Hello, and welcome to the presentation of the Q4 and full year result for BEWI. My name is Christian Bekken, and together with me, our CFO, Marie Danielsson, and Stein Inge Liasjø, who is heading the strategic functions in BEWI. Today, I want to draw your attention to three things: the solid increase in profitability we deliver from the strong development for the packaging and component segment. This goes for both Q4 and the full year. Secondly, our continued positive volume development to the building and construction industry. And thirdly, how we are securing increased profitability going forward. Before we go into the result, I want to take the opportunity to thank all our employees for their effort and dedication in 2025. Our people are the most important factor for us to improve operationally and to strengthen our market positions. So thank you to you.
BEWI's vision is protecting people and goods for a better everyday. It means a lot to us. Here you see a picture of some of our solutions. The fish boxes protect seafood, making sure it can turn into safe and fresh meals for the consumers, and at the same time, it reduces food waste. Insulation roofs make the houses more energy efficient and warmer or cooler, and components to child seats make it safer for children to join you in the car. And then we protect the resources we use by reusing and recycling it again. Like in here in Fredrikstad, last week, we opened our seventh recycling facility and the first EPS recycling facility in Norway. It's not the largest, but this facility benefits from being a part of the insulation facility.
Here, we can reuse the material directly into the new insulation boards with over 55% recycled material. Last year, the share of recycled or non-fossil materials in our products was 34%, above our 30% target. We have the technology, and we have the capacity, and the solution works. Of course, now, the development in taxation needs to come. We are pleased with the results, especially for Packaging & Components. Q4 developed fully in line with the previous quarter in 2025. We have volume growth for all segments. The Packaging & Components business delivers strong results, and it's the key driver for growth in sales and EBITDA. And we are increasing our deliveries to building and construction industry as well. For the full year of 2025, we deliver sales of 3% and an increase in EBITDA of 12%.
Almost the exact same growth applies for Q4. I would like to highlight three key points related to the result. The Packaging & Components segment increased its EBITDA by nearly 20% from 2024 to 2025. This resulted in an EBITDA of more than 15% for the full year in the segment. And remember, Packaging & Components accounts for 43% of our total sales for the year. The segment is made up of several end markets. The growth in sales and EBITDA comes from all these major markets. The second relates to Circular. Here, the EBITDA is still negative, which we are not pleased with, but we have seen good improvements from the measures taken. This is not visible in the Q4 results, partly because the low virgin prices put pressure on gross margin.
With the raw material prices increase in Q1, this will have the opposite effect in Q1. We are still confident that we will make the segment profitable for the year. And the third point is that we, in Q4, made an active choice to stock up our inventory at a very low and attractive price, which will have also a positive effect going forward. At our Q3 presentation, we made it clear that improving the profitability is our key priority. And let me repeat what I said then. We are not happy with the EBITDA margin of 10%. We have taken several measures to improve, all are part of optimizing our value chain. Again, there are three key areas. Operational improvements: we have renegotiated supplier agreements, getting significantly better terms.
In number, we will get EUR 5 million in annual savings at current volumes. This is exclusive of the EPS raw material. In addition, we implement best practice across our facilities, resulting in a higher operational efficiency. We have implemented further cost reductions across the group, including reducing number of employees. This is always difficult, but it's still necessary in today's market. We have made strategic investment. Some of the investments will have a short payback time, as they are directly increasing margins. The best example is the investment in our capacity to produce EPP, the raw material used for Automotive components and also for HVAC systems. All these initiatives will contribute to improve profitability going forward at the current volumes we have, and the effect will increase further as the volumes increases.
With that, I leave the word to Stein Inge to give us an update on the operational and financial performance of each segment.
Thank you, Christian. Our business model is integrated and circular. We have three reporting segments, of which Insulation & Construction is the largest, while Packaging & Components currently contributes most to EBITDA. Circular, where we collect and recycle EPS and trade other fractions, is strategically important to both downstream segments, providing attractive raw materials, both from cost and a footprint perspective. A few comments also about the development in raw after the completion of the transaction last year. Markets were challenging last year, but there are signs of improvement going into 2026. Marie will come back to the financial results. The integration with Unipol is progressing according to plan. And from our side, this is not only an integration, but also a carve-out from the continuing business in BEWI.
