Good morning to you all, and thank you very much for joining us for Elopak's fourth quarter presentation in 2021. My name is Thomas Askerheim, and I'm head of the investor relations function in Elopak. Our presentation today will be held by our CEO, Thomas Körmendi, and our CFO, Bent K. Axelsen. The presentation will be followed by a Q&A session immediately after we've held the presentation. Please use the Ask a Question functionality that you can find in the webcast and submit your question in writing. Now, without further ado, I will hand over to our CEO, Thomas Körmendi, to take us through the business update of the group. Over to you, Thomas.
Thank you, Thomas, and a warm welcome to all of you also from me. Now, I will first provide a business update on how we have performed during the fourth quarter and also some comments on our full year 2021 before I hand over to our CFO, Bent Axelsen. He will take us through the financials. Both Bent, Thomas, and I will be available, of course, to respond to questions in the Q&A following the presentation. Firstly, we are really pleased to report a strong revenue result in the fourth quarter, both for the quarter itself and also full year 2021. The main highlights this quarter are, one, strong revenue growth of 12% compared to Q4 last year. I will provide more details on the revenue development shortly.
Secondly, profitability was as expected on the lower side in the fourth quarter at EUR 22 million in the quarter, which takes us to a full year EBITDA of EUR 121 million, resulting in a high EBITDA margin of 12.9% for the full year of 2021. Thirdly, the key driver weighing on our profitability is of course the input costs in the fourth quarter being significantly higher than what we had expected. On a positive note, we are happy to report that our plants continue to perform very well in the quarter. As announced earlier, actually before Christmas, we also signed an important strategic acquisition for Elopak during the fourth quarter, and we are happy to report that we are on track to completion. I will provide more information about this later in the presentation.
All in all, we are particularly pleased with the top-line performance in the fourth quarter. However, the cost pressure from raw materials and energy markets have been weighing in on our fourth quarter profitability. Now, let's move on to the revenues. Our revenues are up by 12% or EUR 26 million compared to Q4 last year. Adjusting for currency translation effects between US dollar and euro, the increase is actually around EUR 25 million. In total, Elopak's revenue ends at EUR 940 million, which is a 3.5% growth year-on-year, well above our midterm guiding. On a constant currency basis, our growth is actually above 4.3%.
In EMEA, revenues were primarily driven by stronger aseptic growth in the quarter, and we are pleased to see this development as the aseptic growth is one of Elopak's key strategic growth initiatives. In Americas, the main reason for the increase was a positive product mix in our blank sales and very solid growth in caps and closure sales. Finally, we are also reporting higher filling machine sales in the quarter, and as you know, this is a lead indicator that I will also come back to later in the presentation. Again, a growth of 3.5% for Elopak in 2021 is a very solid figure. Now, moving on to our business performance in EMEA.
Our quarterly revenue performance in the fourth quarter is good compared to last year, up by 6%, although compared to a relatively modest Q4 of last year when customers reduced their safety stock due to the COVID-19. In the fourth quarter, we are pleased to see a continued healthy growth in our aseptic volumes, both for our Pure-Pak Aseptic as well as for our roll-fed products. The aseptic business is one of our strategic growth pillars, and it is encouraging to see very solid development in both UHT milk and juice. The market momentum is currently good in the EMEA region for Elopak, and we are recognized as a stable and reliable supplier, given our long track record, high quality offering, and long customer tenures.
In the current environment, the unprecedented input cost increases will cause some disruption in the market, and we believe that we will be very well positioned to offer our customers safe and uninterrupted deliveries, and consequently to win some business from competitors. Our filling machine sales in Europe are also high in the quarter, and a number of large high-capacity filling machines were commissioned during Q4. The main topic for the fourth quarter was definitely input costs, and we have consequently implemented price increases with financial effects coming through mainly from January 2022. Now let's turn to the Americas. Being a strategic growth pillar, we are very pleased to report a significant revenue growth also in the Americas, up by 39% on a quarter-on-quarter basis and 36% on a constant currency basis. The strong performance in this quarter catches up much of the shortfall from the previous year.
