Elopak ASA (ELO) Earnings Call Transcript & Summary

Good morning, and welcome, everybody, to Elopak's first Capital Markets Day. Fantastic to see so many people joining us here in Oslo and also on the webcast. My name is Christian Gjerde, and I'm the Head of Treasury and Investor Relations. We have a very exciting and tight agenda for this morning with a lot of interesting topics to cover. Some practicalities before we move on to our program. In the back left-hand side, there is a fire exit. We have a photographer here today. So if there are any reservations against being photographed and pictures being used, please let us know. Also, please make sure to keep your phones off. Before we start the program, let's look at this video. [Presentation]

And with that, I would welcome our CEO, Thomas Kormendi, up on stage. Thomas?

Thank you, Christian, and a very, very warm welcome to all of you here in Oslo, and of course, also online. On behalf of the entire Elopak team, I have to say, we've been looking forward to this day a lot. And looking in the room here and seeing an absolutely jam packed room, completely sold out is just incredibly encouraging for us. We're, in fact, thinking about another show, one more show of this. It's encouraging because we will, of course, here be presenting to you Elopak, where we are moving, and also give you a chance to meet parts and some of the big global Elopak family. So to do that, we are going to run through, as Christian said, a number of points here, but let's start with actually the key takeaways. And we have 3 things we would like you to remember out of this day. Namely, we are already now the #1 player when it comes to sustainability and carton packaging in liquid food, but we are now aiming to go one step further with this statement, because we are aiming to be the sustainability front runner in a wider scope in what we call wet products. Secondly, we are now aiming to become a EUR 2 billion company by 2030, and with that also increase our margin level to 15% to 17%. And then thirdly is we actually have 3 priorities that will drive this development, that will drive the growth. And the first one is realizing our global growth. Secondly, sustainability front runner and driving -- strengthening our leadership in core. And then thirdly, as you saw from the video, the immense trend -- global trend leveraging the plastic shift. These are going to be the themes that we will be dwelling into and explaining during the day today. So let's just start with the beginning. And interestingly, if you think about liquid food, today, in fact, there are not that many options when you talk about liquid food when it comes to packaging. Most of the liquid food we see around us will be packed in some format of plastic, PPT, HDPE, or other formats. And the downside of that is, of course, that the carbon footprint on that packaging is really significant. So just to understand, if we compare the carbon footprint of a plastic container of some sort, it will vary a little bit between the plastic types, with a carton pack, you will see that actually carton will have somewhere between 60% to 70% lower carbon footprint, lower CO2. So with that in mind, it's of course clear that when we are looking at it, there is an obvious question we ask, could we not use cartons in areas that are traditionally associated with plastics. That is the challenge we have set. So just a few words about who we are. So we are all on the same page here. We are absolutely already now in the business of sustainable packaging. This is what we do. And we do this by packing commodities. Many of you will think of milk, and it's a very important part of our business, but that's not the only part we have. We have a host of different products providing nutrition to consumers around the world. But we also have technology and skills in our portfolio that actively can help us to reduce plastics and provide the world with alternatives. We are today active in some 70 markets. We're selling in some 70 markets. We are selling around 14 billion cartons. We are delivering these through some 11 factories around the world, and we have a very extensive portfolio, as I hope you saw upstairs, for those of you who spent some time there, extensive portfolio in formats in this field. You can also see, we've had a very solid development in recent years in the business. And also you will see that we had a small break when we had Russia after the invasion of Ukraine and we immediately left Russia. That's the gray marking on the slide. We are reporting our business essentially in 2 parts. We have the Americas consisting of Canada, U.S., Central America, and Mexico. And then we can call it the rest, we call it EMEA, which is Europe, Middle East, MENA, we call it, and India. We just put India in there as well. So we're reporting these 2 axes. And in the total organization, we are just shy of 3,000 -- around 2,700 people. So what is it we do as a company? What is actually our business here? So we offer our customers solutions to cover the entire value chain. And very importantly, we have various models depending on our customers' needs. But on one hand, we will have filling machines, and we have the best, I dare to say, best and most hygienic filling machines on the fresh side, chilled side. And we also have aseptic filling machines. We have packaging material, which, of course, is our consumable, and will amount to around 90% of our revenue. And then we have the very, very important part of the services that enable our customers to have a good night's sleep, to have our filling machines running and ensure that we have the high-quality delivery that we do have. So when we have aseptic and chilled, just to get that clear, we have the chilled products, which are the products that needs refrigeration through distribution. These are typically products which are processed at a lower temperature. And then you have products which are distributed ambiently, processed at a higher temperature, and also packed in different conditions with different kind of technology. So we would like to think, and actually we strongly believe that we are preferred supplier to this industry. And why we say that is that we, today, serve big parts of the industry with our products. And mainly in liquid food, you will find that around 60% of the milk in Europe is packaged in cartons, and similarly 30%. So glass half full or half empty, you decide, but it certainly opens up a tremendous opportunity there as well. So dairy and juice are currently the largest markets we have, but we also have a whole host of other things, typically soups, food in various kinds, and also very excitingly, the home and personal care segment. More about that later today. What is important for us and very, very significant part of the company's DNA, in fact, is the fact that we cater to different needs from consumers, different needs of customers. And we do that with our family of packs. We have 3 brands in the company. We Have Pure-Pak, the world's largest and best-known gable top brand. We have D-PAK, which we use for the home and personal care. And then we have the Elopak Roll Fed formats. And these are all split and actually organized based on segments, capacities. We have distribution systems that are some chilled, some ambient, what you need. We have consumer needs, consumption situation such as family packs, in-home consumption, on-the-go consumption or single-use formats. All of this, at the end of the day, we are selling filling machines, production equipment. And here we have a wide range, ranging all the way from 3,000 to high-high capacity 20,000 an hour machines. So we also have a global footprint. We'd like to call it global. It's certainly very international. Maybe not entirely global, but we have our business in the Americas part, where we currently have 3 factories. And as you have seen, we're building the fourth factory as we speak. And also, we have then the EMEA part with factories around Europe, in the Middle East, and also India. Together with that, we have a set of market units serving our customers in these regions and also our technical service organizations serving customers in all of the 70 markets where we are currently operating, a widespread and a very, very important part of this business. I'm also very proud to present the GLT, and I'm doing that because we have a very experienced group, I would like to say, a highly competent group of people. And importantly, a very diverse group. We have a host of different nationalities ranging from Europe to Americas. We have very large countries represented and very small countries represented. We have a group of people coming from the industries of the packaging industry, the carton packaging industry, the plastic packaging industry, and FMCG at large. So a good group of people. And today, you will meet some of them during this presentation. Unfortunately, not all of them, we don't have time for that. But you will also meet 3 other colleagues who will be presenting today marked here in yellow. And I will, of course, present them when we get closer. Evidently, all of the GLT will be available should you want to ask questions. We're here for coffee breaks, lunch, et cetera. Everyone is very happy to help you in that period. Now just a few words on history. And this is really about future. So we are not dwelling on history. But as you saw in the movie, we originate back from '57. We've actually been around in this industry a long time. The value of that is we are extremely well known in the industry. We have a well-reputed company. And when you look at the time line, we have, of course, a set of milestones, including the introduction and establishment of our aseptic portfolio, and all the way ranging up to 2021, when we had the IPO, which is, I guess, why we're sitting here now. The IPO, we'll come back to that. But today is, of course, another milestone for us because today is the day when we are launching our strategy, Repackaging Tomorrow. So I think you understood from the video that sustainability plays a very, very important part in our DNA. And interestingly, unlike many other companies who bring up this theme, we have been at this for many years. In fact, more than 15 years, this has been the center point of what Elopak has been doing. And in our industry, this is, in some cases, required by customers, but it's also important for us internally to engage. All of us here are engaged around it, and we closely collaborate with our industry partners and a lot -- and very closely with our suppliers to drive the developments needed in the sustainability -- meeting the sustainability requirements. Of course, we are proud as well that we have received recognition. We have received recognition on anything from reporting, which we got the A+ now. We have also received recognition from the global EcoVadis, where we received a gold rating, bringing us to up 2% in the world when it comes to sustainability. And finally, and very importantly, only this year, in May, we raised a green bond, NOK 2.5 billion. And the purpose of that is to ensure that we have the funding needed to drive our sustainability-driven agenda, the points that we are going to show you during this day. That green bond, by the way, is what they call Dark Green. And that actually means that this is the highest rating you can get of any green bond available right now. So when it comes to sustainability, we were very early on to say we commit. And we committed to Science-Based Targets initiative. And those of you who have been following this will know that there are 3 different scopes in this. When it comes to Scope 1 and 2, we have delivered, I'd like to say, very well. We have actually reduced our CO2 footprint by 33% from 2020 to end of last year. We've partly done that by investments, investments in Montreal, where we have been able to reduce our natural gas use by more than 60% through investments in new technology. And that has meant that we actually believe that we will reach the Science-Based Target Scope 1 and 2 before 2030, which was the plan we set out. So we are very well on track on that. And when it comes to Scope 3, we are, of course, working closely with the big suppliers we have, all of which commit to reducing their CO2. So we carefully select partners, suppliers who also share the same belief in the Science-Based Targets. During the period since the IPO and actually at the IPO, we presented our growth strategy consisting of a number of elements. We actually had 5 elements. And for those of you who've been following us, you would have seen this slide a few times. We redesigned it, so it looks new, but same content. The thing is, we have 5 elements that have brought us to where we are now. It's our Americas strategy. You will hear a lot more about that later. It's the aseptic development we have. And here, we have developed a new platform, which we call E&P. We call it Pure-Fill. We call it Elopak machine platform. Now we call it Pure-Fill. It's the brand of Pure-Fill. We have installed machines in 5 different markets around Europe. So we are rolling that out. We are producing the machines and delivering on the aseptic strategy as we discussed it back at the IPO. Equally, we had the global growth. We are coming back to that point as well, and we had then the plastic to carton, which we are now putting much more fuel around and more energy behind it. We'll show you what we are doing in that direction. And finally, which has been a fundamental part in the development here relates to the commercial excellence program. And that, for us, is a wide definition of a host of activities ranging from operational improvement, reducing waste in all of our plants, driving the operational improvements through better OE, reducing unplanned downtime, et cetera. Standard things you would do in a manufacturing industry has been the fundamental part in this. But also pricing and working with a system of commercial excellence that enables us to improve our pricing and our way we handle pricing in the group. So what has actually happened since the IPO until today? Quite a lot of things. Very importantly, we have exited Russia, right? We were very clear. We actually exited Russia -- announced the exit at least a week after the invasion of Ukraine. This accounted for 10% of our revenue. But also we have changed the company in other ways. We were very dependent on Europe to a very large degree. We now have a business that is way more balanced with much stronger position in U.S., a #1 position in MENA, and also a plant and a business moving in the high-growth area such as India. Secondly, Americas, and we're going to talk about what happens next. But we have actually increased the business and also changed the business. We used to be a converting plant, selling blanks to other filling machines to customers. We have now moved that into being a genuine system provider and a solution provider in U.S., increasing our EBITDA from 35 to 70 in the period. More to come. Thirdly, we had a limited aseptic portfolio. In fact, we had one machine type. We have now expanded our portfolio to more machine types in the aseptic type, the world's most hygienic fresh and chilled machines just launched in Europe. And also ESL, which is extended shelf life, a longer fresh machine type also at the highest hygiene level available anywhere in the world. Finally, when we, during the IPO, talked about the commercial excellence, we had just launched it, we had just initiated. Now we have worked on implementing it, embedding it. It's simply now a part of operating, which has helped us during the period of a lot of volatility on raw materials, cost, et cetera. We had, thanks to this program, the ability to react and implement the changes in the organization. So we have changed, for sure. But the world around us also changed while we did. And I'm going to ask now 2 of my colleagues to join me on stage to explain how the world looks now, both compared to what we said in 2021, but also what we are facing in the future. And to do this, I will ask Runar Bakken and Emilie Olderskog to join me, I would like to say, on stage, up here, at least. So I'll start with Runar, who will speak first. Runar is Head of our Strategy Office. Runar has been absolutely instrumental in developing the strategy that we are presenting. He has gained an enormous insight into markets, into the competitive field and will run us through what that means. Emilie has just joined us recently, in fact, very recently, I can say, and comes with extensive experience from FMCG, from consulting, and even from sustainability related to completely different industries, really providing value into us, who are so committed to this field of sustainability. So Runar, I will hand over to you. Will you give us some color of what is happening in the market?

