3.6 | 3.8 | |
| 6.1 | 5.0 | 17.6 | 9.1 | 33.3 | ||
| Reversing tax impact on adjustment items | ||||||
| Items affecting comparability | -0.1 | -0.1 | -0.1 | -0.2 | -11.9 | |
| Depreciations/amortisations attributable to fair value adjustments in business combinations |
-0.8 | -0.5 | -2.5 | -1.7 | -2.5 | |
| Fair value changes in financial items | - | - | - | - | - | |
| -0.9 | -0.7 | -2.6 | -1.9 | -14.5 | ||
| Total impact on profit/loss for the period | 5.2 | 4.3 | 15.0 | 7.2 | 18.8 | |
| Attributable to non-controlling interests | 0.0 | 0.0 | -0.1 | 0.0 | 0.0 | |
| Adjusted profit attributable to the parent company shareholders |
-3.6 | 14.7 | 6.5 | 50.6 | 53.2 | |
| Average number of shares | 191 722 290 157 |
720 992 191 655 108 156 | 162 505 164 | 109 723 | ||
| Adjusted earnings per share, basic | -0.02 | 0.09 | 0.08 | 0.32 | 0.32 |
| million EUR | RAW | % | I&C | % | P&C | % | Circular | % | Unallocated | % | Intra-group revenue |
Total net sales |
% |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q3 2022 | 104.5 | 79.8 | 103.4 | 18.3 | 0.1 | -38.5 | 267.5 | ||||||
| Acquisitions | 17.3 | 16.6% | 65.4 | 81.9% | 8.2 | 7.9% | 2.0 | 10.7% | - | - | -18.3 | 74.5 | 27.9% |
| Of which Jackon | 17.3 | 16.6% | 56.7 | 71.1% | 8.2 | 7.9% | - | - | - | - | -17.4 | 64.8 | 24.2% |
| Other | - | - | 8.6 | 10.8% | - | - | 2.0 | 10.7% | - | - | -0.9 | 9.7 | 3.6% |
| Divestments | - | - | -4.7 | -5.9% | - | - | - | - | - | - | - | -4.7 | -1.8% |
| Currency | - | - | -0.8 | -1.0% | -5.0 | -4.8% | -0.3 | -1.5% | 0.0 | -11.0% | 0.0 | -6.0 | -2.2% |
| Organic growth | -40.0 | -38.3% | -26.6 | -33.3% | -12.9 | -12.5% | -6.4 | -35.1% | 0.0 | -1.2% | 21.2 | -64.7 | -24.2% |
| Total increase/ decrease | -22.7 | -21.7% | 33.6 | 41.8% | -9.7 | -9.4% | -4.7 | -25.9% | 0.0 | -12.2% | 2.9 | -0.9 | -0.3% |
| Q3 2023 | 81.8 | 113.1 | 93.6 | 13.6 | 0.1 | -35.6 | 266.6 | ||||||
| million EUR | RAW | % | I&C | % | P&C | % | Circular | % | Unallocated | % | Intra-group revenue |
Total net sales |
% |
| 9M 2022 | 330.4 | 227.4 | 287.5 | 47.9 | 0.2 | -118.8 | 774.7 | ||||||
| Acquisitions | 56.7 | 17.2% | 218.5 | 96.1% | 42.0 | 14.6% | 6.3 | 13.2% | - | - | -43.0 | 280.5 | 36.2% |
| Of which Jackon | 56.7 | 17.2% | 172.0 | 75.6% | 31.9 | 11.1% | - | - | - | - | -40.4 | 220.2 | 28.4% |
| Other | - | - | 46.5 | 20.4% | 10.1 | 3.5% | 6.3 | 13.2% | - | - | -2.6 | 60.3 | 7.8% |
| Divestments | - | - | -13.1 | -5.8% | - | - | - | - | - | - | - | -13.1 | -1.7% |
| Currency | - | - | -2.3 | -1.0% | -14.9 | -5.2% | -1.3 | -2.7% | 0.0 | -8.2% | 0.5 | -18.0 | -2.3% |
| Organic growth | -126.3 | -38.2% | -72.0 | -31.7% | -11.5 | -4.0% | -7.4 | -15.4% | 0.0 | -5.7% | 45.7 | -171.4 | -22.1% |
| Total increase/ decrease | -69.6 | -21.1% | 131.0 | 57.6% | 15.6 | 5.4% | -2.4 | -5.0% | 0.0 | -13.9% | 3.3 | 77.9 | 10.1% |
| 9M 2023 | 260.8 | 358.5 | 303.1 | 45.6 | 0.2 | -115.5 | 852.6 |
Revenue bridge: Change in net sales from corresponding periods in 2022
| million EUR | RAW | % | I&C | % | P&C | % | Circular | % | Unallocated | % | Total adj. EBITDA |
% |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q3 2022 | 14.7 | 6.3 | 13.9 | 0.9 | -1.3 | 34.4 | ||||||
| Acquisitions | 1.1 | 7.8% | 4.6 | 73.9% | 0.7 | 5.1% | -0.2 | -26.9% | - | - | 6.3 | 18.2% |
| Of which Jackon | 1.1 | 7.8% | 3.2 | 51.7% | 0.7 | 5.1% | - | - | - | - | 5.1 | 14.8% |
| Other | - | - | 1.4 | 22.1% | - | - | -0.2 | -26.9% | - | - | 1.2 | 3.4% |
| Divestments | - | - | -0.3 | -5.0% | - | - | - | - | - | - | -0.3 | -0.9% |
| Currency | - | - | -0.0 | -0.7% | -0.8 | -6.0% | 0.1 | 15.4% | 0.1 | 7.4% | -0.6 | -1.9% |
| Organic growth | -12.5 | -85.2% | -0.5 | -8.1% | -1.4 | -10.0% | -1.5 | -172.1% | 0.3 | 19.5% | -15.7 | -45.5% |
| Total increase/ decrease | -11.4 | -77.4% | 3.8 | 60.2% | -1.5 | -11.0% | -1.6 | -183.6% | 0.4 | 26.9% | -10.4 | -30.2% |
| Q3 2023 | 3.3 | 10.1 | 12.4 | -0.7 | -1.0 | 24.0 | ||||||
| million EUR | RAW | % | I&C | % | P&C | % | Circular | % | Unallocated | % | Total adj. EBITDA |
% |
| 9M 2022 | 50.5 | 23.6 | 35.1 | 3.9 | -3.9 | 109.2 | ||||||
| Acquisitions | 5.3 | 10.4% | 12.6 | 53.5% | 6.6 | 18.8% | -1.1 | -27.9% | - | - | 23.4 | 21.4% |