The full year revenue ends at EUR 192 million, just slightly behind last year, which contained a significant roll-fed business for the first six months. On a like-for-like basis, we see growth in our blanks business of 9% for the full year of 2021. The main drivers for the revenue growth in our Americas business is an attractive mix effect in our carton business, growth in the School Milk segment, and strong sales in our caps and closure business. A unique and very important feature of our contract in Americas is the pass-through mechanism in both our supplier and customer contracts. We effectively have a natural hedge, protection of our margins, but with a slight time delay in our price adjustments to customers.
Moving on to our growth strategy, and for those of you who have been following our quarterly presentations earlier, you will have seen this slide before. We really use this slide as a roadmap to navigate and report on where we are with the implementation of our growth strategy. The five steps are all instrumental for Elopak to deliver on the midterm guiding and sustainability. In the fourth quarter, we are again delivering on several of the growth pillars. Firstly, in our Americas business, we're of course very pleased with the strong top-line performance, and you will soon hear from Bent that the profitability has also improved in Americas, both in absolute and relative terms compared to last year.
Now, secondly, our EMEA segment is reporting healthy growth in aseptic, both for our Pure-Pak cartons and our roll-fed business by 10% and 6% volume growth, respectively, for the full year of 2021. Thirdly, in October, we announced the Naturepak acquisition, broadening our geographic footprint to high-growth markets in MENA. Let me briefly come back to this in just one second. Fourthly, we are reporting a good quarter for filling machine signings in this quarter. Lastly, clearly none of this would have been possible if Elopak was not seen and recognized as a company offering sustainable solutions to our customers. It's therefore a very good reassurance for us to see that our sustainability credentials are recognized by external rating agencies. In the fourth quarter of last year, Elopak received a platinum rating from EcoVadis.
This puts us in the top 1% of the plus 70,000 companies that are rated annually by EcoVadis and their network. We're also in the process of being rated by other agencies, and we expect more ratings to come in the first half of this year. Sale of new filling machines is a key leading indicator for Elopak's future growth, and we have had a number of successful signings in the fourth quarter. A number of these machines are linked to the plastic to carton conversion trend that we see in Europe, such as the one Freshways and Graham's deals in the U.K. The U.K. dairy sector is still dominated by plastics, but we are seeing more and more positive signs now for the carton-based packaging. Filling machines are also an important lever for the growth in Americas.
It's actually really good news that we have signed a deal for new filling machines with Coca-Cola in the U.S. in the fourth quarter. Key features of Elopak filling machine business. Let me just highlight a few. Elopak offer both sale and rental solutions to customers, more rentals in the aseptic segment. The lead time we have from order to commissioning will vary depending on filling machine, somewhere from 9-12 months. The lifetime for each filling machine will also vary, but typically between 10-25 years. A typical customer project includes sale of filling machine, a long-term carton closure contract, 3-10 years, and aftermarket service contract. The price range for any of our filling machines will also vary depending, of course, on size, somewhere between EUR 1 million-EUR 3 million, depending on the capacity and functionality.
As you probably all know by now, on the 12th of October last year, we announced that we have signed an agreement to acquire Naturepak Beverage Packaging. For us, this represents a landmark transaction for Elopak, delivering on our strategic ambition to broaden our geographic footprint and target high-growth markets. Today, we are very pleased to report that we are on track to close the transaction in the first half of this year. The approval by the competition authorities is now complete, but we still have one regulatory approval which is currently in the process. We are fully on the post-merger integration, and the planning is well on track, and we currently see no issues with bringing this company into the Elopak family.
We've already mentioned earlier that the purchase price of the company is $96 million, which gives us a multiple to EBITDA of 8.6x, which is, of course, modest compared to recent transactions comparables in the carton packaging market. As we have mentioned earlier, this acquisition will be accretive to Elopak's growth, our margins, and we really look forward to getting this company into the Elopak family and continue the successful growth it has had in recent years. With that, let me now hand over to Bent, who will take us through the key financials. Bent?