Thank you very much, Thomas. Now, let's have a look into some of the key trends that has driven and shaped our updated strategy. Let's start looking into the key macro trends. So both in emerging markets and in the mature markets such as Europe and North America that we operate in, both population and urbanization is expected to increase going forward. At the same time, disposable income is expected to rise. If we look at the mature markets such as Europe and North America, this is expected to have a slight increase in both population and urbanization, while the disposable income is expected to grow approximately 5 percentage points per year. If we look at the emerging markets, the trend is more rapid. Both population and urbanization is expected to have an increase above 1 percentage point per year, while disposable income is expected to rise by 7 to 8 percentage points, meaning 3 percentage points more than the mature markets. So if we look into interpreting that into what it means to our volumes going forward, we can see that the emerging markets we operate in, MENA and India, is expected to be accelerated by those macro trends. As you can see, both MENA and India has a significant higher growth rate than the mature markets we operate in. In addition, MENA and India are driven by some global -- sorry, governmental initiatives such as the government in Algeria promoting aseptic milk. And in India, we see stronger plastic bans and plastic regulations, which we believe will support our growth moving forward. In the mature markets, Europe and North America, the expectation is more moderate. We expect a fairly stable picture going forward. And that is driven by the macro trends I just mentioned. In addition, both regions have seen a slow but steady decline since the '70s in drinkable dairy. That is a trend which is not rapid, but we see it year after year over time. In addition, we expect plant-based to continue growing more than the rest of the market. And we also expect some of what we call plastic replacement shift. That is driven by sustainability drivers that I will elaborate more on very soon. So to conclude, emerging markets is expected to create tailwinds for our industry, while the mature markets is expected to have a fairly stable outlook. Now let's go into a topic which is very close to our heart, sustainability. And what is on our stakeholders' agenda? Well, we see continued increased focus from all stakeholders around us. Our consumers demand more sustainable products, brands demand more sustainable packaging from us, and they even integrate sustainable packaging solutions as a part of their branding and their sustainability strategy. And last but not least, and Emilie will run us through a deep dive of this very soon, increased regulations set new standards for our industry moving forward. Let's have a look into what the customers -- sorry, the consumers think about. Well, what they are focusing on is increased sustainability awareness. So the end consumers, 69% of those say that their sustainability agenda and their awareness around sustainability has significantly increased over the last few years. At the same time, 74 percentage points of U.S. adults say that food and beverage companies need to take responsibility and cut plastics in their consumption. At the same time, 53 percentage points of consumers say that they will pay 10 percentage points more for sustainable food and beverages, including the packaging it's packed in. Now let's have a look at what the customers say about this. So basically what we saw was that end consumers has an increased focus on sustainability, and they demand our customers and us to deliver more sustainable solutions to the market. Well, on our customers' agenda, the agenda look similar. They focus on recyclability and recycling, plastics reduction, and CO2 reduction. Recyclability and recycling is seen as one of the key solutions to our global waste problems. And hence, the bar is raised on recycling and recyclability moving forward. So some of our customers and the larger FMCG companies set even higher ambitions than what regulators do. In addition, plastics reduction and CO2 reductions, we see strong commitments to big cuts moving forward. So what we can see is that our customers are eager to have more sustainable solutions. And we even see many of them integrating sustainable packaging solutions as a part of their sustainability agenda and responding to the market and the end consumers. Now I think this is the time for me to hand over to you, Emilie, to look deeper into the regulatory picture.

Thank you, Runar, and good morning, everyone. As Runar described, the global macro trends with increased urbanization, population growth, and higher disposable income will lead to increased consumption. But with this consumption follows more waste, higher CO2 emissions, and depletion of natural resources. And with that, this has increased the sustainability awareness among consumers and brands and given rise to more regulation. So as you can see from this graph, the numbers of loss, not only in Europe but also in the U.S., has increased significantly over the past decades, and there is more to come. So on the next slide, you will see that from a regulatory point of view, plastic is the big challenge that needs to be targeted. Plastic is associated with challenges when it comes to CO2 footprint, fossil origin and littering. Plastic packaging is also much more widely used than fiber-based packaging. Our society needs to make a shift from plastics to more sustainable materials. And in that shift, regulation is a powerful tool. In general terms, increased regulations tend to be beneficial for companies with sustainability at its core. And that is why Elopak is supporting raising the bar in terms of regulation. So let me now share with you a relevant example of new packaging regulations, the EU Packaging and Packaging Waste Regulation known as the PPWR. Since it was launched in 2019, the European Green Deal has targeted reduced emissions for Europe, ambitious targets. And the PPWR is a key regulation under the Green Deal, and it's the most extensive and ambitious packaging regulation in history. Approval is expected later this year, and it will enter into force by 2026. Importantly to note, both details and targets in the PPWR are still under development. And guidelines must be established by January 28. Since the first draft was issued in November '22, Elopak has followed the development closely, and will continue to do so. Let me just try to summarize the main objectives behind the PPWR in 3 points. One, to reduce packaging waste and to promote circularity; two, to boost recycling and reuse; and three, to harmonize the EU packaging rules. We believe this introduction of harmonized packaging rules will set a new standard, not only in Europe, but in other markets as well. The PPWR introduces many important topics that you can see on this side of the screen, ranging from packaging minimization requirements to so-called eco-modulated extended producer responsibility fees. I will not dive into all of them, but spend some time on design for recycling, because it follows from this that some packaging formats will be banned from the market in the future. Design for recycling is therefore a key milestone in the regulation, and it's also reflected in the targets that we will disclose today. And the specific thresholds are yet to be finalized. But our assumption is that packaging must be recycled at a minimum 55% average rates across all EU countries by 2035. So in sum, we believe that the PPWR represents net advantages for the fiber-based packaging industry in general and for Elopak in particular. Let us look at the possible implications for the industry and for Elopak. Let me start with the fiber-based packaging industry. Standardized requirements across all EU member states will, over time, reduce costs, complexity and uncertainty. One example are the coming definitions of design for recycling. And standardized requirements are also likely to lead to increased cooperation and efficiency, especially when it comes to recycling. Moreover, the new regulation is expected to be a driver for innovation in packaging design and investments in recycling infrastructure. And companies that lead in adopting the PPWR agenda are likely to gain a competitive advantage. No doubt increased regulations will also involve some challenges. Let me highlight 3 of them. First, the carton industry will see an increase in complexity in the short term. Second, it is important to emphasize that there are still many unanswered questions as guidelines are yet to be developed. And third, transition costs for the industry are to be expected. These could come in areas like redesign of packaging, recertification and testing. For Elopak, this has been reflected in our planned R&D investments. When it comes to implications for Elopak, we believe that we have a good starting point. Let me elaborate on 2 examples that underpin this. First, current Elopak cartons are designed for recycling or very close to achieve the proposed grading from the PPWR. Beverage cartons for fresh milk perform well in terms of recyclability according to third-party assessments. Milk and dairy packaging and some plant-based alternatives are exempted from the proposed reuse targets and from the deposit return scheme requirements. And around 75% of our carton sales in Europe today are milk and dairy. We also have a lot of examples to show you later on today on how we are constantly innovating to meet the new regulations. Uwe will show you more of this in a few minutes. And he will also dive deeper into how we are well positioned to meet the PPWR and how we work across multiple dimensions. Because we are now also scaling up knowledge-sharing efforts, and we have taken a leadership role within agenda-setting European industry associations, Elopak holds the EXTR:ACT presidency and other key leadership roles in industry alliances as ACE and ForeverGreen. So our main takeouts from the PPWR. The packaging industry is currently a part of the problem and must, in the future, be a part of the solution. Significant adoption is needed to be able to comply with the coming regulation, both within the packaging industry, but also with national infrastructure with collection and recycling schemes. And in Elopak, we are convinced that our cartons have a natural place in the future's low-emission society. This leads us to our new recyclability target that our entire portfolio will be designed for recycling at 2030, the latest, and this applies for our global operations, not just the EU market. Pending the final definitions of recyclability, we will monitor and adapt to be able to meet the coming requirements. And today's status is that around 70% of our cartons are already within the proposed grading of design for recycling in the PPWR. However, of course, our target must comply with coming standards in all our global markets. And with the innovation projects you will hear more about later, we perceive the 100% goal as realistic to achieve. Elopak welcomes a more level playing field and we work across multiple dimensions to meet the coming regulations. We have a long history of developing sustainable packaging solutions, and we are committed to continue this journey in close collaboration with our suppliers and our customers. So Thomas, I will leave it up to you to wrap up these external trends that are impacting us and has shaped our new strategy.

