The presentation will last for around 30 minutes, followed by a Q&A session where the people here in the audience and the people joining online can ask questions. With that short introduction, welcome, Bent.
Thank you, Christian, and good morning, everybody in the room and online. Nice to be back after the summer. I am going to just jump straight into the quarter. This quarter really is marked by the geopolitical uncertainty, the higher raw material costs, and changes in the consumer behavior. I think against this backdrop, we have stayed focused, implementing our strategy, but also keeping a tight control of our cost base. This quarter is an improvement compared to the softer start of the year. We grew our revenues to EUR 304 million. This is a growth of 4.9% or 5.7% on a constant currency basis. We delivered 8.7% growth on a constant currency basis in America, despite the tragic and serious incident with one of our suppliers, which I will come back to later in the presentation.
The revenue growth in EMEA looks to be low, 3.3%, but actually fundamentally is higher because carton and closure grew by 8%. EMEA is really delivering on the top line this quarter and altogether that gives us an adjusted EBITDA of EUR 45 million with a margin of 14.8%. In Q1, we started to point out the increasing raw material prices following the Middle East conflict, and customer surcharges have been implemented to mitigate this, and these surcharges were implemented during the second quarter. Based on this performance and our strong balance sheet, the board has declared a dividend of EUR 0.065 per share for the first half of 2026, which is close to 53% of our normalized net profits and also in line with our dividend policy.
Not least, in this quarter, we also announced Håkon Volldal as our new CEO, and his start will be no later than 1st of January 2027. Let us take a deeper look at the figures. We mentioned the 5% growth. The main driver of this growth was the continued ramp-up in Americas but at a slower rate than desired. If we look at the carton and closure revenue alone in the group, it is 8.4% reported. We are also happy to report the growth from EMEA with the 8% growth for carton and closures. This was supported by an, I would say, impressive 16% growth in the Roll Fed business coming from onboarding of customers in Poland. What is relevant to add is that this strong top-line performance in EMEA is also supported by attractive phasing in the quarter.
Now, if you look at the year-to-date figures with a softer start of the year, that is a growth of 0.4% or close to 3%, or 2.9%, on a constant currency basis. If we move to EBITDA, the EBITDA is impacted by higher raw material costs following the Middle East conflict because these raw material prices, the price increases, they impacted our P&L sooner than the impact of the customer surcharges. So we expect when we get the surcharges on a run-rate basis, a recovery in the second half of the year. I think the highlight, I would say, of this quarter is that if you look at the second quarter, it is actually one percentage point better than Q1 this quarter. So we really demonstrated that we have the ability to deliver this gradual improvement that we communicated in our Q1 earnings call.
And this uptick does not come mainly from the price increases in euro, but it really comes from the margin accretive growth in America. Now, if you look at the strategy, the strategy slide we always show, and I think when we look at the world today with the geopolitical and market backdrop, the strategy, Repackaging Tomorrow, remains firm. With the three priorities, realize global growth, strengthen leadership in core, and leverage plastic to carton. The largest top-line growth comes from the global growth priority, and within global growth, America is by far the most important growth priority. America represents 50% of the targeted growth, organic growth between 2023 and 2028. Hence, we think it is important to use this opportunity to give you an update of the tragic accident that happened with one of our suppliers.
We will use this section to do a deep dive of that in this quarter. Now, as many of you know, this tragic incident occurred May 26th at Nippon Dynawave's paper mill in Longview, Washington. This is one of our major suppliers of liquid packaging board in Elopak. The incident has resulted in supply chain constraints in Americas, and we worked very decisively to secure supply continuity and minimize the impact in the short term. Now, the lacking pulp production at Nippon will constrain board supply to the market. The board mill operation is currently suspended. However, there are no direct damages to the board machine, nor the coating line. We are taking continuous measures, so our supply to our existing customers are secured through Elopak's network of strategic suppliers. We also do tactical inventory management that will be used to manage shorter and temporary shortfalls.
If you look at the longer term, the board capacity remains supported for growth, and I think it is a very important point, and we remain confident in fulfilling supply commitments to our customers. However, the incident has further affected the in combination with factors that we talked about in the first quarter in Americas related to plant-based, it will impact the growth in the year ahead in America. Now, insurance and the commercial agreements are expected to cover most of the costs to Elopak. We will continue to work actively with suppliers, customers to manage this situation. And I believe that our growing role as a trusted partner in the American market will help us in navigating through this challenge. I now have the pleasure to introduce Ola Buarøy, our CFO, the debut, so he will guide you through the financial section. So, welcome, Ola.
