Good morning, welcome to this presentation of BEWi's result for the first quarter 2021. My name is Christian Bekken, I am the CEO of BEWi. With me today, as always, I have our CFO, Marie Danielsson, who will take you through our financials. If you will switch to the presentation. Our presentation includes some forward-looking statement, I would like to point your attention to our disclaimer. Before I go through the highlights for the quarter, I would like to say that we are very pleased with the result this quarter. Our organization continues to deliver strong results, we can also welcome new members to our team from Honeycomb and IZOBLOK. People I am sure will strengthen our company in the future. Now, I will briefly take you through some highlights for the quarter before Marie will go into more detail on the numbers.
We deliver significant growth compared to the first quarter last year. This is driven by strong markets and positive contribution from our growth initiatives. Our volumes have increased in all our segments and most regions. The exception being our packaging business in the Netherlands. We experienced strong demand, and due to the well-performing operations, we have been able to prove to our customers that we can deliver, which further strengthen our relations to them. About half of the growth come from acquired companies, in particular BDH, which was included in our accounts from 1st of August last year. Our new recycling facility in Portugal ramped up production in first quarter, and we expect the facility to be fully commercial this quarter.
In addition, we have acquired a minority interest in a recycling company, bringing us even closer to our annual recycling target and to our goal of becoming a circular company. We have launched our plans for a new packaging hub, Jøsnøya in Norway. We have, as already mentioned, acquired the Danish paper packaging company, Honeycomb, and we have entered into an agreement to acquire IZOBLOK, which is the leading provider of EPP components to the automotive industry in Europe. All in all, a very good quarter. Now, I will briefly take you through our numbers. For the first quarter, net sales are up by 42% compared to the first quarter of 2020, of which half of the growth is organic, coming from higher volumes and increased sales price for segment RAW.
EBITDA of EUR 16.7 million, up from EUR 14.8 million last year, which at that time was the best first quarter in the history of the company. In the first quarter, we saw a historically sharp increase in the styrene price, and the price was at a historical high level. This positively affected both revenues and profitability for segment RAW, while putting pressure on our margins in the downstream segment, where sales price adjustments toward customers lag approximately one quarter. The increase in styrene price has been challenging to our industry. Once again, our integrated and diversified business model proves to be an advantage to us. Yes, it has been challenging quarter due to the shortage of styrene and the shortage of EPS raw material. Now it seems like most quarters are challenging, one way or another.
In the first quarter last year, raw material prices were low, and then the profitability of our RAW segment was under pressure, while the downstream segments had very good margin at that time. The pandemic hit us and our diversification across countries and end market made us resilient. This year, the high raw material prices provided us with an opportunity to increase the external sales from our RAW segment, and at the same time increase profitability for the segment. As we control the whole value chain, we are able to maintain or increase our deliveries to our customers when players experience shortage in supply and struggle to deliver. In other words, our integrated business model enables us to outperform the market. We have a continued focus on growth with a strong financial platform and a good pipeline of M&A opportunities.
Our growth comes from ongoing organic initiatives as well as acquisitions, where we primarily look for companies that can strengthen our market position, broaden our product offering, enabling geographical expansion, or to increase our recycling capacity. I will now give some examples to our growth initiatives. We have several ongoing growth initiatives. In March, we announced our plans to establish a state-of-the-art packaging hub at Jøsnøya. Here we will not only build our most modern and efficient fish box facility, but it will also be our most sustainable facility, handling increasing volumes of reusable boxes, reusable pallets, and other products for fish farming industry. We also have a fish box facility under construction at Senja next to SalMar's new processing plant in northern Norway, where we expect to start production in the third quarter of this year.
During the first quarter, our new greenfield facility in Portugal ramped up its production and with a capacity of around 10,000 tons, it is an important contributor to reaching our targets. At our installation center in Norrköping, we have invested in a modern extrusion technology. The new technology will improve our production and efficiency, but most importantly, it will enable us to increase the use of recycling material in our production. We have had some delays in Norrköping which caused some extra costs in this quarter, but now we are up and running. Moving on to our acquisition. I was very pleased to finally be able to announce our agreement to acquire a majority stake of IZOBLOK late April. IZOBLOK is the market leader in Europe for EPP components to the car industry, an industry we have been following closely for many years now.
