Okay, I think we will start. I would like to welcome you to BEWI's first capital markets update. Actually, our first physical presentation since we were listed in Oslo one year ago. My name is Charlotte Knudsen. I am responsible for investor relations and communications in BEWI. I appreciate you take the time and also you following us on the webcast. We are really looking forward to share our story with you. First, I would like to point your attention to our disclaimer. The presentation includes a lot of forward-looking statements, so please take a moment to read. I will briefly take you through the agenda of today. Many of you have already met with our CEO, Christian Bekken, and Marie Danielsson, the CFO, as they conduct most of the investor relations or meetings with investors and quarterly presentations.
Christian will talk about our growth ambitions before leaving the word to our chief operating officer, which is Jonas Siljeskär. Camilla Bjerkli, our director of sustainability, will talk you through how we will become a circular company, and how we will reduce our CO2 footprint. Ville Nurminen, our director of research and development, will talk about innovation across our value chain. Finally, Marie will put it all into perspective before Christian will give the concluding remarks. We will have a Q&A session after all the presentations, and all the presenters will come up for the Q&A. To those of you following us on the webcast, you can post your questions throughout the presentations, and we will try to answer them all in the end. We will take a short break after Camilla's presentation, which will be approximately 10:20 A.M., 10:25 A.M., maybe.
We will give you a one-minute introduction to BEWI.
Ever since our beginning in the Norwegian archipelago, we have kept salmon fresh, delivered safe transportation for millions of meals, and provided safe packaging for medicines and organs. With production facilities all across Europe, we offer packaging, components, and insulation solutions to a wide range of industries. Solutions that protect vegetables, keeping them fresh and reducing food waste. Innovative insulation concepts, such as state-of-the-art rooftop systems that keep houses warm and families cozy. We protect people by making shock-absorbing components for cars, bike helmets, and child seats. We have facilities for recycling large volumes of our packaging and reusing the material to create new products. By managing the entire chain from raw materials to the finished product, we can close the loop and lead the change towards a circular economy. We are BEWI. We protect people and goods for a better every day.
With that, I will leave the word to Christian. Christian has grown up with BEWI. He's actually grown up at BEWI, at the facilities. His father, Svenn Bekken, which is also here today founded BEWI with Christian's uncle, Gustav Witzøe, and t he Bekken family is still BEWI's largest shareholder. Christian has been employed by BEWI for almost 20 years. He has been working in a range of different positions in the company, and in my opinion, he has an extreme attention to details, so he knows our company very well.
Thank you, Charlotte. I would have said that it's nice to see you all, but I'm too nervous to feel nice. First of all, I would like to thank also my father, Svenn Bekken, the founder of BEWI, for what he has started, and to remind everybody that we and the company is now harvesting on many, many years of hard work and good decisions made by people. Most of all, I would like to thank the many people in BEWI organization who is a part of BEWI today, bringing forward BEWI every day. My presentation is focused on how we plan to continue to grow. My father and uncle started the company back in 1980, we have been on a journey, and we are still only in the early phases of this journey.
Our vision in BEWi, protecting people and goods for a better every day, this is not just words. We are really proud of our vision because it really capture exactly how we create value to our customers, our employees, the society, and our owners. These images are all examples of how our solutions create value and how they protect people and goods. Bicycle helmets, protecting people, food packaging, medicine packaging, and so on. All these solutions are examples of high-value products made by our own downstream segments to a range of industries and end users. This is one of the key points in today's presentation, how we create value for our customers by offering specialized solutions that protect people and goods for a better everyday. Today, BEWI provide products and solutions from many different materials.
Yes, in Norway, we are mostly known for being a fish box producer to the salmon industry. Our history started at Frøya producing fish boxes, and we are still one of the largest fish box producers. This is only now and makes approximately 15% of our revenues. Nevertheless, a common factor for most of our products and solution is the benefit they offer. They are lightweight, shock-absorbing, and has a superior thermal efficiency. They are cost-efficient, they are durable, versatile, and moisture-resistant. For example, expanded polystyrene, or EPS as we call it, consists of 98% air, and air is the best insulation you can get. This makes our products extremely well-suited for certain product groups. It insulates well in construction projects. It's easy to customize, making automotive parts, technical components, and it's the best way to protect food in transportation.
Today, we almost only use material that is 100% recyclable, but o ne of our sustainability goals is to only produce recyclable products. We know that our license to operate is to only provide sustainable solutions in a circular value chain. This is another of our key points in today's presentation, how we are working to become a circular company with circular value chains for all our products. We will talk a lot more on that topic today. To us, the materials we use and the markets we operate in has provided us with very good opportunities. As mentioned, we have been on a journey. From 2014, we have 6 doubled our revenues through both organic growth and 20 something acquisitions, resulting in a compounded growth of above 30%.
The acquisitions includes a few transformative acquisitions, like StyroChem in 2014, when we bought our raw material supplier and became a integrated company, and the acquisition of Synbra Holding in 2018 and many smaller acquisitions or add-ons, you may say. Our journey of growth has provided us with a strong market position. Through our 40+ years of growth and M&As, we have moved from being a local Norwegian producer of fish boxes to a leading European provider of packaging components and insulation solutions with a broad European coverage, with very local presence and know-how. We have 44 facilities in nine countries, or 60 facilities in 12 countries if we include the companies we hold minority interest in. We are located where our customers are, and we have over 2,000 employees who are all experts in their customers and industries locally.
Our presence and know-how have resulted in long-lasting customer relationships and enabled us to become a leader in both innovation and in circular solutions. BEWI is the largest player in our industry in Europe. We strongly believe in the competitive advantage our integrated model gives us. What does it mean to be integrated? It means that we produce our own raw material. Then we sell it both to external customers and to our downstream segments. In our downstream segments, we produce end products. Before we collect those products again, we recycle it, and we produce new raw materials again. At this point as well, where we can outperform the market, being smart, selling the raw materials to external customers when that has an advantage, and the contrary, when it doesn't have an advantage.
Throughout the value chain, we have extensive industry knowledge, and our model has provided us with stable earnings in very volatile markets. Just to mention a few example, the oil price crashed one and a half year ago, the pandemic, the consequences it gave us for the automotive industry, for the food industry, for the e-commerce, to the current situation we see today with very high commodity prices and shortage of electrical components, and so t he world goes on with many challenges. For us, our integrated business model, combined with our diversified end user base, has proven to be a competitive advantage, not only working as a stabilizer to our earnings, but it's also crucial to becoming a fully circular business. As mentioned, our diversified end user base has been a competitive advantage to us. We have currently divided our downstream into two segments, insulation and packaging and components.
However, many of our technical components, the ones we deliver, which are a part of the packaging segment, is delivered to the building and construction industry, as we provide components to the heating, ventilation, and air conditioning industry. HVAC, we call it. Within the packaging segment, we have significant number of different end markets such as food packaging, protective packaging, pharmaceuticals, as you saw, automotive and so on. All these market demands specialized and custom-made products. Although the insulation segment might seem quite commoditized, we have actually a range of specialized products in this segment as well. Some of them was shown in the movie. The profitability is always where we add on the most value to our customers. In addition to being diversified across end markets, we are also diversified across regions.
Through the pandemic, we noticed that the different countries we operate in were in different phases when it came to restrictions, resulting in different markets being affected at different times. Today, we are a European leading player with strong market position in most of the markets we operate in. Where we have strong positions, we are also a specialized provider. Like insulation in the Netherlands, where we deliver high value-added products. Like fish boxes in Norway, where the specialty lies also in the transportation, the logistics, and the flexibility, and the delivering capacity as well. We create the most value in the specialized markets where we have these strong market positions. We believe that it is important to have strong market positions, and therefore we will continue to consolidate the market and strengthen our positions. Now I have talked about our growth journey and where we are today.
