Challenging Q4 for BEWI, but still closes the year with solid results

The food packaging segment was one of the most stable, with an increase in volumes at Senja's new fish box plant.
BEWI packing for SalMar. Photo: BEWI.
BEWI packing for SalMar. Photo: BEWI.

"Delivering solid results in continued challenging markets", is how BEWI summarizes its Q4 2022 results. The supplier of packaging, components, and insulation solutions had net sales of €1,050.4 million last year. This represents an increase of 40% over 2021, including organic growth of 17% following price increases and additional volumes at the new fish box facility in Senja, Norway. Adjusted EBITDA was €133.6 million for the full year, up 23% from the previous year. This trend was not maintained in Q4, which recorded an adjusted EBITDA of €24.4 million, compared to €26.4 million last year. However, despite being a difficult quarter, the company has kept its good results in net sales, with €275.7 million in Q4, up 32% compared to €208.2 million for the same quarter of 2021.

A year of expansion and acquisitions

"We are very pleased to deliver another quarter with growth and solid results, despite challenging market conditions. The results are negatively impacted by the contribution from Jackon's Nordic insulation business. We are of course not satisfied with this performance, and we are implementing measures to adjust capacity and reduce costs to meet the current market conditions", said Christian Bekken, CEO of BEWI ASA.

"BEWI has delivered growth for many years but the last two years have been quite exceptional", he said at the beginning of today's results presentation. If the growth in net sales from 2020 to 2021 was 62%, they have now achieved, including the full effect of all acquired entities, more than double their net sales and more than a 50% increase in EBITDA. And that, he explained, before counting the synergies and profitability measures implemented.

Through different acquisitions, the company has significantly strengthened its market positions in 2022, expanded into the UK, the Baltics, and Spain, broadened its product offering, and further developed its recycling platform, all in line with the company's strategic priorities.

As a result, in the fourth quarter, BEWI experienced variations in market demand between segments and regions. The building and construction industry saw reduced activity, especially in the Nordic countries, impacting volumes for the RAW and Insulation segment. However, demand from the automotive industry developed positively and food packaging remained stable.

Stable demand for food packaging

As mentioned by Christian Bekken, Jackon's insulation business – of which approximately 65 percent of sales are in the Nordic markets – made a negative contribution in the fourth quarter, mainly due to a lack of price adjustments to compensate for the higher cost level. BEWI has already initiated measures to reduce its production capacity to improve profitability and in response to current market conditions.

In comparison, one of the most stable segments for BEWI in Q4 was packaging and components where, thanks to price increases, volumes at the Senja plant and improved volumes in the automotive and HVAC sector, it achieved an improvement in adjusted EBITDA of €13.3 million, which is an increase of 42.9%. Net sales were €104.4 million, up 18.7%. For the full year 2022, net sales were €391.9 million, this is up 32.6%, and the adjusted EBITDA was €48.3 million, an increse of 20.0%.

As mentioned, within this segment, food packaging stands out in particular, not only because of stable demand but also because of the increase in volumes at Senja's new fish box facility, which contributes positively to the results. BEWI says food packaging is expected to maintain that stability, with a positive contribution from organic initiatives and mergers and acquisitions. Indeed, among the selected key investment projects highlighted by the company in today's presentation are two well-known names in the aquaculture industry: SalMar and Mowi.

Regarding SalMar, the company expects to finalize the development of a new fish box facility in Senja under a long-term supply agreement signed with the Norwegian salmon producer. In addition, BEWI has reported the ongoing development of a packaging facility in Jøsnøya, Norway, under a long-term supply agreement with Mowi. The latter project is expected to start operations in the second quarter of 2024.

About BEWI

Founded in 1980 on the island of Frøya, off the coast of central Norway, BEWI is an international provider of packaging, components, and insulation solutions. The company's commitment to sustainability is integrated throughout the value chain, from production of raw materials and end goods, to recycling of used products. With a vision to protect people and goods for a better every day, BEWI is leading the change towards a circular economy.

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