EPP is short for expanded polypropylene. It is an excellent material for use in cars. In addition to being shock-absorbing, they can reduce noise and replace other components to reduce weight. This means that less energy is used, lowering emissions from fossil cars and extending the range for electric cars. We acquire IZOBLOK to strengthen our position in the market for automotive EPP components. Also, we see growth in use of EPP components in other industries like heating, ventilation, and air conditioning, HVAC solutions. We believe IZOBLOK and BEWi are a good strategic match, and we see great synergy potential to our own automotive business and the other EPP business we have. IZOBLOK is the market leader for EPP components to the automotive industry in Europe with a market share of approximately 21%.
The company is listed on stock exchange in Poland and has three facilities in Poland and one in Germany with excellent location to serve its customers. IZOBLOK has a very experienced management team which will add competence and knowledge to our existing business. The founder and CEO of the company, Przemyslaw, will continue to head the company, which will also continue being a separate listed company. In this figure, you can see some of the products that IZOBLOK typically supply to cars, bumpers, headrests, crash pads and so on, perfectly fitting into our vision to protect people and goods for a better everyday. IZOBLOK has a well-diversified base of blue-chip customers with well-known brands. In addition to this, they recently entered into an agreement to supply Tesla with components to their new facility in Europe. I'll just briefly comment on IZOBLOK's financials.
As you all know, the automotive industry was hit hard by the COVID-19 last year. Prior to COVID, they showed good growth with a significant jump in their revenues from 2016 to 2017 due to the acquisition of the German-based producer of EPP components, SSW PearlFoam GmbH. Pre-COVID-19, the financials from the years May 1, 2018 to April 30, 2019, they had revenues on EUR 51 million with an EBITDA of EUR 6 million. Looking at the current situation for European automotive industry, the production of light vehicles is expected to grow approximately 20% this year compared to last year. In April, we announced a smaller but still a very strategically important acquisition of the Danish paper packaging company, Honeycomb Cellpack, now BEWi Cellpack. Through this acquisition, we strengthen our product offering, but we're also strengthening our business model by being able to offer our customers complementary or alternative materials.
Honeycomb specializes in protective paper packaging with solutions made from fiber, which are both 100% recyclable like our EPS and biodegradable. Finally, we acquired a minority stake at the company Inoplast in the first quarter, adding further capacity to our recycling and bringing us closer to our target of becoming a circular company. With that, I'll leave the word over to you, Marie.
Good morning. We start with looking at the group picture. As Christian was mentioning, we have one more quarter where we grow both from our acquisition initiatives and organically. The organic growth is coming from prices, it's coming from volumes, and it's also coming from product mix. If we look at segment RAW, they have the possibility to increase basically instantly their sales prices based on the underlying raw material prices. In segment RAW, there is a mix between price and volumes that drives the top line. While if you look at Insulation and Packaging & Components or downstream, they do not have the same possibilities. Basically, the organic growth that you see in downstream, that is volume driven. EBITDA is up to EUR 16.7 million. That is approximately 13% improvement. That increase is coming from acquisition, and it's coming from segment RAW.
In our downstream, we have a negative organic EBITDA, organic growth. That is coming back from that we have had increasing raw material prices and not the possibility in this quarter to increase the sales prices. As you can see on this picture as well, Packaging & Components is our biggest segment with approximately 40% of the revenue. This segment will continue to grow with the latest acquisition, both then with Honeycomb and IZOBLOK. We can go to next page. Looking at segment RAW, we have increasing volumes. We have increasing EBITDA. It's explained by increased production capacity. It is a strong underlying market. Most our increased volumes is sold to the external market. The share of external sales, as you can see, is increasing.
When it comes to the margins, I believe most of you are familiar with that they can be volatile from quarter- to- quarter. This Q1, we have an EBITDA margin of approximately 5%. It's an increase from 4.2%. That is what we believe we should be in that range. It is impacted then from we have an upgoing raw material trend, good for the segment. We have a strong demand. We have a good running operation, but on the negative end, we do have some higher fixed cost in this quarter. Packaging & Component, as with RAW, we have organic growth from volumes in all our regions. The exception is the Netherlands. It's quite isolated. It's molded product to the construction industry. We do have some construction sales in that segment. Otherwise, they are growing as well.