Thank you very much, Bent, and good morning to everyone. I will start giving some more color on the raw material impacts following the Middle East conflict. As previously reported, the conflict has led to higher raw material prices on our unhedged positions. We have seen increases on LDPE, we have seen increases on ALU, and the same with freight. In Q2, we implemented customer surcharges to offset the increased input prices. However, due to the time lag from when we started to see the increased raw material prices to when the customer surcharges came into effect, the EMEA profitability is impacted in the second quarter. However, we expect to see the full benefit of the surcharges from Q3 and onwards, which will lead to a recovery. Moving on to the more underlying performance.
EMEA delivered satisfactory top-line growth in the quarter, with revenue increasing both year-over-year, but also quarter-over-quarter. If we look at carton and closure revenue in isolation, we saw a growth of almost 8% in the quarter, and that was mainly driven by higher volumes in both Pure-Pak but also Roll Fed, in addition to the surcharges already implemented in the second quarter. We continued to see the positive development within the UHT dairy category in the second quarter. That was a development we started to see also in the Q1 presentation, and I think we also reported on that in Q4 2025 presentation. So we are pleased to see that that is continuing, and we are growing in our core markets in EMEA, in particular in Germany and Hungary. On the other hand, the somewhat soft ambient juice market continued also in the second quarter.
That is a trend we have seen for a while. However, the impact was less severe in the second quarter than what we saw in the first quarter. That is partially a timing thing, but it is also due to the fact that juice consumption is typically picking up around summer season. On Roll Fed, we are pleased to see that we still have the recovery in the second quarter. We reported the recovery in the first quarter after an extended period of Roll Fed volume decline in Europe. So we are pleased to see that recovery, and it came through, in particular, our new customers in Poland and also Ukraine. Moving on to the equipment side, which typically fluctuates somewhat between the quarters. We are reporting a decline on equipment this quarter.
That is partly a timing thing, as we commissioned fewer machines this quarter, but we also have to remember that we reported a very strong quarter in the second quarter in 2025 on the equipment side. So that is also an important part of the explanation, and the equipment revenue is also the main explanation for why the year-to-date revenue in the segment is declining. So if we summarize the revenue development in EMEA in the quarter, we grew with almost 8%, looking at carton and closure. Equipment revenue declined, while aftermarket revenue was almost flattish, leading to 3.3% revenue growth in EMEA in the quarter. Turning to margins, we saw the impact of the timing effect on the Middle East or the raw material price increases following the Middle East conflict, and that led to almost a 1% margin decline to 17.8% in the quarter.
But as expected or as mentioned, we expect this to pick up and be fully recovered in the second half of the year. When it comes to India, we know that India is a more volatile market by nature with different tender mechanisms. We reported margin pressure in that geography in the first quarter. We have implemented targeted margin management measures in this quarter, and we have started to see the result of it, especially on the costing side, which has led to improved margins in India in the quarter. However, India is still margin dilutive for the group. Overall, to conclude on EMEA, the margin has improved since the beginning of the year. We reported a margin of 17.4% in Q1, while now it has improved to 17.8%, despite the time lag impact following the raw material elevation.
Crossing the Atlantics, turning to Americas. In Americas, we delivered revenue growth and improved margins, despite the somewhat challenging market conditions, and also the Nippon incident occurred end of May. If we look at carton and closure revenue in isolation, we grew by almost 12% in America. We continued to grow market share in Americas. We had new business with our existing long-standing customer relationships, but we also gained new business or business with new clients in the quarter. And it was both enabled by the investments we have done into increased production capacity in the U.S. If you have a look at the market side in Americas and also as we reported during the first quarter, we continued to see the softer than previously expected demand within the plant-based category. While within call it the more traditional dairy market and demand remained stable.
Looking at the equipment side in Americas, we commissioned fewer machines in Americas. However, if we are looking at the strong order backlog in Americas and in particular within the school milk segment, we are confident that it will pick up again and it is also supporting the investment in our third production line in the U.S., which is dedicated to a large extent to school milk. Turning to margins. The margins in Americas improved by more than one percentage point to 22.9% in the quarter. As Bent pointed out, it is driven by increased operational leverage and production output in the U.S. as the plant was in a ramp up phase during the first half of 2025, as we remember. So that was as expected.
