Welcome, and thank you for joining Frigoglass Conference Call Regarding First Half 2025 Financial Results. At this time, I would like to turn the conference over to Mr. John Stamatakos, Treasury and Investor Relations Director. Mr. Stamatakos, you may now proceed.
Thank you very much. Thank you all for joining us today. In this call, we will discuss our first quarter 2025 results, deliver assurance, political consensus relating to the new senior citizen loan, the first year senior citizen loan, and the second year senior citizen loan issued by Frigoglass S.A. I'm joined today by our CEO, Serge Joris , and our CFO, Maos Metaxakis . Serge will begin by sharing the highlights and providing an operational review for the first half of the year. Manos will then walk you through our financial performance in more detail before handing back to Serge to discuss the outlook for 2025. We will then open the floor for questions. Before we begin, please note that this conference call contains forward-looking statements. It will be considered in conjunction with the quarterly statements set out in our slide deck.
With that, I will turn the call over to Serge.
Thank you, John. Many thanks to everyone joining us. I'm very pleased with our operational and financial performance in the first half of the year. It has been broadly as expected. We delivered solid top-line growth, strong EBITDA margin expansion, and good free cash flow generation. As discussed in previous calls, 2025 marks an exciting chapter for Frigoglass, our year of transition, as we continue executing our transformation initiatives. Over the past two years, the group has undergone a rigorous and systematic transformation across both business segments. This has fundamentally strengthened our financial performance, as clearly reflected in our first half results. I would like to take this opportunity to sincerely thank our teams across the group for their hard work and unwavering dedication to our customers and our business. Our performance is truly a reflection of an exceptional team effort. Let me share now the key highlights.
Commercial refrigeration continued to foster this momentum, with sales increasing by 15%, driven by strong execution in Europe and sustained volume growth in Asia. While we navigated some challenges, including the strategic repositioning of a key customer in Europe, these did not materially affect our progress. The results reflect continued progress in our turnaround efforts and highlight the impact of our strategic initiatives. Glass also delivered strong results. Currency-neutral sales decreased by 61%, supported by effective pricing actions and solid volume growth across all operations. Pricing enabled us to offset inflationary pressures and currency headwinds, further highlighting the resilience of the business and the success of our commercial and operational strategies. At group levels, EBITDA reached EUR 44 million, which represents an impressive 91% increase year-o ver-y ear.
Our strong top-line performance, combined with disciplined execution of our efficiency and cost reduction programs, led to a 6% percentage point improvement in operating profitability, bringing our EBITDA margin to approximately 16%. Moving to the next slide. These excellent first half results underpin a record-high last twelve months' performance in the recent years, which provides us with confidence in our ability to continue delivering solid growth for the rest of the year. On a last twelve months (LTM) basis, we reached group sales of EUR 473 million and EBITDA of EUR 65 million. This is a reflection of the strong performance across both our businesses. In commercial refrigeration, LTM EBITDA stood at EUR 28.5 million or EUR 14.3 million, excluding our Russian business, which demonstrates a EUR 17.5 million improvement compared to 2023. In glass, we reached an LTM EBITDA of EUR 36.8 million, which is broadly in line with 2022 EBITDA.
That was despite the hefty devaluation of Naira during the period. Turning to slide seven, let me walk you through the key performance drivers across our geographies within the commercial refrigeration segment. Sales declined by 1.4% in East Europe due to lower cooler placements in Russia in the second quarter. However, excluding Russia, the region continues to perform strongly with sales growing by almost 10%. This growth reflects the consistent execution of our performance, innovation, and market expansion initiatives. These efforts have contributed to market share gains, mainly among customers beyond the Coca-Cola popular network, resulting in incremental sales. The increase was largely driven by a solid performance in Hungary, Poland, and Bulgaria, which more than offset softer demand in Belarus and the Czech Republic. In Russia, sales declined at a double-digit rate.
This was mainly due to the phasing of orders that were shifted to the second half of this year and lower demand from local customers. Our asset performance for the business delivered mid-single-digit sales growth, supported by successful pricing initiatives and continued expansion across selected markets. In Western Europe, sales grew by a robust 50.3%, following an acceleration trend in the second quarter. This performance was driven by strong cooler placements, mainly in Germany, the UK, Spain, Greece, France, and Sweden, and reflects orders from soft drink customers and market share gains across various customer segments, including energy drinks. In Africa and the Middle East, sales increased by 1.8%, assisted by cooler placements in Nigeria and Egypt. In South Africa, sales were up by a mid-single-digit rate, supported by increased activity in our asset performance services business.
Following the inauguration of local production in Egypt in May, we were able to successfully meet demand from our customers during the second quarter. Egypt represents a milestone for Frigoglass. It is expected to sell next year, and we will be able to capture demand also during the seasonally strong first half of the year. Turning now to Asia, sales increased by 9.5%, primarily led by strong demand in India. In India, we recorded double-digit sales growth, supported by demand from soft drink customers and our ongoing customer-based expansion initiatives. Our Indian facility is strategically located to serve the northern and northwestern regions. With a broad and localized supplier base, we are very well positioned as a reliable, high-quality, and innovative supplier of commercial coolers in this region. Moving to the next slide and our glass business.