We have BDH, the acquisition that we did in August last year. The biggest part of that acquisition belongs to the Packaging segment, and they contributed approximately to EUR 18 million to the top line. We have an EBITDA that has gone from EUR 8.6 million up to EUR 10.5 million. EUR 2 million is coming from BDH, and what that means is that basically, the organic growth is rather flat on EBITDA. Again, it's coming back from that we have increasing raw material prices, and we cannot adjust sales prices instantly. That also then explains the margin that you can see has dropped quite significantly. It's back to you have a flat top line, you have increasing raw material prices. In addition, BDH becomes a bigger part of this segment, and they have a big share of trading activities, and that is lower margins compared to our production operation.
You have a margin dilution also coming from that fact. Looking at Insulation, same story. We have volume growth in all our regions. We are in particular happy about that the increasing volumes now continues in the Benelux area. You might recall that we had a negative trend in 2020. They are now growing again. It's important to us because the Benelux region is approximately 50%, half of this segment's sales. This segment Insulation, they are sensitive to volatile raw material prices in particular and in the short perspective. That is due to that approximately 55%-60% of their bill of material relates to raw material. As a consequence, the EBITDA is declining in this quarter.
Again, you have increasing raw materials, you have a flat top line, the price adjustments will follow in the coming quarters. By the end of 2020, we closed one of our production facilities in Sweden in Norrtälje. We moved that into Norrköping to create a central hub for insulation in Sweden. That production is not fully yet up and running. We have some delays. We expect it to be fully in production by the end of this quarter, and this has also impacted the result in the quarter for Insulation. To summarize, again, keep in mind we have volume increases in all our regions. We have good volume increases in the Netherlands. That is the biggest region in this segment, and the sales prices will be adjusted going forward.
If we look at the consolidated P&L income statement, Christian mentioned we have net sales that is up approximately 40%, half from organic growth, half from acquisitions. Sticking out is the raw material prices. It's up in EUR, it's up in percentage of sales. Same story, flat top line, basically, besides in segment RAW. You have increasing raw material prices. Goods for resales is increasing in EUR from the NOK 2.3 in 2020 up to uncertain . This is all related to BDH that has these trading activities. We grow. With that comes more employees. We are approximately 160 more full-time employees compared to 2020. With that comes increasing labor cost, of course. We also have increasing depreciations. We have broken them down in depreciation that is related to operation. Those you should measure versus the CapEx that we are spending.
We have the depreciations that is related to IFRS 16, we have the amortization that is related to our acquisitions. We have some lower contribution from our joint ventures. It's down from EUR 0.6- EUR 0.3 million in the quarter. This is mainly insulation operation, they struggle as well, just as we do with the increasing raw material prices, they also have good volumes. This is mainly Germany and France. Financial items, rather high in this quarter, approximately EUR 3.7 million are coming from a fair value revaluation of our shares in KMC. We had an opposite situation in Q4, they had a swing up in their share price Q4. Now it's back to the level we bought the shares for. If you take that out, we have financial items that is in line with last quarter.
Taxes, if we take out the impact from the revaluation of the shares and also non-deductible transaction costs, we have an underlying tax rate that is at 28.5%. What I would like to highlight is that we do have a negative profit for the period, but again, it's a revaluation non-cash EU 3.7 million that impacts our financials. Again, take that out, and then it's easier to compare to Q1 last year. If you look at the balance sheet, we can see that our net debt has, as from year-end, increased approximately EUR 8 million. We have had a basically neutral cash flow from our operation, and that means that it is our CapEx that drives this increase in the increased net debt. We have cash on hand of approximately NOK 53 million.
In addition, we have an unused credit facility of NOK 25 million, as you know, we did a private placement earlier in May and brought in an additional NOK 200 million. Most of that will be used for paying the shares in IZOBLOK, but approximately NOK 55 million, so additional EUR 5.5 million then will remain on our balance sheet. We have a leverage that is in line with the last quarter or in year-end. As you can see, if you compare to where we were a year ago, we have a declining and improved leverage, and that is coming from that our earnings is improving compared to our balance sheet. Working capital, short, it's increasing, but again, it's coming from the acquisitions. I think most of this I already mentioned, we have a more or less neutral operating cash flow.
It's a slightly positive NOK 0.3 million. We have invested close to NOK 7 million in CapEx, where half of that is coming from our greenfield projects or ongoing investments, the rest is more related to our normal operation. Christian has already been through the ongoing investment programs. You can see them on this page as well. Portugal and Norrköping, the Swedish investment, are at the end. It's in Norway we will spend the money in the coming quarters. We go to a summary and the outlook. This is something that we would like to highlight because we can now see that we have a rather unique situation on the market. We look at IHS Markit forecast. As you are aware, they present historical and they forecast cost for raw materials.