| Of which Jackon | 5.3 | 10.4% | 6.6 | 28.1% | 5.1 | 14.6% | - | - | - | - | 17.0 | 15.6% |
| Other | - | - | 6.0 | 25.4% | 1.5 | 4.2% | -1.1 | -27.9% | - | - | 6.4 | 5.9% |
| Divestments | - | - | -1.0 | -4.4% | - | - | - | - | - | - | -1.0 | -0.9% |
| Currency | - | - | -0.1 | -0.3% | -2.1 | -6.1% | 0.3 | 7.3% | 0.5 | 11.7% | -1.5 | -1.4% |
| Organic growth | -38.5 | -76.2% | -4.5 | -18.9% | 1.0 | 2.8% | -4.3 | -110.6% | -0.1 | -2.0% | -46.4 | -42.5% |
| Total increase/ decrease | -33.2 | -65.8% | 7.1 | 29.9% | 5.4 | 15.4% | -5.1 | -131.2% | 0.4 | 9.7% | -25.5 | -23.3% |
| 9M 2023 | 17.3 | 30.7 | 40.5 | -1.2 | -3.5 | 83.7 |
EBITDA bridge: Change in adjusted EBITDA from corresponding periods in 2022
Consolidated condensed interim financial statements for the period ended 30 September 2023
Consolidated condensed interim statement of income
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Revenues | |||||
| Net sales | 266.6 | 267.5 | 852.6 | 774.7 | 1 050.4 |
| Total operating income | 266.6 | 267.5 | 852.6 | 774.7 | 1 050.4 |
| Operating expenses | |||||
| Raw materials and consumables | -115.4 | -118.9 | -358.1 | -327.3 | -432.4 |
| Goods for resale | -18.4 | -30.1 | -66.4 | -104.1 | -136.1 |
| Other external costs | -59.6 | -51.7 | -195.5 | -144.5 | -229.9 |
| Personnel cost | -52.0 | -34.7 | -154.5 | -100.3 | -149.3 |
| Depreciation/amortisation and impairment of tangible and intangible assets | -18.3 | -11.8 | -52.0 | -32.5 | -47.2 |
| Share of income from associated companies | 0.3 | 0.6 | 1.4 | 2.8 | 2.8 |
| Capital gain/loss from sale of assets, adjustment purchase price acquired companies and sale of business | 0.5 | 0.1 | 0.2 | 9.8 | 9.7 |
| Total | -262.9 | -264.4 | -824.9 | -696.0 | -982.5 |
| Operating income (EBIT) | 3.7 | 21.1 | 27.7 | 78.7 | 68.0 |
| Financial income | 1.4 | 0.1 | 4.1 | 0.4 | 2.0 |
| Financial expenses | -12.7 | -6.0 | -35.1 | -19.3 | -27.4 |
| Net financial items | -11.3 | -5.8 | -31.0 | -18.9 | -25.5 |
| Income before tax | -7.6 | 15.3 | -3.3 | 59.8 | 42.5 |
| Income tax expense | -0.7 | -5.2 | -2.8 | -16.7 | -7.2 |
| Profit/loss for the period | -8.3 | 10.0 | -6.1 | 43.1 | 35.4 |
Consolidated condensed interim statement of comprehensive income
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Profit/loss for the period | -8.3 | 10.0 | -6.1 | 43.1 | 35.4 |
| OTHER COMPREHENSIVE INCOME | |||||
| Items that may later be reclassified to profit or loss | |||||
| Exchange rate differences | -0.3 | 0.9 | 4.7 | -1.3 | -2.2 |
| Items that will not be reclassified to profit or loss | |||||
| Remeasurements of net pension obligations | -1.1 | 2.8 | -2.2 | 2.6 | -4.2 |
| Income tax pertinent to remeasurements of net | |||||
| pension obligations | 0.2 | -0.5 | 0.4 | -0.5 | 0.8 |
| Other comprehensive income after tax | -1.2 | 3.2 | 2.9 | 0.8 | -5.6 |
| Total comprehensive income for the period | -9.6 | 13.2 | -3.2 | 43.9 | 29.7 |
Profit attributable to
| million EUR (except numbers for EPS) | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Profit for the period attributable to | |||||
| Parent company shareholders | -8.7 | 10.3 | -8.4 | 43.4 | 34.4 |
| Non-controlling interests | 0.4 | -0.3 | 2.3 | -0.3 | 0.9 |
| Total comprehensive income attributable to | |||||
| Parent company shareholders | -9.7 | 13.4 | -5.7 | 44.2 | 28.7 |
| Non-controlling interests | 0.1 | -0.2 | 2.5 | -0.3 | 1.0 |
| Earnings per share | |||||
| Average number of shares: | 191 722 290 | 157 720 992 | 191 655 108 | 157 162 505 | 164 109 723 |
| Diluted average number of shares | 192 444 927 | 159 052 419 | 192 545 143 | 158 603 373 | 165 490 895 |
| Earnings per share (EPS), basic (EUR) | -0.05 | 0.07 | -0.04 | 0.28 | 0.21 |
| Earnings per share (EPS), diluted (EUR) | -0.05 | 0.07 | -0.04 | 0.27 | 0.21 |
| Earnings per share (EPS), basic (NOK) | -0.51 | 0.66 | -0.50 | 2.77 | 2.12 |
| Earnings per share (EPS), diluted (NOK) | -0.51 | 0.65 | -0.49 | 2.74 | 2.10 |
EPS in NOK is calculated using average rates for the period
Consolidated condensed interim statements of financial position
| million EUR | 30 Sep 2023 | 30 Sep 2022 | 31 Dec 2022 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | |||
| Goodwill | 245.0 | 185.3 | 262.8 |