We operate this as a joint venture, where the two owners have equal seats on the supervisory board. Currently, both, Christian and myself are board members. In Q4, the new CEO took office. Rick Klop is an experienced industry leader, who we believe will be very positive for the further development of the company and its offering. Moving to the reporting segments, starting with our biggest, Insulation & Construction. As you can see on the picture, Q4 and Q1 makes up the winter season and is traditionally the slowest period in our main markets. We deliver volume growth, both, in the quarter, 2%, and for the full year, 3%. There are big differences between our geographies. Our performance in the Nordics and Baltics is improving, while we don't see the same development in our central European geographies, Germany, U.K., and Benelux.
Our top line, net sales, is impacted by lower raw material prices, as well as product mix. In the Nordics, where we grow our volumes most, we have a higher share of commodity products. We see that our Circular value chain gives a competitive advantage in the market. In the quarter, we launched new products under the GreenLine brand, with up to 100% recycled gray EPS with higher insulation values. This has been well received in the market. For the full year, EBITDA is almost on par with 2024, but this quarter was weaker than the same quarter last year. Our Q4 this year is lower performing due to product mix, one-offs, and also performance in certain geographies, while Q4 last year was comparably solid. As Christian mentioned, implemented measures, including personnel reductions, have been done.
This is mostly in our central European businesses, where we've also made leadership changes. We expect this to give results going forward. Over to our second largest segment, Packaging & Components. This segment makes up 45% of our total net sales for the quarter. We saw continued positive development in the quarter, delivering strong growth both in revenues and EBITDA. Sales were up 13% and EBITDA up 25%. We have seen this development throughout the year, with sales up 10% and EBITDA up 19% for the full year. We deliver positive developments for all our major end markets. Automotive is the key driver this quarter, with significant sales and EBITDA growth, following strategic investments in customer projects and our vertical integration in the value chain. Automotive is one-third of the total for packaging components this quarter.
You should take the longer view on this business, as individual quarters may be impacted by one-offs. We have a positive long-term outlook, and we are proud to deliver vital parts to some of the most successful car models in the market. Food packaging delivers solid results, accounting for 38% of the segment, volumes are in line with Q4 last year, and if you look at the full year, has a solid growth from 2024. This is what we expected and communicated last February. The last few days, we have also heard several of our biggest seafood customers present positive outlook for their volumes going forward. HVAC is growing 12% and other is up 5%. This other category consists of numerous products to different industries, including pharma and defense industries. We see significant growth and further opportunities here.
Circular is our smallest segment, but an important enabler for our downstream businesses and the reason BEWI is recognized as a Circular company. We collected 38,000 tons last year. This means, in principle, every 15 minutes, 24 hours a day, seven days a week, 365 days a year, a fully loaded truck is delivering EPS waste to our Circular ecosystem. Recycled GPPS, which is the product that you see on the picture here, is up by 32% in 2025, giving higher utilization and cost efficiency in our recycling operations in Europe. Our GPPS constitutes about half of the business in Circular. Sales in the quarter is up 6%, and even more so for the full year, with a 15% increase. We have reduced the cost level in this business.
Unfortunately, this is offset by lower gross margins in the quarter. This is due to the link, the relation between sales prices for recycled materials with the price of virgin materials. Virgin prices have been low in Q4, but are now increasing in the start of 2026. We have also built some stock based on the low prices in Q4, which we expect to give results going forward. EBITDA for the full year is up 30%, but still on the negative side. We have built this business from scratch, developed the technology, and are now converting the material to end products with success in the market. This has been a startup business, where we now are at the level where we will be fully able to focus on getting black figures. We're confident that we will further improve our results going forward.
Here is Marie to take us through the financials.
Thank you, Stein Inge. In the quarter, sales is up 3.4%. We have volume growth, as mentioned, in all the segments, but if you look into the euro increase, the increase is mainly coming from Packaging & Components, and then we have slight increase from Circular. But then in insulation, with lower raw material prices, we have a different product mix. The volume increase gets offset by the raw material cost. If we look at EBITDA, it's up 10%. This is coming from Packaging & Components. In Circular, we do have a very good development, but as Christian and Stein-Inge has mentioned, we have a challenge in the quarter with the gross margin, following the low raw material prices, the virgin material prices, and that offsets the good underlying performance in Circular.
