Welcome to this presentation. My name is Christian Bekken, and together with me, as always, I have our CFO, Marie Danielsson, who will take you through the financials. Our presentation includes some forward-looking statement, so I would like to point your attention to our disclaimer. Before we look at the fourth quarter, I would like to start by taking a look back at the years behind us. BEWI has delivered growth for many years, but the last two years have been quite exceptional. From 2020 to 2021, we had 62% growth in net sales, and now from 2021- 2022, we deliver, including full effect from all acquired entities, more than a doubling of our net sales and more than 50% increase in the EBITDA. That is before we count synergies and our implemented profitability measures.
We are very pleased with our performance for the year as we continue to deliver solid result in challenging times. No doubt, it has been a challenging year. Russia invaded Ukraine, inflation has been high, prices have been volatile, and supply chain unpredictable. On top of this, Norwegian government has announced a resource rent tax on agriculture, causing massive uncertainty for our seafood industry. Styrene and EPS prices increased until late August, after which we experienced a significant decrease. In fact, from the third to the fourth quarter, a decrease on approximately 20%. For us, the decrease result in margin shifting from our upstream to our downstream units. Again, we see the benefits of our integrated business model. When the price of raw materials and other costs increase, it is crucial to adjust prices to compensate for this.
This is a success factor for us in BEWI and a key contributor to our continuous organic growth. Another key success factor is continuously adjusting production capacity to the market conditions. I will come back to this. For the second half of 22, there was a slowdown of building and construction industry in Europe, where the Nordic was harder hit than other markets. For us, this has had and is having an impact on demand for raw and insulation. However, as we are able to adjust our capacity and prices, we manage in this market to maintain solid margins. The demand for food packaging has remained solid throughout the year, and we have seen improved condition for our automotive industry as well. Last but not least, we put behind us a year of high M&A activity, including completion of the transformative Jackon transaction.
Let's take a closer look at the fourth quarter. The highlights for the fourth quarter are we deliver organic growth and margin improvement from our downstream units. We have completed our largest transaction to date through the acquisition of Jackon, we are very disappointed by Jackon's performance. The good news is that we are on the way to fix that. The development in the markets we operate was similar for the quarter as mentioned for the year. Raw and insulation saw lower volumes following reduced activity in building and construction industry, where the largest decline was in Nordics. Demand for food packaging was stable for the quarter, with increased volumes at the fish box facility at Senja contributing positively. There was a continued solid demand for HVAC and automotive components, although still with some uncertainty related to customer production volumes.
As mentioned, styrene and EPS prices decreased by approximately 20% from the third to the fourth quarter, resulting in a margin shift from upstream to downstream segments, in line with what we communicated in the third quarter report. Still, we have managed to maintain the gap in raw. In the transaction side, in the fourth quarter, we completed the acquisition of Jackon, the Spanish insulation company, Aislenvas, and the Czech recycling company, Inoplast. We will take a closer look at this transaction later in the presentation. In addition, we completed the first phase of the divestment of our industrial real estate portfolio. I will give you some financial highlights for the quarter and for the full year before Marie will go, as always, into detail on what is behind the numbers.
Overall, we deliver a solid result, both for the quarter and for the year, especially given the challenging times. For the fourth quarter of 2022, we posted sales on EUR 276 million, 32% up from last year. All segments except RAW segment delivered organic growth, following a strong price management in our organization. Sales for RAW was impacted by lower volumes and prices. Our EBITDA was EUR 24 million compared to EUR 26 million for the fourth quarter last year. This reduction is explained by lower contribution from RAW. The reduction, as you can see in EBITDA margin, is down, which is partly explained by RAW, but mainly by the dilutive effect from consolidating Jackon into our figures. Let's take a closer look at Jackon's development.
In October, we could finally complete our acquisition of Jackon and start to integrate Jackon business into BEWI, more than one year after the owners of Jackon accepted the bid. First of all, I would like to say that we remain very pleased with how Jackon complements us. Through the combination of our companies, we significantly strengthen our market position and broaden our product offering to the market. Jackon is a well-invested company and has several strong brand. That said, as I said before, we are very disappointed with Jackon's performance for 2022. Jackon had revenues on EUR 423 million, with an EBITDA on only EUR 24 million. Of this, only two months was consolidated into BEWI's accounts, amounting to close to EUR 54 million in sales and only EUR 1.5 million in EBITDA.