What you see to the left is the difference between historical styrene prices and historical EPS prices. You also see their forecast for the second quarter. If we look five years back and up until now, there is a gap. The difference between styrene prices and EPS prices is between EUR 360 and EUR 400 per ton, approximately. What has happened now in Q1, and in particular, you can see it as the forecast for the second quarter, is that we are well above the normal range. This we have not seen before. This is coming from two things. It has been a shortage of styrene that has impacted the availability of EPS raw material. In combination with that, there is a strong demand for EPS. The gap or the margin has increased.
What we can see is that IHS, they forecast an EPS contract price that is approximately 40% higher compared to Q1 this year. What they forecast is also that the gap, the difference between styrene and EPS prices, will be approximately 25%-30% above the normal range. That is what you see in the top end in this graph. What does that mean? That means that this will directly impact the margin for our segment RAW in the second quarter. I don't know, Christian, will you take the outlook and summary?
I will, Marie. Thank you. As we are now almost two third into the second quarter, we can say that the volumes development remains solid into this quarter. We continue to experience strong demand except for slowdown for fish boxes in Norway, which is a normal seasonality in the segment. The raw material prices have continued to increase this quarter. As Marie has just explained, prices for the EPS raw material is expected to increase around 40% this quarter. This leads to a gap high above the normal range for us, which directly impacts the profitability for RAW positive. On the other side, the continued increase in the cost of raw material are challenging our margins for the downstream segment for the second quarter as well.
In particular, this goes for packaging and component segments, where lower sale of fish boxes and margin dilution from the BDH operation also will challenge the margins. Summing up, we are well-positioned for further growth. We have a solid operational performance providing a positive cash flow. We have a proven business model and a proven delivery capacity in challenging times. We experience a strong underlying demand. We have a robust financial position, and we will continue to pursue growth opportunities in line with our strategic priorities. I would just like to open for questions if there are any.
Yes, Christian. If anyone would like to pose any questions, you can do it in the tab in the upper right of your screen. We currently have one question for you. How do you experience the development in demand for EPS products, and especially in the packaging and component segments? Are customers substituting towards non-EPS solutions that might appear more environmentally friendly for their end users?
On the contrary, we see that the demand is growing for the products, and we see that our recycling strategy and our communication around recycling enables us to explain to the customers that the places where we use our products, the products are very sustainable and are always taken care of as recyclable products. Also the figures shows that there is a growing demand in the total picture. That is basically because of our product strategy, where we already five to 10 years ago started thinking where our product is well used. As for example, in components where we see a great growth in HVAC industry.
Thanks. Maybe in relation to that, can you also share some thoughts on how BEWi will be affected by both the EU Taxonomy and also other environmental regulations going forward? How BEWi is positioned to those changes in the regulations and also the EU Taxonomy, as I said.
I can start and Marie can take over, but it's difficult to actually comment directly on that. Just briefly, our insulation business in the EU Taxonomy will, of course, be positive. Over 50% of our business is insulation, and obviously, as we were speaking about components, making cars lighter will also affect positively. Marie, you can take over and also comment on this a little bit.
No, I think you're right. We need to be careful here. We have done a study together with one of the banks. We have concluded on a high level that we believe that approximately 40% at least will be green revenue from the EU Taxonomy framework. We will continue to dig into this because I think it's bigger than the market currently understand how to interpret the framework that EU just presented a few weeks back, the final draft from. There will come consensus going forward. High level analysis that we have done together with one of the banks shows upon 40% of revenue, which is rather high for an industrial company. That comes from that the insulation operation have such good impact on the energy efficiency in our houses.
The packaging industry, that we cannot see as green revenue, as the framework is written today.
Thanks a lot. I also have one question regarding the outlook. I noted that you're writing that you're seeing lower volumes of fish boxes. Is that due to the rotation towards more elaborated products in the salmon farming industry, or is it due to more structural and long-term reasons?
This is due to basically our customer structure and where they take out the fish over what time. This is normal seasonality in the segments where we are or the geographical areas where we are. We see no other, not explanation, but we see no other reason for this than the customer structure and the geographical footprint we are at. It varies across different regions in Norway at different times.
Thanks a lot. I don't think we have any other questions from the audience, so thank you for your contributions.
Thank you for your time.
Thank you.