Good morning to you all, and thank you very much for joining us for the very first quarterly presentation by Elopak ASA. My name is Thomas Askeland, and I'm Head of Investor Relations in Elopak. The presentation today will be held by our CEO, Thomas Körmendi, and our CFO, Bent Axelsen, and will be followed by a Q&A session straight after the presentation. Please use the ask a question functionality in the webcast and submit any questions you might have in writing, or you can wait until the end of the presentation and when we'll have the Q&A session and a conference call, and you can ask the question yourself. Without further ado, I'd like to introduce our CEO, Thomas Körmendi, who will take us through the business performance of Elopak Group for the second quarter of this year. Thomas, over to you.
Good. Thank you, Thomas. A warm welcome from us in Elopak to all our new investors and the analyst community. I will provide a business update on how we've performed during the last quarter before I hand over to our CFO, Bent Axelsen, who will then take us through the financials. Both Bent, Thomas Askeland, and I will be available to respond to questions in the Q&A following the presentation. Firstly, I'd like to draw your attention to our highlights for the second quarter. Elopak has delivered resilient performance and a continued strong profitability during the second quarter. Number one, our profitability has continued to be solid, which is shown in the high EBITDA margin of 14.3%, despite the current inflationary pressure. Our revenue fundamentals are intact, even if somewhat lower revenue reported compared to the exceptional Q2 of last year.
I will provide more details on the revenue development shortly. We are extremely happy to report that our plants continue to perform very well in this quarter, both operationally and also on safety. Our sustainability-driven strategy is on track to deliver new innovative, sustainable products to our customers. During the second quarter, we launched tethered caps, and today we are also announcing our brand-new eSense carton. We see a positive development in our aseptic business on the back of a very strong 2020 and Q1. All in all, we have delivered resilient performance, and we are especially pleased with our solid profitability for the second quarter. Revenues continue to grow, although slightly down compared to the exceptional Q2 in 2020. Our revenue for the second quarter ended at EUR 242 million, which is in fact the second best of the previous six quarters.
Although it is down from the EUR 253 million in the quite extraordinary COVID-19 second quarter last year. The revenue decline compared to last year is primarily due to stockpiling in the initial phase of the pandemic in second quarter of 2020, leading to an abnormally high revenue recognized in the second quarter of 2020. As we all recall, second quarter, both Consumer Holding and our customers building safety stocks and inventory led to the higher revenue in the quarter. All that said, the most encouraging effect on the revenue during the second quarter is the higher sales in our aseptic business, which is fully in line with our strategic priorities. Now let's move on to our EMEA business. We have delivered satisfactory revenue performance during the second quarter of 2021.
The graph on the left shows a decline from last year, where the high revenue, as I mentioned, was due to the stockpiling that we all witnessed during the initial phase of the pandemic. A positive contributor to our revenue performance in EMEA is the volume growth in the aseptic segment. We are pleased to see some of the results from our strategic focus on the aseptic segment with a +12% growth here. We are also seeing promising signs of filling machine sales with high activity in the second quarter in Europe, securing several new contracts. Our main challenge in EMEA, as well as in Americas, is the continued very high raw material costs impacting our margins. Bent will further address this topic of raw material in the financial section. Turning now to Americas, here the situation is somewhat different than the one in EMEA.
Our Americas business is still operating under challenging COVID-19 related market conditions, and the decrease in revenue compared to last year is somewhat reflecting this. The positive news is that the business is managed very well. Our plant and operation in Montreal are responding in an effective manner. Consequently, despite the restrictive environment, we have been able to maintain our solid margins in Americas business as well. A key reason for the decreased revenue in Americas business is also the euro-dollar currency translation impact, which accounts for more than 50% of the revenue difference. Bent will also explain more about these effects when we get to the financial section. The ongoing COVID-19 situation in the Americas makes it more challenging to execute on our business development activities, the new business, simply because we have difficulties accessing plants and as well as filling machines.
On the positive side, though, we have experienced very strong sales in our closure business, which is up by more than 25% compared to last year. That, in fact, is a business requiring less technical assistance at site. During the IPO and in all the material we used, we presented our sustainability-driven strategy. Today, we are happy to report that our implementation is largely being executed according to plan. Our strategy relates to five areas. One, growing the business in North America by offering unique innovations and state-of-the-art filling equipment. Two, continue to expand our aseptic business with consumer-preferred packaging solutions. Three, expand into new geographies. Four, continue to convert plastic packaging into carton packaging, both in existing as well as in brand-new segments. Five, of course, persistently drive the commercial excellence and the operational improvements agenda that we have in place.