This has provided us with a very solid foundation for further growth. Now I'll run you through some opportunities ahead of us. We operate in growth markets. These are three of the most important end markets going forward, and a ccording to market analysts, they are set to have a 4%-5% compounded growth over the next five years, summing up to an expected volume growth of 25% in this period. It has always been important, and it's still important for our company to position to take advantage of these markets. Looking at the construction market, where we are the market leader in Netherlands. Through our acquisition of IsoBouw, a part of the Synbra deal, as you can see from this graph in Netherlands, make up around 50% of our sales in the insulation segment. Although less than 50% of the volume goes to this region.
This means that the prices and the margins are higher in the Netherlands, as the market is very advanced and with a high degree of value-added products in our portfolio there. For example, the picture here, you see SlimFort, the product. On the other hand, we have the Nordics, which is more of a commoditized market with higher competition. We believe there is a potential for improvement in the Nordics, including increased use of high value-added products and further consolidation as well. The whole of Benelux region has a similar product and market dynamics as the Netherlands, and therefore we are looking for further strengthening our position in that region. Therefore, we have recently announced that we are progressing to finalize the acquisition of an insulation company in the Benelux regions. This is a good example on a typical transaction for BEWI.
A well-run company with a broad product offering where we see good synergies and cross-selling potential. Here we strengthen our position in a profitable growth market. Further to the automotive market, who has currently experienced a serious shortage of semiconductors, as we all know, following a significant impact from the pandemic in 2020. However, this industry is expected to grow, and the growth will mainly be driven by the boom of electrical cars. As BEWI is a provider of EPP components, expandable polypropylene to cars, this means two things. One, the number of cars produced in general is set to increase. Two, the use of EPP components in electrical cars and in each car is also expected to increase. Which brings me to another good example of a typical BEWI transaction. Our acquisition of IZOBLOK earlier this year.
Through this acquisition, we are now the market leader in Europe with more than 20% market share of all cars produced in Europe. Although IZOBLOK is currently also affected by the shortage of semiconductors, we believe in the long-term fundamentals for the industry, and this company fits perfect to our operationals. The management team in IZOBLOK includes the best experts, and we are not only adding upstream and downstream capabilities, but important innovation capabilities as well. Here you can see some of the examples of the components delivered from IZOBLOK, also and a selection of the customers. Moving on to the more traditional packaging and components, mainly packaging. We see a very fragmented market with a high degree of customization.
Here, the market is mainly driven by the growing population, but also by the increasing demand for e-commerce and the end users focus on the environmental aspect of the products. Following the mentioning change in consumer demand, including increased focus on environmental aspects, we continuously seek to adjust our offering to meet the demand from the market and the customers. We want to provide the customers with the best packaging solution, no matter what the materials they are made from. Sometimes it's EPS, other times it's paper-based products. Sometimes it's also the combination of both. Broadening the product offering to include complementary materials is important, but most important it is to close the loop and to become circular. We are really committed to closing the loop. What does this mean? Yes, we have announced that we have an annual recycling target on 60,000 tons.
I cannot think about anyone else to have the same target in the industry in Norway, but the target will change as we grow. To become 100% circular, we will need to take back the same amount of raw material which we put into the society each year. If we, for example, produce 200,000 tons and approximately 1/3 of those are used to products with a lifeline of less than 1 year, we need to take back 1/3 of those 200,000 tons to recycle them each year. This is our real goal. My colleague, Camilla, will talk more about this and the importance of becoming circular and to reduce our footprint and the responsibilities we have later on today. We go back to talk about our journey of growth.
In addition to the expected organic growth, we plan to continue to expand and strengthen our market position through acquisition going forward, still in line with the same firm principles that we have had for the last 40 years. We have a strong pipeline of attractive M&A opportunities, and we have a well-established team and a process to execute on these opportunities. Some of the opportunities have been in the pipeline for years, while others could be popping up due to timing on shorter notice. Some are transformative, like Synbra, others smaller add-ons. Even the ones popping up due to timing, we have known for years. We really do know the market we operate in. We continuously evaluate opportunities, and we are quite confident that we will continue to be the leading consolidator in the industry. To summarize, what have we talked about? What does it mean?
It means that we have created a solid platform for continued organic growth and M&As going forward, and we have spent 40 years on doing this. We have a strong market position in growth markets and an organization with deep industry knowledge and a financial position backing it all up. Within the current operational financial framework, we aim to roughly double our revenues, more than double our EBITDA, and to increase the return of capital up to 20%. With that, Jonas, I leave the floor to you.
Thank you, Christian.
Thank you, Charlotte.
Yes. Christian has talked a lot about our integrated business model and how it is a competitive advantage that enable stable earnings. More is to become circular for us. I will talk about how we work through the value chain and the complexity to it. As Christian said, to be integrated means that we are producing raw material that is taking place in raw. We are doing the converting to the end products that is happening within the production, and we are collecting the EPS back from the market, and that is happening in the recycling. Although that we are an integrated player in our industry, there are more companies that are integrated, but not like us because we have the recycling capabilities.
Most of the EPS that we bring back is coming from the packaging, and especially the food packaging that we can reuse into new raw material, into new end products as packaging solutions or insulation solutions. If we zoom in a little bit more on raw is actually our backbone making this possible. Both factories that we have is located near the coastline due to that we need efficient supply of raw material. As Christian also said, we are shipping material to our own downstream production, but we are also shipping it to external customers, which gives us better market dynamics and intelligence. The Finnish site is covering the Nordics, while the Dutch side is covering the rest of Europe. Both factories are well invested in modern technology. BEWI is one of few that has two sites. That gives very stable production to the market.
We are not depending on just one factory as our competitors are. We are investing in new capacity to ensure specialties as recycled EPS raw material, but also other specialized value-added products. Within our production, we always strive to improve margins by delivering value-added solution to our customers. We do this in different ways. Even though that we are a supplier of commodities, we are adding value to those products as well by offering private branding, bundle sales, complementary material, but more important is that we are collecting the leftovers and the wastes. We are also a supplier of specialized products with high value, those products has been taking base in a long-term relationship with years of collaboration with our customers. We are often a part of the logistic, unloading the deliveries to our customers, handling their material in-feed to their processes.
This is adding value to us, but more important, to our customers. Not all market are the same, and Insulation Netherlands and Nordics are a good example of that. In the Netherlands, we are the market leader with high margins due to the high level of complex, high value-added products that we are selling into the market in an integrated solutions. In the Nordics, we are more of a commodity supplier in a very highly competitive landscape. In both these examples, Insulation is contributing to raw by taking raw material from our upstream. That is showing our strength in our integrated business model. Netherlands is a good example of what the Nordics strive to become, and we see a potential of adopting best practice from the Netherlands to the Nordics.
To be able to establish a strong market position, we are setting the market standards by developing specialized products for our customers. I would like just to give you one example, and that is the picture below. That is our shuttering system as an ICF system for foundation to houses. It has orange reinforcement made out of the same material as the EPS itself, which make it fully recyclable. It's not two different material, it's one material. This product gives value to the construction site by shortening the production time. The orange reinforcement that you see is actually doing that we can use less EPS. When our customers is ordering those products, they will most likely also order the commodities from us, so-called bundle sales.
Insulation Norrköping in Sweden, mid Sweden, is one of our latest acquisition and will become a full range supplier of solutions in EPS, but also XPS to the construction industry. We are doing that by really concentrating and focus on the recycled content within those products. We are still working to realize the full potential of that acquisition. Now I will talk about packaging and components. There are similarities to Insulation, and I will try to highlight the difference with packaging and components. In the packaging and components segments, we are developing products in a close collaboration together with our customers. That is the difference compared to Insulation when we are offering our customer new innovative products. The process of developing product can take up to 5 years, creating very good relations with the customer.
It starts with one idea, either from our side or from the customer's side, and e very idea will be looked into as a future potential business. We develop specialized customized product and integrated solution, and i t takes five years, so w e have a really good opportunity to look at the pipeline all the time to see that we are in line with our targets. These are images of products that we have developed close with our customers. The lifetime of these products can vary. I would like to give you some examples. In the top left corner, you see a car that is Volvo. We are a supplier to Volvo.