Thank you, Emilie. Thank you, Runar. Let's just look at what -- how we look at this in a wrapped up format. So as Runar said, the world is changing, but we strongly see that the underlying global megatrends that we're seeing everywhere actually supports our business and will provide continued growth for Elopak. Secondly, and this is, of course, very, very important for a company like Elopak, who is so closely linked to consumer and consumer convenience, the fact that the consumer awareness and demand for sustainable solutions are increasing is a major impact for us, and it leads to an increased demand of sustainable packaging in general. We see that we have the figures for it. We see it in -- actually, you probably, all of us see it in every day when you go shopping. Now there has been a lot of talk about regulatory changes, and I think Emilie explained it excellently when saying we actually support regulatory changes. We think it's the right thing to bring the packaging industry into a more sustainable way. And our commitment, frankly, in this field for so many years leads us to believe that we have a good leverage here and that we can -- it actually supports our business and our growth moving forward. So with this in mind, then, of course, we say, right, what is going to happen now for us. And here is why I would like just to introduce you to Repackaging Tomorrow, which is the headline of the strategy and of all the activities that you will be hearing about now. There are a couple of things that are fundamental in our belief when we develop the strategy, when we worked on it, to say these beliefs are fundamental in how we look at the future. And let me share 4 of them with you. Firstly, we come from a world of a very resilient business model. We are in the world of resilient foods what we sell. And we believe that, that position, which we described before, is going to give us opportunities to leverage megatrends in the world. I'll come back to that in a second. Consumers are changing, expectations are changing, and regulations, as we know, are changing. It is the biggest change we are seeing in regulatory changes right now ever being presented in an EU perspective. We have regulated around packaging in various regulations, but never at the extent that the PPWR does. This has impact for all packaging in Europe. But we believe, as I said before, there is a host of challenges in this. This is clear for any packaging, but also a great set of opportunities if you're on the right side of the fence, so to say. But we also believe that what we have seen, and Runar pointed out, that the long list of global FMCGs, who publicly make commitments based on the demands from their consumers, from their retailers, will continue. And that demand is going to drive for more solutions in cartons, because that is currently the most sustainable solution available in the market. And as we will see during the presentation, we also see, and I indicated that at the beginning that the amount of products currently being packed in plastics that could potentially be packed in a more sustainable format allows us to say there is room to develop technology, and there is a lot of technology already out there. So we are actually pursuing partnerships and potentially accretive M&As, which can enable us to drive into more areas and replace more plastics in areas that make sense. We'll come back to that as well. So we have formulized this in 3 priorities. And the main point in these 3, that these 3 priorities will bring us to the EUR 2 billion target that we have set. But the 3 priorities work individually, but also interlink, because actually they support. The #1 thing is, of course, we are going to realize the potential we have out of the investments we have made globally, the capital we have allocated both in MENA and India, and also in U.S. with the establishment of -- with the factory we are building now in Arkansas. Our main priority is to ensure that we get the full benefit out of the investments made in those areas. That is #1 priority. Then we have a very strong core business, and we are going to see what that means for us, but we are going to expand our market share in Europe. We come from a very strong market share in fresh, but we believe that with our portfolio and our development, as you will see, we're going to strengthen that even further based on the innovations in sustainability that Emilie alluded to just before. There will be regulations. And for those who do not meet the regulations, they will be out of the market essentially. And then the third one is this immense plastic to plastic replacement shift. We call it plastic to carton, P2C. It is a plastic replacement shift that we see in a host of other areas outside of our traditional areas such as plastic cups for yogurts, such as soups and sauces currently packed in plastics, home and personal care that we'll hear more about, et cetera, et cetera. So these are new areas with immense potential that we are very interested in addressing in the plastic replacement shift part of our strategy. So we are now going to spend some time on looking into each of these in a deeper way. And I'm going to ask parts of the organization here, my colleagues, to present to you how we look at this and what we're going to do. But first things first, and that is, we will just have a cup of coffee. 10 minutes coffee. [Break]

Pretty exact 10 minutes. Well, maybe not really. Welcome back, and I will start with apologizing here, because I understand that it's pretty hot at the back end of the room. So to be honest, we have been a little bit overwhelmed with the interest. And clearly, the air condition is also overwhelmed. So it is working at its maximum and it has promised to deliver, but we'll see. Right. So let's now spend some time in diving in what we call realizing the global growth. And to do that, I would first ask our President of U.S. -- sorry, Americas, U.S. President is something else, different time of year, but sorry, Lionel, maybe another day. Lionel has joined Elopak 5 years ago, is absolutely instrumental in, frankly, the stellar performance we have had in Americas. He joined us from a long career with global FMCG companies around the world; working in Africa, exciting moments he tells me about; Europe, and also now in Americas. Based out of Montreal in Canada, as you will see, Lionel is actually part of the diversity we have with his very, very international background here in Elopak. So please -- before I do that, actually, I just want to put Americas' performance into context of what we are looking at when we say global growth. Because you will see here on your right side, my left side, the revenue ambitions that we have for the world within the 5-year period and further period, and you can see the impact of Americas. This is a huge opportunity. You have seen an amazing delivery up to now. And with the new plant that Lionel is going to explain, we are putting even more fuel behind that growth. Beyond that, we will also be looking at what is the plan for MENA and India. And also here, you can see that the global part of our business is, in our plan, expanding to become an even more important part than what it is today and has been traditionally. We are not -- just to make that clear, we are not typically reporting MENA and India separately, it's part of EMEA, but today, we are diving into it to give you a better understanding of what that means and where we are, but it's not to say that we're changing the way we're going to report about it. First things first, Lionel, please.

Merci, Thomas. Bonjour. I promise that will be my only 2 words in French. So welcome to America. As you know, this is a huge opportunity for the growth of Elopak. This is a super-sized market, a $1 billion market. For the last decade, I will say that one player in the market has almost monopoly by selling cartons, closure, filling machines in the fresh beverage industry. For decades, this market has been a commodity market, driven by low prices without significant innovation. For decades, this market has suffered from disruption on supply chain many times. And the last one has been the one with school milk disruption last year. For decades, I guess, that this market is starving for competition, for innovation, and now for sustainability. As my colleague said, the world is changing very fast. And America is changing, too. Not as fast as Europe, but it's happening, too. Who would have thought 20 years ago that sustainability would be so critical. Who would have thought 10 years ago that America, with Tesla, will lead the market on electrical cars. Who would have thought 5 years ago that America could ban single-use plastic. This is really happening. 12 states in America already banned it. Legislation is starting to put pressure also in America, as it has been mentioned earlier in this presentation, and is going to accelerate those changes. Currently, over 200 laws are in discussion in America regarding sustainability. Elopak had the right vision 5 years ago regarding America. This is a fast-growing market for us. And this market is a perfect fit for all innovations that we have developed so far and using in Europe. This is a market where Elopak is already a sustainability front runner. And this is simply a unique opportunity of growth for us. Our competition is not investing anymore. It is running very old assets. It is closing plants over the years. They are struggling on delivering a good experience to their customers. In the meantime, Elopak kept investing. As mentioned, Thomas reduced its carbon footprint significantly in America, introduce innovation in the market as natural brown board, as brand new filling machine, and lately, tethered cap. This is our opportunity to shine. And trust me, we're going to shine. Today, our ambition is to offer a fresh vision to American market, a strong partnership to American customers to deliver a sustainable growth. Today, our ambition is to increase by 70% our revenue within the next 5 years and to double it within the next 7 years. This is maybe the most important slide of the story of America. So American market is very different from European market in many ways. We have bigger buildings, we have bigger cars, we have bigger cities, we have bigger suites. Okay. I'm stopping here. So how could we leverage the fact that we are the leader in Fresh worldwide, except in America. How we could leverage all the sustainability DNA that we have in this market that at first sight doesn't seem to be that appealing for sustainability? How we can leverage all the innovation that we have developed in Europe? Because this is a different market. When you're drinking mainly 1-liter size product, we're drinking half gallon or 2-liter size product. We have bigger fridge, and bigger appetite, I guess. We're also a bit fatter. I'm only in America for the last 20 years, so it doesn't show yet. So here what you see is that in 2021, this is the turning point of our strategy. And this is why we have such an acceleration in the growth that you noticed so far. We are doing now the same as what we're doing in Europe. We are supplying an end-to-end solution, a global solution to our customers. And as mentioned by Thomas, that's the best way for them to have good sleep. We are supplying then filling machines, and we have been very successful. Within the first year, we grabbed almost 50% of that market. It allows us to supply all what we could have regarding our packaging solution on cartons and on closures, and it opened also opportunities on the aftermarket service for mainly spare parts. So that's the best way for us to make sure that we are in control of that market and that we can also supply all our innovation on brand new filling machines, which makes the introduction in that market easier. So back to facts. No sustainable growth is possible without strong basis. No sustainable growth is desirable without strong profitability. For the last 5 years, I will say that we have established a vision of growth for America and designed a tailor-made strategy to build solid foundation. Strategy is about 15% of the work, and 85% is about execution. At Elopak, we strongly believe that it's all about people. And that's the reason why 5 years ago, we ensured that we have a very strong team to be able to deliver on what we commit to and on our ambition. Within 5 years, Elopak has increased revenues by 54% at a compound annual growth of 8%, beating each year market growth. Our profitability growth at the same time is over 100%, delivering in 2023, a performance of 24% of our net revenues, showing how robust is our strategy. As I told you, I moved in America 20 years ago and this is exceptional. This is a unique story. But, because there is a but, this is not a story about 5 years ago. This is not about operational excellence, delivering high profitability. This is about increasing our market share. This is about beating the market every year. This is Elopak's story about accelerating growth in America. Today, we have a good headache, or maybe I should say we have a strong headache, we have a solid headache. We're at capacity and still facing a strong demand for our products. So growth has already started, as you have noticed, and it's happening now by doing what we do the best in a market that we're leading worldwide. I want to share my excitement regarding that fantastic project that I'm blessed, I will say, and I just want to thank the Board of Directors and also management at Elopak to allow us to realize that project, which is quite ambitious. So as we're at capacity, what's more normal than investing in additional capacity to support our growth and our ambition in America. So let me tease you with a quick update on this fantastic, this outstanding, this exciting brand new plant, state-of-the-art plant in Little Rock, Arkansas. This is a $70 million CapEx investment. That reflects on our ambition and on our potential in the region. This new facility of 350,000 square feet has the capacity to double our production over the upcoming years. This is a unique opportunity for us to complete our footprint, to reach our customers in a better way in the U.S. with a very low cannibalization with our existing plant in Canada. This is an investment in the first line of production that is already sold out. And this is a project that will be delivered on time and budget in 2025. So just to conclude, I'm really happy to live in America, to work for the last 5 years at Elopak, because I'm in front of a huge market, where we have one main competitor who, I guess, is not at its best currently. This is a unique opportunity, of course. And as you noticed, quite a significant one. We started that journey 5 years ago, delivering over that period outstanding results. And today, Elopak keeps accelerating by investing in a new plant in Little Rock, Arkansas. Please, Thomas, if you want to join us?