| Other intangible assets | 144.1 | 87.8 | 135.2 |
| Total intangible assets | 389.1 | 273.1 | 398.0 |
| Property plant and equipment | |||
| Land and buildings | 239.4 | 119.8 | 238.6 |
| Plant and machinery | 174.1 | 102.0 | 178.0 |
| Equipment, tools, fixtures and fittings | 25.3 | 10.3 | 28.2 |
| Construction in progress and advance payments | 38.0 | 13.7 | 23.9 |
| Total property, plant and equipment | 476.9 | 245.8 | 468.7 |
| Financial assets | |||
| Shares in associates | 12.3 | 12.6 | 13.2 |
| Other financial non-current assets | 16.6 | 15.5 | 8.9 |
| Total financial assets | 28.8 | 28.0 | 22.1 |
| Deferred tax assets | 13.0 | 6.1 | 4.4 |
| Total non-current assets | 907.9 | 553.0 | 893.2 |
| million EUR | 30 Sep 2023 | 30 Sep 2022 | 31 Dec 2022 |
|---|---|---|---|
| Current assets | |||
| Inventory | 147.5 | 111.6 | 167.6 |
| Other current assets | |||
| Accounts receivable | 166.2 | 149.9 | 156.7 |
| Current tax assets | 2.0 | 1.2 | 0.7 |
| Other current receivables | 16.5 | 10.0 | 14.2 |
| Prepaid expenses and accrued income | 19.5 | 9.9 | 12.5 |
| Other financial assets | 1.8 | 9.0 | 8.3 |
| Cash and cash equivalents | 43.1 | 67.2 | 47.5 |
| Total other current assets | 249.1 | 247.2 | 239.9 |
| Total current assets | 396.6 | 358.8 | 407.5 |
| TOTAL ASSETS | 1 304.5 | 911.8 | 1 300.7 |
Consolidated condensed interim statements of financial position cont.
| million EUR | 30 Sep 2023 | 30 Sep 2022 | 31 Dec 2022 |
|---|---|---|---|
| EQUITY | |||
| Share capital | 18.3 | 15.1 | 18.2 |
| Additional paid-in capital | 323.2 | 181.4 | 322.3 |
| Reserves | -13.2 | -9.3 | -15.3 |
| Accumulated profit (including net profit for the period) | 86.6 | 124.9 | 94.7 |
| Equity attributable to Parent Company shareholders | 414.8 | 312.1 | 419.8 |
| Non-controlling interests | 13.0 | 7.9 | 10.0 |
| TOTAL EQUITY | 427.8 | 320.0 | 429.8 |
| LIABILITIES | |||
| Non-current liabilities | |||
| Pensions and similar obligations to employees | 2.4 | 0.9 | 1.3 |
| Provisions | 3.1 | 1.1 | 0.4 |
| Deferred tax liability | 55.2 | 28.6 | 58.3 |
| Non-current bond loan | 247.7 | 246.8 | 246.9 |
| Other non-current interest-bearing liabilities | 311.8 | 98.0 | 238.2 |
| Other financial non-current liabilities | 0.7 | - | 0.7 |
| Total non-current liabilities | 620.9 | 375.4 | 545.7 |
| million EUR | 30 Sep 2023 | 30 Sep 2022 | 31 Dec 2022 |
|---|---|---|---|
| Current liabilities | |||
| Other current interest-bearing liabilities | 45.8 | 30.3 | 112.4 |
| Other financial liabilities | 1.6 | 0.0 | 0.4 |
| Accounts payable | 97.7 | 87.5 | 83.5 |
| Current tax liabilities | 16.5 | 20.6 | 16.4 |
| Other current liabilities | 19.8 | 14.9 | 15.1 |
| Accrued expenses and deferred income | 74.4 | 63.0 | 97.3 |
| Total current liabilities | 255.8 | 216.4 | 325.2 |
| TOTAL LIABILITIES | 876.7 | 591.8 | 870.9 |
| TOTAL EQUITY AND LIABILITIES | 1 304.5 | 911.8 | 1 300.7 |
| Trondheim, 6 November 2023 | |||||
|---|---|---|---|---|---|
| The board of directors and CEO of BEWI ASA | |||||
| Gunnar Syvertsen Chair of the Board |
Anne-Lise Aukner Director |
Rik Dobbelaere Director |
Andreas Akselsen Director |
||
| Kristina Schauman Director |
Pernille Skarstein Christensen Director |
Christian Bekken CEO |
Consolidated condensed interim statements of changes in equity
| million EUR | 1 Jan–30 Sep 2023 | 1 Jan–30 Sep 2022 | 1 Jan–31 Dec 2022 |
|---|---|---|---|
| OPENING BALANCE | 429.8 | 262.2 | 262.2 |
| Net profit for the period | -6.1 | 43.1 | 35.4 |
| Other comprehensive income | 2.9 | 0.8 | -5.6 |
| Total comprehensive income | -3.2 | 43.9 | 29.7 |
| New share issue, net of transaction costs | 0.8 | 14.6 | 158.7 |
| Dividend | -0.6 | - | -20.8 |
| Share-based payments | 0.2 | 0.5 | 0.6 |
| Acquisition non-controlling interest | 0.9 | -1.3 | -0.6 |
| Total transactions with shareholders | 1.2 | 13.9 | 137.9 |
| CLOSING BALANCE | 427.8 | 320.0 | 429.8 |
Consolidated condensed interim statements of cash flows
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Operating income (EBIT) | 3.7 | 21.1 | 27.7 | 78.7 | 68.0 |
| Adjustment for non-cash items etc. | 22.1 | 12.0 | 55.2 | 20.1 | 50.5 |
| Net financial items | -10.7 | -3.6 | -12.1 | -11.1 | -16.4 |