For BEWI, that means that we are supplying EPP components to the Volvo automotive industry that reduce noise, that will save energy for heat and cold, and we are making the vehicle or the car lighter so Volvo can extend the driving distance. Another example in the top row is the chainsaw from Husqvarna. We are delivering components that reduce vibrations for the user. In the bottom row, as also Christian showed, we are a supplier to the medical industry, and right now we are supplying EPS trays to the COVID vaccine. Short lifetime products as the fish box, maybe also as the tray of the COVID vaccine, has short lifetime, and they are designed to be recycled. A general rule, long lifetime products is a result of a long-term development with the customer, and the product is likely to be produced over and over again for years.
Coming into the automotive industry, we do have long-term development together with them, and that is a key. I will come back to that. BEWI as Christian also were mentioning, is one of the leading supplier within EPP automotive in Europe as today. This means being in control of all the necessary approvals, certificates, all the high complex technology, and also delivering quality. What we are really focusing on right now is to be close in relationship to their design and development departments. BEWI can ensure recycled content, high quality, innovation to safety critical and energy-efficient components. We do have a stable platform for further growth within the EPP and automotive industry, and we have recently won 2 tenders, where one of the tender was delivering components to Tesla, the car.
Like the automotive business with long-term relationship and years of collaboration, we are delivering highly specialized packaging solutions. Our focus is to deliver the best packaging solution to the customer, regardless of material. We can today combine different material in the same product, ranged from BioFoam that I know Ville will talk more about, EPS, paper, cardboard, PE foil, EPP, et cetera. Whatever material that will be used, we are always striving to add as much recycled material into the application or product. Just to give you an example that happens within two weeks ago. One of our biggest customers within components, Danfoss, maybe you have heard about them, actually changed from a paper-based packaging into a recycled plastic packaging because the best choice for Danfoss was to use this packaging material all over again 100 times to 500 times instead of creating a lot of paper waste.
By being a diversified supplier to our customers, we can grow together with our customers, follow our customer. In packaging, we have worked closely with the fish industry for decades. That is our history from Frøya. Over time, we have developed superior products and become an integrated part of their value chain. Fish boxes are specially designed for recycling due to its short lifetime. More important is the design for food safety. In addition to the product properties, value are added into services as we are monitoring the customer warehouse and making sure that the forecast, the order, the production, and the delivery is happening just in time. We are also taking care of the unloading of fish boxes at their site and taking care of their in-feed into their processes.
Adding to this, through those close collaboration with the fish industry over time, we have moved towards circularity with our joint venture in Poland. I will describe this a little bit more in details. Fish boxes are being produced in Norway to the salmon slaughterhouses. Salmon are being shipped to Poland to a company called Morpol that is processing the fish into food. In our joint venture that also include a factory, we are taking care of the fish box by washing the fish box, compacting the EPS, pelletizing the compacted EPS to PS granulate. The PS granulate are being shipped back to our raw factory in Finland that will use this material instead of virgin material. New raw material with recycled content will be shipped again to Norway. This is to close the loop.
As we have already stated, closing the loop is our license to operate in the future, and e very single ton of collected material is saving 75% of CO2 compared with virgin material. We want to capture as much of the waste streams as possible, we are doing that through collection of leftovers from building sites and from our customers' factories. To do this efficiently, we are developing a waste handling system to monitor the waste streams. We are setting up collection hubs for various material to make sure that the material will be recycled. Through collaboration with authorities, waste management companies, we are planning to do this at scale. Also one more good example. Recently, we have signed an LOI with the Site Zero in Sweden, Svensk Plaståtervinning.
That is the largest waste collector of plastic within Sweden, and that is really strengthen us to reach our goal going forward. We are present where our customers are located, both in recycling, logistic, and production. As an example, SalMar is building a new fish slaughtery up north Norway, Senja, and we are building our fish box factory wall to wall with SalMar. Similar cases will happen in more places across Europe. This enable collaboration, strong relationship that will last for decades and make it difficult for our competitors to enter. Our key strategic priorities include continued focus on innovation, which enable us to achieve Circularity, and that is our license to operate in the future. This will make sure that our organic growth can continue and M&As will be possible.
Innovation also means energy efficiently, that we are reducing energy consumption with new process technology that I know that my colleague Camilla will give you a little bit heads up upon. By that, Camilla, I welcome you to the stage. Camilla is our Director of Sustainability.
Thank you, Jonas. Hi.
Hi.
I will try to give you an overview of the sustainability challenges or maybe possibilities confronting our industry today, and how BEWI are working to adapt to a more sustainable production and consumption. I will start with our key strategic priorities. Seen from a sustainability perspective, we are today in a transition period where sustainability and climate change are the most important topic on the agenda. If BEWI as a company are to succeed in adapting to a more sustainable production and consumption, we need to adapt to a more circular economy. In order to become circular, we need innovation in search for more sustainable products and solutions. At least we need to increase our market position when it comes to collection and recycling. Our sustainability strategy is based on three pillars: becoming circular, actively engage in partnership, and contributing to an inclusive society.
I will not go through the whole strategy today, but focus on what BEWI means is the most material topic, namely becoming circular. I just want to highlight that becoming circular and actively engage in partnership are interlinked. We are not able to succeed in becoming circular if we are not cooperating with our stakeholders in the whole value chain. I will, in my presentation, highlight this several times. Why is circularity so important? Reading the Circularity Gap Report tells us that our current economy are 8.6% circular. If we look at the Norwegian economy, the Norwegian economy are only 2.4% circular, meaning that our economy are still linear, and we have a massive Circularity Gap that we need to close. We know that 65% of our greenhouse gas emissions are related to material management.
There is a huge potential to use circular economy as a strategy to reduce our impact and contributing to reaching the Paris Agreement. I will use EPS as an example. Today, 1.8 million tons of EPS are supplied to the market. Out of this, only one third is collected. One reason for this low percentage is that 78% of the EPS supplied to the market goes into products in the construction sector, meaning going into products with a lifetime more than 50 years. We know that EPS, in some cases, are not sorted out and goes into the mixed waste streams. There is a large amount of EPS that are not included in these numbers. However, 75% of the collected waste are coming from packaging, and out of this, 33% is recycled, meaning 67% are going to incineration or landfill.
We look at EPS from the construction sector, 9% is being recycled. This is mainly also due to that EPS from the construction sector is contaminated, making it difficult to being recycled. 91% are going to landfill or incineration. EU has set a target to increase recycling of plastic packaging to 55% by 2030, meaning that with the current recycling capacity, there is a gap of 22%. EU has also set a target to increase recycled content to 30% by 2030, and w ith the current collection capacity, this means that if the industry are going to reach the target of 30% recycled content, everything we collect today needs to be recycled in order for us to have enough recycled raw materials. That is, I think, the biggest challenge today is collection and recycling. To increase our collection capacity and to increase our recycling capacity.
BEWI decided early that we needed to change our business model, and take responsibility, and to lead the change in becoming circular. In 2018, we established BEWI Circular and set the ambitious goal that we wanted to collect the same amount of raw materials that we supplied to the market annually. We also established Use-ReUse initiative to increase awareness that we need to sort out and to collect EPS, as the EPS is a material that are 100% recyclable. Since 2018, we have invested EUR 10 million in greenfields, machines, and acquired recycling companies. In just three years, we have gone from zero to a collection and extrusion capacity of 20,000 tons, and we are very proud of that. In August, we also issue a sustainability-linked bond, committing ourselves to collect 45,000 tons within 2024 and 60,000 tons within 2026. This is the context.
Sorry, just some water. What we have done so far, and I will now go through some of our commitments and give you some examples of what we are working with in order to become circular. I just want to highlight that becoming circular, it's not just about collection and recycling. We also need to lean our production. We need to increase our resource efficiency, focusing on making more of less, and at the same time using renewable energy. We must work to keep our products in the economy for as long as possible, meaning that we are working to give our products longer life, either because the product itself lasts longer or because the product can be reused.
Of course, we need to close the loop, meaning that we need to design our products so they are able to be recycled and go back into the loop, and to collect. If we manage to lean, keep, and close our activities, we will use fewer resources, providing similar needs. At the same time, reducing our greenhouse gas emissions. If we look at BEWI's most material topic, it is our consumption of energy, raw materials, and transportation that we need to focus on. When it comes to energy, we are focusing on mainly two things, energy efficiency and transition to renewable energy sources. As Jonas was mentioning, energy efficiency is part of our daily operation. We are working with it every day, and w e are also cooperating with our suppliers to invest in new production system that will reduce our cycle time in production.