During the second quarter, we indeed experienced a positive development in our aseptic segments and also our plastic-to-carton conversion. In Americas, we continue to pursue our America strategy according to plan, despite some more headwind than expected, primarily related to COVID-19 related difficulties I just mentioned. During the past couple of months, we have also gained increased confidence in our sustainability-driven strategy on the back of the recent reports, such as the ones from EU and UN, as well as the overall mega trends in general consumer sentiment. We firmly believe that sustainability will be an even more important topic with our customers going forward, and we will be supportive in driving the plastics-to-carton conversion trend.
Let me reiterate that we also remain fully committed to meeting our science-based targets to reach the ambitions of the Paris Agreement in the longer term, but equally so, continue right now today to deliver on our innovations within sustainable packaging solutions to meet our customers' needs. Given the increased momentum in the sustainability trend within the packaging sector, we are continuing to pursue opportunities and driving innovations that meet our customers' demand. We believe that we are part of the solution, and we are ready to deliver tangible innovations right now. In response to the Single-Use Plastics Directive, we already launched our tethered cap solution named Pure-TwistFlip in June. The purpose of this innovation is actually to address the plastic waste situation.
Our solution will provide customers and consumers with the same convenience as with current screw cap solutions, while being environmentally friendlier by remaining attached to the pack after opening. The Pure-TwistFlip cap will hit the shelves in Germany now this November in this year. Today, we are also launching our second big sustainable packaging solution, packaging innovation, namely our Pure-Pak eSense carton. The eSense carton is an aseptic pack without the aluminum layer. With this innovation, we are addressing the areas around climate change and specifically offering products with lower CO2 impact. The elimination of the aluminum layer results in a reduction of the carbon footprint by 28% while facilitating full recyclability. This is, of course, on top of the 69% lower CO2 emissions from a standard aseptic carton pack versus a PET. Very substantial differences and results.
Now it's about time to dive into our financials, and I'll hand over to our CFO, Bent Axelsen. Bent, please.
Thank you, Thomas. I will now take you through the financial performance for the second quarter, and at the end, I will provide some perspectives on the outlook. Let me start with the key highlights. We are today reporting an adjusted EBITDA margin of 14.3% for the second quarter, which is quite close to what we reported for Q1 and slightly below Q2 last year. This profitability level is much supported by positive product mix and continued strong operations. Our financials remain robust despite some COVID-19 impact and raw material headwinds. Following the IPO, we have an improved capital structure with a leverage ratio close to two. This has given us a solid financial platform for further growth. Let's move to the revenues. EUR 242 million is the second highest quarter so far in Elopak.
Compared to the same quarter last year, the revenues are down 4% or 3% on a fixed currency basis between US dollar and euro. We have a resilient revenue base despite the pandemic. For the second quarter last year, the revenues were artificially high due to the stockpiling that Thomas has talked about. Revenues are also down due to loss of customers in Americas, especially in Roll- Fed. On the positive side, we are pleased to see the revenue growth in the aseptic business, both in dairy and juice, as the aseptic is one of the key strategic growth priorities for the company. Finally, the second quarter was a good period for sales of filling equipment, which we take as a positive sign of a normalization of business. All in all, resilient revenue development despite the pandemic.
Our profitability remains strong. For the second quarter in a row, we deliver margin levels in line with our midterm EBITDA guiding. The adjusted EBITDA is EUR 35 million, which is down 7% from last year. Adjusted EBITDA margins are slightly down from 14.7%- 14.3%. For Europe, growth in aseptic has improved the average margin, a key driver for our positive product mix. We have a slight decrease in fresh dairy in line with the market trend. These volumes have primarily been in segments with relatively lower margins. In Americas, the lower top line from Roll- Fed and the impact of the pandemic have contributed to a lower EBITDA. As Thomas pointed out, both strong operations in the plants and growth of caps and closures support our margins, which stay at around 16% in Americas.
Continued strong operations in the European plants have also helped to mitigate increased raw material prices. Raw material prices will be discussed more in detail on the next slide. Before we move on, I want to remind that we are showing here the adjusted EBITDA and the adjustments we have made in the second quarter is the transaction cost of EUR 4.3 million related to the IPO. To illustrate the key drivers of the adjusted EBITDA development, we show the bridge on the left-hand side of the slide. Compared to last year, we have a positive net revenue mix effect for the reason we have explained. A major effect in the second quarter is related to raw materials. Raw material prices remain high throughout the second quarter and have continued at elevated levels also during the last two months.
Polymer prices peaked in June, July 2021 and are at historical high levels. Low-density polyethylene or LDPE account for some 13% of our raw material costs. Aluminum prices continue to increase, but this is having a slightly less impact compared to the LDPE in our company. Aluminum accounts for around 3.5% of our total raw material costs. Our hedging policy is to enter financial hedges for the majority of our LDPE and aluminum exposure for up to 18 months. There is a time lag for raw material impact due to our inventory positions. Consequently, not all price increases observed in Q2 have affected our Q2 P&L. In Americas, we have a practice with raw material clauses in our customer contracts, which provides margin protection.