| Income tax paid | -4.4 | -0.6 | -13.8 | -9.2 | -14.2 |
| Cash flow from operating activities before changes in working capital | 10.7 | 28.9 | 56.9 | 78.5 | 87.8 |
| Increase/decrease in inventories | -1.5 | -1.4 | 14.0 | -20.0 | -20.4 |
| Increase/decrease in operating receivables | -2.8 | 7.5 | -20.4 | -31.4 | 28.6 |
| Increase/decrease in operating liabilities | 7.8 | -18.2 | -2.9 | 0.5 | -55.1 |
| Cash flow from changes in working capital | 3.5 | -12.1 | -9.2 | -50.9 | -46.9 |
| Cash flow from operating activities | 14.2 | 16.8 | 47.7 | 27.6 | 40.9 |
| Acquisitions non-current assets | -12.6 | -8.9 | -40.1 | -23.3 | -43.7 |
| Divestment non-current assets | 0.2 | 0.0 | 18.4 | 0.3 | 92.8 |
| Business acquisitions/ financial investments | 0.1 | -14.5 | -0.1 | -73.1 | -228.7 |
| Cash flow from investing activities | -12.4 | -23.4 | -21.7 | -96.2 | -179.7 |
| Borrowings | 5.3 | 2.5 | 76.0 | 7.0 | 85.0 |
| Repayment of debt | -6.8 | -3.8 | -105.6 | -12.3 | -18.3 |
| Dividend | - | - | - | - | -20.8 |
| Dividend to non-controlling interest | -0.6 | - | -0.6 | - | - |
| New share issue, net | - | - | 0.8 | 1.0 | 1.0 |
| Cash flow from financing activities | -2.0 | -1.3 | -29.4 | -4.3 | 46.9 |
| Cash flow for the period | -0.1 | -7.9 | -3.5 | -72.8 | -91.9 |
| Opening cash and cash equivalents | 42.6 | 75.9 | 47.5 | 142.3 | 142.3 |
| Exchange difference in cash | 0.7 | -0.8 | -1.0 | -2.4 | -2.9 |
| Closing cash and cash equivalents | 43.1 | 67.2 | 43.1 | 67.2 | 47.5 |
Notes to the financial statements
Note 01 General information
The company and the group
BEWI ASA, with corporate registration number 925 437 948, is a holding company registered in Norway, Trondheim at the address Dyre Halses gate 1a, 7042 Trondheim, Norway.
Amounts are given in EUR million unless otherwise indicated.
Note 02 Accounting policies
BEWI ASA applies the International Financial Reporting Standards (IFRS) as adopted by the EU. The accounting policies applied to comply with those described in BEWI ASA's Annual Report for 2022. This interim report has been prepared in accordance with IAS 34 Interim financial reporting and the Norwegian Accounting Act.
Note 03 Related party transactions
Christian Bekken, CEO of BEWI ASA, is together with other members of the Bekken family major shareholders of BEWI ASA through Bekken Invest AS and BEWI Invest AS. Companies owned by the Bekken family are related parties to BEWI ASA.
Other related parties are BEWI's associated companies, for example the two 34 per cent owned companies Hirsch France SAS and Hirsch Porozell GmbH. Transactions with the related parties' companies are presented in the tables below.
Transactions impacting the income statement
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Sale of goods to | |||||
| Companies with Bekken as significant shareholder | 0.0 | 0.0 | 0.0 | 0.4 | 0.4 |
| HIRSCH France SAS | 4.6 | 6.0 | 16.7 | 19.8 | 25.6 |
| HIRSCH Porozell GmbH | 6.8 | 14.1 | 24.1 | 38.9 | 46.2 |
| Jablite Group Ltd. | - | - | - | 3.6 | 3.6 |
| Inoplast s.r.o. | - | 0.9 | - | 2.7 | 4.3 |
| BEWI EPS ehf | 0.0 | - | 0.2 | - | - |
| Total: | 11.4 | 21.0 | 41.0 | 65.4 | 80.1 |
| Other income from | |||||
| Companies with Bekken as significant shareholder | 0.1 | 0.1 | 0.2 | 0.2 | 0.3 |
| Inoplast s.r.o | - | 0.1 | - | 0.6 | 0.6 |
| Total: | 0.1 | 0.2 | 0.2 | 0.8 | 0.9 |
| Purchase of goods from | |||||
| Inoplast s.r.o. | - | 0.6 | - | 3.4 | 4.5 |
| Remondis Technology Spólka z o.o. | 1.0 | 1.4 | 3.5 | 2.8 | 4.2 |
| Total: | 1.0 | 2.0 | 3.5 | 6.2 | 8.7 |
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Interest Income from | |||||
| Hirsch France SAS | - | 0.0 | - | 0.1 | 0.1 |
| Jablite Group Ltd. | - | - | - | 0.0 | 0.0 |
| Total: | - | 0.0 | - | 0.1 | 0.1 |
| Rental expenses to Companies with Bekken as significant shareholder |
5.1 | 2.6 | 14.1 | 8.0 | 11.4 |
| Total: | 5.1 | 2.6 | 14.1 | 8.0 | 11.4 |
| Other external costs to | |||||
| Companies with Bekken as significant shareholder Total: |
0.0 0.0 |
0.1 0.1 |
0.1 0.1 |
0.1 0.1 |
0.1 0.1 |
Transactions impacting the balance sheet
| million EUR | 30 Sep 2023 | 30 Sep 2022 | 31 Dec 2022 |
|---|---|---|---|
| Non-current receivables | |||
