Welcome to this presentation of BEWI's result for the third quarter of 2021. My name is Christian Bekken, and I am the CEO of BEWI. With me today, as always, I have our CFO, Marie Danielsson, who will take you through the financials. Our presentation includes some forward-looking statements, so I would like to point your attention to our disclaimer. You can also ask questions on the webcast during the presentation. Now, I will briefly take you through some highlights for the quarter before Marie will go more detailed into our numbers. Highlights for the quarter. BEWI delivers yet another solid quarter. This is driven by strong demand and growth, improved volumes and prices in all segments. Food packaging in Norway, particularly strong. Completed refinancing in August. Issuance of a five-year sustainability-linked bond of EUR 160 million under a framework of EUR 250 million.
Launched intention to issue subsequent bonds under existing framework. Completed acquisition of majority stake of IZOBLOK. Launched a tender offer to acquire remaining shares. Acceptance on offer to acquire Jackon Holding. Acquisition of U.K. recycling company Volker- Gruppe and acquisition of Belgian insulation company Kemisol. Briefly looking at the numbers. Of course, we are very pleased with the number. For the third quarter, net sales are up by 58%. 43% is organic growth from volumes and sales prices in all segments. An EBITDA of EUR 34.2 million and 8% margin. Strong market and demand from segment RAW improved margins in Packaging, largely explained by positive developments for food packaging in Norway. Still, the weak automotive production, due to the lack of components, negatively impacts our result. The acquisition of Jackon Holding is the most transformative so far in BEWI's history.
1st of October, we launched an offer to acquire 100% of the shares in Jackon Holding. 15th of October 2021, we received an acceptance of the offer from all shareholders. Akselsen family, through investment company HAAS, will receive shares, and we are looking forward to work together with Akselsen family and to continue developing the company. The other shareholders will receive consideration in the form of cash. The offer reflected an enterprise value on a cash and debt-free basis and with an agreed level of working capital of Jackon of approximately NOK 3,350 million. Completion of the transaction is subject to satisfactory due diligence, resolution of the BEWI's general meeting to issue consideration shares and customary closing conditions, including regulatory approvals. Transaction is expected to be complete during first half of 2022.
BEWI will finance the transaction by the issuance of new shares and from cash sources available to BEWI. Jackon is a company with a long history and with stable results, as you can see here. Jackon has been a Norwegian industrial success story and will, together with BEWI, continue their journey. The companies complement each other very well. Geographically, as you can see on this map, a complementary product portfolio with high added value products for our customers, cross-selling a broader set of premium solutions to our customers, illustrated in the middle figure. Cost leadership through sharing best practices. Optimization of logistics, saving both the environment and costs. Know-how through innovation, creating better solutions for a sustainable future. We will continue to lead the way and set high standards for improvement in our industry in many parameters, but we need to highlight once again sustainability and circularity.
This slide speaks for itself. It shows the last 12 months running pro forma figures for the combined company with net sales over EUR 1,000 million and an EBITDA of EUR 150 million+, including synergies, a 15% margin and of course, 2,900 employees. Although we are doing transformative acquisitions, we continue our strategy on buy and build, especially in our Circular segment. Volker- Gruppe is a U.K.-based recycling company, and it will strengthen our position in recycling in Europe. It is a profitable company, and it has an annual collection of 6,000 tons of EPS and a total of 25,000 tons of plastic and paper waste trading yearly. This will set us closer to our target to become a circular company.
We have also finalized the process of the announced acquisition in Benelux, Kemisol in Belgium, a company that will strengthen our position in the market for insulation solution in the Benelux region. A family-owned company since 1961, with net sales in 2022 of EUR 24.7 million. Year- to- date increased by 53% compared to first half 2020, and an EBITDA in 2020 of EUR 4.5 million, improved by 90% first half year this year compared to last year. Closing is expected to happen in November. With that, I leave the word over to you, Marie.
Yes. All right. As Christian was mentioning, we are in the quarter again growing through acquisitions and organically, and the organic growth is coming from volume and prices as always. What has happened in this quarter is that we have styrene prices, that is the raw materials into segment RAW, has slightly decreased, but the EPS sales prices, they have remained at the high level, which is then a deviation from the normal pattern. This is again due to the high demand and the extremely strong market that makes it less sales sensitive on prices, of course. Also looking at the downstream segments is that due to the high raw materials, and this is now the third quarter, we have the high level of the raw material prices.