The three main reason for the disappointing results is lack of price adjustment, too high cost base, and in extra, high Nordic exposure to a difficult market. The good news is that this is possible to fix. To a certain degree, it is already fixed. Since it took so long to complete the transaction, we had plenty of time to plan for the integration with Jackon. Since the completion, we have digged deeper into the operation and the numbers, and our key priorities are: to improve the profitability in Nordic insulation business. We have already reduced the number of employees by more than 100 people. We have implemented strict cost control, including freeze of new hires and external consultants. We will implement further cost savings measures shortly. Most importantly, we are implemented the BEWI Way, meaning that we adjust prices and cost and capacity to current market demand.
Remember, costs are now also reduced due to the simple fact that the raw material prices has gone down. We also need to adjust capacity to current demand. Following the combination with Jackon, we will optimize our production footprint and adjust our capacity to the current demand. We have reduced the working shifts at several of our facilities. We have decided to close one facility and to convert a facility from insulation to a recycling business in Nordics. In total, we are implementing annual cost savings of EUR 5 million in addition to the synergies. We have a good track record of extracting synergies. In this case, we are going to extract more than EUR 15 million, and we are very confident in our communicated synergy target.
More than 50% of the planned initiatives are already implemented, and approx 50% of them will come from procurement, transport, and logistics. In BEWI, we have a long tradition for divesting our real estate, as it provides us with a strengthened financial position. Last summer, we announced that we entered into an agreement for sell of real estate portfolio on NOK 2 billion. In November, we sold 11 properties valued at approximately NOK 900 million, and we expect to sell the remaining part of the portfolio during the first half year this year. Let's look at some of the organic growth initiatives in BEWI.
We tend to talk a lot about our acquisitions and how they fit our strategy, but it's important to know that we also have an ongoing organic growth initiatives, meaning we invest a lot in BEWI in organic growth, and they have also invested a lot in Jackon in organic growth. Here is a selection of three projects. Two new fish box facilities on the long-term agreement with SalMar and Mowi. We have built a new fish box facility at Senja next to SalMar's new processing facility in InnovaNor. The volumes from the facility increased throughout 2022 and contributed positively in the second half of the year. Volumes will increase further in 2023, as we did not have the full effect last year, and since SalMar now has completed its acquisition of NTS, which will increase their volumes.
In addition, we are well on the way with building a new packaging facility at Jøsnøya under a 10-year contract with Mowi. We have invested to increase our production capacity of recycled material and Grey EPS. We invested in an extrusion line at our facility of raw materials in Etten-Leur, which will increase our capacity by 30,000-50,000 tons, enabling raw to grow more than 10%. As we now will increase the internal sales due to the recent acquisition, this capacity increase will contribute to a good balance between internal and external sales in raw materials. Also investment in a production line for construction board for the European market. This is an example of investment project initiated by Jackon. Through the new line, we almost double the current capacity of Jackon boards.
Jackon boards are used in bathrooms and sold in many European markets where the product has a market share of 20%-30% and the demand is high. To sum up, our organic growth initiatives are important to secure our long-term competitiveness and to secure growth also in difficult times. In fact, these initiatives result in a growth of 3%-5% in addition to regular market growth, which means for us between EUR 50 million and EUR 75 million added to our pro forma sales the coming years. 2022 was a busy year. We have completed seven acquisitions, adding close to EUR 600 million in sales. All acquisitions are in line with our M&A strategy. We have broadened our offering with complementary materials through Eskefabrikk and Paper Packaging, ball pools, PIR and sandwich panels, and what I spoke about, Jackon's strong brands.
We have expanded geographically to U.K., the Baltics, and Spain. We have strengthened our market position through the Jackon transaction, and we have expanded our Circular platform through the acquisition of Berga Recycling. All these transaction increases our diversification, which remain a key success factor to us. We have shown this overview before. Lately, the geographic diversification has increased following our expansion. Looking at the segments, Circular has increased its contribution and so has also Insulation. However, this chart includes reported numbers for BEWI and not pro forma, so Insulation will have a larger share when we include acquired companies. Our exposure to the building and construction will increase to around 60% when we include acquired entities, which we are very pleased with given our strong belief in the long-term potential for this sector, meaning Insulation business.
Our diversified and integrated model makes us quite robust to the changes in raw material prices and mixed market developments, as we have shown now and are showing always. To sum up, we have continued to grow in 2022, and we will continue to grow going forward, partly based on our organic growth initiatives and also due to the acquisition done last year. Of course, we will continue to grow via acquisition when the timing and the companies are right. We are a strong European player with a broad local footprint. We grow in line with our strategy. We have integrated in diversified business model, which enable us to have robust earnings, and we have a proven track record for adjusting prices and capacity to current market, and also to extract our synergies from our acquired companies. Our organization is already ready for further growth.