What is important to remember is that fundamentally, the carton industry will benefit from sustained high LDPE prices, but there is high uncertainty on future levels. All in all, solid profitability despite exceptional raw material prices. Our financial position has strengthened over time, and after the IPO, we are at a leverage ratio of 2.1x, measured as net debt divided by adjusted EBITDA. Our net debt was significantly reduced due to EUR 50 million new equity raised in the IPO, but also through good cash from operations. The positive adjusted EBITDA development continues to delever the balance sheet. A main explanation to the improved net debt position is also the low CapEx spend during the first half of 2021. We expect the CapEx to catch up due to increased activity on filling machine placements and also the upcoming investments in our Montreal plant. Finally, let's look ahead.
For the financial year 2021, we are seeing a moderate revenue development. We expect our 2021 revenues to be in line with last year. Raw material price level will continue to impact our business. Although we have seen some effects in Q2, we expect the Q3 figures to be more impacted by the raw material cost due to our inventory positions. Consequently, we expect our EBITDA margin for 2021 to be slightly below that of 2020. The long-term fundamentals for our growth remain intact, and we are confident with our midterm guiding, as presented in the prospectus before the summer. This concludes the financial section of this presentation, and I'm handing it over to our CEO, Thomas Körmendi, to summarize.
Thank you, Bent. Thanks. To summarize it all, I'd like to leave you with the following key takeaways from our presentations. Firstly, we are satisfied with the Q2 result and having delivered continued solid performance in line with our expectations, despite the significant raw material headwind and a continued pandemic in the world. The raw material prices have remained high at a level somewhat higher than actually we had foreseen as well, and this will impact results in the short term. However, sustained high LDPE prices will absolutely support conversion from plastic to carton. Thirdly, we remain committed to our strategy and our targets as we are uniquely positioned for the increased momentum for sustainable products and solutions. Thank you for listening, and we will now continue to the Q&A session. Over to you, Thomas.
Thank you, Thomas. That concludes the presentation, and we're now moving on with the Q&A session, which will be in two parts. The first one will be on the call and will be managed by the operator, and the second part will be the questions that you have posed on the webcast through the Ask a Question functionality. With that, I'll hand over to the operator to take us through all the verbal questions for the call. Operator, please go ahead.
Ladies and gentlemen, if you wish to ask a question, please press five star on your telephone keypad. To withdraw your question, please press five star again. We will have a brief pause while questions are being written. As a reminder, if you wish to ask a question, please press five star on your telephone keypad. As there are no questions at the moment, I'll hand the word back to the speakers.
Okay. Very well. We will take the questions from the webcast, and I'll start out with a question from Mr. Tore Tellefsen. Have any green funds taken Elopak into their portfolio? Others agree that you are an ESG company? That's from Tore, that goes to CEO Thomas .
Okay. Thank you, Tore, for the question. The answer to the first part is yes, they have taken us into the funds. The second part, which I assume relates to the EU Taxonomy question, we are in a position there that we, as well as I think most other companies, are currently trying to understand and reviewing what it means to be considered within the taxonomy rules. I cannot answer you completely on that, but we are, as I said, in the process of finding out, and will be knowing that shortly.
Very well. I'll move on to a question from Ole-Martin Westgaard from DNB. The first question goes, given your implied weak margin guidance for the second half due to cost inflation on raw materials, how should we think about margins for 2022? i.e., how quick can you restore the margins? Any historical lessons that are relevant?
Bent, please.
Yes, as we mentioned in the presentation, the raw material outlook is very uncertain. It's very hard to predict. That makes this difficult for us to give any further concrete guidance into 2022. I think Elopak as a company is not able to move quickly inside a year. There's a stronger correlation as time increases. Another element I think it is important to remind is that high LDPE prices is good for the carton industry because it will facilitate the transition from plastic to carton.
Very well. A second question from Ole-Martin Westgaard: How many aseptic filling machines have you sold in the second quarter, and can you comment on the number of leads for the second half? We'll just take that straight from me, and we're not going to provide any numbers on the filling machine sales from Elopak. That's our policy, that we will not comment on the volumes. Moving on to the third question from Ole-Martin Westgaard in DNB: Can you comment on how the price-volume mix was in Americas and Europe in the second quarter year-on-year for the cartons? The price-volume mix in Americas and Europe, if we can comment on that.
We don't have any concrete information to provide on the product mix. As you can see from the results, we would like to have seen higher revenues. The mitigating factor in the America operation is the way we work in the factory, the way we are able to reduce the waste. That is to say, the key driver of the margin development. In Americas, the EBITDA margin is around 16% for this quarter, which is approximately the same as the same quarter last year, which also was 16%.