| Companies with Bekken as significant shareholder | 0.0 | 0.1 | 0.1 |
| Total: | 0.0 | 0.1 | 0.1 |
| Current receivables | |||
| Companies with Bekken as significant shareholder | 2.1 | 2.8 | 1.8 |
| HIRSCH Porozell GmbH | 0.1 | 0.1 | 0.1 |
| Inoplast s.r.o. | - | 0.8 | - |
| Total: | 2.2 | 3.7 | 1.9 |
| Current liabilities | |||
| Companies with Bekken as significant shareholder | 0.5 | 0.2 | 0.3 |
| Inoplast s.r.o | - | 0.1 | - |
| Total: | 0.5 | 0.3 | 0.3 |
Note 04 Segment information
Operating segments are reported in a manner that corresponds with the internal reporting submitted to the chief operating decision-maker. The Executive Committee constitutes the chief operating decision maker for the BEWI group and takes strategic decisions in addition to evaluating the group's financial position and earnings. Group Management has determined the operating segments based on the information that is reviewed by the Executive Committee and used for the purposes of allocating
resources and assessing performance. The Executive Committee assesses the operations based on four operating segments: RAW, Insulation & Construction, Packaging & Components and Circular. Sales between segments take place on market terms. Each segment sells products that are similar in nature. External revenue for the different segments also represents the group's disaggregation of revenue.
| RAW | Insulation & Construction | Packaging & Components | Circular | Unallocated | Elimination | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| million EUR | Q3 2023 | Q3 2022 | Q3 2023 | Q3 2022 | Q3 2023 | Q3 2022 | Q3 2023 | Q3 2022 | Q3 2023 | Q3 2022 | Q3 2023 | Q3 2022 | Q3 2023 | Q3 2022 |
| Internal net sales | 31.3 | 35.4 | 0.8 | 0.8 | 0.7 | 2.3 | 2.8 | 0.0 | 0.0 | 0.0 | -35.6 | -38.5 | 0.0 | 0.0 |
| External net sales | 50.5 | 69.1 | 112.3 | 78.9 | 93.0 | 101.1 | 10.8 | 18.3 | 0.1 | 0.1 | 266.6 | 267.5 | ||
| Net sales | 81.8 | 104.5 | 113.1 | 79.8 | 93.6 | 103.4 | 13.6 | 18.3 | 0.1 | 0.1 | -35.6 | -38.5 | 266.6 | 267.5 |
| Adj. EBITDA | 3.3 | 14.7 | 10.1 | 6.3 | 12.4 | 13.9 | -0.7 | 0.9 | -1.0 | -1.3 | 24.0 | 34.4 | ||
| EBITDA | 3.3 | 14.7 | 8.1 | 5.5 | 11.8 | 13.9 | -0.7 | 0.6 | -0.4 | -1.9 | 22.1 | 32.9 | ||
| EBITA | 2.0 | 13.3 | 1.2 | 2.9 | 5.6 | 8.9 | -1.3 | 0.2 | -0.6 | -2.0 | 6.8 | 23.2 | ||
| EBIT | 1.9 | 13.2 | -0.2 | 2.2 | 4.4 | 7.8 | -1.6 | 0.2 | -0.8 | -2.2 | 3.7 | 21.1 | ||
| Net financial items | -11.4 | -5.8 | ||||||||||||
| Income before tax | -7.6 | 15.3 |
| RAW | Insulation & Construction | Packaging & Components | Circular | Unallocated | Elimination | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| million EUR | 9M 2023 | 9M 2022 | 9M 2023 | 9M 2022 | 9M 2023 | 9M 2022 | 9M 2023 | 9M 2022 | 9M 2023 | 9M 2022 | 9M 2023 | 9M 2022 | 9M 2023 | 9M 2022 | |
| Internal net sales | 102.3 | 107.2 | 1.7 | 3.3 | 2.5 | 8.1 | 8.9 | 0.2 | 0.0 | 0.0 | -115.5 | -118.8 | 0.0 | 0.0 | |
| External net sales | 158.4 | 223.1 | 356.7 | 224.1 | 300.5 | 279.5 | 36.7 | 47.8 | 0.2 | 0.2 | 852.6 | 774.7 | |||
| Net sales | 260.8 | 330.4 | 358.5 | 227.4 | 303.1 | 287.5 | 45.6 | 47.9 | 0.2 | 0.2 | -115.5 | -118.8 | 852.6 | 774.7 | |
| Adj. EBITDA | 17.3 | 50.5 | 30.7 | 23.6 | 40.5 | 35.1 | -1.2 | 3.9 | -3.5 | -3.9 | 83.7 | 109.2 | |||
| EBITDA | 17.3 | 50.6 | 27.0 | 30.1 | 39.8 | 37.0 | -1.2 | 2.9 | -3.2 | -9.4 | 79.7 | 111.2 | |||
| EBITA | 13.4 | 47.3 | 7.6 | 23.1 | 22.5 | 22.8 | -3.0 | 1.7 | -3.6 | -9.8 | 36.9 | 85.0 | |||
| EBIT | 13.1 | 47.1 | 3.4 | 21.1 | 19.1 | 19.2 | -3.6 | 1.7 | -4.4 | -10.4 | 27.7 | 78.7 | |||
| Net financial items | -31.0 | -18.9 | |||||||||||||
| Income before tax | -3.3 | 59.8 |
| RAW | Insulation & Construction | Packaging & Components | Circular | Unallocated | Elimination | Total | |
|---|---|---|---|---|---|---|---|
| million EUR | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |
| Internal net sales | 142.0 | 4.0 | 10.0 | 0.7 | 0.0 | -156.8 | 0.0 |
| External net sales | 276.0 | 329.9 | 381.9 | 62.4 | 0.3 | 1050.4 | |
| Net sales | 418.0 | 333.9 | 391.9 | 63.1 | 0.3 | -156.8 | 1050.4 |
| Adj. EBITDA | 57.0 | 31.1 | 48.3 | 2.5 | -5.4 | 133.6 | |
| EBITDA | 40.0 | 33.6 | 53.3 | 2.6 | -14.2 | 115.2 | |
| EBITA | 35.7 | 22.3 | 33.6 | 0.9 | -14.8 | 77.7 | |