With that, Marie, I leave the word to you.
Good morning. We look into the financials. Wrong direction. Here we go. In the quarter, we have grown the revenue with approximately 30%. This is coming from growth in our acquired entities. We have growth in our downstream, but we do have negative growth in our raw segment, and that is due to volumes, and it's also due to decreasing prices. Year- to- date, we grow approximately 40%. It is acquisition, but I want to highlight that we do have organic growth in all our segments. EBITDA-wise, we end the year, or the fourth quarter with an EBITDA of EUR 24.4 million. This is coming from, again, acquisitions. We have negative growth in segment raw, but we do have positive contribution again from our downstream.
Year- to- date, we do increase EBITDA with 20%. 10% is related to acquisition, but 10% is increase in our organic, in the old BEWI, in organic growth. That is growth in all our segments besides Circular that have had a quite tough year, and that is in particular in the fourth quarter. All in all, it has been a stable quarter with growth, continued growth in our downstream segment. It has been a fantastic year where we have growth in all our major segments. Adding to that, we have the acquisitions, and there we have only started with the integration work. Again, there is different market mechanism, so I will go through the different segments and explain how they develop then.
I mentioned that we do have lower volumes in segment RAW, and that is due to that there is a more soft market in the building and construction market, and that is in particular in Nordics. We also experience that our customers are very careful looking after their own stock, and keeping their low stock low, and are expecting lower raw material prices into Q1. What we can see currently, this changes from not day to day, but it changes. The market prices is actually rather, it's stable, but if it's somewhere going, it's going up. Looking at EBITDA, it looks like a heavy drop, and it is. We lose EUR 9 million approximately in this quarter compared to last year.
That is not due to the gap or the gross margin because we actually have the same gross margin pretty much this year compared to Q4 last year. It is explained by volume. It's also explained by that we do have a higher cost level, and that is both in production cost, which is basically chemicals, energy cost. We also have higher fixed cost this year. Part of that is related to increased maintenance cost, which you can see as semi-fixed. We also have higher cost for ICT because we have implemented a fully new ERP system in this segment. 50/50 approximately between volume and cost structure explains the drop in the EBITDA.
If you look at the gross margin compared to the third quarter, it is lower in the fourth quarter, and that follows the natural trend when you have decreasing raw material prices, and that is approximately 20% in Q4 compared to Q3. You always get a hit on the margin in the upstream due to inventory adjustments. We have actually managed to keep up the gross margin very well even so. It is lower than the third quarter. Just short on the year-to-date, we do increase organically and with acquisition approximately 50/50, but year-to-date organically we grow.
Also worth mentioning because we have spoken about Jackon, we say it's a disappointment, but I think it's worth knowing that if you look at Jackon's raw segment, it actually performs better than BEWI. It's in the quarter, it's also year-to-date, which you will find in the appendix. That is due to that they have an extremely well-run factory. They have worked with price management in this segment, and they have had a slightly different internal price settlement internally, which we now are aligning with the BEWI structure then. Insulation. In insulation, we have more than doubled the revenue. Of course, this is coming from the acquisitions mainly, Jackon being the main contributor, but we also have U.K., we have Lithuania in here as well.
Organically, we have a growth in the quarter of approximately 5%. If we start with the organic growth, we all know that building construction, it's down. That means, yes, we are impacted. We do have lower volumes in the quarter, and it goes in particular in the Nordics. However, from an EBITDA perspective, we have managed to handle this extremely well, and that is through the price adjustments we have adapted our cost structures, and now we are favoring from that the raw material prices are decreasing. When you see the EBITDA margin on 7.1%, you need to read between the lines here because organically, the old BEWI, we have done one of the best fourth quarter ever. The EUR 7.5 million, it actually stands also for the organic number because net acquisitions and divestment is zero.
That means that organically we have an EBITDA margin of 14.6%, and that's an increase in euro with 70% in the fourth quarter. BEWI has done it fantastically in this fourth quarter. That also goes for the year-to-date number, where we have an organic growth and the margin slightly above last year. Again, I will repeat a little bit of what Christian said, because if I speak so highly about organic, and the BEWI that we have had control of for the full year, then you can question the acquisitions, and Jackon again, the main contributor. It's, again, keep in mind, consolidated from November, which means considering the Nordic exposure, it's a low season for insulation.
