Welcome to this presentation of the results for the third quarter of 2022. My name is Christian Bekken, and I am the CEO. Together with me, as always, our CFO, Marie Danielsson, who will take you through the financials later on. We would like to point your attention to our disclaimer, as our presentation may have some forward-looking statements. Directly into the highlights for the third quarter of 2022. BEWI once again delivers a solid quarter thanks to a dedicated and experienced organization. We remain well-positioned in what we expect to be challenging markets ahead. Highlights for the third quarter. We already, as many times before, see mixed market development between segments and geographies. For example, we see stable demand for insulation solutions in Benelux and we remain committed to growth in solutions, especially for renovation.
We also see softer volumes for commodity products in the Nordics. We see continued positive development for sales to the food industry, and it is as communicated always less cyclical. We experience strong demand for HVAC. Goes without saying that energy saving is a mega-trend, and volumes to the automotive industry is gradually improving from very low volumes. Styrene raw material prices increased into Q3 and dropped towards the end, while EPS raw material prices remain high, resulting in a solid gap. Sales growth following price adjustment compensating for higher cost level. Once again, a strong performance from all our employees in BEWI. Price management is about everything from product quality to product strategy. In the subsequent events, we completed the Jackon transaction finally, and we are now fully focused on extracting synergies, meaning cost savings of more than EUR 15 million.
We have completed the first phase of the divestment of real estate portfolio, leaving the company in a robust financial position. We need to measure our performance in numbers. Therefore, we get following financial highlights for the third quarter of 2022. Net sales of NOK 267 million, a 38% growth. 15% organic growth. Mixed demand, as I said, different markets and products. High demand, for example, in HVAC products. We have growth from strong price management, as mentioned before. Positive development for sales to the food industry. The 24% explained by acquisition. Companies like Trondhjems Eskefabrikk, Berga Recycling, and many more. We have an EBITDA of NOK 34 million, up 0.6%. 11.5% negative growth. Lower volumes in RAW segment. Decreasing prices in upcoming winter season.
We have positive organic growth in downstream segments, Insulation and Packaging. 11% improvement from net of acquisitions due to synergies. We will come back to the real estate portfolio, an agreement with KMC Properties for sale of the real estate up to NOK 2 billion, which we have informed about earlier. 24 properties and one land plot. The first phase is completed. 10 properties and one land plot in Norway in a value of NOK 900 million. Second phase is expected to happen first half of 2023. This provides BEWI with a strengthened financial flexibility going forward. We have now finally completed the acquisition of Jackon Holding, the most transformative transaction so far in BEWI's history. BEWI's offer for Jackon was accepted by the owners in October 2021.
The offer reflected an enterprise value of NOK 3,350 million on a cash-and-debt-free basis with an agreed level of working capital. The transaction was closed on 19th of October in 2022, it's settled by NOK 1.3 billion in cash and an issuance of 32 million new shares to HAAS, which now holds a position of 17% in BEWI. The synergies was expected to be between EUR 12 million-EUR 15 million, meaning cost savings of confirmed now more than EUR 15 million. Although it has only been two weeks since we got the visibility on this, it is confirmed that there is a lot more synergies to be had. Financial highlights for Jackon for the third quarter. Net sales of NOK 101 million, 3% negative growth.
Lower volumes from sales of insulation solutions in the Nordics and lag in price adjustments. Historically, they have had yearly price adjustment. It will not be the case in the future. EBITDA of NOK 7.1 million, down from 15.8. An increased cost level and lower volumes combined with time lag in price adjustment. It would be obvious to state that it's a huge potential for improvement by implementing the BEWI business model into our company. There is significant opportunities from the acquisition. As mentioned before, cost synergies on EUR 15 million, share of best practice to improve cost positioning and driving operational excellence throughout the organization. Capacity flexibility, improving ability to tailor internal production to match production capacity with regional demand, and saving transportation costs. On top of this, we will have more solutions for the customers, cross-selling which gives us growth and sharing of know-how.
A continued profitable growth from acquisitions. We increase our diversification from acquisitions. As you can see, a combined turnover of EUR 1,527 million and an EBITDA LTM of EUR 182 million without cost synergies. A tough process is ahead of us, and there is a lot of hard work to be done to improve these figures. With our diversified business model, we are robust, and we are up for the target. As you can see on this diagram, you see that we have robust earnings between the segments, packaging and insulation and raw. Have to be said here that raw is external sales and also stable earnings between the segments. As communicated before, you will see here that it will happen, a shift from margins from raw to our downstream.