| EBIT | 35.3 | 19.4 | 28.8 | 0.3 | -15.8 | 68.0 | |
| Net financial items | -25.5 | ||||||
| Income before tax | 42.5 |
External revenue by country (buying company's geography)
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Total Finland | 13.1 | 15.5 | 35.8 | 42.4 | 54.2 |
| Total Sweden | 20.9 | 16.7 | 69.0 | 51.3 | 73.8 |
| Total Denmark | 16.8 | 15.4 | 59.3 | 52.5 | 73.2 |
| Total Norway | 53.5 | 48.3 | 158.8 | 139.0 | 193.0 |
| Total Portugal & Spain | 15.3 | 18.2 | 51.3 | 52.6 | 73.6 |
| Total Iceland | 4.4 | 8.0 | 16.9 | 20.2 | 25.2 |
| Total Baltics | 10.3 | 8.4 | 26.9 | 19.5 | 33.1 |
| Total UK | 12.3 | 18.4 | 55.8 | 36.7 | 57.6 |
| Total Germany | 30.2 | 25.7 | 102.4 | 71.5 | 101.0 |
| Total Poland | 15.1 | 11.7 | 38.8 | 40.5 | 44.8 |
| Total Russia | - | 4.4 | - | 14.0 | 14.0 |
| Total Netherlands | 27.9 | 36.3 | 98.7 | 116.5 | 154.3 |
| Total Belgium | 7.3 | 8.2 | 27.2 | 30.0 | 38.6 |
| Total France | 10.6 | 8.4 | 37.9 | 25.3 | 36.1 |
| Total Other | 28.9 | 23.9 | 73.8 | 62.6 | 77.9 |
| Total Group | 266.6 | 267.5 | 852.6 | 774.7 | 1 050.4 |
Note 05 Depreciation/amortisation and impairment of tangible and intangible fixed assets
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Attributable to operations | -8.3 | -6.3 | -25.2 | -16.8 | -24.1 |
| Attributable to IFRS 16 | -6.5 | -3.0 | -16.0 | -8.0 | -12.0 |
| Attributable to fair value adjustments in business | |||||
| combinations | -3.6 | -2.5 | -10.8 | -7.7 | -11.2 |
| Total | -18.3 | -11.8 | -52.0 | -32.5 | -47.2 |
Note 06 The group's borrowings
| million EUR | 30 Sep 2023 | 30 Sep 2022 | 31 Dec 2022 |
|---|---|---|---|
| Non-current liabilities | |||
| Bond loan | 247.7 | 246.8 | 246.9 |
| Liabilities to credit institutions | 130.0 | 11.0 | 87.8 |
| Liabilities leases | 181.8 | 87.1 | 150.4 |
| Other non-current liabilities | 0.7 | - | 0.7 |
| Total | 560.2 | 344.9 | 485.8 |
| Current liabilities | |||
| Liabilities to credit institutions | 5.4 | 14.3 | 69.5 |
| Liabilities leases | 22.2 | 14.3 | 20.1 |
| Overdraft | 18.2 | 1.7 | 22.8 |
| Total | 45.8 | 30.3 | 112.4 |
| Total liabilities | 606.0 | 375.2 | 598.2 |
| Cash and cash equivalents | 43.1 | 67.2 | 47.5 |
| Net debt including IFRS 16 impact | 562.9 | 308.0 | 550.7 |
| Subtracting liabilities capitalised in accordance with IFRS 16 | |||
| Non-current liabilities leases | 174.7 | 85.9 | 149.1 |
| Current liabilities leases | 21.1 | 13.5 | 19.3 |
| Total | 195.8 | 99.4 | 168.4 |
| Net debt excluding IFRS 16 impact | 367.1 | 208.6 | 382.3 |
Net debt is also presented excluding the effect of IFRS 16, since the impact of IFRS 16 on net debt and EBITDA is excluded in the relevant covenant calculations.
The group's loan structure
As of 30 September 2023, the group has one bond loan outstanding. The bond is unsecured and linked to a sustainability framework, matures on 3 September 2026, with the possibility for BEWI to unilaterally decide on early redemption after 3 March 2025 of 50 per cent of the bond outstanding at that date. The main term for the bond outstanding during the year is presented in the table below.
| Issued amount | Frame | Amount outstanding | Date of issuance | Maturity |
|---|---|---|---|---|
| EUR 250 million | EUR 250 million | EUR 250 million | 3 September 2021 | 3 September 2026 |
The bond is recognised under the effective interest method at amortised cost after deductions for transaction costs. Interest terms, as well as nominal interest rates and average interest rates recognised during the quarter are presented in the table below.
| Bond loans | Interest terms | Nominal interest 1 Jul–30 Sep 2023 |
Nominal interest 1 Jan–30 Sep 2023 |
Average interest 1 Jul–30 Sep 2023 |
Average interest 1 Jan–30 Sep 2023 |
|---|---|---|---|---|---|
| EUR 250 million | Euribor 3m + 3.15% | 6.61-6.95% | 5.12-6.95% | 7.17% | 6.62% |
In addition, the group has a revolving credit facility (RCF) of EUR 150 million granted by two banks. As of 30 September, the revolving credit facility was utilised in the amount of 136.8. The group also have liabilities such as local liabilities to credit institutions and overdraft facilities in some of its companies and liabilities for lease contracts.