Here it is where we have the most potential to really increase energy efficiency by 25%. We need to switch to renewable energy sources. As a company, BEWI have said that within 2030, 50% of our energy sources needs to be non-fossil. Currently, 20% are non-fossil, mainly due to that we are using natural gas to produce steam in order to foam or mold our products. We have started to look for alternatives, and in one of our production sites in Sweden, we have managed to reduce the CO2 emission by 50% by replacing natural gas with bio-oil. The main challenge today is limited capacity on national grid to electrify. It's limited access to renewable energy sources. We are dependent on government intervention and to collaborate with our stakeholders to find good solutions.
Our design team are also working constantly to reduce raw material in our products. As Jonas was mentioning in his presentation, reducing the amount of raw material in our product is where we really could do an effort. We have also committed ourselves to use 50% non-fossil raw material in our products by 2030. In 2019, we really reached a milestone where we were able to produce the first 100% recycled EPS raw material. We are now in a ramp-up where we are starting to use recycled materials in our products, running test productions, and are starting to identify products where we can increase the use of recycled content. When it comes to transportation, also here we have an ambitious target, 50% non-fossil fuel by 2030. In 2020, I assume that none of the transportation was non-fossil. Here we have a far way to go.
This year we have managed to sign a contract with 1 transportation company in Sweden that are 100% non-fossil. The same as with the renewable energy sources, the main challenge today is access to non-fossil transportation. We are also working to find suppliers closer to our sites in order to reduce transportation and are cooperating with our suppliers to find more sustainable solutions. We are working to keep the products in the economy. We are mainly working with new business models, looking for possibility to reuse our products and to ensure that our products are 100% recyclable. We are working closely with our customers to identify products that can be included in a subscription model and can go in a loop. One example of this is the BEWI Box.
Today, we have produced 100,000 BEWI boxes that has been reused 50 times today. Most likely it can be reused maybe 100 times. By reusing the boxes 50 times, we have prevented the production of five million boxes or prevented the use of 7,500 tons of raw material. Here is where we really can do an effort and an impact in reducing our environmental footprint. By offering a subscription model, BEWI is also the owner of the product, the owner of the raw material, meaning that we have the raw material storage in the market, making sure to having access to high-quality raw material that eventually will be collected and used to produce new products. We are also working together with the customers to look for how we can reuse our products.
One example of that is that we are collecting leftovers from Volvo, taking it back, reshaping it to new products, meaning that we are reducing cost, reducing consumption of raw materials, and reducing the amount of waste, t hen we need to close. As mentioned earlier, our main challenge is to make sure that EPS are sorted out for collection. We are mainly working, as Jonas also was talking about, investing in collection hub to secure increased collection and sorting, collaborating with our customers and municipalities, and are actively looking for M&A opportunities. When it comes to mechanical recycling, we have reached a capacity of 20,000 tons and are investing in new extruders in order to increase our capacity. However, the limitation with mechanical recycling is that the waste needs to be cleaned.
Waste coming from construction sector that are contaminated, we have to find other solution in order to close the loop. Therefore the solution and chemical recycling is needed. Ville will come back to that, I think, to talk a bit about this topic. In all sectors, we see regulation to increase circularity and reduce greenhouse gas emissions. In the construction sector, we see the Energy Performance of Buildings Directive with requirements to increased energy efficiency. In the automotive sector, we have the End-of-Life Vehicles Directive aiming at reducing waste. We also see that our customers, such as Volvo, have set a target to reduce CO2 emissions for one car by 25% within 2025, meaning that Volvo, again, are setting requirements to their suppliers to increase recycled content, increase the share of non-fossil energy sources. For plastic packaging, a ban for single-use plastic has been introduced.
We have our producer responsibility scheme. There is a target to increase share of collected plastic for recycling, t here is a plastic tax on the way. Recyclability and increased recycled content are regulation that will come. We, as a company, welcome all of these regulations. It is easy to talk about sustainability, and it's easy to talk about circularity, but it's much more difficult to implement it. There is a lot of challenges, but as a company, we see a huge potential and exciting opportunities for new partnerships and new innovations. If we, as an industry, can manage to become circular, we have an excellent chance to address climate change, and we are committed to lead the change together with our stakeholders. Thank you. I think now we will have a 10-minute break and then continue with the presentation.
Yes.
I guess that everybody is back. My name is Ville Nurminen. I am research and development director of BEWI. I am here to tell you about the innovation and research and development of BEWI. In the beginning of the presentation, I will focus on the setup, how the research and development activities has been done in BEWI, then I continue with the highlights of different development things. In the end of the presentation, I will focus on recycling. Let's warm up a little bit with a funny picture. In this picture, you can see a guy who has done a really fantastic innovation. He has invented a wheel. Really world-changing innovation, but a pparently, you can see also that he has made a quite common mistake in research and development work. Do you know what it is? Anyone? He forget to ask the customer that what is actually needed.
That kind of a mistake cannot happen in BEWI. We are working so close together with the customer that we always know what the customer demand is. In innovation nothing is that black and white. What do you think? Would the guy invent the wheel if he would have asked the customer? This slide you have seen already in the previous presentations. What I'm especially happy of is that the innovation is selected to be part of one key priority for the BEWI Group. Circular Economy, of course Circular Economy is heavily depending on innovation. Some of the recycling technologies or Circular Economy technologies are already available, but there is plenty of different things what you still need to develop. Some technologies are simply not existing. Profitable growth, this is supporting really well our innovation actions. By doing acquisitions, we are constantly increasing our knowhow and product portfolio.
I especially like this word profitable, because I always like to say that in research and development, you should have fun. It's really fun to innovate new things but w e are not doing it for fun, we need to be profitable. You can divide our research and development activities in three different parts. We have the raw material development, then we have packaging and components, and then we also have the insulation part. In raw material development, the main site is located in Netherlands in Etten-Leur, but we also have research and development resources available in Porvoo site and in our EPP production sites in Poland and Germany. Everything which is done in terms of development of circular business, that is also handled in R&D site.
Packaging and components, like Jonas already mentioned earlier, that is done really tightly together with the customer, so it needs to be present locally. That is handled in every individual business unit. We have strong departments in Netherlands and in Denmark. In that sense, if help is needed, of course, these Netherlands and Denmark units can give it to the other business units. The main location for insulation development is also located in Netherlands. They have really, let's say, good track record from last 20 years, and they are really able to give fantastic ideas for the rest of the insulation business units. It doesn't mean that we don't have development resources available in other insulation sites, but the main hub is in Netherlands. Of course, even though we have separate research and development in these three different parts, it doesn't mean that we don't work together.
Of course, we work together. Some comparison to our competitors. We are really the largest vertically integrated player, and t hat gives us really good benefit in terms of development or research and development, if you want to say it so. One benefit is for sure that we have access to know-how throughout the value chain. We know what is going on in the markets. Really access to the business intelligence. We know what the customer demand is, w e know what should be developed. One benefit is, of course, testing. If we want to design or develop a new thing, it's easy to test in our organization. There is always somebody who can help us in terms of testing. We can do it always inside our group. One thing what I want to highlight also is the resources in equipment.
We have lab scale equipments, we have pilot scale equipments, in production scale, you just name it. We have pretty much everything what you can figure out in processing of plastics. By working together in the last bullet point, you can see already one highlight. We succeeded to increase the capacity in our Etten-Leur raw material site by 25 KT without any major investments. Unbelievable achievement by working together. Well, in some sense, you can also divide our research and development in these three different categories. Commodities. Okay, in normal insulation boards, fish boxes, simple packaging articles, those are really normal and commodity business for us. It doesn't mean that there is no space for improvements. Of course, there is, and w e are always looking for ways to make products better. Specialized products.