As the market will support us in the megatrends, for example, in insulation and food industry. We are strengthening our position across Europe, and we are now among the leading providers of packaging components and insulation solutions. We have a proven track record. We have a leading market position, and we have established BEWI Circular in 2018 to lead the industry towards a circular economy. We have 80 facilities. We have more than 3,900 dedicated employees, and we have a broad and diversified customer base within food, pharma, automotive, leisure, thermal insulation and residential housing industry. Marie.
Yes. Good morning. I will guide you through the financials. As Christian was mentioning, we are delivering a stable growth and stable earnings in the quarter. Revenue is in the group increasing from EUR 193 million up to EUR 267 million, and 40% of that increase is coming from organic growth and 60% from acquisition. The organic growth is coming from all the different segments. However, this is now mainly driven by price. It's a mixed picture behind that statement, so I will guide you through that more in detail when we speak about the respective segments. EBITA ended basically in line with last year at EUR 34.4 million. As you can see, it is the acquisitions that is contributing positively while we do have decreasing contribution from our old BEWI, so to say.
Also here, it's a mixed picture, and our downstream segments is now performing better compared to last year. Year to date, EBITA is increasing more than 30%. Opposite here, that increase is mainly coming from organic growth. In segment RAW, we do have lower volumes in the quarter compared to last year. It is price that drives the top line upwards at this time. Sales to the building and construction industry were, as usual, down in the third quarter due to seasonality, and we have not seen the pickup materialize after the vacation period. We see that the customers are cautious and prefer to reduce stock at this time, and that is due to the fact that now the raw material prices are decreasing. Rather than building inventory, they are taking the stock levels down.
Styrene prices, they continued actually to increase in the beginning of the quarter, but as from mid-August, they decreased. What happens then is that segment RAW, they have to decrease the sale prices. Generally, this means that the margins get squeezed. We are happy to see that we can maintain a solid gross margin even so, but it is not comparable to the third quarter last year when we were in an upgoing price trend when you have the opposite and you have a margin expansion due to that you can increase sale prices and sell on lower inventory prices. EBITDA decreased from NOK 19.4-NOK 14.7, but year to date we are increasing the EBITDA, and all of this is coming from organic growth.
Moving into segment Insulation, we have sales that is increasing 70%, and 70% of this is coming from the acquisition, so the majority is coming from acquisition. Volumes in the Nordics are decreasing. However, we do see the volumes in Benelux as more stable. We have increasing EBITDA euro-wise, increasing from EUR 5.4-EUR 6.3, but it's very evident that the margins is decreasing, and I will try to explain the reasons for this. If you look at BEWI's fully owned entities, we are increasing the earnings, and we are increasing the margins, and this is back to the good price management and the business model that BEWI is operating in, as Christian mentioned. We are very pleased to see this because recall now that the volumes are lower in this quarter, and downstream is still suffering from higher raw material prices.
Because even if the raw material prices decrease from mid-August, that is not the raw material that our downstream segments has produced on in this quarter, so that impact will come in next quarter. BEWI is doing fine. The joint ventures that we have, they contribute less to the earnings in this quarter compared to last year, and that is mainly coming from the French operation. Our joint venture in France, they are serving the Italian and the French market, and actually both those countries has ceased with different tax schemes and different state subsidies over the last month. I think it's fair to say that the softer market has accelerated due to this fact. There are new schemes under discussions, but nothing is decided yet, and we do not know how they will be structured.
For this time, the French operation is not performing as well as last year. Then we have the acquisitions. They are contributing positively. This is our U.K. operation and Baltijos Polistirenas in Lithuania. However, to a much lower margin compared to BEWI's previously fully owned insulation activities. This is coming from that they have been producing on expensive raw materials and also suffering from high energy prices, and those cost increases has not yet been transferred to the customers. That also dilute the margin. Packaging & Components. In Packaging & Components, we also increase sales. It's up approximately 30% to EUR 103.4 million. As for Insulation, growth is coming both from organic growth and from acquisitions, and slightly more is coming from organic growth in this segment.
Christian mentioned it before as well, we have very good sales to our food customers, the food industry. Same goes for the HVAC customer is performing very, very well, and we are also very happy to see that sales to the automotive customers are step-by-step improving. Also here we have a positive development on EBITDA. It's up more than 20% to EUR 13.9 million. It is coming from that we are step-by-step adjusting our sales prices, due to the underlying raw material prices and other increasing production costs, as well as the acquisitions that is actually supplying to the food industry, both of them, and they have a very good contribution to our earnings.