There is a challenge, but we are extremely happy to see the earnings that we have, and it also proves that we managed to transfer the raw material prices to our customers. The EBITDA has increased actually 90% from EUR 17.9 million up to EUR 34.2 million, and this is mainly, mostly 100%, it is coming from organic growth and not from acquisitions, and that is due to that IZOBLOK, due to the challenges in the automotive industry, contribute negatively. RAW again, it is the same story that you have heard. We have increasing volumes, we have increasing margins coming from the GAP, that is supported by the extremely strong market, and we also have a production that manage to produce high volumes every day that we can put out on the market.
The rest is mathematics between volumes and the gap. In packaging and components, we have growth, acquisitions, mainly IZOBLOK, but also some other acquisitions, and the organic growth. Here we grow in all the regions, but what sticks out is Norway and the fish boxes. Also here, looking at the EBITDA, it is an improvement, 25%. Same story as for the group. It is the organic growth and underlying business that contributes to the increasing EBITDA. Since we are consolidating IZOBLOK into this segment, same story, we have a negative impact from IZOBLOK, but then we have positive impact from other acquisitions. Net, a small contribution from acquisitions, but 25% in increased EBITDA is mainly coming from organic growth. What we can see on the margins in this segment is that they are improving.
It proves that we can transfer, again, increasing raw material prices to our customers. This segment is the segment that has the highest impact from the increasing energy prices, and also the lack of components. Again, the automotive industry our customer segment, automotive industry is in this segment. That impacts negatively, the opposite. If we compare what sticks out on this page is a decreasing margin in the quarter, and that is a combination from product mix. We do have more trading activities in our product portfolio compared to last year, and again, the negative contribution from IZOBLOK. Then you also get the dilution with the high sales prices, you do get a dilution on the margin, even if you earn the EBITDA in euros that we do.
On insulation, here again, we are growing organically and through acquisitions, mainly through organic growth, and it is the Netherlands that drives the organic growth with increasing volumes for us. This is the segment we do not manage to increase our EBITDA compared to last year. Two reasons for that. We have a challenge in Sweden. We have a new production line. It's not fully functioning. It has taken much longer time than we expected from start and impacts results negatively. Secondly, we have the raw material prices. If we compare to last year, in the third quarter, we have had a period at that time with historically low raw material prices. We compare it with a quarter where we now for a rather long time have had high raw material prices, and that do some things to your earnings in the end.
Circular, t his is the first quarter where we report Circular as a separate segment. Previously, we have reported this within our corporate result. This is the business segment that is responsible to collect and convert used EPS into recycled raw materials. We started this business late in 2018, with the main task to secure the waste streams of used EPS. That is the main challenge for this segment because the technique is out there, the challenge is the collection and to get hold of the waste streams. This is a top priority, as you know, because we want to be a circular company. We have grown it through acquisitions, through green fielding, through local initiatives out in Europe, and we will continue to grow it.
The end game is to reach. Now we say it's the 60,000 tons, but that is currently what we put out in the circular economy, the EPS that we sell to products with a lifetime less than one year. That's the end game. As from this year, we have managed to turn around red numbers into black numbers, at least in year- to- date. We will come back to that, but to be circular is key for us. For that reason, also, when we now refinance the group a few months back, we placed a sustainability-linked bond. What we did is that we put a target basically on this business area with the tons that they should collect, so that is to further put focus on how important this is to us.
I think this is familiar to you. It's just again, to highlight how we report our minority interests. We have a couple of joint ventures, the biggest one in Germany, France, U.K. We do not consolidate them fully into our books, so this is to show up on that. The EBITDA that the joint ventures do is EUR 7.5 million. But since we only consolidate the shares, BEWI's shares of the net profits, we only consolidate EUR 4 million of those millions. There is a discrepancy of EUR 3.5 million, you could say, if you would compare with a full consolidation then. Some comments to the consolidated full P&L. Again, sales is up 58%, as Christian also mentioned, most coming from organic growth. We have increasing raw material prices.