Thank you, Thomas. As Thomas pointed out, the key financial highlight in Q4 was the revenue growth of 12%, with aseptic growth in both dairy and juice. The fresh dairy development was more or less in line with market trend. From a margin perspective, Q4 has been, as expected, more challenging compared to Q3. Adjusted EBITDA in the fourth quarter was EUR 22 million, down from EUR 26.8 million same quarter last year. We also had a few one-off effects that did not go in our favor. With an EBITDA of EUR 18 million in the EMEA region, we see the impact of the exceptional raw material prices. Compared to our own expectations, electricity and aluminum prices went even higher, and in addition, we experienced more direct impact of supply chain disruptions.
In America, the story is different, as we have raw material clauses in our customer contracts. The EBITDA increased by 28% or EUR 2.2 million, up to EUR 10 million. We have a better customer and product mix, and growth in sales of closures compared to last year. We are excited about increased sales of filling machines, which contributed both to the top and bottom line. Operations in the plant in Montreal remained strong and supported the healthy results in the quarter. For the full year, the EBITDA ended almost at the same level as 2020, which fundamentally is a satisfactory result given the unprecedented raw material situation. Let's take a look at our adjusted EBITDA bridge for the quarter.
As you can see from the chart, the raw material impact is the key driver with EUR 6.9 million negative impact for the carton production in Europe. While LDPE prices peaked in Q2, aluminum and energy continued to rise. Financial hedging and commercial clauses have mitigated the effect to a large extent. Regarding pricing, it is important to remember that most of our customer contracts in Europe have a one-year price validity with raw material clauses mainly for parts of the closure business. This means that we typically do not see significant price increases during the year in Europe. If we look at the same illustration for the full year, we see the same pattern for raw materials, which started to gradually impact our results from Q2. For the full year, we have a stronger positive net revenue mix, mainly coming from the growth in aseptic segment.
In addition, filling machines and stable operations contributed positively. Let's move to our financial position, where we report a leverage ratio of 2, which is at the same level as in Q3 and in line with our midterm guiding. Our leverage ratio will increase by around 0.5 after the completion of the Naturepak acquisition, which is based on their full year 2020 EBITDA. Our midterm leverage ratio target remains unchanged. Our free cash flow is positively impacted by our relatively low CapEx of EUR 37 million and dividend received from our joint ventures. On the other hand, operating capitals has increased back to a more normal level, and payable taxes are also higher than normal, mainly due to currency effects and distribution of earnings between our legal entities.
In May, the general assembly will decide the first dividend as a listed company, and the board recommends a dividend of 0.75 NOK for the year of 2021. This is around 52% of our adjusted net profit per share and in line with our dividend policy. To wrap up the financials for 2021, challenged margins in Q3, but with solid revenue growth, full year revenues above our mid-term guidance and full year EBITDA at satisfactory level. Despite the current raw material challenges, we deliver sustained operational improvements and growth. To the outlook. The year has started with satisfactory volumes, and we are implementing price increases in the European markets. We aim to grow our revenues in line with our mid-term targets. This excludes any financial impact of Naturepak.
The raw material prices have sustained at a high level so far in 2022, with LME currently on the rise, and it's a high degree of uncertainty with regards to future levels. Through our business model and commodity hedging, we mitigate some of these fluctuations. With a return to a more normal activity level as the pandemic fades and with the current inflationary pressure, it is expected an increase in operating costs in line with pre-COVID levels. A key priority will be to ensure strong cost discipline going forward. As we have mentioned before, the Naturepak acquisition will be accretive to margins. As far as the midterm targets are concerned, they all remain unchanged. This concludes the financial part. Back to you, Thomas.
