• Net Sales: EUR191 million for Q4, up 3% from last year.
• EBIT: EUR19 million excluding raw and trading, up 10% from the same quarter last year.
• EBIT Margin: 9.7%, up by 0.5 percentage points.
• Full Year EBIT Margin: Decreased slightly from 9.5% to 9.3%.
• Operating Cash Flow: EUR33 million for the quarter, driven by positive working capital development.
• Inventory Reduction: EUR13 million reduction in inventory, approximately 10% decrease.
• CapEx: Target not to exceed EUR20 million for the year, with significant reduction compared to previous years.
• Leverage: Slight increase in Q4, with net interest-bearing debt reduced by EUR67 million during the year.
• Cash Position: EUR73 million at year-end, with an additional EUR30 million in available facilities.
• Recycled Material Collection: 35,000 tonnes collected in 2024, a 30% increase from the previous year.

• Warning! GuruFocus has detected 4 Warning Signs with OSL:BEWI.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bewi ASA (OSL:BEWI) achieved organic growth in both top line and EBIT for the first time in nine quarters.
• The company reported a 3% increase in net sales for the fourth quarter, reaching EUR191 million.
• Bewi ASA (OSL:BEWI) has increased its collection of used EPS by nearly 30% in 2024, reaching 35,000 tonnes.
• The merger with Unipol positions Bewi ASA (OSL:BEWI) as the most cost-efficient producer in Europe with a strong recycled offering.
• The company has strengthened its financial position by reducing net interest-bearing debt by EUR67 million in 2024.

Negative Points

• Bewi ASA (OSL:BEWI) did not reach its ambitious target of collecting 45,000 tonnes of used EPS in 2024.
• The EBIT margin for the fourth quarter was 9.7%, which, although an improvement, still falls short of the company's financial target of 15%.
• The insulation and construction segments experienced a loss, with more than 50% of this loss coming from joint ventures in Germany and France.
• The company's raw material division reported lower volumes in the fourth quarter due to regional market differences and cautious customer inventory buildup.
• Despite improvements, the leverage remains above target, with a slight increase in the fourth quarter.

Q & A Highlights

Q: Can you elaborate on the strategic transactions mentioned in the earnings call? A: Christian Bekken, CEO, explained that Bewi ASA announced the merger of BEWI RAW with the Dutch raw material company, Unipol. This transaction, along with a packaging transaction announced in October, positions the company for further growth in higher margin segments. The merger is expected to create a competitive and large player in the market, with synergies estimated to be around 2% of revenue, translating to at least EUR8 million.

Q: How did Bewi ASA perform financially in the fourth quarter of 2024? A: Marie Danielsson, CFO, reported that net sales for the fourth quarter were EUR191 million, up 3% from the previous year. EBIT was EUR19 million, excluding raw and trading, which is a 10% increase from the same quarter last year. The EBIT margin improved by 0.5 percentage points to 9.7%. The company also saw positive organic growth in all continuing operations.

Q: What progress has been made in the circular segment? A: Christian Bekken, CEO, highlighted that Bewi ASA increased its collection of used EPS by nearly 30% in 2024, reaching 35,000 tonnes. The company plans to increase this further to meet its target of 45,000 tonnes in 2025 and aims for 60,000 tonnes in the future. The use of recycled material in production increased by 77% in 2024.

Q: What are the expectations for the joint venture with Unipol? A: Stein Inge Liasj, Chief Strategy Officer, stated that the joint venture is expected to become the most cost-efficient producer in Europe with a strong recycled offering. The joint venture is projected to have a turnover of EUR400 million based on 2024 figures and is expected to deliver dividends from the first year. The profitability is anticipated to increase significantly as market conditions improve.

Q: How is Bewi ASA managing its financial position and leverage? A: Marie Danielsson, CFO, mentioned that the company has been focusing on strengthening its balance sheet by reducing net interest-bearing debt by EUR67 million in 2024. This was achieved through operational measures, restructuring schemes, cost reductions, and working capital improvements. The leverage is expected to decrease further with the proceeds from recent transactions and working capital improvements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.