Welcome to this presentation of BEWI's Result for the Second Quarter and First Half of 2021. My name is Christian Bekken, I am the CEO of BEWI. With me today, as always, I have our CFO, Marie Danielsson, who will take you through the financials. Our presentation includes some forward-looking statement, I would like to point your attention to our disclaimer. I will start with some highlights for the quarter before Marie will go more detail into our numbers. We are very pleased with the result this year, both for the quarter and the first half of the year. The results for the quarter are by far the strongest results we have ever had, we deliver significant growth over last year. This graph shows our net sales and EBITDA for the last 12 months.
The results are most of all driven by a strong demand in all our markets. This has resulted in higher volumes sold in all our segments, which is the most important to us. As you all know, there has been a shortage of all kinds of raw material this year, causing an upward pressure on prices. This includes our most important raw material, styrene, as well as the price of EPS beads, which is the product we sell in segment raw. In addition to the strong result, our operation and growth initiatives are progressing as planned. Our operation performs stable and well. We have ramped up our recycling volumes in Portugal, and we have completed the acquisition of both paper packaging company Honeycomb Cellpack and IZOBLOK.
On Monday this week, we also announced that we are initiating a refinancing process enabling us to take our growth ambition to the next level. I will briefly take you through some numbers and highlights for the quarter. For the second quarter, net sales are up by 88% compared to the second quarter of 2020. 27% of that are organic, coming from higher volumes and increased sales price in all segments. We have an adjusted EBITDA of EUR 31.6 million, almost a double of the same quarter last year. This is our best quarter ever. In the first quarter, we saw a historically sharp increase in the styrene prices, and the price was at a historical high level already. This positively affected both revenues and profitability for segment raw, while putting some pressure on our margins in the downstream segment.
As we have explained before, the sales price adjustments toward customers in our downstream segments lag approximately one quarter. This was also the case for the second quarter, as the price of raw material continued upwards. For the first half year of 2021, we record revenues of EUR 347 million, 65% up from the first half 2020. 60% of the growth is organic, coming from higher volumes and, of course, higher prices. The strong market provides us with a strong result, but I would also like to underline that we outperform the market. Part of this explanation is our integrated and diversified business model that once again proves to be an advantage to us. It gives us stability and protects us against negative impacts in markets or other incidents like we have spoken about during our period now in COVID-19.
The very same model also gives us opportunities to take advantage of strong market demand as we have and are still seeing in segment raw. We have done what we can in segment raw to support our customers. We produce more. We are destocking our storage. That put pressure on our logistics. Of course, we take out higher margin. This is one of the ways we outperform the market. In addition, I would take this opportunity to also explain why our integrated model is important for our ability to become a circular company, which is a high priority to us. There is a major difference between being a company that recycle and a circular company. Being integrated enable us to be fully circular. We collect used material, we recycle, and we use the recycled material into our production of new products.
High raw material prices gives higher recycled material prices as well. Not only does this give more profitability to our circular companies, it also gives us recycled products with higher attractivity, and this puts positive pressure on everybody to change into circularity. In other words, our integrated business model enables us to outperform the market, not only measured in result, but also in sustainability. Positioning BEWI in the lead of the change towards circularity in our industry. In BEWI, we have a strong focus on growth. Although the solid result this year provide us with a solid financial position, we have recently initiated a refinancing process where we intend to establish a new financing framework. We do not do this because we have to, but because we have high ambitions to take this company to the next level through attractive M&A opportunities.
Marie will say more about this later on in the presentation. For example, one of the important thing, as I already have mentioned, is that we are going to continue to be the leading recycling consolidator in the market. We have several ongoing growth initiatives, and here is some selected projects. In March, we announced our plans to establish a state-of-the-art packaging hub at Hustad. Here we will not only build our most modern and efficient fish box facility, but that will also be our most sustainable facility, handling increasing volume of recyclable boxes, reusable pallets, and other products for fish farming industry. During the second quarter, the plans for the new hub have progressed, and we have entered into a conditional long-term lease agreement with KMC Properties, who is responsible for setting up the facility, and we have started the pre-phase project.
As mentioned before, we also have a new box facility at Senja, next to SalMar's new processing plant InnovaNor . The facility is now ready for production. Our recycling facility in Portugal has ramped up during the first six months, and we can now say that we are in full production. The facility has a capacity of approximately 10,000 tons. At our insulation center in Norrköping, we have invested in a modern extrusion technology. The new technology will improve our production and efficiency, but most importantly, it will enable us to increase our use of recycled material in our production. Production at XPS line in Norrköping started towards the end of the second quarter. Moving on to our acquisitions.