We have Circular, that is the segment that is responsible for collection of used EPS for further conversion into recycled materials. The first nine months, we have so far collected approximately 20,000 tons of used EPS. I think all of you are aware of that this segment, we started up from scratch only a few years ago. We built it up through acquisitions, through greenfielding, and through local initiatives, and this journey continues, of course. We are improving the earnings in the quarter compared to last year. This is driven by acquisitions. It is the Berga acquisition earlier this year and also from Volker. If you compare the performance this quarter financially to last quarter, the earnings has decreased.
This is explained by decreasing virgin raw material prices. There is a longer lead time in this segment from collection through the processing until recycling, and there is a challenge to match the input cost with the current selling prices. We move on. I think most what needs to be said on this page is written in the bullets, but I would like to highlight the fact that of course the cost structure is growing. It's driven by acquisitions. On depreciations, you can see what is attributable to the operation. That is what you should link to or CapEx level. IFRS 16 is related to rent that we paid to leased real estates. Net financial items, underlying is NOK 1 million lower. There is a revaluation on shares that we hold, so NOK 4.8 million is related to our financing.
We also have taxes that is impacted by non-taxable items, so underlying tax rate is approximately 25%. We have the shares in the associated companies. There is three of them. We always comment on this, but it's to highlight how they are accounted for into our consolidated P&L. We only consolidate the share of the net profit in these entities, and that is EUR 2.4 million. We do not consolidate a top line. If you would compare this with BEWI's share of these joint ventures, EBITA, it's much higher. It's the 6.4 then compared to the 2.4 that we consolidate. There are some hidden values in here. Okay, capital structure. By the end of the third quarter, we hadn't done yet the Jackon closing, so this is before closing.
At that time, we were stable on leverage compared to previous quarter. We have a net debt of NOK 308, of which approximately 100 is related to IFRS 16. That is the discounted rental payments. Two hundred and nine, approximately, excluding IFRS. At closing, we had an unused credit facility of EUR 150 million. I think what is of interest or most of interest here is to understand how the balance sheet looks like post-closing of Jackon. We have a target to always be below 2.5. At closing of Jackon, we ended at 2.5. As per yesterday, when we divested the first tranche of the real estates, we went down to 2.1 in leverage. We are below our leverage target also post-closing Jackon. Cash flow.
Solid cash flow in the quarter. I believe, if I recall correctly, that I told you that I expected the working capital to be stable in the quarter. That was wrong. We have actually tied even more working capital to our balance sheet. Important here now is then to understand that this is related to accounts payable, and payments for styrene, so it's more timing on payables, and it's not that we are building up inventory at this time. Not visible on this page, but we have, in this year, tied extremely much working capital to our balance sheet. It's more than NOK 50 million, by the end of September. In addition, Jackon had EUR 20 million, in their balance or in their cash flow, tied to working capital.
This is driven, if you compare to previous years, it's very high, and that is driven by the increasing raw material prices and also that we have had good volumes throughout the years. This will come back then in the fourth quarter, due to the seasonality. It will be a good cash flow in the fourth quarter.
Thank you, Marie. Now to the summary and outlook. It is resource efficiency that drives our growth across our portfolio, but also most markets and mega trends. Aiming at using less materials and energy, optimizing transport, reducing waste, reuse and recycle more, it's crucial to our society, and it's what drives profitability for us and our customers. We in BEWI use our business model to try to create sustainability. For example, our division, Circular, try to change more materials to be recycled into new products. Our RAW enable us to be circular. Our Insulation division saves energy by insulating more. Our packaging and components do everything from keeping food safe to protecting food waste. We are creating energy efficient components both in HVAC industry and automotive industry. BEWI remains committed to lead the way in our industry.
When you do these things in the right way, you should grow. We have a growth strategy. In RAW, we invest in new extruders to increase recycled capacity, maintaining our raw material balance. As I've said many times before, we are aiming to have a 50% external and 50% internal sales of RAW, enabling us to outperform the market. We will continue to consolidate the recycling market, focusing on ensuring our waste streams so that we are in a good position in the future to sell recycled products. Our Insulation increase the portion of insulation solution system with high added value solutions for our customers, especially in the renovation area, which we are looking at now. In Packaging & Components, we grow in both fibre paper packaging and trading solutions, a one-stop shop for our customers. We are well-positioned in so-called challenging markets.