In the picture you can see a special product which is incorporated in the air ventilation or air conditioning machine. It doesn't necessarily need to be product as such. It can also be material, some special material. We are frequently checking what is going on in the world. If there is some special materials which we see that we could take benefit of or which could be useful for us, we are definitely ready to continue to work with that kind of a product or material. Integrated solutions, that I consider to be some kind of extra service on top of these products, like in deliveries or whatever. In few words about the materials, o f course, EPS is the main product for us or main material for us. Many of our competitors, they are feeling that EPS is already like a dog bone.
All the meat is already chewed off from the bone, but that is not how we see it. We definitely feel that there is a lot of things still that what we can improve. Recyclability and recycling, of course, that is obvious. Also insulation values, fire behavior, mechanical properties, strength, any kind of special features, for example, antibacterial properties. Those things can be added to EPS, and definitely we can create more value by doing so. XPS, that, if ever, you can claim that that is commodity, but it is extremely important for us, especially in terms of recycling. We can add already now quite a lot of recycling material into XPS production, and we are developing it further so that we can increase the loading of recycled material in XPS. There is still some space to improve also in different kind of properties, especially in mechanical properties.
EPP. By IZOBLOK acquisition, we got access even to EPP raw material production. For sure, EPP will have a more focus in research and development, too. What I would like to emphasize is the extrusion foaming process. We are the only one in the world who is now producing EPP in extrusion foaming, and it has clear benefit in the cost structure. We can basically do EPP cheaper than our competitors. Of course, we need to have autoclave process also available for certain products because autoclave process has a advantage in terms of quality of EPP products. BioFoam. We were the first company to come out with the BioFoam product. Our BioFoam is polylactic acid based, i t's biodegradable, and it's based on the renewable raw materials. Fantastic product. In that sense, you can even say that BioFoam could replace EPS.
There is still minor differences in the product properties, but you could do it already now. The disadvantage, or let's say the problem, has been price. Material prices for, or renewable material prices are sky high. In that sense, BioFoam is still meant for quite niche markets, but y ou have to realize, like I mentioned, that it's biodegradable and using renewable raw materials. At some point, price doesn't matter. Let's go into highlights. Fish boxes. Maybe you could even claim that what kind of a highlight is fish box? It's only a box. Well, I would say that is fantastic product, fish box. There is enormous amount of development on the background before you have the fish box in your hand. It starts from the raw material development, machinery development, optimizing your production, and even the service for your customer. Everything needs to be developed.
An EPS fish box is still the way best product to pack fish. There is no competitive product which can perform as good as EPS box. Automotive parts. Excellent example working together with your customer. That needs to be done really close with your customer. Again, it requires huge amount of development work on the background to take us there where we are now when we have the extrusion foaming possibilities. We have really efficient production and comprehensive design capabilities. Window frame is an example of joint cooperation together with upstream, downstream, and customer. Together with Netherlands downstream, Denmark upstream, and one our good customer, we were able to develop UV-stabilized EPS and window frame made from it, which is even working in elevated temperature. Great example of joint effort. Xire. Xire is non-burnable EPS. Let me repeat it. Non-burnable. Come on, EPS always burns. This one doesn't.
This one will not burn. Fantastic example how you can play with the features. The non-burnable properties achieved by a coating. We have actually changed the fundamental properties of EPS to be something else. SlimFort. I think that Christian and Jonas, both of them already mentioned SlimFort. I think that the SlimFort solution is one of the most brilliant solutions what we have ever developed. It contains different densities, even different colors, metal inserts, and everything is designed to help the customer to install the product as easy as possible. Because of that, it has been huge success in Netherlands. Last but not least, GreenLine, 100% recycled EPS. We were the first ones. Great. Let's go to recycling. These are the recycling technologies what is available for plastic recycling generally, but more detailed, recycling of EPS or polystyrene.
Direct reuse, I guess that we have done already decades. It means that we use our off-specs in raw material production back to the process or cuts off in insulation production, we feed it back in the process. Mechanical recycling, that is containing everything where you keep the polymer as it is. Chemically, the product stays the same. Dissolution process is something which is dropping between mechanical and chemical recycling. Chemical recycling, that means that you break down the polymer in smaller hydrocarbon compounds. By combining all these different technologies, you are actually able to achieve carbon neutral ecosystem. I guess that should be the ultimate goal. I always say that when you have carbon in this recycling loop, as long as you keep the carbon in, it's fine. Don't release the carbon. Well, to be honest, of course, you always have some leakages.
There is always some waste generated or some of the loop is leaking some carbon out from the recycling loop. Those leakages should be replaced with the renewable styrene and pentane in our case. Actually, some kind of a test quantities of renewable styrene and pentane are already available. Like mentioned, direct reuse, that we have done already decades. Now we are focusing on mechanical recycling. In this picture, it's called recycling extrusion. We know that is the easiest way to recycle plastics and polystyrene, and we also know that will be used in future for sure. At the same time, we are investigating that, basically that when it would be right time for us to jump in the train of dissolution and chemical recycling. Those are not proven technologies yet in production scale.
For us, it's wise to wait a while and see how they actually work. Mechanical recycling, we can consider that is already established quite well in our company. We have really joint effort with our Circular business, upstream and downstream. We started already 2017 with a joint venture in Poland, which is recycling the fish boxes and the EPS extrusion production in Porvoo site, which is using those recycled fish boxes as feedstock. 2019, we developed that 100% recycled grade, and the next big step will be the big extruder in our Etten-Leur site in Netherlands. 25 Kt of capacity, recycling polystyrene in EPS production. We shouldn't forget XPS production. That is extremely important part of the recycling story. In XPS production, we are able to add quite a lot of recycled material. Dissolution. Dissolution process has two major benefits in terms of recycling.
It's really a separation process, which means that we are able to remove all the contaminants, even pigments and other plastics and odor. Because of that, it is much more easier for us to get a food approval for this kind of a product, which is recycled with the dissolution. We have already invested in the company called Polystyvert in Canada. That is only some kind of a, let's say, investigation investment. We want to have the access to all the data and technical knowhow, what they are doing, and we want to know how it goes in Montreal with the full-scale project what has already been starting up. Further on, we are participating the project in Europe, PS Loop, where pretty much all the different EPS producers are present, and that site has, I guess, started already.
The original idea was that HBCD, the former flame retardant agent, would be removed with this system. Chemical recycling. Chemical recycling, you can divide in two different parts. You have so-called depolymerization, and then you have feedstock cracking. Depolymerization means that you break down the polymer to its original monomer. In our case, it would mean that polystyrene is converted back to styrene. Feedstock cracking means that you will go even further down, y ou break the polymer to smaller hydrocarbon compounds. Depolymerization, I consider that with technology provider, that is something that we might be able to do ourselves. Feedstock cracking is done in big oil refineries, so it means that we need to have a partner for that. This is only an example. What is going on in world with the depolymerization project?
There is one, two, three, four, five, six, seven different projects started or starting up in world. We are pretty much discussing all of these companies. Our target is that we would have an access to recycled styrene, at least test quantities in the beginning. The main message from this picture is that we are really in the beginning. It takes roughly five years before the depolymerization technology is really proven. You can see that there is it even for at least three different technology provider, you don't know what technology is the best. At least five years before this is really proven, and we know that what is the most efficient way to do depolymerization. 10 years, roughly, we start to have really industrial scale volumes coming out from depolymerization. Let's go to final conclusion.
I always say that research and development is all about the people. That is actually what it is. It's up to the people to innovate something. It's about smart, creative, intelligent, and ambitious people. I think that we have them. It means also that we are constantly looking to increase our resources in terms of people. If we meet a smart people who we see that could contribute to our research and development, we are ready to hire that person. Sustainable R&D strategy. This is extremely important. Everything what we develop, already in the beginning, we evaluated that in terms of sustainability. If it somehow violates the strategy, what we have selected towards sustainability, then we stop it already in the beginning. Integrated development through the value chain.