Thanks, Bent, and let me try just to summarize it all. I'd like just to leave you with the following key takeaways from our presentation today. Number one, of course, is we are really pleased with the fourth quarter revenue growth compared to the fourth quarter last year, as well as the full year. We are pleased because it substantiates the fact that we continue to deliver on our strategic plan on all of our five pillars. The Americas business is delivering growth both in revenue and EBITDA terms. The aseptic growth continues with very solid growth rates in both UHT milk and juice. Thirdly, our acquisition of Naturepak in MENA is now approved by the competition authorities, and we expect to fully start the integration soonest.
Plastic to carton conversion is happening in the U.K. and elsewhere in Europe with an increased high capacity filling machine sales as the strong lead indicator. Not the least, despite all of the supply and logistics disruptions we all experience every day, we continue to deliver strong performance across all of our plants. Thank you all for listening, and we will now continue to the Q&A session, and over to you, Thomas.
Investors, and we're starting off with some questions from Ole Martin Westgaard, DNB. The first question goes to Thomas Körmendi, and it's about organic growth. You guided on organic growth of 2%-3%. At the same time, you're having positive impact on pricing. What are your expectations for volume growth in 2022? And should the organic growth have been higher given the price increases you have seen? Thomas.
Thank you. Thank you for that question. We are, you know, as we just explained, we do see a very positive momentum in our industry, and we expect to continue to see that this year. We also see it is early to guide around the year, so for that reason, we have kept it at what it is, but we do see a positive trends on the volume growth.
Very well. Moving on to the second question from DNB. You have a weak EBITDA margin for the fourth quarter of 9.3%. You comment that cost inflation is still expected to impact margins and that you see a normalization of costs post-pandemic. However, the pricing is up from January. How do you see the margin trajectory? Should we expect a gradual improvement from Q4 2021 levels? That goes to you, Bent.
Thank you. We have worked a lot on the price increases in the second half of the year. Those price increases, they are effective from January. Those price increases will support the margin. We want to be careful stating exactly whether that is in a way sufficient to cover raw materials because we would like to be very careful making any statement on outlooks about the raw material forecast. With the current political situation, it's probably made it even more difficult to project raw material outlook.
As a follow-up question to that, EBITDA margin goes to you as well, Bent. It's about normalization of costs post the pandemic. What can we say about that?
Yes. I think all companies are experiencing a lower cost base during the pandemic, and so did we. During the IPO process, we communicated that we saved around EUR 5 million in traveling costs. Some of that needs to come back in order to drive the organic growth of the company. On top of that, we have an unknown factor with the salary adjustments coming this year, which is just an unknown factor to us. The last part is also that we need to strengthen the company to some extent to onboard Naturepak and also to strengthen some corporate functions related to the fact that we are a listed company. We don't have a single number, but we wanted to signal the trends.
Okay. Very well. A question about Naturepak, and that goes to you as well, Bent. Assuming that Naturepak is consolidated in the second half of 2022, should we expect that the 2022 EBITDA margin should be above the 2021 level?
Thank you. What we can say is that, and with what we have communicated today, is that, first of all, it is an attractive business. Naturepak is a profitable business, and we share the multiple today. Naturepak would be, will be accretive to our own margins. It's too early to comment on how that, the total margin picture will look like for Elopak because we are not providing quantitative guiding on EBITDA margin for 2022 given the overall uncertainty. Naturepak will support the margin in the positive direction, and we will revert with more updates, after we have done the closing, where we'll review how this will play out for the total picture of Elopak. We will follow the situation as we move forward in the year.
Okay. Over to you, Thomas, a question on the filling machine sales. What are the expectations for filling machine sales in 2022? If we can give any guidance on that.
The backlog we see on filling machine sales is actually really good. We also see a situation when it comes to filling machines, and this is for our industry, as I think pretty much any industry, of course, some disruption in supply, which means that while we have a strong backlog and we believe we will have a strong sales, we also need to make sure that we can actually deliver the machines in time and install and commission them this year. That is a little bit where we still need to see where we end up. The backlog is good, the outlook is good on filling machine. Interest is high across both Americas as well as Europe.