Yes. I'd like to join you. Thank you, Lionel. And just a couple of thoughts on highlights here. Lionel makes it sound very easy. Of course, it's not, right? It is technology, it is operations, it's all of these things that have come together now, where we are really making a difference in the Americas market. What is very important for us and has been determining factor actually for the last couple of years with various situations on lack of school milk board, et cetera, that you may have seen on news is that we are the reliable partner in a world where that has not necessarily been the case from other sites. We do that with world-class services. We do that with the equipment we sell, with the material we're offering. We are driving the business through that concept -- or that quality concept of reliability. And also to Lionel's point, everybody here in the room knows that EU is further ahead on sustainability than probably anywhere else, but they're also interested in U.S. Trust me, they're actually very interested. To Lionel's point, quite a number of states have already banned single-use plastics. They have more regulations in the U.S. than we do in EU. Maybe not federal, but more regulations. There is a tremendous opportunity also here when you are the front runner in sustainability. We have more markets and more global growth ambitions. And one of the very exciting investments we did in '22 was, of course, MENA. And for Elopak, it's important to understand that actually, it was new and not new, to be honest, because we had been in the region through a joint venture for many, many years. So we knew the business reasonably well, I would say, not like we know it now, but we did know the business reasonably well, we knew the customers, and it was very clear for us that this was a great opportunity in a world where the underlying market trends were good, growing population, growing income, high consumption of milk, high consumption of fresh milk. So a lot of elements that played in favor of doing this. What we have said as an ambition is to use our local production capacity that we have through the acquisition we made of Naturepak and expand the business into more technology, more value-added services and more high-quality solutions. And you should know that in MENA, when we came there, honestly, the business we bought was a relatively simple converting business that we are now targeting to become a high-quality solution provider. Why? Because it makes sense for our customers at the end of the day. Because they get lower costs, they get lower waste, and consumers get better products on top of that. We are going to increase our revenue to around EUR 100 million in the region by 2030. And today, we have taken this relatively simple business that we bought and added the high-quality, high-hygiene filling machines. We have changed the way we actually manufacture the material, which allows us to get higher hygiene and allows us to get a longer shelf life, meaning in a world where shelf life is really low, in some cases, 3, 4 days in a packed shelf life, we're now, with our customers, able to increase a chilled and fresh product to 14 to 16 days. It makes a big, big, big difference for the customers in terms of their waste. And it certainly makes a big difference for consumers in their daily purchasing. We are not talking about aseptic products yet, we're talking about chilled. Extended shelf life, improving shelf life, reducing costs, and improving sustainability. So we are the market leaders now, and we intend evidently to remain being the market leaders in fresh. But we also intend to -- as we are upgrading our plant and ensuring that, that is up to the standards required to produce things like aseptic, we are going to expand our portfolio in the region locally produced in our plants in MENA and then supply our customers in that part of the world. We also, on top of that, have an immense opportunity beyond MENA, because for those of you who know Morocco -- we all know Morocco, but from a supply point of view, Morocco is now acting more and more as the entry point into Africa. So we look at Sub-Sahara Africa. We are now currently supplying markets, as you will see on the slide here, on Sub-Saharan close to Morocco and surrounding Morocco. We believe that with the strong footprint, including the possibility of producing aseptic, we're going to see this also as an export hub in the period to come. Even in MENA, sustainability is a very, very big topic. So also here, we believe that the strong drive we have in the company will also have a positive effect in growth markets such as MENA. India, we've all been very excited about India ever since we entered also here in 2022. And as many of you will know, this is a joint venture. We made a big effort in finding the right partner in joint venture. And India actually has developed over and beyond expectations for us what we defined as said in the plan. We are now saying, India, in the period up to 2030, will deliver EUR 150 million in revenue, and within 5 years, close to EUR 100 million in revenue. Pretty amazing, at the same time, still a very, very small share in the big Indian market ahead of us. We are, of course, there because it is with a wide, wide, wide margin, the largest milk market in the world. And it's also a market with a growing middle class, with a growing retail setup, and strong demand from middle class for modern packaging, high hygiene packaging, and a lifestyle that they've been used to in many other cases and places where they have been. So we are now extending our position into supplying Pure-Pak in India as well. And we are going to do that both for milk, which is the obvious, but also another product where there is a demand for high-hygiene, high-quality packaging solution. This goes, for example, we see it in areas related to cream, some plant-based products, smaller products, but in the scale of India, still tends to become enormous in size. We are also here strongly believing that a market like India, which is a fresh milk market, offering a high-quality solution with a longer shelf life versus the plastic bag that they're using now, which is a plastic pouch with 2 days or 1 day shelf life, offering a solution that can go all the way 2 weeks and above is going to be very, very attractive, and we see good traction on that as we speak. So what are we actually going to do to meet our ambitions. We have, again, 3. Everything we do is 3. We have 3 priorities here. Increasing the capacity. That is happening as we speak. We are selling Elopak Roll fed. We are going to do that with more capacity, simply because demand requires that. And we are doing that putting our position in the market as the quality supplier in a world where you have variations at best, we can say. So our job here -- our reason for being is we come with Elopak brand, we've been around since '57, we are the quality supplier in that world. We are introducing Pure-Pak for consumers -- middle-class consumers. It's evidently not a solution for the entire Indian market, but the middle class in India in itself, of course, means hundreds of millions of people. So a huge potential market when you start tapping into this. And then finally, equally to MENA, we also see that there are opportunities to growth outside of India with the plant we have, which is a really high-quality plant just outside Delhi. Now I mentioned it as an opportunity. It's not our focus, because we are in India. India is enormous. And even if we are supplying well, we are still very, very, very small. And even with EUR 150 million in revenue in 7 years, it's still a very, very small size we have. So we have enormous potential just getting the distribution in India, just attacking and supplying India with the plant we have. So keys to success, really, in both cases, leveraging our production capacity, leveraging local production in these markets. This is absolutely true for India, true for MENA. Local production is a key to drive growth. For us, it's about remembering where we come from, high-quality products, high-quality technology, high-quality services in everything we do, and differentiate ourselves between a number of the suppliers in both areas of the world. We want to be a reliable partner. We've seen it works in the Americas. Reliable partners in an industry where our customers are looking for a good night's sleep. You look for reliability. This is a unique industry. You get the milk. Whether you want it or not, milk arrives at the dairies. You have to have reliable partners to secure a good night's sleep. So this is what we will say about MENA and India for now, but let's then have a look at leadership in the core. And clearly, for us, historically, the core is Europe. The core is fresh or chilled. And the core is also the hub of our innovation that you will see in many of the other aspects of our strategy. So I'm very happy to introduce to you our EVP and Head of North Europe, Stephen Naumann; as well as Uwe Schulze, who is EVP and responsible for our product and development, some call it R&D, but it is the development organization. Stephen has been with us for a few years by now. He is very trusted and experienced in the Elopak organization, having worked in Europe for many, many years, and currently also now helping us to secure that we get India exactly on the right track. Uwe has also joined us recently and comes with an extensive materials background, having worked in a number of packaging companies, polymer-oriented and carbon-oriented, and always working on developing materials, barriers, coatings, et cetera, et cetera. So a warm welcome to you. Stephen, I hand over to you.