The Nordics is the region which has been the most impacted by the softer building and construction market. Jackon has not adapted their sales prices and cost structure. All of these measures are taken. We have already started, and the additional measures that Christian already has spoken about. I just want to highlight because if you just look at 7.1, yes, disappointment, but keep in mind that BEWI has done one of the best fourth quarters ever. Packaging and component, that is an extremely stable segment. Growth in the quarter is mainly coming from the acquisitions. EBITDA-wise, we growth both organically and with the acquisitions. It's back to that we have a very solid and stable demand in the food packaging segment.
Senja, the greenfield that we have started this year and is ramping up, performing extremely well. We do have increasing volumes in HVAC and in the automotive customer segment. Step-by-step increasing. The acquisitions done this year is mainly to the food packaging industry, which is extremely stable, non-cyclical. It's the paper packaging company, Trondhjems Eskefabrikk. We have bought fish box production in the U.K. through the Jablite acquisition, and Jackon is mainly on the packaging side, fish boxes as well, even if they do have some industrial packaging in there too. This story goes both for the quarter and year-to-date. Then we have Circular, the segment responsible to collect used EPS. We have actually increased or collected tons with more than 50% this year, which we are extremely proud of.
Now we have 29,000 tons collected EPS. That is so important to us because that is what make us, that helps us to be a closing loop and also to be able to offer our customers EPS with recycled content in the downstream. It's not just the collection that we have invested in and increased. We have also increased in our recycling capacity. Now we can actually recycle just as much as we collect, and previously we have had to outsource part of that recycling. Financially though, it's not the best quarter for Circular. That is explained by that Circular have a much longer value chain compared to our other segments.
That is because they have to collect, then they have to process, they have to process again, and then they sell it to the market. That means that the time between they buy the recycled material in a totally different market compared to when they sell the recycled material. Underlying it is dependent upon the virgin prices, and again, virgin prices has decreased 20% in the fourth quarter. That has impacted Circular's result. Looking at the consolidated financials, don't need to comment on net sales. I want to highlight other external cost. It sticks out. It's high. It's explained by, we have had high cost for transactions. It has not been, it has been a costly journey with the competition authorities in many ways.
Financially is one of them, that we couldn't close Jackon, is another way to look upon it, not until after one year. That impact other external cost, then as you know, we have already announced that, we have made a settlement with the European Commission, on a case from 2013, that is also impacting other external cost. On our net financial items, that also sticks out. Underlying the increase is approximately EUR 2 million-EUR 2.5 million in increased financial cost because we actually had a revaluation of shares in our Q4 2021 number that positively impacted the number.
The increase of 2.3, if I remember correctly, that is related to that, yes, we have a higher debt with all the acquisitions that we have done and all the investments that we have done. You're all aware of where the interest rates are going, that is a higher cost for financing. Yes, more on the financial capital structure. We have done quite many transactions in the quarter that impacts the balance sheet. We closed the Jackon deal. We closed late in December the acquisition of Aislenvas, a Spanish insulation company. We have divested real estates. We have distributed dividend. All in all, this means that the leverage has gone up, the return on capital has decreased.
What we are working on now, as Christian mentioned, is the divestment of the residual of the real estate portfolio that we are about to sell. With that, our leverage will come down again then under our target of 2.5. On cash flow, worth mentioning here, we do have a positive cash flow in the quarter. It is lower than last year, mainly explained that we haven't had the cash release in working capital that we normally have and expected. We built some inventory that is in Circular, and it is in segment Raw. We also have some impact from payments in our styrene supply, which can hit quite hard actually between the quarters depending upon when we pay them.
CapEx, we speak about what is maintenance CapEx, what do we need to spend to keep the current business up and running, where we have a target to not spend more than 2.5% of sales. We have spent slightly more, but I would say it's, we have spent in line with our target with the 2.5. On top of that, and what drives the major part of, or the major share of, the CapEx is those larger investments that Christian already have mentioned, where we invest in new extruder line for recycling, increasing recycling capacity, a new packaging facility, and a construction board in Belgium that's a part of Jackon. That is the main. I think with that, Christian, I leave it back to you.
Thank you, Marie. As always, I have to do what I promised my colleague, and that is to smile a little bit more because we are working hard in BEWI. It's also so that the merger between Jackon and BEWI, it's a fantastic merger. It's a fantastic opportunity. We are now 3,300 hardworking employees. As always, I will still underline that we have much to learn from the Jackon employees, which are together with us now, as we can learn them. The combination between their market power and our structure BEWI Way is what creates the great future. To sum up, we continue to be well-positioned in challenging markets. The market development -- yes, it is mixed.