Pledged assets
In total the group has pledged asset amounted to EUR 78.4 million for interest bearing liabilities in acquired companies as described above. The bond loan and the revolving credit facility are unsecured.
Contingent liabilities
Guarantees issued to suppliers amounted to EUR 61.4 million.
Note 07 Fair value and financial instruments
| million EUR | Level 1 | Level 2 | Level 3 | Total | Carrying amount |
|---|---|---|---|---|---|
| Financial assets measured at fair value through profit and loss | |||||
| Participation in other companies | 14.0 | - | 0.5 | 14.5 | 14.5 |
| Derivative asset | - | 1.8 | - | 1.8 | 1.8 |
| Total | 14.0 | 1.8 | 0.5 | 16.3 | 16.3 |
| Financial liabilities measured at fair value through profit and loss Derivative liabilities |
- | 1.6 | - | 1.6 | 1.6 |
| Other financial non-current liabilities | - | - | 0.7 | 0.7 | 0.7 |
| Total | - | 1.6 | 0.7 | 2.3 | 2.3 |
| Financial liabilities measured at amortised cost | |||||
| Bond loan Total |
236.9 239.7 |
- - |
- - |
236.9 236.9 |
247.7 247.7 |
Financial instruments are initially measured at fair value, adjusted for transaction costs, except for financial instruments subsequently measured at fair value through profit and loss. For those instruments, transactions costs are recognized immediately in profit and loss. The group is classifying its financial instruments based on the business model applied for groups of financial instruments within the group and whether separate financial instruments meet the criteria for cash flows that are solely being payments of principal and interest on the principal amount outstanding. The group is classifying its financial instruments into the group's financial assets and financial liabilities measured at fair value through profit and loss and financial assets and financial liabilities measured at amortised cost. The table above shows the fair value of financial instruments measured at fair value, or where fair value differs from the carrying amount because the item is recognized at amortised cost (the bond loans). The carrying amount of the groups' other financial assets and liabilities is considered to constitute a good approximation of the fair value since they either carry floating interest rates or are of a non-current nature.
| Level 3 – Changes during the period (EUR million) | Participation in other companies |
Other financial non-current liabilities |
|---|---|---|
| As of 31 December 2022 | 0.5 | 0.7 |
| Fair value adjustment through profit and loss | 0.0 | - |
| As of 30 September 2023 | 0.5 | 0.7 |
• Level 1 – listed prices (unadjusted) on active markets for identical assets and liabilities.
• Level 2 – Other observable data for the asset or liability are listed prices included in Level 1, either directly (as price) or indirectly (derived from price).
• Level 3 – Data for the asset or liability that is not based on observable market data.
Note 08 Net financial items
| million EUR | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 |
|---|---|---|---|---|---|
| Interest revenue and other financial income | 1.4 | 0.1 | 4.1 | 0.4 | 2.0 |
| Exchange rate differences, net of fair value derivatives | - | - | - | - | - |
| Total financial income | 1.4 | 0.1 | 4.1 | 0.4 | 2.0 |
| Interest expenses and other financing costs | -8.8 | -3.4 | -24.4 | -8.9 | -14.5 |
| IFRS 16 interest expenses | -2.7 | -1.5 | -7.9 | -4.0 | -6.0 |
| Fair value adjustments shares and participations | -0.5 | -1.0 | -2.7 | -6.4 | -6.7 |
| Exchange rate differences, net of fair value derivatives | -0.7 | -0.3 | -0.0 | -0.1 | -0.2 |
| Total financial expenses | -12.7 | -6.0 | -35.1 | -19.3 | -27.4 |
| Net financial items | 11.3 | -5.8 | -31.0 | -18.9 | -25.5 |
Note 9 Shares in associates
BEWI has five interests in Shares in associates: HIRSCH Porozell GmbH, HIRSCH France SAS, Energijägarna & Dorocell AB (E&D AB), BEWI EPS ehf and Remondis Technology Spólka z o.o.
The table below presents key aggregated financial data as reflected in BEWI's consolidated accounts.
| million EUR (except percentages and sites) | Total |
|---|---|
| Number of production sites | 14 |
| Book value as of 30 September 2023 | 12.3 |
| Key financials YTD 2023 | |
| Net Sales YTD 2023 | 141.0 |
| EBITDA YTD 2023 | 10.8 |
| Of which owned share of EBITDA | 3.6 |
| EBIT | 3.9 |
| Net Profit | 2.8 |
| Consolidated into BEWI's EBITDA, share of Net profit | 0.9 |
| BEWI's share of EBITDA minus impact on consolidated EBITDA | 2.8 |
| Net debt | 23.0 |
| Of which owned share Net Debt | 8.4 |
The difference between share of income from associated companies of EUR 1.4 million, reported in the income statement, and the EUR 0.9 million in share of net profit consolidated into BEWI's EBITDA in the table above, is due to changes of the statutory accounts for these companies when applying the equity method for consolidation into BEWI Group.