So thank you, Thomas. Friendly introduction. Hello, everybody. I will lead you through to the second strategic initiative, strengthen the leadership in the core business or how I would call it, how do we grow against the trend and stay the #1 player in the Europe's fresh milk market. Core business is best characterized as a market with rapid changes. We have seen Corona, we have seen the invasion of Russia into Ukraine, we have seen depressed economic development, but let's not forget, and Emilie was really detailed in this, we are facing newly implemented environmental regulations like the SUP directive and PPWR. Emilie made quite a long explanation on it. I believe this calls for action throughout the whole industry, giving us really some thoughts which we have to implement into reality, and as Emilie showed, 100% recycling by 2030. So there is a strong demand from our consumers going sustainable packaging. So our consumers do want it. Runar has been presenting this to us. Why is this so important for us? We want to strengthen our #1 position in the fresh market, and we are working hard to utilize these regulation shifts in order to give us a tailwind to grow. These are sustainable innovations which we are working on, shifting more plastic packaging into our fiber-based packaging. As a sustainable front runner, we will deliver above-market growth. You can see it here, we will visit tools of sustainable innovation, recyclable portfolio, and our flexible system offering. We will grow from EUR 800 million in 2023 to EUR 890 million in 2030. So we have just been talking about the future development of revenue. Why do you think I'm so confident? Perhaps because I'm a salesman, where you need to be convincing. No, but seriously, let's take a short recap of the past. Mature markets are, in the best case, stable, and we have been even faced with a consumption decline, Runar was alluding to it as well, since 1970. I was not aware of that, but at least we have seen it over the last 5 years. We have had a consumption decline of 1.5%. And still, as you can see here, we were able to grow. The reasons for that is our flexible system approach, combined with our sustainable innovation and the shifting consumer preferences for environmental friendly packaging. As you can see, we have started the journey in 2019 with a turnover or revenue of EUR 646 million, and we will land in this year somewhere around EUR 816 million. I know that Lionel has presented quite some impressive figures, but I believe as well, Europe has something to offer. Now to the question, how did we achieve this growth and how will we achieve our ambitious strategy? One answer is, with the help of substrate shift. It's not the only answer, but that's one answer. And looking to the screen up here, we see some top European customers which we have been able to convince to change parts of their packaging from plastic into cartons. I'll just name a few of these customers, Freshways and Arla. Arla is a big, not Danish, but Scandinavian dairy group. Campina, the multinational Dutch dairy group. Wheyco and as well A-Ware in the Netherlands. [indiscernible] in Lithuania. [indiscernible] in Finland, sorry, when I spell something wrong. This is sometimes very difficult to pronounce. And Levmilk in Slovakia are all dairies which have been deciding to go Pure-Pak, switching from either plastic caps for school milk and cream, or 1 liter PET bottle for drinking milk. Tropicana, Belgium; and Britvic in the U.K.; and Morrisons in the U.K. have been in PET in the juice segment and changed into cartons. Finally, H2O4U in Finland; and Wasser Box in Germany changed their PET bottles for the water segment into cartons. So you see, the substrate shift has been working quite in our favor. Together with many companies around the world, we will make sure that their brands are packed in our innovative, environmental-friendly packaging going forward. Now you might think that the rolls cannot come only from the substrate shifts. Now that's pretty right. During the last years, we have been as well looking for sure to the opportunities in the marketplace. And we can see here 3 of the latest successes, where we have been able to attract customers of our competitors, or let's put it this way, of one competitor over the last years. I'll start on the right-hand side from you, Tolnatej, this is their brand, Tolle, who has changed the entire fresh milk business into gable top, coming from our competition system. And not only that, they decided as well for our aseptic carton lately. Let me, at this point of time, explain a bit how we always see the market and our customers. If we have a chance to work with potential customers, we are looking into logically the possibilities which we do have. Mostly, we are the -- not dominating, but we are the market leader in fresh, and we have something really good to offer in fresh. And there in Tolnatej, we made it through the fresh business, convinced how we have been operating the projects, and convinced the customer that this could be as well the way forward for him in aseptic and he changed his aseptic portfolio as well to us. You will see it coming to the market by beginning of next year. Then I'm coming to Hochwald Foods. Hochwald Foods has been, been worked upon 10 years from our sales force, really 10 years, to change the famous brand, Bärenmarke, into our gable top system for the fresh business. How did we manage that? We changed him 3 years back in the aseptic business. Honestly, we started with aseptic. So the other way around. Like I described it just before, we changed him, Bärenmarke, from competition system into our gable top aseptic system. And after we have been really accomplishing this project successfully, the customer decided to go as well with the whole fresh portfolio, which is huge. Bärenmarke is really a huge brand in Germany. We are now seeing this in the shelves, and we are super proud that we can go every day packet from the shelf and have a very nice fresh milk brand now. And that's the way they sell them in Germany. There is no brands, there's only retail breads. Last but not least, Luxlait. Luxlait is, as you might imagine, a Luxembourg dairy, which we have changed now as well to change their portfolio for the entire fresh milk business and their brands into gable top. And now I need to read this a bit more careful, because these are quotes from 2 customers, which I would like to read to you, because I received them recently. "We were looking for a system solution that was not only robust and reliable, but also impressive with flexibility and intuitive operation. The new Pure-Pak carton packaging also significantly reduces our plastic consumption and helps to reduce CO2 emissions. Says Daniel [indiscernible] from Hochwald Foods. And Attila Koller, CEO from Tolnatej, stated, "By delivering on production and packaging efficiency, Elopak helps us meet customer high expectations in the fresh market and keep pace with constantly changing demand for healthy and balanced nutrition." With these very positive customer quotes, I would like to discuss a bit about system approach. Even though Thomas has been going into it, but I have it in my presentation as well, so sorry to repeat a bit of this. The filling machine, which we have developed, and which I will just focus on a bit later, the filling machine is an integral part of the system. The system that we are selling to customers is a normal project. It is downstream, so it's conveyors, it will be a wrap around, it will be a pelletizer. That's what we as Elopak offer as a project solution. But the system approach is, as Thomas explained it as well, is the carton, is the cap, is, not to forget, the technical service, and as well as the spare parts, plus the project execution. So very, very important. The integral part of this project are our filling machines. And we have been launching a new generation of filling machines lately. So this machine hit the market in 2022, August 2022 to be exact, and yes, the first launching partners of this new generation filling machine were [indiscernible] in the north of Germany, very close to the border of Denmark. They replaced 3 filling machines, followed by Hochwald for their brand, Bärenmarke, which I was alluding to before. They have been replacing 4 filling machines of our competitors against 4 of our new generation filling machines. We see further strong order intake for these new type filling machines and we expect as well a growing market interest based upon shelf life of 60-plus days, robustness, flexibility, and high hygiene standards, which gives our customers the possibility to fill a huge range variety of products for the cool chain. So to sum up, I heard that as well before, our growth is based on being a reliable and flexible partner. That was said by Lionel. This is the same in U.S. by the way. So we need to be reliable, we need to be flexible, and we need to offer the most sustainable and advanced technology. To do this, we must continually improve, especially in sustainability and innovation. Therefore, it's my pleasure to introduce Uwe Schulze, our EVP P&D or product and development, who will shed light on how we are advancing daily in innovation and how we are working continuously to stay ahead of advanced technology and seeking advantage of the newly implemented regulations and the regulations that will come. Thank you. Uwe?

Thank you, Stephen, and hello to everyone. So I will present you now how we address upcoming regulation by leveraging our leading innovation capabilities. So Emilie has already highlighted in her part of our presentation about the new PPWR regulation. And I will now put some color behind on what we are doing. First, we are building this on our strong Elopak organization and capabilities. Second, we materialize our technology and product innovations. Third, upstream the value chain, we build on our strong collaboration with our suppliers. And fourth, the same is true downstream the value chain, where we work in close collaboration with our customers, for example, when it comes to testing our new products. And fifth, advocacy and collaboration within our industry is key, and Emilie gave you already some very specific examples on that one. So let's continue with a quick look on our history. We, as Elopak, are very proud of our long history of innovation. It all dates back to the year 1915, when the patent for the iconic Pure-Pak gable top carton was granted. By the way, the same year as the patent for the Coke bottle was granted. And why is our Pure-Pak carton still relevant? Because we have been continuously innovating. I would like just to pick some examples out of this impressive history. So when we look at the year 1957, when the Pure-Pak carton was introduced to the market, it did not have yet resealable openings. So therefore, the year 1991 marked a huge innovation when we introduced the patented Pak-Lok screw cap system. So it offered for the consumer a whole new level of convenience. Also, the cartons themselves have seen huge development and improvement over time. And since the millennium, we have launched a series of new cartons where, again, I picked just some examples. If you look at the Pure-Pak Sense in 2013, we have added a new feature with the folding lines. So this makes it now for the consumer much more convenient to completely empty the carton, by this avoiding food waste, and it makes it also more straightforward in the recycling. If we look at the year 2017, we introduced the Pure-Pak based on natural brown board. That is, first of all, another significant step towards lower carbon footprint. But as you can see also nicely on the picture, it makes the sustainability of our carton more visible to the consumer. And to the right, you see the Pure-Pak eSense that is the first of a kind aseptic barrier carton without aluminum. And that was brought to the market in the year 2022, together with Europe's largest producer of juice and wine, Garcia Carrión. The development on the board was accompanied by launching also new generations of our filling machines for the fresh segment, for the aseptic segment, and now also for the nonfood segment, and Stephen gave some examples in his part. Important, we will continue our journey of innovation, further driving sustainability in combination with convenience for the consumer, and it all based on the iconic shape of our Pure-Pak carton. So with my next slide, I would like to dive a little bit deeper into the core elements of our carton. In close cooperation with our customers and depending on the specific needs of the product our customer wants to fill into our carton, we address all these areas with targeted development programs. So let me start on the right side of the slide, you see the paperboard, which is the main and core element of the carton. Together with the barrier technology, which you see in the middle part, this forms a multilayer structure, which ensures optimum shelf life and keeps the product safe for use. If you turn to the left on this slide, you see polymers from circular feedstocks. These are now commercially available on the market and offer a sustainable alternative to polymers from fossil feedstocks. And we use this new class of polymers in our development program for barrier technology to develop further alternatives to aluminum barriers, but we use them also in our development program for more sustainable openings, which you see center top. Everyone knows the tethered caps nowadays in the market. We are working on alternatives as just mentioned, with polymers from circular feedstocks, but our program goes all the way up to fiber-based alternatives like the easy opening, the pure paper flip, and fiber-molded openings, and I have some nice examples for you in a minute. Again, I would like to reiterate, all these development programs are based on strong collaboration with our suppliers as well as with our customers. So let me summarize our 4 focus areas for innovation. Designed for recycling, which means every component of the carton which we are addressing needs to be compatible with each other and needs to make the recycling process more straightforward. Second, aluminum-free portfolio. I mentioned the eSense, and our innovation efforts in this important area continue, because aluminum is a finite resource. It's very energy intense in its production. And therefore, the more we are able to reduce it, the lower the emissions, the lower the carbon footprint, and the more straightforward the recycling. Maximizing fiber yield, which is, from our technology, the logic response to reduce plastic. In area #4, I just gave you some examples, replacing the plastic closure with more sustainable openings, ideally based on fiber. And now I would like to close my part of the presentation with giving you a sneak preview on some of our latest innovations in the area of sustainable closures. And maybe some of you have already seen the examples which we have upstairs. And I would like to start here this slide from left. This is our new easy opening. And many of you might wonder that what's new with easy opening, especially here in Nordic, it's very well known. True. You know it for the fresh segment, but this is now the first of a kind where we offer this easy opening also for our aseptic product range, and this makes then our aseptic carton the more sustainable solution. If you turn to the middle of the slide, you see our new pure paper flip. This is a carton-based opening, and it brings us a little bit back to the origins, but with a whole new level of convenience. So it's easy to open. It's very nice in brewing, so it avoids dripping, and it can also be easily reclosed. So that is the next step in the development. And then further to the right, we have this one here. That is our new resealable opening based on molded fiber. And it brings then the sustainability in a molded fiber-based solution with the convenience for the consumer of a resealable opening. Molded fiber, by the way, is a material you might know from a carton, for example. It's renewable, it's recyclable, it's even compostable. And these 3 nice innovations show that it's possible to overcome the dilemma of having to make choices between sustainability and convenience for the consumer. We can deliver on both. And with that having said, I would like to hand it back to Thomas.