We announced our agreement to acquire the majority stake of IZOBLOK late April, and I spent some time on our first quarter presentation to explain why we think IZOBLOK and BEWI is a very good match. During the second quarter, we worked to finalize the agreement and to complete the transaction. We did that early in July. This agreement is a good example on how we work when we look to companies to acquire. We started this project three years ago, and during these years we have looked into the market, we have spent time with the management, we have been looking for synergies, we have been looking for opportunities to strengthen IZOBLOK in the near future. This time and analyze is why we believe this company will be strengthening BEWI in the long term.
These resources and the time we also use is why BEWI often have success in our integration process later on. IZOBLOK is the market leader in Europe for EPP components to the automotive industry. Yes, we all know that automotive industry has been struggling for the last year, first due to the pandemic, now to the shortage of electrical components. At the same time, this industry is undergoing a major transition, going from conventional combustion engine to zero-emission electrical cars. We believe that IZOBLOK is in an excellent position in this industry, and we believe that the EPP components are an excellent use in cars. They are shock-absorbing, noise-reducing, and can replace other components to reduce weight. This means that less energy is used, lowering emission from fossil cars and extending the range for electrical cars.
Late July, IZOBLOK was awarded one of the largest nominations orders in the industry from German company, Adient. The order is for car seats made out of EPP, and it's worth approximately EUR 50 million. This will boost IZOBLOK's revenues from EUR 24 million to EUR 32 million. With that, Marie, I leave the word over to you.
Thank you. Good morning. We look more closely into the financials. As Christian Bekken was mentioning, this is again a quarter where we grow from both acquisitions and organic growth. The organic growth is, of course, a mix between price and volume and also a product mix. The essential is that we grow volume-wise in all our segments. The biggest impact from price you will find in raw, where you have a lower impact from the price in our downstream segments, which means that the organic growth that you see is more coming from the increasing volumes. EBITDA has more than doubled. We end at EUR 31.6, compared to EUR 15.7 last year, and again, it's coming from the acquisition, and it's coming from our segment raw, where you find a lower contribution from our downstream segments for reasons that you are aware of.
To summarize, before we go into the individual segments, we want again to highlight that we do experience a very strong market in all our segments, in all our regions. Our operation is working extremely well right now. We have a business model that again proves to be very robust, where we, in times when we have highly increasing raw material prices, as a group, generate a very solid result, even if we have lower contribution in our downstream currently. We have continued our growth journey with both acquisitions and the investments in organic growth opportunities, as Christian is mentioning. We also see the outcome from previous quarters' initiatives in our numbers in this quarter. That, again, means that we do the best quarter ever this second quarter.
If we look into segment raw, we have increasing volumes and of course, also have a price impact on the top line. We do also a fantastic EBITDA in this quarter. That comes from the volumes, and it also comes from that there is a good market. We can sell the volumes that we produce to a very attractive price. Not just that, because it's easy to say that it's a strong market, but we also have an operation in all the function that do it better and better. That means that procurement, they do a better job, or a sales team in raw do a better job, and the operation is doing a fantastic job with continuously improving the production volumes. The strong market, we do believe that that will continue for the rest of this year.
In packaging and components, we have a top line that has increased approximately EUR 30 million compared to Q2 last year. EUR 20 million of that is coming from the acquisitions and EUR 10 million is coming approximately from the organic growth. There are two things to keep in mind here. We do have lower volumes this quarter in Norway when it comes to fish boxes, and as you are aware of, that goes up and down from quarter-to-quarter. Norway is in general a product that has a higher margin, so we do have a margin dilution in this quarter due to this, but all in all, the volumes are higher in this year. Time flies, and as you might recall, it was actually in the second quarter last year, we experienced first the impact from COVID.
Even if we were not that much impacted, we did have some lower volumes in the second quarter, in particular in segment packaging and components. When we say that we have increasing volumes, it's easy to believe that, okay, that is due to that the second quarter last year was not that strong. The volumes that we have in this quarter is actually higher than we also had in the second quarter in 2019. We are growing. If you look at the EBITDA, that has increased. It's all coming from acquisitions. We do have lower contribution from our old BEWI, if we call it that. Again, it is because of a regional product mix. We do have less sales in Norway in this quarter. They are picking up again in the third quarter. It goes up and down.
It's not related to any market, it's not related to customers, it's only due to the slaughter volumes in a specific quarter. It's coming from that we do have the heavily increase in raw material prices where we do have a lag in the price adjustment towards the customers. That means in the next quarter, the full impact from the price increase is related to the up on raw material prices will impact the numbers in the segment. IZOBLOK, we closed, as Christian mentioned, in July. That means that as from the third quarter, IZOBLOK will be consolidated into the group's numbers, and that will be 100% into the packaging and component segment. We go to insulation, and insulation is, as the other segments, a segment that is growing both organically and through acquisitions. We are very happy that the Netherlands are growing.