That was already mentioned that it gives us a lot of benefits that we are working in the all different parts in the value chain, especially creating the know-how, knowing what is going on in the markets, and be able to test easily different things. Finally, strategical R&D acquisitions. Even though we have really smart people in our organization, it might be the case sometimes, however, really unlikely, that somebody is even smarter than us. If that happens, Christian can always buy the company or the technology. Thank you. That is all from my side. I would like to invite Marie Danielsson to tell you about the financial things.
Thank you. Okay. Christian and the team has told you about BEWI, what we are doing, how we are doing it, and where we are heading. I will try to put some financial perspective into this. Christian already told you that we are striving for approximately doubling our revenue and more than doubling our EBITDA. That might sound aggressive, but I would say that it's ambitious. Why do I say that? I say that because you need to put that into a perspective. That you can do by looking into the history. What you see on this page is the last five years and where we are coming from. You can also understand that when we say that we intend to do this again, we are the same team that will do this with some additional core competencies.
It should be fully doable. What we have done is that we have gone from being a Nordic commodity producer to a European service and solutions supplier. We have gone from being exposed to a rather limited end customer market to a much more broad end customer market and have a regional diversification. We have gone from being rather low in our vertical integration with low volumes sold from our upstream into our downstream to be much more integrated. We have gone from a linear business model into a circular business model. Of course, we have turned from a private-owned company to a public company. That sets the scene a little bit from where we are or to what we are heading. What have we done then?
How have we been able to increase our EBITDA from the 31 only a few years back to now, LTM to over EUR 80 million? It is, of course, a well-run operation that is the foundation for everything. We have been able to capitalize on the investments that we have made in organic growth. On top of that, we have all the acquisitions where we have been able to take out the synergies. We do have scale advantages. That is an add-on to this. I would like to go back to what Ville mentioned at the beginning of his presentation as an example, when we look at raw. When we acquired Synbra, we had two chemical plants all of a sudden.
We do not only buy companies to turn them around and to learn them a lesson, this is how BEWI do it. We do it because we know that two competent companies and management, they can do a lot together. Again, with small investments, we managed to increase the capacity from 65,000 tons to 90,000 tons. That's a huge percentage in one of the chemical plants, only by sharing experience. I think also key has been for insulation to go from a commodity producer with Sweden as the main market to be a more advanced value-added insulation solution provider with an exposure to the European market. The same goes for packaging and components. We had a rather limited product portfolio back in 2017, and then we acquired Synbra. We acquired a lot of Fish Box industries in Norway.
I would say that that has also contributed a lot to this. Not visible yet into the numbers is the acquisition of IZOBLOK, where we now have become the major EPP component producer in Europe, and that we will capitalize on going forward. Moving into the future, we are striving for approximately doubling our revenue in five years' time. We believe that approximately 1/3 will come from organic growth, that 2/3 and a major part will come from acquisitions. We see clear potential across all the segments in all the regions within the different technologies. We will see growth everywhere. On this slide, you see the most important growth area that we have identified. Benelux in insulation segment, that is 50% of our insulation segment today.
There is very strong macro data out there that substantiates strong growth for the future. That in addition with M&A activities will drive insulation. We believe strongly in food packaging, mainly in Norway. It is, of course, the salmon industry, but it's also other food industry in the Norwegian market. We are shortly up in production in our new facility in Senja that Jonas was mentioning next to SalMar's new slaughtering. We have communicated that we intend to build a new packaging hub at Hitra that will also supply materials to the food industry. Then we acquired BDH and that is pretty much only a year ago. That is also providing mainly packaging to the food industry and that we will continue to capitalize on, therefore f ood packaging in Norway is important. Automotive. We believe that that is a growing market and that that market will rebound.
That in combination that we will continue to consolidate the European EPP component market will add growth. Starting with the acquisition actually of BDH because they had paper packaging solution in their product portfolio. We acquired a company called Honeycomb in Denmark a few months back. That is the start for our complementary paper packaging segment that we believe will be of importance for the future. That will be a complement to our existing customers, but we also believe that this will bring new customers to us. Finally, we come back to circular again and again, but we will of course continue to grow our circular operation.
This is both when it comes to collecting EPS streams, but also to convert it into new raw materials. Then looking at the EBITDA, it is of course the same drivers, and I will come back to that. Overall, we believe that the margins that we have today, that is a sustainable level. We do not believe that we will increase our margin as much. It will be the stable level that we are at today but w hat is important is that we increase our capital efficiency, and we measure that as a return on the capital employed. There is a page just on that topic later on in this. That is key. One could wonder that how will then the contribution look like in five years time if all this is happening?
If you then look to the left, you see how the EBITDA, where does the contribution come from today? We operate in three segments today, approximately each of them contribute between 30%-40% each. That will not be the case in five years time. If we start with Raw, they will contribute less, but they will have a stable contribution to the group. With acquisitions that we will do, their integration will increase, which means even more stable return for the group. We are also intending to expand our extrusion capacity, that means that we increase the capacity to produce recycled raw materials. That will contribute to this. Then opposite, we have had in this year an extremely high, what we call gap. That is the gross margin in segment Raw for different reasons.
We have built a business model on a normalized margin level for the future. Raw will contribute in percentage less. Increasing will Circular do, because we, as Camilla has mentioned, we have just started. We started late in 2018. We have spent a lot of startup cost. We have set the foundation with the management, with a team that runs it. It is about continue to get the streams and to be able to compact the volumes further and to make it then more profitable. Insulation, three drivers, and that will increase in percentage. Christian spoke about our Insulation Segment that is pretty much divided into two different businesses. We have the Nordic market that is more commodity, low margin today, and we have the Benelux area that is approximately 50% then and high margin.
We have the strong macro data in the Benelux and in the Netherlands. We believe that the Benelux region will grow in relation the most within this segment. There is again, the highest margin. We also see that we have a great potential in the Nordics to increase the margins with adding new products and also increasing the underlying margins in current operation. Then of course, M&A initiatives. This will be an area where we will invest in, and it's coming back to the products that contribute positively to the society. We need energy efficient houses, so extremely important. New: packaging and component.
We have now all of a sudden divided this into thre different buckets, where we have the more traditional packaging and component that will be a little bit less. We have broken out now automotive and also paper packaging. If we start with the more traditional packaging and component area, there we believe that the growth will come from organic initiatives. Again, it will be the food industry mainly in Norway that we believe is the driver for this with the initiatives now at Senja, Hitra among other things, and also BDH then. Then we have automotive. Now it's not really fair because now we do not have IZOBLOK in the left circle since we acquired them in July. We intend to continue to grow in automotive and to buy company to further consolidate the market there.
That we believe will be up to a 10% contribution to our EBITDA base. On top of that, we have only started the paper packaging efforts that we also believe will be an important contribution to us in the future. Just before we leave the earnings and more to highlight this, I think most of you are very familiar with that. We have had a very, strange is the wrong word, different year when it comes to the EPS prices this year. Normally, we talk about the gap that is the difference between what we buy the styrene for and what we sell the EPS raw material for. This is basically segment Raw. Normally, that is quite stable. The margin is between EUR 350-400 per ton.
If you would take this curve and go back to 10 years, it is the same. It goes in that corridor. Something happened here, and that's not for this presentation, but we have had an extremely high margin in segment Raw, and that you can also see then on segment Raw's number. What you also see is then what is happening and from a financial perspective, why it's so good to have an integrated business model because then downstream, they turned opposite. They suffer from the increasing raw material prices, so they have a dip in their EBITDA. In the totality to the very right, we have a stable margin. That is why we are not that afraid of volatile raw material prices because we know that in a totality and with further integration, we can keep our margins stable.
I guess that this is the one million dollar question. If we say that we are going to grow double, two-thirds will come from M&A, how much will we spend? Here you have the answer. We believe that we will spend around EUR 300 million-EUR 350 million over the next five years in M&As. More will be spent on insulation acquisition, and we believe that we will spend quite a lot in paper and less in automotive and less with circular. In total, between the EUR 300 million-EUR 350 million. To remind you again and a little bit about the targets that we are looking for, we are looking for well-run companies. We are not looking for turnaround cases. We want them to have a clear synergy potential.