Thank you, Uwe, and thank you, Stephen. So clearly, the opening and closure part is of great focus for us, because this is what distinguishes development when it comes to making big, big, big steps forward in handling and recycling. We are leveraging our position. We continue to do that. What is also very important to understand is that we have a flexible model, which means that we can actually adapt to the wishes and needs of our customers in a swift and fast way, which is unique to us versus our competitors. And then finally, of course, we are, to Stephen's point, growing our market share based on our technology, based on our services, but also exploring the new categories such as plant-based we have. And with this, I'm going to move into the third element of the 3 parts, and that is, of course, the replacement of plastic, something everyone within Elopak is very excited about. And the one who is mostly excited about is Dirk Endlich, who is running the team and the organization behind this move. Dirk has been with Elopak for many years and has extensive experience in North, German by background, but also in other markets in North, but also Americas in Canada and in U.S. And he is now taking the challenge to convert all the plastic into carton. So please, Dirk.

Yes, thank you. Thank you, Thomas, and thank you for welcoming me here. It's a pleasure for me to introduce the maybe most sexy initiative and strategy of Elopak to the Capital Market. I've been here since, like Thomas said, a long time, since 1999. It's a long time. And I was present when Elopak sold a lot of carton packaging into the home and personal care market. Customers like Procter & Gamble, Henkel, Unilever, Reckitt Benckiser, you name them, did buy a lot of material and a lot of carton packaging in the '90s and in the early 2000s years. And it's interesting enough that now, 25 years later, we are talking to the same clients again, perhaps for a different reason, but we do. Or like Arnold Schwarzenegger would say, "We are back." So we talked already a lot about that, but the liquid packaging industry makes up a major part of the world's excessive plastic use. The United Nations Environment Program, the UNEP, estimates that the world purchases 1 million plastic bottles per minute. So you can count the minutes of this presentation and then you know how many plastic bottles have been purchased in that time. And only 8% of the total plastic produced is recycled, or to turn it around, 92% is not. And looking at the share of plastic packaging, 40% of the plastic waste comes from plastic packaging. And when we look into the coming years, the UNEP expects that the global plastic waste to triple until 2060. So what does that mean and what is in for Elopak? The plastic bottle market in Europe and North America is estimated to be EUR 105 billion in 2030 and growing. And we, as Elopak, see a huge conversion potential from plastic into our product, into carton of 15% to 20% of food and nonfood packaging. So the identified markets for cartons are EUR 13 billion to EUR 17 billion. That's a large addressable market. The longer-term market opportunity for liquid cartons is EUR 7 billion to EUR 8 billion. However, this is a market more difficult to reach, as customers are using flexible packaging and packaging that is more difficult to convert into carton. The more short-term conversion opportunity is in the home and personal care markets, and in food applications that have a meaningful overlap with Elopak's current customer base, such as yogurt cups, butter pods, or frozen food packaging. The near-term opportunity in beverages, nonfood and new applications is estimated to be at around EUR 6 billion to EUR 9 billion. So what is driving the shift? We talked about that. So unlike in the 1990s, today, it is the search for the most environmentally friendly and sustainable packaging that is driving the shift from plastic into carton solutions. The top 3 multinationals in Europe have increased their sustainability targets focusing on becoming net zero, recyclability, and reusability of products. To reach their targets, they are heavily investing in introducing refill solutions, focusing on both refill stations in the supermarkets, but also refill packs. That's our business. Elopak's ambition is to build on the leading sustainability position and increase the sales of our D-PAK solution into that market. Our target is to be the leading supplier of sustainable fiber solutions to the home and personal care market and beyond, expand product portfolio into new areas through acquisitions and partnerships. We'll come to this in a second. Today, we already see the first movers in home and personal care market using the fiber-based D-PAK solution. It's already in shelf. Within 5 years, we will develop the D-PAK program into next-generation D-PAK packaging also for primary use, and target a sales of EUR 60 million plus possible M&A activities. In 2030, the D-PAK program will evolve into next generations and open up new product application with a sales target of EUR 330 million. So who has guessed that in an Elopak presentation, we show such a picture. Maybe [indiscernible], maybe you might have guessed that this is coming back again, but I'm happy that we can talk about the home and personal care market now again. So home and personal care market is estimated to grow 4% to 6% per year. And the total market is using 27 billion packages per year, where the targetable end-use areas fitting to our D-PAK is round about half, so 14 billion packages. And product segments of high interest are laundry care, liquid fabric softeners, liquid dish washing, mouth washing, soft surface cleaner, and a lot of products more. And more than 60% of the market is in the hand of the top-tier customers, like, again, Procter & Gamble, Unilever, Henkel, Reckitt Benckiser and so on. So Elopak is again in a dialogue with all of the fast moving consumer goods companies and did already launch multiple products in home and personal care segments into the supermarket shelves in many countries. So watch out, when you're going shopping, you already find the first launches of these products in the supermarket shelves, buy them, please. So as mentioned before, we are already partnering up with the top-tier global players in home and personal care. In fact, we have been active in these markets for many years now, again. And some of you may be familiar with these 3 examples you see here on the screen, starting to the left. This is a product from McBride. I just saw yesterday night on LinkedIn the post from McBride. So if you're interested, go on LinkedIn, look for it. It's just recently shared. A leading co-packer in the fast-moving consumer goods world, and they are using our D-PAK solution for their own brand, Surcare, and this is a laundry liquid. Refill solutions, what you see in the middle, are also something we already deliver. And here is a photo I took from a shop outside of Oslo of an Orkla OMO refill solution. And with Orkla's ambitious sustainability goals and a focus on reducing plastic, there are already more products from Orkla like OMO, as I mentioned, Blenda, but also Milo put into carton packaging. And additionally, to the right, you might recognize it, Procter & Gamble, one of the world's largest consumer goods companies recently shared on LinkedIn that they are testing Elopak D-PAK carton for their Fairy Max Power refill solution. Great. Now it's getting more interesting. So let me share some insights into our efforts to improve our product portfolio. So on the left-hand side, you see a picture of an OMO carton in 1.5 liter. That's a refill pack, which is, as I said, sold in Scandinavian supermarket and already in shelf. The package is available in sizes between 500 milliliter and 2 liter, so from small to large. And the first generation, as we call it, the first generation product comes already with all attributes of a safe and sustainable packaging solution using 80% less plastic than a plastic bottle. It stands out in the shelf. Consumers see it. It comes with all sustainability benefits of an Elopak liquid paperboard carton, and we started with this generation 1 already together with Orkla back in 2020, 2021. This is our generation 1. On the right-hand side, you see more a draft or a sketch of a preview of our D-PAK generation 2 to be launched next year. And when we are zooming in a little bit into the generation 2, we can quickly recognize that this is a new product group in its own right, which is different from a beverage carton. It comes with multiple opening solutions such as child-resistant closure, special pouring caps developed for the special applications in home and personal care industry with this extra promotional label that you can use to promote your brands in various ways. You can imagine that you can do a lot with this eye-catching space on a carton, which the consumer has the first view on when he stands in front of the shelf. So it allows our customers to promote their brands and to replicate the shape of the bottle on the carton. It allows to create a brand-specific packaging. Requests that are coming to us are often saying that we would like to have an individualized package for our brand. Here we have the possibility to do that. Again, sizes are ranging between 500 milliliters and 2 liters. So again, from small to very large. To summarize, our new plastic to carton division is currently engaged in multiple initiatives to take advantage of the market opportunities we see now. However, we have identified 3 main strategic focus areas, again, 3, Thomas, to which we will dedicate our attention to going forward. First, we are committed to continuous improvement of our D-PAK solution. This involves close collaboration with our existing customers to refine and improve our products matching with customer needs. Second, we are actively working on developing the next generation of D-PAK solutions, which are illustrated in the slide before. This involves advancing our technology and ramp up our R&D activities. And third, we are focused on expanding and advancing our product portfolio. This strategic initiative aims to introduce new offering in adjacent markets, broadening our range and tapping into new opportunities. This is very exciting. And now I hand it over back to you, Thomas, to give us some more details on this third focus area and how we will ramp up our efforts to explore new solutions for new adjacent markets. Thank you.