They had decreasing volumes throughout 2020. We saw a shift in this by the end of last year. They continued to grow in the first quarter, they continued to grow in the second quarter. Just as for packaging component, it just not only when you compare to 2020 and a COVID quarter, if I call it that, it's also compared to 2019. It might stick out, but in this segment, we do have a lower EBITDA, also with the acquisitions contributing positively. That is, again, due to the lag that we have in price adjustments to the customers. In insulation, we have a higher percentage of raw material in the bill of material, which means that insulation is more impacted from this lag in the price adjustment compared to packaging.
This will again then catch up in the third quarter now when the prices have started to stabilize and decrease to some extent. Minority interest. This is a slide that we have had in our presentations from time to time, and it's more to highlight how the joint ventures that we do have are reflected into our financials. We have a couple of joint ventures, and the biggest one is in Germany and in France related to insulation, and then we have some smaller ones as well. How we take this into our numbers is that we take our owner share of net profit.
If you look at the middle of this slide, you can see that our share of the net profit and what is consolidated into our financials is EUR 2.5 million. However, if you look at the performance of these companies, they have had an EBITDA year- to- date at EUR 13.4 million, a few lines up. In a normal valuation environment, we would have taken our percentage of EBITDA, which is the 4.8%. There is a difference between what we do consolidate and what would have been reflected in a normal valuation, so to say. This is to highlight, and it's also worth mentioning that we have extremely good contributions from these minority interests, and especially then from France and Germany, that are the big ones. If we look into our consolidated full income statement, I think we have spoken about most of this.
We have an increase in net sales. It's volume, it's acquisitions, it's prices that impacts. What you see is the raw material percentage is increasing as a percentage of sales due to the increase in raw material prices and considering that we cannot adjust sale prices instantly in our downstream. You might also notice that we have a higher goods for resale that is coming from BDH. That is a trading company, mainly. They have production as well, but a lot of trading. Personnel, of course, increases, depreciation increases, everything comes from all the acquisitions that we have done. When I say that we have a good contribution from our joint venture, you might notice here that we actually have a lower number this quarter compared to Q2 last year.
That is only due to that we had an acquisition adjustment for our entity in France last year with a positive 3.5. Underlying, they performed 0.0 last year to compare with the 2.1 this year then. Financial net has increased. Part of that is a revaluation of shares, hasn't anything to do with cash flow, and the underlying tax rate is at 27%. Shortly on the balance sheet, we have a net debt that amounts to EUR 185 million. It's EUR 106 if you exclude IFRS 16. It has increased compared to year end. This is driven mainly by working capital. You will find that in the bottom where you can see that we increase this, our working capital with the seasonality that we do have in our business.
On top of that, we also have an impact from the increase in raw material prices, which means that we tie more working capital throughout the value chain until the end of the year when it comes back. We did a private placement in the second quarter, and those money will be used to pay for IZOBLOK. For those of you that might reckon that then impact the leverage positively, that is yes, but we also have an extremely high working capital this quarter. I would say that the trend of a decreasing leverage where you can compare the 1.5 to year end and a decrease from Q1, that is a fair leverage number. We have also reclassified one of our bonds from being non-current to be current, and that is due to that we have a maturity in April on that one.
Then lastly, a little bit about the refinancing process that we initiated earlier this week. What we intend to do is that we would like to redeem the two outstanding bonds that we have. It's a total volume of EUR 140 million. We want to replace that with a new bond with up to EUR 160 million. Intention is that will be unsecured. It will be a sustainability-linked bond. We think that this is the right thing to do, not only because of all the acquisitions and initiatives that we have in our pipeline, but also to continue to integrate our sustainability mindset in all our principles or in all our processes. That has been a given for us that this needs to be a sustainability-linked bond. With that, we will also increase then the credit facility that we have.
I don't think it's that much to say about the cash flow. We have a positive cash flow, operating cash flow in this quarter, that is even though we have had such a high impact from increasing working capital. We have spent approximately EUR 8.5 million in CapEx. More than EUR 2 million of that is coming from our organic growth initiatives with Senja being one of those initiatives, for example. With that, back to you.
Thank you, Marie I will now comment on the outlook for the next quarter. We are now well into the third quarter, and we can say that volume development remains solid into the quarter. We continue to experience strong demand, and we expect this to continue the rest of the year, as Marie said. The prices seems to be stabilizing on SM. Official figures currently forecast a gap in line or a little bit higher than Q2 for EPS beads. This is, as we have said, positive news for segment Raw. Margin in downstream segments is expected to catch up now when the raw material prices has stabilized. Summing up, we are well-positioned for further growth. We have a solid operational performance providing us with a positive cash flow.