On a currency-neutral basis, sales in our glass container business grew by an impressive 63%, primarily driven by pricing actions. The total volume increased by 19%, supported by strong demand from customers in the brewery, food, and pharmaceutical sectors. On a reported basis, sales were up by 42% despite the adverse impact from currency movements. We stayed agile in navigating a challenging environment, achieving good volume growth while effectively passing on tough constraints and FX volatility to our customers. Our pricing initiatives led to an average pricing increase of 37% year- over- year. Volume growth was also strong in our complementary plastic crates offering, which saw double-digit increases. Combined with pricing, this resulted in currency-neutral sales growth of 69%. In Europe, sales increased by 47% despite headwinds from the Naira's devaluation. In the UK, local currency sales were up by 35%, driven by pricing.
Building on our first half performance, we remain confident in our ability to sustain momentum going forward. Turning to the next slide, slide nine. One of the key drivers behind our current margin performance has been the implementation of a dynamic pricing mechanism. Combined with solid volume growth over the past few quarters, this has led to a significant improvement in our objective EBITDA margin. A core component of our transformation program has been the restructuring of our commercial agreements to enable dynamic pricing. This helps us to better manage the impact of foreign exchange volatility and inflation. In 2024, we successfully expanded the application of the pricing mechanism to cover a greater share of our energy and raw materials costs, the two most significant components of our cost base.
The shift to quarterly price adjustments for these inputs is allowing us to more effectively recover costs in a timely manner. As the dynamic pricing continues to roll forward across our contracts, we expect an even higher percentage of cost recovery in the coming quarter. Overall, our margin performance also reflects this progress, increasing sequentially from 8% in the first quarter of 2023 to approximately 35% in the second quarter of 2025, representing a 27% percentage point uplift year- over- year. With that, I'll now hand it over to Manos. He will walk you through the financial performance for the first half of the year.
Thank you, Fred. Good afternoon to everyone. Here is the end of slide 11 for an overview of our financial performance. Starting with the commercial refrigeration, sales increased by 14.6% year over year, averaging approximately EUR 213 million. This growth was driven by a strong performance in Western Europe and the continued volume growth momentum in India. Adjusted EBITDA increased by 37% to EUR 21.5 million, demonstrating the strong execution of our transformation initiatives. The EBITDA margin improved by 160 basis points to 10.1%, supported by production cost improvements, mainly in our Romanian and Indian operations, as well as shift growth in low material costs. Material cost savings are expected to generate substantial benefits this year, mainly driven by alternative component sourcing, effective negotiations with suppliers, and product cost optimization initiatives.
Productivity savings, mainly through the implementation of production leveling initiatives and labor throttling to facilitate workforce and supply chain organization, are also expected to support EBITDA margin this year. Adjusted EBITDA for commercial refrigeration, excluding film modulation, improved from EUR 4.5 million last year to EUR 14.2 million in the first half of 2025. Turning to glass, on a reported basis, sales increased by 39.3% to EUR 63 million. As Fred noted earlier, our agile pricing strategy and volume growth more than offset the currency devaluation. Adjusted EBITDA increased to EUR 22 million, up from EUR 7 million in the first half of 2024. The adjusted EBITDA margin expanded by 19.4 percentage points to 35%, driven by successful pricing adjustments, sustained volume growth, and continued focus on cost control. Turning to slide 12, let's review the components of the free cash flow.
Adjusted free cash flow improved to an inflow of EUR 6.8 million compared to an outflow of EUR 9.8 million in the first half of 2024, resulting in a positive gain of approximately EUR 17 million. This significant improvement was primarily driven by a substantial increase in our operating profitability, with adjusted EBITDA contributing approximately EUR 21 million. Free cash flow also benefits from a lower net trade working capital outflow, mainly reflecting a material reduction in inventory. This was due to strong demand in the commercial refrigeration business during the second quarter. Capital expenditures amounted to EUR 21.2 million, up from EUR 6 million in the prior year period. The increase is mainly related to the purchase of equipment in preparation of the upcoming furnace rebuild.
Given that the majority of these topics relate to the glass business, it is worth noting that the commercial refrigeration business delivered a good free cash flow generation in the first half of this year. On a normalized investment basis, the glass segment will also have the resulting strong free cash flow generation. Thank you for your attention. Let me pass the floor back to Serge.
Thanks, Manus. Now, let's turn to the final slides and our outlook for the rest of the year. Despite the volatile macroeconomic environment, we remain confident in our ability to deliver a solid performance throughout 2025. This confidence is underpinned by the strong first half results. As anticipated, we delivered good volume growth in our commercial refrigeration business in Western Europe, with market share gains in targeted performance segments. The glass container business continues to demonstrate strong momentum, supported by solid volume growth and the positive impact of our pricing initiatives. We remain focused on executing our transformation program and expect this to drive further market share gains in selected markets through a more competitive product offering and enhanced commercial capability. For Nigeria, pricing alongside cost optimization initiatives are expected to drive profitability margin improvements going forward.
Additionally, we will maintain discipline, working capital management, pursuing incremental efficiencies, and generating free cash flow to support our operations. Finally, I reiterate our capital expenditures guidance of approximately EUR 35 million for 2025. This is primarily related to equipment and materials for the upcoming furnished refills. Thank you for your time today. Manus and I are now happy to take your questions over to the operator.
Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.
Thank you, operator. Thank you to everyone for joining today. We are very pleased with our year-to-date performance. This is in line with expectations. This gives us the confidence to reaffirm our full-year expectation for a solid performance. With this, I'd like to thank you once again, and please don't hesitate to reach out to us if you have any further questions. Thank you very much.