Very well. Thank you. Moving on to a question from Mr. Dagfinn Hansen: Resilient performance, but per competitor, SIG Group show an EBITDA adjusted margin that is approximately double of Elopak, representing EUR 60 million per first half of 2021. Why is that, and what will Elopak do to improve profitability from the 14%-15% levels?
Good. Thank you for that question. I think it is very important to understand that there are some fundamental differences between the aseptic business and the fresh business. Historically, the aseptic business has been a system sales only business, whereas the fresh business in the world has been a mix of system-related as well as non-system-related business. That has meant that overall, everywhere in the world, the fresh profitability is at a lower level than the aseptic is. Clearly, we have a mix. We are the global leaders in fresh liquid carton packaging with a business on the aseptic side as well. That really is why we have the differences we have. What are we going to do?
Well, in our projections, we have a projection of 14%-15% margin development, which is a solid development and which is based on the growth element that I outlined, namely the Americas growth, the aseptic growth strategy that we're embarking on, our geographical expansion, the significant plastic to carton conversion, continuation of the many improvement activities we do, both on the commercial side as well as on the operation side. All of that is driving our margin, and all of that is driving our business in the coming five years.
Very well. Thank you, Thomas. Moving on to the next question. It's from Mr. Robin Santavirta in Carnegie. M&A, important topic. You have mentioned that you're looking into growth through acquisitions. Could you update of the situation and outlook related to this?
I can do it very briefly and, let's say, from a very top-line level. We are indeed looking at a number of different activities and acquisitions that will support our business and help us to drive the growth that we are outlining. Specifically, where we are with this now, I cannot disclose now, but I can tell you to the point that Bent made during his presentation, that we feel in a very good shape to execute on our strategy when it comes to acquisitions as well, and we'll continue to work on this heavily in the coming period.
Okay. Very well. Thanks, Thomas. Moving on to another question from a banks analyst, Mr. Truls Engene of SEB: What is the expected revenue development year-on-year for the third quarter, and can you please elaborate and quantify the expected higher raw material costs that you expect to experience in the third quarter? That goes to Bent or Steve.
Thank you for the question. I think for that, I will refer to our outlook statement in the presentation where we have provided the guidance for the full year. We are not able to break that down between quarters. What we said in that outlook statement is that we expect the revenues to be in line with 2020 and the EBITDA margins to be slightly below those of 2020. Just to remind that EBITDA margin, that was 13.5% for the full year of 2021. We reported 40.3% for the quarter to 2021. Thanks.
Very well. Moving on to the next question from Moomal Irfan from Goldman Sachs. "My question is regarding inorganic growth opportunities. Is this something on your radar right now? And geographically, where would be priority?" I suppose that goes similar to the M&A question.
Yes. I can just reiterate some of the issues we have. Clearly, we have, as one of the pillars in our growth strategy, the geographical expansion. Currently, we have a very strong position in Europe, and we have a strong position in Americas, and we are also present and with a good position in the Middle East. When we talk about expansion, we are pretty much looking at all the areas where we are currently not very strong and where we see opportunities with our portfolio and with our offering. Specifically what that means in terms of M&A, I cannot at this moment disclose beyond saying that to the point I made before, we are absolutely exploring the opportunities in the areas where we see good potential for us.
Very well. Thank you. Then on to the next question. It's from Luke Pez: "How confident are you to pass on the price increases into next year, offsetting the second half margin pressure?" I suppose, Thomas, you can comment on that.
Yes. Clearly, the raw material situation is facing the entire industry, not only this industry, but essentially all industries we're looking at. There is no question about the fact that it is facing all of the players in this industry. Clearly also our customers are faced this from many other suppliers that they have. We are addressing this, and we are clearly announcing that the cost increases that are being seen in the market will need to be passed on, and we are doing that as we speak. We absolutely believe that that is going to happen, and as I said, it's a issue not limited in any way to Elopak, but very much an industrial, essentially all industries right now.
Very well. The final question from the webcast, from Mr. Dagfinn Hansen again: "Will Pure-Pak eSense be for both high and low acid drinks and for the current filling machine portfolio?
Thank you, Dagfinn. That's a very good question. The eSense that we are launching, we are launching as an aseptic solution, so we will eventually get that on both high and low acid. High acid, low acid milks means milk, juice products, absolutely yes. From a filling machine technical point of view, the way a filling machine works is that the sealing system on a normal filling machine using aluminum foil uses a certain sealing type called induction heating. When you take away the aluminum foil, you need to seal the pack in a different way, which is what we are now doing as a consequence of the launch of eSense. No, it's not entirely the same, but we have a solution to it, and it will be available for both high acid and low acid.
Very well. That concludes our Q&A session. Thank you all for joining. Thanks for the questions, and we wish you all a very nice day.
Thank you.