Good. Moving on to a question from Robin Santavirta of Carnegie, and it's to Bent. It's about the earnings outlook for 2022, and with the current input cost headwind, is it possible for Elopak to reach an adjusted EBITDA growth in 2022?
Everything is possible. I think we want to be careful to be very specific on margin outlook. We have been, say, wrong before in terms of forecasting where energy would go, where aluminum would go. We want to be really careful giving you a specific number at this point in time.
Okay. Very well. I'm gonna move on to some questions from Mr. Dagfinn Hansen, and it's about Russia and the sanctions, and the question goes to you, Thomas. How will the sanctions against Russia impact the operations in Russia, and also operations in Ukraine, if we can say anything about that?
Well, we are of course monitoring and following the situation as everyone else very carefully. We have, you know, in Russia and Ukraine, we have 336 employees, colleagues. Their safety is, of course, our main concern. We have many customers, loyal customers, and millions of consumers who rely on us every day for their milk, juice, kefir daily use. What we do now is we are of course concerned and committed to supply, continue to supply. Meanwhile, we are monitoring best we can what happens in the future related to sanctions. But that's really all I can say about it right now.
Okay, very well. The second question, which is about the MOU that we have just signed with-
Mm-hmm
the Nippon Paper Industries. Can we say anything about the content of the MOU and some more information about what it entails?
Look, for us, we think of this as a great opportunity. Nippon Paper is a trusted supplier of ours in Americas. It's a great innovative company in Japan, primarily. We have worked with them over years. They are now also an investor in Elopak. What we're then looking at is how can we jointly work on development projects, so R&D-related initiatives, technology-related initiatives. Are there products that we can work on specifically related to Asia, related to this part of the world? Are there some of the developments either they or we are currently putting to market that we can then jointly use? We actually think there are a whole range of things which can strengthen Elopak and benefit as well, Nippon in Japan.
Very well. Moving on to a question from Truls Engene of SEB, and that goes to you, Bent. It's about margins and margin expectations. What are the margin expectations for Europe and Americas in the first quarter and into 2022 relative to 2021? Yeah, I think we've touched on sort of guidance several times, but is there anything that we can say about guidance? There are a number of questions here from many people on the guiding and the outlook. Just overall, what can we say about 2022 again?
I think maybe the additional points to make is that of America. In America we have the raw material clauses in the customer contract, which is different to Europe. The margins that we have experienced in Americas, we don't expect these to be as volatile because of that commercial model. That is kind of one to take home for America. When we talk about the uncertainty related to raw materials, that is mainly an uncertainty related to Europe. We will continue to do financial hedges, and we still have commercial clauses in parts of the closure business as we mentioned in the presentation.
Okay. Very good. Another question from an investor, which is related to what you just answered, Bent. We understand that it's impossible to provide a forecast of raw materials for the year. If we assume spot prices, how much of the spot price increase is compensated by the price increases towards our customers?
Yeah.
In other words, where would the mark-to-market EBITDA stand currently?
Yeah.
Look, we have to explain this in a way. We have, of course, implemented price increases. As Bent said, these are all valid from January this year. These price increases, and this is how this works, are negotiated with our customers throughout the year. When we do the price increases, we always do the price increases in a way that reflects value for what we are selling, so it's a value-based pricing, and of course, with a view on cost. But it's never, in our part of world, a one-to-one relationship. What we are seeing now is that spot prices are high, certainly higher than probably anyone expected a while back. Meanwhile, the price increases we are...
have implemented and then the ones we are currently also discussing with new customers who have come to us since then. We are reflecting to the best of our ability what the market outlook we have, as well as the combination of our value. Giving you a very, very exact question-answer to this is difficult at this moment.
Okay. Very well. Thank you. I think this concludes the Q&A session. There are a number of questions along the same lines as we've just answered, so I hope that we've been able to now cover off all the questions that you had. In the event that you have further questions, you know, please reach out as well to Elopak on the investors email and get in touch with us as and when. In the meantime, have a good rest of the day, and look forward to speak to you again.
Thank you. Thank you very much for your attention.