Note 10 Earnings per share
| Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | 2022 | |
|---|---|---|---|---|---|
| Profit for the period attributable to parent company shareholders (million EUR) |
-8.7 | 10.3 | -8.4 | 43.4 | 34.4 |
| Average number of shares | 191 722 290 | 157 720 992 | 191 655 108 | 157 162 505 | 164 109 723 |
| Effect of options to employees | 722 637 | 1 331 427 | 890 035 | 1 440 869 | 1 381 172 |
| Diluted average number of shares | 192 444 927 | 159 052 419 | 192 545 143 | 158 603 373 | 165 490 895 |
| Earnings per share (EPS), basic (EUR) | -0.05 | 0.07 | -0.04 | 0.28 | 0.21 |
| Earnings per share (EPS), diluted (EUR) | -0.05 | 0.07 | -0.04 | 0.27 | 0.21 |
| Earnings per share (EPS), basic (NOK) | -0.51 | 0.66 | -0.50 | 2.77 | 2.12 |
| Earnings per share (EPS), diluted (NOK) | -0.51 | 0.65 | -0.49 | 2.74 | 2.10 |
EPS in NOK is calculated using the average rate in the period
The number shares outstanding have increased from 191 347 992 to 191 722 290 compared to 31 December 2022 in a new share issue in February 2023. Earnings per share is calculated by dividing profit attributable to parent company shareholders by the weighted number of ordinary shares during the period.
Note 11 Five-year summary
| million EUR (except percentage) | 2022 | 2021 | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|
| Net sales | 1 050.4 | 748.2 | 462.6 | 429.9 | 380.7 |
| Operating income (EBIT) | 68.0 | 67.8 | 39.5 | 20.3 | 13.7 |
| EBITDA | 115.2 | 105.5 | 70.0 | 48.0 | 28.6 |
| EBITDA margin (%) | 11.0% | 14.1% | 15.1% | 11.1% | 7.5% |
| Adjusted EBITDA | 133.6 | 109.0 | 65.0 | 51.8 | 30.9 |
| Adj. EBITDA margin (%) | 12.7% | 14.6% | 14.0% | 12.1% | 8.1% |
| Items affecting comparability | -18.3 | -3.4 | 5.0 | -3.9 | -2.3 |
| EBITA | 77.7 | 75.4 | 45.8 | 27.5 | 18.3 |
| EBITA margin (%) | 7.4% | 10.1% | 9.9% | 6.4% | 4.8% |
| Adjusted EBITA | 96.1 | 78.8 | 40.8 | 31.4 | 20.7 |
| Adj. EBITA margin (%) | 9.1% | 10.5% | 8.8% | 7.3% | 5.4% |
| Net profit/loss for the period | 35.4 | 34.4 | 30.0 | 5.6 | 1.6 |
| Cash flow from operating activities | 40.9 | 67.4 | 33.2 | 35.9 | 17.6 |
| Capital Expenditure (CAPEX) | -43.7 | -34.7 | -26.6 | -14.3 | -13.8 |
| Average capital employed | 629.1 | 409.6 | 322.0 | 301.1 | 183.2 |
| Return on average capital employed (ROCE) % | 15.3% | 19.2% | 12.6% | 10.4% | 11.3%1 |
As from 2019, the group applies IFRS 16. The impact from IFRS 16 in 2019 was EUR 7.5 million on EBITDA, EUR -5.4 million on depreciations, EUR -2.5 million on financial expenses, EUR 0.1 million on income tax and EUR -0.3 million on net profit.
1 without IFRS 16 effects
Note 12 Quarterly data
| million EUR (except percentage) | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 266.6 | 289.6 | 296.4 | 257.7 | 267.5 | 277.0 | 230.2 | 208.2 | 193.0 |
| Operating income (EBIT) | 3.7 | 14.1 | 9.8 | -10.7 | 21.1 | 35.8 | 21.8 | 13.8 | 24.9 |
| EBITDA | 22.1 | 30.7 | 26.9 | 4.0 | 32.9 | 46.4 | 31.9 | 24.5 | 34.5 |
| EBITDA margin (%) | 8.3% | 10.6% | 9.1% | 1.5% | 12.3% | 16.8% | 13.8% | 11.8% | 17.9% |
| Adjusted EBITDA | 24.0 | 31.5 | 28.2 | 24.4 | 34.4 | 40.3 | 34.4 | 26.4 | 34.2 |
| Adj. EBITDA margin (%) | 9.0% | 10.9% | 9.5% | 8.8% | 12.9% | 14.6% | 14.9% | 12.7% | 17.7% |
| Items affecting comparability | -2.0 | -0.8 | -1.3 | -20.4 | -1.5 | 6.1 | -2.5 | -2.0 | 0.3 |
| EBITA | 6.8 | 17.5 | 12.6 | -7.3 | 23.2 | 38.0 | 23.9 | 15.7 | 27.0 |
| EBITA margin (%) | 2.6% | 6.0% | 4.2% | -2.7% | 8.7% | 13.7% | 10.4% | 7.5% | 14.0% |
| Adjusted EBITA | 8.8 | 18.3 | 13.9 | 13.0 | 24.7 | 31.9 | 26.4 | 17.6 | 26.7 |
| Adj. EBITA margin (%) | 3.3% | 6.3% | 4.7% | 4.7% | 9.2% | 11.5% | 11.5% | 8.5% | 13.8% |
| Net profit/loss for the period | -8.3 | 3.0 | -0.7 | -7.8 | 10.0 | 24.9 | 8.2 | 9.0 | 11.9 |
| Cash flow from operating activities | 14.2 | 26.0 | 7.4 | 13.2 | 16.8 | 25.0 | -14.2 | 34.5 | 31.2 |
| Capital Expenditure (CAPEX) | -12.6 | -16.2 | -11.3 | -20.4 | -8.9 | -9.2 | -5.2 | -12.2 | -7.2 |
| Average capital employed | 916.6 | 836.7 | 735.2 | 629.1 | 520.6 | 476.8 | 434.0 | 409.6 | 388.6 |
| Return on average capital employed (ROCE) % | 5.9% | 8.4% | 11.4% | 15.3% | 19.3% | 21.5% | 22.0% | 19.2% | 18.1% |
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