The Nippon incident led to some production inefficiencies in Americas in the quarter that had a slight negative impact on the margins in Americas in the quarter. Not super significant, but it had a slight negative impact. We assume that will be covered later by commercial agreements and also insurance coverage, but there is a time lag impact. And when it comes to Nippon and also reiterating what Bent said, our priority is now to fulfill our supply commitments to our customers and a bit depending on how the situation develops, it could potentially have an impact on the short-term growth trajectory in that segment. So to summarize the EBITDA development in the group in the quarter it went from EUR 44.2 million to EUR 45 million. And it had a margin decline of 0.5 percentage points in the quarter.
Without the timing impact from the Middle East conflict, the margin would have been stable. The positive effect you see on the net revenue mix is driven by increased volumes in Americas, but also in EMEA, and also to some extent, the surcharges implemented already in Q2. While the raw materials is impacted by the elevated raw material prices we have started, or that we saw during Q2. The level of 4.3 should not be seen as a sustained level or where the raw material prices will be going forward, as it consists of a few elements. It will depend on how the raw material situation develops during the second half of the year. We have seen that the prices have softened somewhat, even though still at an elevated level. But Q2 also had an element of inventory turn impacting the figure.
We are pleased to see that we are reporting a strong cash flow generation in the quarter. Despite the CapEx investment of EUR 28 and the dividend payment of EUR 27, our net debt remains fairly stable. Looking at cash flow from operations. On top of the EBITDA, we are freeing up around EUR 16 million, caused by reduced net working capital. That's partially explained by reduced inventory in the Americas following the Nippon incident, and we had to withdraw on the stock in Americas. We also have some phasing items on the net working capital, but it's also a result of our systematic work to improve the company's net working capital position. If you're looking at cash flow to investments, where the majority relates to equipment replacement and maintenance program in Europe as previously announced.
We also have some CapEx on the U.S. plant still, and it also consists of filling machine investments. During the quarter, we also received the final installment related to the divestment of the Russian plant we did back in 2022. So that transaction is now fully settled. Moving to cash flow to financing activities, the key driver was the dividend payout to our shareholders related to the second half of 2025, that took place during the second quarter this year, while interest paid and lease payments were at normal levels. That brings our net debt to EUR 293 end of the second quarter. Looking at our financial position to remain solid, we are still at the leverage ratio at 2.2. Also, after the CapEx investment in the quarter and also after the dividend payout.
When it comes to return on our capital employed, it's fairly stable, around 15%, reflecting a consistent relationship between earnings and our capital base. Maybe most importantly, we continue to make progress on the U.S. plant investment. We have yet invested EUR 109 million, and we expect additional EUR 19 million before we have completed the three production lines. There are no changes from what we have reported previously, meaning that the overall investment budget remains unchanged. So for the summary and outlook, I give the word back to you, Bent.
Thank you, Ola. Thank you. Let me summarize. The second quarter of 2026 demonstrated an improvement from the softer start of the year. Based on the performance and a solid balance sheet, the board has declared a dividend of EUR 0.065 a share for the first half, corresponding to 52.5% of net adjusted normalized net profits. Gradual improvements are expected to continue through the second half of 2026, but this is subject to raw material prices and foreign exchange volatility. Finally, a challenging operating environment in Americas and global market and geopolitical headwinds are expected to impact growth in the year ahead. That summarizes our presentation, and we are now ready to take your questions.
Perfect. Thank you, Bent. Thank you, Ola. We will now be moving to the Q&A session, starting with questions from people here in the audience. When I hand you the mic, please state your full name and the company that you represent, and make sure to speak into the microphone.
Thank you. Marcus Gavelli from Pareto Securities. At your CMD in 2024, you outlined the aseptic growth and India as one of the key. This is certainly not very good at the moment. I assume also you are doing some cost measures in India, but the rollout there, it also looks maybe a bit delayed. Do you feel that you are behind on that margin trajectory for EMEA with the current state, or do you feel with the measures taken in India that we're getting in there?
Thanks. I think let's then separate between the Europe trajectory and the India trajectory. I think if you start with the Roll Fed business, that business is more saturated with supply compared to what we believe to be the case during Capital Markets Day. So it's a crowded space. There is an overcapacity of Roll Fed product that we expect to continue in the years ahead. When we will reach the balance, it's difficult to say because the lead time to invest in new capacity is not so long in India. I think it's fair to say that the Middle East's conflict is not helping our plans related to Pure-Pak introduction in India because the logistics costs are almost prohibitive to start the growth based on import. It's possible, but it's far from an optimal solution.