If you compare that to sales, it's up. It's due to the high raw material prices. We have much more trading activities. We have also acquired some trading companies. That means that we have higher goods for resale as a cost. The rest of the cost has increased, driven by acquisitions. Only if we compare to June, we have close to 500 more employees into the group. Of course, most of them are coming from the acquisition of IZOBLOK. Same goes then for depreciation increases, aligned with our acquisitions. Net financial items looks high. It's due to the refinancing where we redeemed the two old bonds, which we had to pay up for. We also have a revaluation of shares, that goes into that numbers. If you take those items out, you have a more normalized, financial cost.
Same goes then for the tax rate. If you take out the impact from the refinancing and the fair value valuation of the shares, we have an underlying tax rate at 25% currently. Capital structure, we are performing well. That means something to the balance sheet. We take the leverage down step by step. By the end of this quarter, we are at 1.3 x EBITDA versus our target to always be below 2.5x. It is the improved EBITDA that drives this because we still have quite high working capital due to seasonality, so it will improve further. When we refinanced the group in August, we also refinanced our credit revolver facility. It's now a facility of EUR 80 million, which we have not used at this time. That is cash available to us.
This also shows the strong cash flow. We have operational cash flow of more than EUR 30 million in the quarter. Again, it's coming from the underlying business, not that much working capital release that will come in the fourth quarter. Investments, EUR 7.2 million. Part of that is investments in our investments initiatives that we describe in the report, and I believe you have heard about them quite many times. Finally, just to highlight again, which we are extremely proud about, but we managed to put a sustainability-linked bond on the market in August. The frame is EUR 250 million. We raised EUR 160 million. We announced this morning that we will do a tap, or hopefully we will do a tap, the coming days.
That will of course be a part of the financing of the shares of Jackon. The KPI that we will be measured against is these collected tons that Circular is responsible for. We should reach then the 45,000 tons by the end of 2024, and another 20,000, up to 60,000 tons by the end of 2026. With that, over to you.
Thank you, Marie. Now to the summary and outlook. Volume development as well as operation remains solid. We experience solid demand despite challenging market conditions in some end markets. Most industries are currently impacted by increased uncertainty related to shortage and/or delay in deliveries of components, as well as cost inflation on several operational costs. We expect GAP to remain strong also for the fourth quarter due to consistently high EPS prices. The completion of Jackon transaction is expected to happen in the first half of 2022. We are still ambitious, and we are set out to continue our growth journey, targeting to double our EBITDA with a return on capital on 20% with a solid financial platform and a dividend policy on 30%-50% of the underlying net profit. With that, I open for questions.
Thanks.
Is the mic on?
Okay. Thanks. My first question goes to the dividend. Can you give us any comments on dividends for 2021, given that the leverage is now rapidly increasing due to all the acquisitions and also as you're doing a tap issue on the outstanding bond? That's my first question. My second one goes to procurement synergies related to the Jackon acquisition. Maybe you can also give us some more color on what kind of procurement synergies you see here, because I find it kind of hard to wrap my head around those synergies.
First question first, we will still have a good headroom under our financial policy and targets to pay out dividend for 2021, even though we finance the acquisition of Jackon and other acquisitions as well. That is the answer to the question number one. Question number two, it is to go into detail on synergies is very difficult, although we have a detailed plan on how we take out synergies. On that front, I can give you that over 50% of the synergies is represented by pure procurement synergies of best practice.
As I have stated many times before, when we acquire companies, it is not only we that are better than the companies or the targets or the merging companies, it's also sometimes the merging or target companies that is better than us. When you talk about the procurement on here, we're talking about procurement in the size of NOK 5 billion+ . I'm not exactly on the figures now, but to give you a picture, 1% is NOK 50 million. Also in terms of transportation costs, that is severe in terms of synergies here. If that answer your question, it's we become very important for our suppliers as well. Other questions? Before we end, I would like to say that in BEWI, we continue our journey.
We have delivered a strong quarter, again, but for us it's about long-term thinking and how we develop the company, not quarter- by- quarter, but year- on- year. Thank you for your time, and we will see you next time.