The building and construction industry is expected to be down around 10% in 2023 in volumes. That will impact volumes in RAW and insulation. Packaging remains stable. We will continue to grow from our organic initiatives and M&As. So far in 2023, the styrene and EPS prices have been fairly stable. Our key priorities, as I have said, will be going forward to integrate acquired companies and extract synergies, which is our expertise. It is to adjust production capacity to cost and to the current market conditions. It's to improve the profitability for Nordic Insulation business. Based on this, we expect continued growth in our EBITDA for 2023 as we see it now. With that, I leave the floor open for questions. Probably, Marie, you need to help me with some of them.
Thanks. I'm alone over here. Just on the inventory side, it seems like the inventory has increased quite a lot this quarter by approximately 50%, if I'm right. Can you elaborate a little bit on that? Should we expect to see some working capital release in Q1 as you said we should expect in Q4? Are there any timelines that you were into in Q3?
Yes. Considering that I know that I said it will be a release in the third quarter, it didn't happen. I will be extremely careful. I still believe so. We have had lower sales in RAW. We didn't expect that to such extent. That has impacted. We have also made some strategic decision to bunkering on the recycled material, which is in Circular, due to the current market prices. I do believe, yes, that if it goes somewhere, it should go down.
Also following our strategy to fix 30% of our going forward contracts was done by November and December. That is a success looking at the raw material price in hindsight now. That is the reason why.
Thanks.
We have questions from the webcast, Joachim Huse from Pareto. Do you expect declining sales prices for insulation and packaging as well? Does the expected 10% demand decline for construction account for lower prices as well, or is this only in terms of volumes?
It depends in which area, but, basically, we will adjust the prices to the market conditions, as we say, and meaning that, when the prices of, for example, raw material goes down, the prices of fish boxes goes down. It's not about the price, it's about the margins. I have to say that also it's probably not enough explained, but the prices from quarter three to quarter four went down by 20%, meaning that we are very clear on we are displeased with the performance on a very short basis of Jackon, and that is, changing prices in a short period. You have to remember, in the long term, it has been a fantastic journey for them as well. It is a temporary short challenge which we will handle.
To the answer, yes, of course, we adjust the prices to the raw material and energy cost at all times. On the volume side, we were speaking, and I think I said that as well, we were speaking about volumes, not about, prices when we speak about a decrease on 10% in construction in Nordics.
We have another question from Petter Mossig. How would you describe the Nordic insulation market as such and expectations going forward? The second question is, you stated you were disappointed about Jackon's business. For a comparison, how did the existing BEWI Insulation business perform in the Nordic market compared to the Jackon business?
I'll begin with the last question because I don't know if I got both of them. The last question is that the business of BEWI in Insulation Nordics is very, very small in Norway. It's basically trading, and that is profitable. It's not the same products which Jackon has, so it's different kind of products. In Sweden, we have had struggles with the Norrköping facility, and that has been non-profitable. The other factory has been profitable, and the Norrköping factory is related to the startup of an XPS line, and that we have communicated in the presentation. The first question was?
How do you describe the Nordic insulation market as such, and what are your expectations going forward?
Yeah, the Nordic insulation market is a consolidated and interesting market. Going forward, we will have need for insulation in Norway and in Sweden and in Denmark, as well as in the rest of Europe. It is the best way to preserve energy. It is a very exciting market.
Okay, we have questions from Ivar Larsen. Two questions. The first one is also related to the Jackon transaction. The Jackon purchase has proven to be very costly. What are lessons learned, and how will that affect your future M&A strategy?
Yeah. I have to say that I disagree to this, because it is what I have stated all along. We had a difficult process by applying for the process, and it took us one year, and it is very difficult for a company to be, in hindsight, ownerless for one year, and that is out of our control. The performance is a short period of time, on six month we are talking about here. We, as we said in the presentation, as we said, now, is that we are believing that this is a... or not believing, we are seeing that this is a temporary fallback, and it will be back to normal within a short period of time. We see, still, Jackon as a fantastic acquisition and, I...
Even I, an angry industry man, cannot do anything about the formal processes of competition authorities.
The second question from Ivar Larsen, I think, goes to you, Marie. Where do you see the net interest-bearing debt go after the sale of Jackon properties?
It should go down below the 2.5. That is our target, and then step-by-step improving.
Okay, thank you. We have, for now, no more questions from the webcast. I don't know if we have more questions here. No, it doesn't seem like we have. With that, we will conclude, and thank you for listening in.
Thank you very much.
Thank you.