Release Date: August 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bewi ASA (STU:5T0, Financial) reported a solid operational cash flow of EUR23 million for the quarter, supported by a reduction in working capital.
- The company ended the quarter with over EUR100 million in available cash and liquidity, indicating strong financial positioning.
- Bewi ASA has started selling certified recycled EPS (CR EPS), which is expected to increase market volumes and provide a competitive advantage.
- The company has doubled its capacity in construction boards with a new production line, which is expected to boost sales in high-value products.
- Bewi ASA is strategically positioned to capitalize on market recovery, with a focus on energy-efficient solutions and insulation, which are expected to provide synergies across divisions.
Negative Points
- Revenues for the quarter were down by 4% to EUR277 million, reflecting the challenging market conditions.
- The company experienced weak margins in its RAW segment due to volatile styrene monomer prices, impacting gross margins negatively.
- Sales in the Circular segment decreased by approximately 15% compared to last year, with ongoing challenges in accessing waste streams and profitability.
- The Packaging & Components segment saw a decline in sales and EBITDA, with lower margins due to pricing lags in the fish box segment.
- Despite efforts to reduce costs, personnel costs increased due to salary hikes influenced by underlying inflation.
Q & A Highlights
Q: Can you provide an overview of BEWI's financial performance for the second quarter of 2024?
A: Christian Bekken, CEO, reported revenues of EUR277 million, a 4% decrease, and an EBITDA of EUR29 million, including EUR7 million from acquisition-related compensation. Despite challenging markets, the company maintained a strong focus on cash flow and balance sheet strength, achieving an operational cash flow of EUR23 million.
Q: How is BEWI positioned in the market, and what are the strategic priorities moving forward?
A: Christian Bekken, CEO, emphasized BEWI's competitive advantage in recycled materials and tax-free products. The company is focused on increasing the use of recycled materials, reducing costs, and strengthening its financial position to capitalize on market recovery, particularly in the Insulation segment.
Q: What are the key developments in BEWI's segments, particularly RAW and Insulation?
A: Marie Danielsson, CFO, noted that RAW volumes are stable despite weak building industry demand, with EPS prices up 6% and styrene prices up 20%. In Insulation, sales are stable with higher prices, and the company is seeing improved results in the Nordics and Germany due to cost structure adaptations.
Q: How is BEWI addressing the challenges in the Packaging & Components segment?
A: Marie Danielsson, CFO, stated that while sales and EBITDA have declined, there are operational improvements in industrial customer segments. The company expects volume improvements in the fish box segment in the second half of the year, with automotive continuing to perform well.
Q: What are BEWI's financial priorities and outlook for the future?
A: Christian Bekken, CEO, highlighted the focus on reducing working capital and CapEx, with a target of over EUR150 million in liquidity by year-end. The company is preparing for growth in key markets, leveraging its competitive advantages and strategic positioning for market recovery.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