Thank you, Dirk, for this insight into the world of home and personal care. There's one element which we are very excited about as well. This is a new world for us. We have been there before, as Dirk explained, but there is another world out there that we would like to address. And that is, of course, this enormity of plastics you have in your refrigerator at home, be that in yogurt cups, sour cream, the likes, not the least, the spreadables, the butters, the margarine, all of that is a plastic business waiting to be converted into carton. You see the sizes here. All in all, it's a very sizable business, and it's certainly a business where the customers are asking for solutions. So it's not a push on our side, it's very, very much a pull. So Dirk mentioned it, and I mentioned at the very beginning, we believe that with our skills, competence, experience in the group, we have the right set to attack or explore these kind of segments as well. We know this is difficult. We know it's not something you easily do, but we also know that the technology is there. It is existing. The technology, in some cases, is very, very close to what we have. Evidently, filling machines will be different, et cetera. But it's something that we can definitely build on. So we are leveraging this, and we're actively looking for partnerships in this field and all M&As where we can find accretive growth. And the accretive growth comes simply with a number of set criteria we've set. Because we believe that some of the technologies in this field are exactly similar to the ones Uwe showed when he talked about molded caps, molded fiber, which merge into our existing business. So by our innovation, we will see that the steps we do in one area is actually fully synergistic to the other areas as well. We look for areas where there is a need to replace plastic. There are many needs, but they're clearly exposed to this plastic shift. We look for areas where we have synergies with our customer base. Clearly, there is the examples we mentioned before on yogurt, spreads, et cetera, typical dairies, food products. We also look at areas where our filling technology, which has been a liquid technology, but is now moving into wet product technology, expanding from the kind of filling system we have, but we have the filling technology do that, and also the barrier technology to protect some of these products, which, in the case of grease products needs a certain level of protection that is quite challenging. So with all of these elements and looking at these parts in our -- when we select the partners, when we look for the M&As, we do a very, very tough screening and constantly look for opportunities in this direction. We are convinced that they are there. We're also tough to make these accretive in both strategy and also financial if we look at the M&A part in this. So summing up on P2C, it's very clear that we have here, in this case, not 3, but 4 takeaways. We are developing here a little bit. We were the first in the home and personal care market years ago. We actually have a preferred partnership position versus the big FMCG companies. We already know them. We have very good relationships with them. They are actually coming to us, frankly, for these products. They are in the push -- or rather in the pull. We have historically had the track record of seizing the opportunities and we have also the track record of delivering on M&As, delivering on joint ventures, delivering on partnerships, which we have done in the last 3 years and also previously on the joint ventures. So we think this is an enormously interesting area for Elopak. We are hugely excited about the opportunities that get presented and also the opportunities that are still to come. [Presentation]

Good. That was clear. So this is the time when we would have had a coffee break. However, given that we are just a little bit behind schedule, I would recommend, if you need to stretch your legs, let's just stand for a minute. If not, we'll just push on. I think we push on. And to do that, we still have, of course, for many of you, the most interesting parts to come, namely the facts and figures here. How does this all add up from a financial point of view. And let me just invite Bent Axelsen, our CFO, to the room. Bent has been with us 5 years. He also has a long career, international career, having worked in Asia, Europe, head office, market unit, financial functions, commercial functions, so really, really a vast experience, and has been absolutely instrumental in not only Repackaging Tomorrow, but definitely IPO, post-IPO, quarterly presentations, annual reports, et cetera, so a lot of work. So please, Bent, scene is yours.

Thank you, Thomas. So it's time to talk about the money. But I will start with a recap and maybe start with the new chapter that we entered in 2021, where we all sat in our home offices and listed a company on the stock exchange. It's been a really exciting journey, and this is showing the share price development over this period. And as you can see that we have delivered really attractive returns, significantly above that of the Oslo Stock Exchange. We had a dip in 2022, where we saw the worst raw material rally that this industry has ever seen. It was followed by the invasion in Ukraine, which affected the raw materials even more, and we also had the consequent exit out of Russia. But we showed resilience, and we regained the markets above our historical levels. While we were doing all that, we were still paying dividends equivalent to 50% of our net profit. And if you look at the last dividend payment, that was NOK 1.46 per share, while we also deleveraged our balance sheet down to less than 2 in end of 2023. This is the history where we see a stable development on revenues, starting to grow quicker in 2021. Obviously, we had inflation, and we had price increases that were necessary in order to compensate for raw materials, but that's not the only driver. Lionel talked about how he was taking market share in his market, growing revenues by EUR 100 million just in 2 years. We saw that we had the exit out of Russia in '22, but we got MENA and we got India with inherently higher growth rates. Finally, we are also growing the aseptic business. If you look at the profitability on the margin, we see that we are now stabilizing at the higher run rate compared to history. Here, we see the dump also in the profitability in '22, which was caused by the reason I just explained when I went through the share price. Another way of looking at this is to look at our return on capital employed. This is a more complete way of measuring profitability. And here, we are delivering 17% in 2023, and we are still delivering at that level. This is not only an industry-leading return with us, but it's also significantly above our cost of capital. It's also interesting to see that in 2022, in the middle of the storm, we still delivered 7%. For those of you who were with us on Teams or Zoom from all of our home offices, we went through 5 midterm targets. And we are very happy and we are very proud that we have delivered or outperformed on all of them. We are still today at a leverage level below 2, and that is after paying our record-high dividend of EUR 34 million, and it's also having invested EUR 21 million in Arkansas. So great achievement, very proud, but now we need to talk about the future, our new midterm targets. So here they are. We have divided the targets into people, planet, and profit. For people, we have selected safety as our target. On planet, we have 1 for climate, CO2, and 1 for nature, recyclability. And we are maintaining 4 profit targets, which is still organic revenue growth, EBITDA margin, dividend and leverage. And I will go through these targets one by one. Starting with people and planet. For people, we have chosen safety. Obviously, the ultimate ambition for safety is 0 injuries. That is clear. It is a key license to operate and it's also part of being sustainable. The target for our total recordable injuries, TRI, is 3.2%, and that is actually 30% reduction compared to the level we have today. Moving to the planet target, where we aim for a 25% reduction, measured in absolute terms. We are maintaining the target, but it actually means an increased ambition level, because over the same time period between 2020 and 2030, we are doubling -- more than doubling our revenues, but still the target is minus 25% Scope 3. The next target is recyclability, and my colleagues talked about designed for recycling. Here the target is that all our cartons around the world are going to be designed for recycling. It is a requirement in the EU, but that's not enough. We are going beyond compliance. We think of this as a competitive edge. So this will bring us top line, it will bring us business. We also think that other regions will be inspired by what EU is doing. We also have global customers with their own sustainability targets. They want Elopak to be a sustainability front runner wherever we are, hence, global approach. So what is important for me as a finance guy is to say that people and planet target are not just add-on targets in our company, they are embedded into the strategy. It's a part of our profitable growth, and there are also prerequisites in order to deliver what my colleagues have talked about. Moving to profit, starting then with revenues. Here, we are targeting an organic growth rate of 4% to 6%. Let me put that into perspective. So yes, we have a high growth rate the last 3 years, but we also had significant raw material increases, significant inflation. That is really, really important when you look at our targets. You need to set them in the right context. When we are setting this target, we are assuming a normalized inflation scenario. So whilst a big part came from price and mix historically, a big part of the future actually comes from volume growth. That is ambitious. If you break it down to the initiatives that we talked about, global growth is the most important top line driver, starting with Americas with close to EUR 200 million growth over the period. So what is this about? This is about tapping into the potential and really having Arkansas as the enabler delivering cartons to customers we already work with, products we already know, segments that we already are serving with a proven technology and it's margin accretive. So it's a huge part of the growth, but it's also relatively low risk. If we move to India, that is EUR 65 million. And what is that about? That is to continue to grow the market share in Roll Fed, but it's also to get started with Pure-Pak, which is really the Elopak key identity. MENA with EUR 35 million, as Thomas talked about, it's about upgrading the offering, differentiating through extended shelf life, ESL and also growing the aseptic business. Leadership in core, EUR 40 million. So what is that about? That is the impact of the innovation that we are developing in Europe. It's about tapping into growth pockets. It could be plant based. It could be other segments. And here, we are not assuming any consumption growth. So this is our own work. The last part is plastic to carton, EUR 60 million, and this is the organic growth part of things. This is mainly the home and personal care area. Here, we are developing. And as Dirk pointed out, the main part of that growth comes after this 3- to 5-year period. So this really is a long-term development journey. On the right-hand side, we are going to EUR 2 billion in 2030, and that will be a combination of continued organic growth but also proactive M&A activity, mainly in the plastic-to-carton space. So an ambitious top line target, but it's also robust because we are not betting on one horse only. Let's move to profitability, here measured as EBITDA margin. And same thing here, the global growth is the main contributor to the absolute margin uplift. The first driver of the improvement is actually to continue the growth, deliver the growth on -- in margin-accretive areas. America is already margin accretive. MENA is already margin accretive, and India will become margin accretive during the midterm period. For the global growth, for a large part of this initiative, we will leverage the existing organization, which means that we will be able to grow without significantly increasing our fixed cost base. To further develop the business in leadership core and to drive innovation and to comply with PPWR, we are stepping up our R&D efforts. That is in this part of the chart. So in the short term, that will have a negative impact on the margin in a very short beginning, and then we will tap into the growth pockets that are margin accretive in the end of the period. For the plastic-to-carton area, we are ramping up the organization that requires people and resources to deliver on the growth. But in this area, we have margin-accretive growth measured in contribution and a huge potential coming in the end of the period. We will obviously continue with our operational excellence. OEE, waste are 2 important drivers. We also are replacing old assets. And the combination of improvements and replacing assets is around EUR 5 million per year. Finally, Thomas touched upon it, commercial excellence. It's about how we price and position our products according to value but also in a way that we can respond swiftly to market changes. It's also how we optimize our spend and our procurement. So if I look at the revenues and the profitability, I think we can say that we have a balanced perspective between top line growth and bottom line growth. Then we need to invest. With this growth and with this ambition level, we are increasing the investment sum. The investment level will be around 5% to 7% of the top line. In the first couple of years, we will be in the higher end of that interval, approaching then 5% by the end of the period. This year, in '24, we will invest around EUR 125 million. The phasing of the annual CapEx will depend on the progress of our initiatives. And we are showing here the accumulated CapEx between '25 and '28. So what are we going to invest in? First, we have the U.S. plant, which is mainly an investment in '24 with $70 million. We are also evaluating a second line for the reasons that Lionel pointed out: the first line is sold out. That is under evaluation. We will spend CapEx to replace multiple assets to improve profitability, waste performance, et cetera, but also add capabilities that we need for the nonfood growth. We will spend CapEx to increase production capacity and technological capability in our global growth areas like Morocco and India. And we will have a maintenance program, which is similar to the past, much with our new portfolio, and that will be around EUR 25 million. All these projects are scrutinized. And we are testing them against strategy, return, risk. We're also looking at our balance sheet in order to get the right CapEx level. We also have flexibility in this program. So what you're seeing here, only 10% is committed. So we have the flexibility to reallocate if things would change along the way. So to -- in conclusion for the CapEx part, we have a robust plan, and we have the CapEx that we need in order to both deliver the top line growth and the improved profitability growth. Even if we are investing, we are still going to pay dividends. We have a high growth rate. We have high CapEx, but we also have a very attractive profitability which enables us to maintain the dividend policy, which is 50% to 60% our normalized net profit. The dividend will be declared in euro and will be paid twice per year. We will obviously consider the financial strength of the company and the future capital need, but this dividend range is then balanced against our financial plan. So with a high growth rate, with a high CapEx but also high profitability, we think that this distribution of the dividends is attractive for our shareholders. Let's move to the financial position or leverage ratio. It's key for us to stay within the BBB- rating that we received from Nordic Credit Rating. Hence, we are maintaining our leverage ratio target of 2 over the midterm period. As you can see from this chart, for the next couple of years, we will be slightly above the mid target, but we will quickly deleverage the balance sheet in a couple of years. And we will, in the end of the period, moving even below the midterm target. So high growth rates, good profitability, CapEx program, attractive dividends but yet a deleveraging of our balance sheet. And then we need the money to finance all this, and actually, we have good access to capital in our market. We have BBB- from Nordic Credit Rating. We got the darkest green color in the rating from Standard & Poor's. When we issued the bond in spring, our books were 2.5 oversubscribed with a NOK 2.5 billion bond that is ranging between 3 to 7 years. Close to 80% of our financing is being swapped into fixed. And on top of that, we have an RCF. So the organic growth plan is secured. And with our plan, we don't need any equity injection in order to deliver on the numbers that I presented in the midterm period. Coming back to the midterm targets. Safety for people; planet, CO2, design for recycling and carbon footprint reduction; revenue, EBITDA, dividend and leverage, a mix of targets that we have still strong confidence that we will deliver on. So with that, I will hand it to you, Thomas, for the final thoughts.