We have a proven business model that also gives us the opportunity to outperform the market. We experience strong underlying demand. We have a robust financial position, and we will continue to pursue growth opportunities in line with our strategical priorities. With that, I would like to open for any questions.
Okay. We have received a few questions through the webcast. We will start with the first question from Herman Dahl, analyst in Nordea. He says that Q2 was obviously an outstanding quarter, that is also making it hard to compare it, like for like, with Q2 2020. Can you give some color on the split between increased prices, M&A growth, and organic volume growth across all segments? I guess, Marie, you will answer the question.
It is a tricky question because we cannot compare due to product mix, and you have a regional mix as well in there, and we have trading operation. I think that what we can say is that in segment Raw, we have a volume growth of approximately 5%, and the residual 95% is priced in. You have a lower impact in the other segments where you have volume increases that are more close to 60% and a price that is more 40%. Keep in mind that in that, you also, again, you have a regional mix, and you do have a product mix. You need to take it for what it is.
Okay. We have another question from Herman as well. On the raw material side, are you seeing any large greenfield projects impacting the market balance in the European EPS market?
There is often debottling of capacity, so there is often coming more capacity year-on-year in the market. It's at least over 10 years since there was a greenfield project in segment Raw, and we would have known if there were a big startup or something in Europe. The answer is no.
A follow-up question regarding M&A activities. Are there any specific downstream market verticals you are now particularly focusing on in the M&A strategy?
As I have said numbers of times, when we do acquisitions, we do them in a thorough way. There are at all times several acquisition opportunities we are looking into. We are, as I refer again to IZOBLOK, having plans which have been there for three years. We will continue to do it in this way. As I've said earlier, I've said that we will continue to grow, especially in the recycling business, so that we will reach our target on 60,000 tons. We see a favorable insulation market to continue. We also see both packaging attractive, and we have, as you have seen now, acquired companies within the paper packaging segment. We will continue to strengthen those position in addition to follow our geographical clear strategy to build ourselves up in Europe.
Last question. We have another question saying that what is the rule of timeline from price fluctuations from raw into the other segments? Is it typically automatically correlated and already in agreed form with clients in the downstream segments, or is there other mechanisms, for example, competition impacting this?
Of course, it's competition. Competition always impacts a market. We try to push the prices forward in this segment, obviously, and that, as we have spoken about now, is easier when the demand is high. That, of course, is an additional push on prices. In general, this is a market which works on a general stable level on pushing the prices forward. I will add on to what we have repeatedly said as well. We outperform the market by being strategical in both our procurement and our sales of our product by destocking and buying forward contracts and so on. As I said, numbers of times limited to a quarter in time.
Yeah. Summing up your answer is saying that the rule of thumb, if there are any, is approximately three months from the raw material increase until the prices-
Yes
Yes.
We like to say that we try to outperform that at all time, and we have done historically.
There's a question from Anders Hillerborg. You expect Q3 earnings in line with Q3. I guess that has to be Q3 earnings in line with Q2. Roughly how much of the Q3 earnings will come from IZOBLOK?
It's a difficult question, and it's Yeah, Marie?
Sorry?
It's a difficult question. It's a newly acquired company. We will continue to pursue more control over the company, obviously, and more knowledge about the company, but the situation in their industry is in a very difficult position where the producers of cars have challenges with other products than our products. That depends basically on that. We would continue to believe that this company will softly or slowly ramp up to the normal level we have seen historically. We don't expect that to happen next quarter. Basically, it will have little influence on our numbers Q3. That's the answer.
We have another question from Marcus Kubek. How big do you think is the effect of IZOBLOK on the packaging and components segments in the rest of the year in terms of sales and EBITDA?
Repeating my answer, it will have a low effect on the result due to the situation in the automotive industry. Obviously, you will have a turnover, which is, if you analyze and just around EUR 20 million with little impact on the result. We expect, as I said before, this to improve in the next year. In the next year, you saw when we acquired the company, and the company has an EBITDA on a little above 10% in a normal year, so then you can add up the figures at that time. But in the coming first half year, we don't expect the automotive industry to ramp up due to the lack of material or electrical components in automotive industry.
Anything you would like to add?
No.
No? Good. We don't have any other questions right now. Let's give it 30 seconds. Anyone wanting to add another question, please use the function in the webcast window. If you have other questions, you're welcome to contact us. I think there seems to be no more questions. With that, I think we will conclude the presentation. As you also can see from the slide, we are planning a Capital Markets Day in late September. It's going to be the last week of September. We don't know the exact date and place, probably Oslo or Frøya. We will come back to that as soon as possible. With that, I think we conclude the presentation.
Thank you for your time.
Thank you.