And then in insulation, there are some isolated impacts to the quarter compared to Q4 last year, and for that reason, and also the product mix, there is a lower contribution this year. If we then look at the full year 2025, the story is pretty much the same. Volume growth in all the segments. We have a top line that is increasing in EUR from packaging and also from Circular. And EBITDA-wise, again, it is packaging that drives the increase. It's up approximately 20%. We have good progress in Circular. EBITDA is up 30%, and insulation similar to 2024, but the negative impact that comes in Q4 impact it slightly down. If we look at the consolidated income statement, you can calculate that the COGS is 42% of net sales, to compare with, to compare with 45% last year.
This then is coming from that, yes, raw material prices is lower, but there is also a higher share of packaging and component in the sales mix this year. Personnel cost is increasing, but here you need to remember two things: we have restructuring costs, and we also have been ramping up volumes in Automotive, also some other production lines, and we do have a new facility in Automotive in Germany. If you adjust for this, then the increase is 2% in the quarter. Depreciations and amortizations, you find the details between the different categories in note five in the report. But in the quarter, it is impairment of some trade names that explains the increase that we have in this line.
Then, if we look at share of income from our associates, here we have BEWI's share of net profit in our joint ventures, and the bigger ones are, of course, BEWI RAW and our joint ventures with Hirsch in Germany and France. The negative contribution in the quarter is coming from BEWI RAW, mainly, and I think everyone is aware of that RAW still operates in a tough market, but there are also some integration costs in the quarter. As from Q4, we have amortizations of fair value adjustments in relation to the acquisitions impacting the income statement. In the fourth quarter, we have taken six months of those amortizations. That means that in Q4, we do have some extra cost impacting BEWI RAW. If you look at the net financial items, it's decreasing. It's down 20% compared to last year.
If you look at the full 2025 number, you do have an increase, but then you also need to recall that we had approximately EUR 5.5 million in additional financing cost in relation to the refinancing in the third quarter. That means that net income for the quarter ends at a -EUR 15 million, but for the full year, we have a positive EUR 16 million. If we then move to the cash flow, we have an operative cash flow in the quarter of EUR 13.5 million. Of this, we have spent EUR 8.8 million in CapEx, and this is a mix between the maintenance and the growth strategic CapEx. For the full year 2025, the maintenance CapEx have mounted to EUR 17 million. That brings us to our free cash flow, where we start with the adjusted EBITDA.
It's 21 in the quarter, and then we deduct the lease payments. We deduct the maintenance CapEx, quite stable between the quarters. Then we have the working capital, which can be volatile between the quarters, driven by seasonality. What sticks out this year and in the quarter is the inventory, because we knew that the raw material prices were low in the fourth quarter, decreasing all from April. And we knew that the prices were going up in the beginning of 2026. For that reason, we have been bunkering, as Christian mentioned, and we have an additional one month on stock, and the value of that is more than EUR 10 million. So we don't have the normal working capital release that you could have expected.
That means that we end the quarter with a free cash flow of EUR 9.6 million, and that approximately 45% of EBITDA. Finally, then, looking at the capital structure, we have by year-end a net debt ex- IFRS of EUR 197 million, and that's a decrease from EUR 264 million last year. This is explained then by the operating cash flow. We have been divesting assets, and we did the rights issue in the third quarter. Leverage then is now step by step decreasing. If we compare net debt to the third quarter, it is pretty much the same, and that is explained that we didn't have the working capital release, but we do have an increase in EBITDA, and that means that we take the leverage down further.
Cash, we end with EUR 65 million cash at hand, and then on top of that, we have the RCF of EUR 75 million that is unutilized, and that should also then be seen as available liquidity. With that, I leave the word back to Christian.
Thank you, Marie. I'll then summarize and talk about our key priorities. We are delivering on our priorities to reach our financial targets. Through the transactions completed last year, we simplified the structure and sharpened our operational focus. We have also done strategic investment in Automotive that significantly increases the profitability in this business. Then, we are improving profitability on current activity level through several measures, as already mentioned. We are well positioned for growth in the building sector, both organic from the market recovery and structural growth from the megatrends related to energy-efficient products. We are also well positioned for growth in Packaging & Components, as we demonstrated last year. This trend is continuing. And lastly, we are reducing the leverage through improved free cash flow because we limit the CapEx, and we will increase our EBITDA. And that concludes the presentation for today.
Thank you for listening, and then we'll see you next time.