We expect it to come. We experience mixed market development and increased uncertainty, and we are adjusting accordingly. As I was mentioning, styrene prices continue to decrease into Q4, expecting shift of profitability between upstream and downstream segments to continue into Q4. We are focusing on integrating acquired companies and extracting synergies, meaning reducing costs of at least EUR 15 million. We have also initiated preventive measures for improved cost control. We are prepared, if necessary, and we continue to have a strong pipeline of attractive M&A opportunities when the timing is right for this. BEWI remains financially and operationally robust to meet what may come. Now we are open for questions.
Okay. We have received a couple of questions through the webcast. To those listening in, you can post your questions in the webcast console. We have a question from Herman Dahl at Nordea, saying, "Jackon's EBITA basically halved compared to Q3 2021, while sales was only down by 5%. What is driving this reduction?
There is, we see higher costs and a lag of price adjustments, and it's pretty clear to us that we are having a different model, where we do price adjustments accordingly to what we have said earlier on a monthly and quarterly basis, whereof Jackon has been more to the yearly basis. A price lag.
Second question also from Herman to you, Marie. Should we expect a reversal of the working capital buildup in Q4 with the decreasing raw material prices?
Yes. It's two reasons. One is that raw material prices are decreasing, but also due to seasonality. We always have a positive impact from working capital in the Q4 quarter. Again, I will just emphasize this again that BEWI has EUR 50 million tied to the balance sheet and Jackon 20. In total, we have EUR 70 million at this time. Not all might come back in the fourth quarter, but there will be a cash release in the fourth quarter.
The third question from Herman as well, related to the Circular business. Can you comment on the market share within the Circular business?
I will need to come back to that, but we have then got your challenge for the next quarterly report, in terms of commenting on that. We have figures on it, but I would like to ensure that the figures we use are correct. As I have stated many times, we are leading that market. Nevertheless, we will come back to that on our next presentation.
Okay. We have a question from Eva Larsson related to the Jackon integration of Jackon and the synergies. What timeframe do you see for the realization of the synergies of EUR 15 million in connection with the Jackon transaction?
We comment on that as always. It takes approximately one year to realize the synergies. Maybe it will take shorter time because we had a good preparation on voluntarily, but nevertheless, one year.
Okay. There's a second question also from Eva Larsson. You are approaching your net interest-bearing debt and EBITDA target after the Jackon transaction. Does this mean that we should see lower M&A activity going forward?
As you also see in the presentation, we have stable earnings. We are planning to continue with that. And we remain committed to our target financially to grow approximately 20% on a year-on-year basis. In long-term perspective, no.
We have a question from Henrik Larsson, which I guess is related to the same question. Do you expect net leverage to decrease going forward, or are you comfortable with today's level?
We have communicated on that before as well, and we expect the debt to decrease.
You expect the leverage to go down?
Yes.
Yes. Another question also from Henrik Larsson. How long is the time lag between lower EPS prices and when the downstream segments see lower EPS prices?
It's different from contract to contract, also back to our customers. It is on monthly basis, meaning basically two months, including storage.
We have a new question from Joachim Huse at Pareto. With the construction industry expected to be soft in 2023 but with higher demand from renovation, what are your underlying growth expectations for this segment?
It is we are exposed to the insulation market, not the construction market. That is important to understand. Even so, if in some geographical markets or when the markets somewhere geographically go down, we are also exposed to infrastructure, and we are exposed to renovation as well of insulation products. It's difficult for us to predict what is happening in the market in 2023. As we always communicate, we are prepared to adjust for the markets going down as well we have adjusted for the markets going up. We have a flexible cost structure, which enables us to handle most situations in the market, which we have done for the last 40 years. Nevertheless, my answer is also it's important to understand it's a difference between construction and insulation.
If the construction market goes down by X, it's not necessary that the insulation market goes down by X because of renovation and infrastructure.
Thank you. We have a question, I think maybe for you, Marie, from Morten Normann at Carnegie. Do you have a ballpark number for achieved synergies from acquired companies in Q3?
I don't have the exact figures. Also we have the figures, but I don't have it in front of me. I need to come back on that, sorry.
Okay. I will come back to you on that, Morten. We will also come back to Herman on his question. We have no more questions right now. If there are any other questions, please post. Otherwise, I think we will conclude the presentation.
Thank you for listening.
Thank you.