That is not that we can only take out synergies in the acquired companies, it's that they have a strong management, they have a very good business model. We can be better together. It's a cross-synergy impact. Of course, they should have a healthy, long-term outlook. It's quite common that we acquire companies that have a lower return or EBITDA than we have. What we then can manage to do and what we would like to show on this page is a few examples on how we manage to increase the EBITDA step by step. It doesn't happen overnight. It takes time. As you can see, both BEWI Automotive that we acquired on a very low EBITDA % is now up on a BEWI average level, and BDH Holding same, step by step, slowly increasing their margins. The M&As.
We also need to spend some on our organic growth because we are also going to grow a third from that. Normally, in the history, we have spent approximately 2.5% of our revenue in CapEx that is related to just maintaining the normal operation, adding equipment, becoming a little bit more efficient. That will not change. That we believe is still sufficient because we have rather well-equipped facilities. On top of that, we have spent, and we will continue to spend more in greenfield projects, and we also need from time to time to spend CapEx in relation to integration in M&A situations. At this time, we have identified that we in the coming three years will need to spend close to EUR 40 million-EUR 50 million in such projects. We have spoken about them already.
We intend to build a new packaging hub in Norway at Hitra. We intend to expand our extrusion capacity to produce recycled raw materials and to support the full circularity. We also need to spend money on ICT or on information communication and digitalization, and that is across the organization to be ready for the future. I mentioned that it is not the EBITDA percentage that is the most important for us. We believe that that will continue to be on a rather stable level. You will not see a big shift up here. What we are striving for is to increase the return on our capital employed. Again, going back and looking at the history, we have been doing this over the last year. What we believe is that with this plan, we should be close to 20% in 2026.
Where will this come from then? It is, again, that you need to invest in good production, y ou need to create a very robust operation. We need to invest in R&D so that we get all these good value-added products to the market, and we need to continue with M&As, where we can take out the synergies and become better together. That is the key that drives this. Maybe also a question that one could ask is that, how are you going to fund this? We are going to fund that with the financials that we now have available, because we did a big refinancing just a month ago for five years, that is then supporting this financial model. What we have is, of course, the cash that we generate in our normal operation.
We now have an increased bond facility where we can increase further under this framework that is up to the EUR 250 million. We have a not utilized credit facility of the EUR 80 million. That in combination supports this business or financial model. This is something that we have discussed in the management team, but when we have discussed this financial model and this ambition growth plan, we have discussed and concluded that we will never jeopardize our balance sheet. For that reason, we have kept our leverage target to the 2.5, which I believe you are familiar with. We should be able to grow, but we will grow in a pace that we never jeopardize our balance sheet and that we should at all times strive to be below the 2.5 in leverage.
Finally, before I leave it back to Christian again, is also our promise that we will continue to distribute dividends in line with our dividend policy. It's for the same reason that how will we do this? Yes, we will do this in a pace, so that we have a strong balance sheet. Always have a balance between the cash flow or financial position and again, then ending in that we can distribute dividend. I think that's it.
I don't know if it's possible to have concluding remarks on this, I will just take us out of the box. We can look at here, obviously, we are a company and we are promising a lot. Yesterday we had a meeting with our Board of Directors, and we had a dry run. This is a new word, dry run. We don't have time for dry run in our companies, in the nighttime and in the morning there we do dry runs. I was asked, "Is this too good to be true?" I reflected over that yesterday when we had a dinner and also this morning. Yes, in today's perspective, it might be too good to be true. We are very aware of what we are promising the market.
We have discussed it. We are a management and an organization that stands behind these promises we give to the market. It's not too good to be true. It's like I started my presentation. It is hard work over 40 years. It's a hardworking organization still working together. Have worked together now for 10 years with most of you. I am very confident that we will deliver on this. Maybe not always quarter by quarter. This is what is good with this presentation. When you look in the long run, when you look at the fundamentals, we will deliver on that. If you take to the last page.
We will, in a five years time, look at a company which has doubled their EBITDA, have a return on capital on 20% with low leverage. We have the capacity to pay dividend as we go. That is my concluding remarks for today. We open for questions.
Okay. We open for questions from the audience. Also, we have received some questions from the webcast. If there are any questions from the audience, we might start with Herman from Nordea. Marie, you can come up, and Jonas, come up.
Thanks, thanks for a very thorough presentation. Fantastic to see what you're doing on sustainability and also on the growth going forward. I have two questions. The first is regarding insulation in the Nordics and in Benelux and on how you're looking at the possibility to obtain the same margins in the Nordics as you've obtaining in Benelux with specialization and increased sales of those kind of products. The second one is towards your situation, you're clearly ahead of competition with regards to recycling. How are you looking at the ability to obtain premium pricing on the recycled products, both at the moment and also going forward in the five-year perspective?
We start with question number two. I think that for us, the commitment in recycling is absolute, and our commitment to do profitable growth, it's also absolute. In the shorter perspective, those can cross each other as they have done for the last three years. We have actually spent more money on recycling without getting a premium on it. I think it's difficult for us to say that the market are willing to pay a premium next year or the year after that. We shouldn't think like this. We know our business, as Camilla was speaking about. We know the demands that are coming. I think that we are more aware of what is coming than the market are.
We would just leave it to the market, but I am very confident that the result will be that the lack of recycled raw material will be the future, and the premium prices will be there. In that sense, that is a price for all of the market. It's still the same products. If it's a difference or not, it's still the same products. In the long run, I am sure that we will pay for the work done in recyclable products. The first question was more about insulation and..
Yeah. If I understood your question correctly, could we adopt the high margin from the Netherlands into the Nordic and how to achieve that? Yes, that could be done. We should also remember that the Nordic is a different market compared with the Dutch market, but certain technologies, certain products could be adopted, and that work is being in progress as we speak. There are more competitors in the Nordic market compared with the Dutch market. The market, without saying this, the market needs some kind of consolidation as well in the Nordic to achieve this.
Thanks.
Okay.
Okay, I'll take a question from the internet or the webcast. What are the assumptions for organic sales growth until 2026? Can you explain what are the key drivers for EBITDA margin expansion, please?
You take the second and I take the first then? I think that we named also the figures of the market we were most exposed towards, and they have a compounded growth on 5%. Wasn't it a question? Emphasizing on this, it's more to understand how committed the company is to actually look at what products is there in five years to choose the markets and to choose the products which are there in five years from now. We spend a lot of time together with our organization on understanding this. There is a risk of plastic bags not being there in 5- 10 years from now. We all know that bicycle helmets are in there five years from now, one way or another. That's looking at the market.
You can develop a bicycle helmet. It can be inflated bicycle helmet. It can be a normal bicycle helmet, but you know the market. To understand where you should put your resources in growth market, I think that's the most important thing. We do believe that that organic growth and our position will bring us to grow those 25%, which we spoke about in the presentation. Camilla?
No, we didn't say that we will have margin increases, which I think the question was. To remain then on a good, stable EBITDA level, I think it's three drivers. One is back looking at the segments insulation. We do have very strong macro data for the Benelux market. That is a high margin business for us. That in combination with being able to take up the margins in the Nordic will contribute well. We believe strongly in the Norwegian food market. That is non-cyclical. That also creates stability over time. We believe that will grow both through the initiatives in the new Fish Box factories and the intended investments, and also from BDH. Then the third is Automotive, where we only have started, and we now are in a rather tricky situation.
We know, again, based on macro statistics, that car production will come up again, and that we also see as a driver for good contributions coming years.
Just a quick follow-up question. Why would you not assume any margin expansion as you are doubling the revenue base? Should there not be any positive effects from economies of scale or improvements of product mix? For example, higher share of value-added products, particularly in the Nordics.
Yeah.
Marie.
I'll take that question because it's a difficult question because I have to explain then that the part of the business model to BEWI, it's to acquire company and to focus on the synergies to improving those companies together. In the big picture, that is more of the amount we are talking about. Of course, every day we are working, every morning we wake up and we try to improve the processes we do every day. In that sense, we should improve margins, but also you have an inflation of costs, so it's a difficult situation to discuss. I think it's more, if you call it down to earth, to talk about the realistic level is to keep and maintain the cost structure we have on our products today.