My take on India is that the growth in India is lower than where we need to be in order to deliver on the top line as we talked about in 2028. It is very difficult to say because when things start to fly in India, it starts to fly very quickly. But it is very important that the factors that we cannot control really are stabilizing. When it comes to, I would say, aseptic in Europe, I think we are demonstrating ability to grow in that segment. I think overall, the trajectory in what we call core Europe is quite in line with what we talked about back then, but the drivers behind that growth have varied.
Plastic to carton shift have been somewhat softer. Consumption decline may be a little bit sharper. Our market share growth also higher, net wise, aligned with what we talked about in the Capital Markets Day.
Thank you. Just one on the Americas, understanding that the operational environment is a bit tough right now, but could you try to remind us of where you are currently with Line 2 in terms of utilization? Also, again, visibility is low, but at the moment, do you plan to slow that utilization or, sorry, ramp up of utilization down, or is that still very much up in the air what you decide to do? Just also because you said Line 2 and Line 3 will be in parallel. We will assume some-
Exactly. I think the way we talk about America now is more how are we going to deliver the total top line for America? The ambition remains, which is to deliver EUR 480 million based on the currency back in September 2024 for the top group. How we are going to deliver that growth will be to utilize the capabilities of the three different lines. Different lines have different capabilities producing different products. I think how we are ramping up Line 1, Line 2, and Line 3 really depends on the product mix that are desired and demanded from our customer base.
We have started with Line 2 going according to plan, and Line 2 has the capability to deliver formats that we do not produce at Line 1. The ramp-up plan in terms of getting the lines installed, get them commissions, is going according to plan. The growth will be more in a, as you pointed out yourself, a more parallel approach reflecting the needs of the markets from a portfolio perspective.
Great. Thanks. That was all for me.
Thank you. Any further questions from the people in the audience? No. Okay. Then we also have a couple of questions coming in online. Starting with first one from Jeppe Baardseth, Arctic Securities. Could potentially higher board prices in the Americas due to the Nippon situation be captured through our pass-through contracts? Do these contracts provide a dollar-for-dollar pass-through on cost increases, or do they also allow you to maintain margins?
That sounds like a CFO question, Ola.
Yeah, I think the situation in the Americas is still somewhat unclear, right? Our focus is to supply our customers according to what we have agreed and also supporting their needs. When it comes to the supply prices or the board prices in the future, I think it is a bit early to say. We have a good collaboration with all our suppliers. We have a network of suppliers in Americas, and we have the usual rounds with them. I think it is fair to say that we will come back to that later on when we are seeing how this situation develops.
We will have commercial arrangements. We have insurance coverage which will protect in this intermediate period. There could be timing effects in terms of when we can acknowledge that settlement. As we have also pointed that out in the second quarter report.
Thank you, Ola and Bent. One more question from Jeppe. "When were the customer surcharges implemented, and when do you expect to see the full financial effect?" He has a few more follow-ups, but I will leave it at that first.
Thank you. That matches our capacity to remember. The surcharges that were implemented middle of the second quarter, which means that our expectation is that we are on the run rate starting Q3.
Thank you, Bent. "Do the surcharges apply across the entire customer base in EMEA or to only certain customers or contracts?
They apply to most customers, and it depends a little bit on the contract structure. But in general, I would say all customers will get the surcharges more or less.
Thank you. The last part of Jeppe's questions. "Are the competitors implementing similar surcharges, or could this potentially have an impact on your market share development?
Okay. Yeah. We are, of course, monitoring also what our competitors are doing. I would say to a very large extent, this is an industry thing, so we are not alone.
Thank you. That was the last one from Jeppe. We also have one from Elliott Jones Myklebust in Danske Bank. "Given potential board availability issues in Americas, is it too optimistic to assume medium-term targets are hit in 2027?" I think he probably refers to 2028, but midterm targets, Americas.
Yeah, I can take that question. When it comes to 2028, we are reconfirming the ambition to deliver EUR 480 million based on the currency in September 2024. Also what we write in the report is that the board constraints and the following dynamics, which comes on top of the plant-based consumption decline, will impact the growth in the year ahead. Consequently, that means that the growth is not going to be as linear as we assumed in the Capital Markets day.
Thank you, Bent. That was the last question that I had received online today. If there are no further questions from the people here in the audience, we will round off today's quarterly results presentation.
Thank you very much.
Thank you, everyone.
Thank you.