In terms of what we are talking about in insulation and higher added value products, yes, in some countries we will have better results due to improvements, but in other parts as well, which we have spoken about today, there will be difficulties due to various reasons. In general, we will maintain our margins on what we do, and then we will try to do better margins over the acquisitions we do and the synergies we take out for the company.
Okay, we have a few more questions. If you're spending EUR 300 million-EUR 350 million on acquisitions, how much will be financed by shares or own funds and debt?
There is two sides. We can finance everything, as Marie showed, by our own capabilities financially, but i t's also a privilege to be a part of the BEWI journey. I think that many of the companies joining BEWI in the future will also become shareholders due to the fact that they will be a part of the journey as we are an industry company made for industry people. That's an invite to people, owners that have companies that can be a part of the BEWI journey.
Okay, we'll take a few more from the webcast. What are your criteria for M&A in terms of profitability of target companies?
As we always say, we like companies which have the stable earnings over time, earning between 5% and 10% EBITDA, where we see the synergy potential to take them up to the level which BEWI is at now. That is a standard, but it's a very complex picture, more than EBITDA, but that's the simple answer.
I think we answered this next one, CapEx requirement per year to reach 2026 targets. I think that was in your presentation, Marie?
Yes. That is approximately the 2.5% of revenue as a base. On top of that, we have, as per today, projects in the pipeline, not started, but that we would like to move on in the range of EUR 40 million-EUR 50 million.
You mentioned your jointly owned downstream facilities. Could you elaborate a bit on the medium to long-term ambition for these minority interests, both in terms of growth and margins going forward, but also whether you have the goal to making them fully owned eventually?
Obviously, if you look at BEWI's strategy, and I cannot speak for our joint-owned companies, but from BEWI's view, it's a target to make them wholly owned by us, but it's various of aspects bringing up to this. We have the same targets for the joint-owned companies as we have for ourselves, the same expectations. Everything is the same for our joint-owned companies as it is for us. Obviously, it's a strategical position, and we will at all time consider what is best for the company in terms of having those strategical positions or not.
We just have a few more, and then if there are any questions from the audience, we'll take that. Natural gas prices for the winter keep rising. How big is the natural gas in your raw materials needs? Is there a gas price at which you will need to curtail some of your production? I guess you will answer maybe.
Could that be a question for you, Camilla?
No.
Well, I don't.
It's difficult to understand how much of our production. It's impossible to answer that. Even with our detailed knowledge, I do not think that's possible to have in the top of our head now, so we can come back to that question.
Yeah. Exactly.
Yeah. Thank you.
Of course, it will have an impact, but the increase will not be that sky high that it would have some kind of a meaning to our production.
In general, the cost level we see now in Europe will affect our companies as all companies in material prices, in energy prices, and so on. In terms of in the total, it is less of our cost structure. It will not have severe impact, and we do not see anything that it will really impact our company today.
Okay. Just a few more. One, if you take EBITDA the last 12 months of EUR 83 million and correct for normal GAAP, what is then your corrected starting point relatively to 2026 goal of EUR 170 million?
I think we are back to that you cannot only look at one individual segment, because if that wouldn't be the case, then we would have seen much higher earnings in our downstream. It's back to that always need to look at the total. We believe that the total is
Still a valid base.
Yeah, I totally agree. I think it was very clear on the presentation as well, where you see the overall margins of the overall company. We have communicated that very thoroughly and direct. I think that's the expectation going forward as well.
Yeah, a follow-up question for that, using more raw material internally would automatically increase margins due to higher intra-group revenues, which lower group revenues. Could you elaborate a little around this, compared to no change in overall EBITDA margins for 2026? That's a tricky question as well. We will continue to grow our volumes in raw, and we will continue to acquire companies as well. We will be integrated to a bigger part. On the other hand, we always sell to market price, internally or externally. It's more about
You have to remember, in terms of our growth and all our targets also, the recycling capacity we are building up to reach 60,000 tons will even out the total capacity if you include that with the raw material production as well. We are striving for having the same balance between raw material, both virgin and recycled, and the downstreams we have.
Okay, regarding the gap between the styrene and EPS prices during the autumn this year, what's your expectations?
I think we were communicating that on the Q2 report, and I think that our expectation going forward, and we promise not to speak in short term here in this meeting, but I'll do one exception. Our expectation is that we will see the same strong market, in what we call the short time of next half year. We see no changes in the pictures which we have shown. I think we communicated that on the Q2 presentation, so that it's not forecasting in any way.
There's another question which I think Marie has answered. The negative impact on earnings in first half this year from high raw material prices. I assume this person then, thinking about the downstream segments. How large is that impact, and when will you have compensated for this? I think we partly answered that because we compensate for that through the raw material segment.
Yes.
We also were pretty clear on the Q2 outlook that we expect the Q3 and Q4 to be strong quarters. Capital is currently cheap and there's a lot of companies looking for acquisitions. How much are multiples increasing on targets?
Yeah. Back to our fundamentals, as I have said in the presentation, everything is timing, and obviously capital is cheap, but we will continue what we have done for 40 years, and everything has an exception. Still, again, we need to look at for the next 10, 20 years. In next 10- 20 years, both the capital cost will change and the companies will change, and the prices of companies will change. We will try to remain a independent player, and we will continue to do what we do, and that is to acquire companies that we can take out synergies and make them stronger together with our company than they are standalone.
Lars, just a second.
Thanks. With your history going back, creating this integrated value chain, I know the history with starting with StyroChem. You seem to have been successful in taking out a lot of the raw material risk, and you managed to build a larger company with less risk. You've had a phase of a lot of M&As, building many verticals. When you then give a strategy going five years forward today, very impressive with the focus on sustainability, giving a lot of attributes, and also with the interesting R&D strategy on understanding market opportunities. For me, it's not clear that the very strong focus on M&A, buying cheap and making them profitable into your margin level, rather than trying to have a strategy where maybe the focus could be more on where could you use your pricing power?
If you have the best market knowledge, you're exposed to a lot of these verticals. I really see an opportunity to be a more profitable company through penetrating the most attractive segments rather than building broad and going for volume markets. Maybe there's something that I quite don't understand because I really see BEWI as a company that could be very profitable, and the most profitable through your R&D focus on 100% recyclable products. There's something there that I'm still looking for you to be even more profitable.
I like your question. It's a challenging question because you are asking if we do not have more plans to be more profitable. I promise you, in the market strategies, in the operational strategies, in the R&D strategies.
In all over the companies, we have shown for the last year that we are aiming for being profitable. Even in our circular strategy, we are aiming for being more profitable. On that side, I would expect our company to become more profitable. We are also very humble because we have 40 years experience in our company. Market, they go up and down. Sometimes it's very easy to see, okay, here is a market. For example, now we see a market in raw material. It's easy to have high margin, and there is many who are exiting out of this market. You can use all your time and spend all your resources on that. Two years, maybe three years afterwards, they changed. It's become different again, and then you see the downstream.
I think that is the fundamentals of our company, not to be more and more profitable. Obviously, we want to be more and more profitable, and we have shown that we are more and more profitable. To impact the society with our knowledge on how to bring companies together, to bring customers together, and to really innovate for the future, that is our profession in terms of taking over company and acquiring companies and making them stronger together. It's more than a acquisition strategy where we acquire cheap companies. I have never come to a company and said, "I want to acquire your company cheap." It's like saying, "You have a bad company, I want to buy it." I look at companies with potential.
I look at companies with possible synergies between us and companies that can make a future better together with us than they are standalone. From there, we have the strategy of growing, merging companies more than acquiring them. I understand your question. I hope that was more clarification on how we are thinking. I think it's impossible to have a margin on 25% for an industry company, for example. It's not impossible for BEWI to have 17% next year.
All right, thanks.
Okay, then we just have one final question. I don't know. It's about will KMC Properties benefit from the new acquisitions?
No. Also, we in BEWI, if it's KMC Properties, if it's Sagax or whomever, we always look at the possibilities of optimize our capital structure in terms of sometimes divest companies or divest properties as well. This is what we will continue to do always.
With that, we say thank you for attending.