Thank you, Bent. And let's sum up the day before we open up for the Q&A session. So I hope you have got today a good insight into who we are, where we're moving, how we see the future and really why we, of course, believe that Elopak is a very good investment case. We are a global player, and we have a resilient business model, and we work in resilient categories. We are exposed to global megatrends, but these megatrends actually work in our favor because they are strengthening our positions and are building on the areas where we have our strengths. As you have seen from Bent's presentation just now and looked at the figures and see the development, we have a proven track record. We have been doing what we said we would do. We have delivered on the targets we set out, and you have met today a very experienced management team, bringing you both from this industry as well as other industries. So now we are clear with our strategy, repackaging tomorrow, delivering 4% to 6% growth, 15% to 17% EBITDA and a EUR 2 billion company. We're doing that in these 3 areas. And we have been through it. We are already the frontrunner. We are continuing that. We are investing behind it. We are ensuring that our position in this point will certainly not, in any way, decrease on the contrary with the developments we have. This is an area of strength for us. We are driving a EUR 2 billion company. We have the activities in place to do that. And the 3 priorities that we've been through: the global growth, the strengthening of our core and, not the least, the plastic shift. So with this, let me just remind you that during this presentation, 160 million PET bottles have been added to the world. Just reflect on that. 160 million just when we've been listening in here. And with this, I would also say thank you very much for listening in also those of you who are on the -- listening online and in the room. And now we're opening up for Q&A.

Yes. Perfect. Thank you, Thomas. So we'll then invite for Q&A. Starting first to take the questions from the people here in the audience. We have 2 microphones moving around the room. Please raise your hand, and remember to use the microphone when you ask the questions.

Håkon Fuglu from SEB. With regards to your Arkansas plant, your initial investments there were EUR 50 million, and you upped that to EUR 70 million. So my question is, is your first production line including that capacity increase as well?

The short answer is yes. This is including the first line, yes.

Okay. And I have 2 more.

I would like to just complement that answer because the change from EUR 50 million to EUR 70 million is because we changed from a lease solution into an ownership solution. So that is actually not an increase of the investment. It was a better way of financing with the lower cost that was the initial plan in June. So EUR 50 million and EUR 70 million is basically the same commitment in money, but financed in a smarter way.

But it also included EUR 5 million in capacity increase, if I correct?

Includes 5...

Of those EUR 20 million in increase, EUR 5 million of those were related to capacity increases. There were some scoping that we -- which we increased the scope slightly on the first line, that is correct, to make the plant more future proof. So that is correct.

And I have 2 follow-up questions there. In the U.S. market or in Americas in general. Besides you guys and, obviously, the market leader there, the market is rather fragmented. Are you looking into any M&A opportunities?

Well, we -- our strategy in U.S. is really organic growth, and we have very, very good traction, and we are setting up the facility, which is, in an American context, frankly, better than anything else you will find there. So it's not the prime focus to buy. M&A is not the prime focus there.

And final question. It relates to basically our growth ambitions. Have you included any renewal of filling machines in Americas in those ambitions?

Filling machines is part of our strategy in America. And as Lionel showed, it's this end-to-end solution that has been the winning formula for us now in Americas. And in our plan moving forward, this continues at full speed. Currently, as we speak, literally as we speak, actually, we are commissioning filling machines, and we are now setting up and selling filling machines to be commissioned also in '25 and beyond.

So in your 2030 targets for Americas, that also includes filling machines sales and not only cartons?

Yes, yes. That's correct, scope.

And also -- and it is also -- this is also the way we report our figures. When we report America, that always includes the income from the sales of filling machines. And to add to that comment, the model for filling machines in America is selling the machines and not leasing them out.

My name is Alf Andersen, and I represent a company called Fresh Water Norway. And your competitor, they are in Sweden. They focus a lot on cartons for bottled water. And everything you say today is not, except those milk cartons for bottled water. But do you have any plans to move into that market going forward?

I hope you did taste this. In fact, we -- in this industry, the water part is a little bit the -- so to say, the Holy Grail. This is an enormous PET industry that everyone, of course, when you're in our kind of business, would like to convert. We are doing what we can. We have in U.S. Boxed Water, which is a great brand in U.S. It's not Perrier size, but it's a very good brand. And we also have, across in other markets, water -- filled water. And we haven't highlighted it in the strategy, but we are definitely working on it within our sales organizations, Europe, Americas and also in MENA, where there's quite some interest around this right now. So definitely interesting. We -- why have we not included it? Simply because we think we need to get a better hold on it to see what is going to be the potential here. But we are very happy to talk to you afterwards.

Yes. Robin Santavirta from Carnegie. First of all, thanks for good presentation, some encouraging message you have. Now I have a bigger-picture question. It's related to your profitability. So if we look at IPO time, maybe a lot of people felt it was high margin the year before. But if we go 5 years back from now, we can see your profitability has improved quite significantly. And I wonder whether that is only or mainly driven by the growth you have had in Americas and maybe MENA as well or the other stuff that we cannot see such as improved sales or value-added margin, improved efficiency within the company. So if you can sort of comment a bit on that.

Will you start?

Yes. So my first answer to that question, we are not going back. I would like to point out 3 main drivers. One, America is a completely different company than it was in 2021: EUR 100 million higher revenues, doubling of EBITDA from EUR 35 million to EUR 70 million. We have a sold-out line 1, and we are evaluating how we're going to expand further. That is still going to continue. Remember also that we are delivering margins north of 20% for every revenue we are growing in America. So it's not only important from a revenue perspective, but it's also important from the EBITDA perspective. So that is sticky. Two, we were in Russia. That was 10% of our top line. The margin was 10%. So you lose Russia, you lose your top line, but that was not the storyline of our business. In comes MENA, margin accretive to the group. Then we have India, which is on its way to also be very margin accretive to the group. That's your second point. The third point is the commercial excellence program that was initiated on the pricing side back in the days. Now it is institutionalized. What does it mean? How we price and position our products according to value but also how we will respond in volatile markets. There are many reasons, but these will be the top 3 reasons that I would mention. And you can also throw in the aseptic growth in the mix, which is also margin accretive compared to the fresh business.

That was very clear. The second question I have is related to organic sales growth. Now the target back in the day was 2% to 3%, and now it's 2x that. So quite a significant increase. I think you spent a lot of time sort of detailing why that is. I'm still a bit sort of curious whether there's a change in the market. The market growth rate I saw was, to me, similar to before. So essentially, what has changed from 3 years back, you are now doubling the sort of organic sales growth target? And also, when you talk about gaining market share, is that from other materials mainly? Or is it from other liquid packaging companies?

Okay. Let me start and then you add on here because we are gaining market share, right? We are gaining market share frankly pretty much in all the markets we operate in. There can be exceptions, of course, in individual smaller markets. But if you look at it from a regional point of view, we are definitely gaining market share in Europe. In our core Europe, and as Stephen showed, that is partly substrate shift, i.e., formats that would have been in 100% plastic formats or significant part of the format is in plastic. There are some solutions like that. And partly, it is market share where we simply, with our portfolio, with our sales work, I'd like to say, actually have been winning the business from our carton competitors as well. So this is, in Europe, definitely the case. In U.S., it is market share. It's not a substrate shift. It's a move from essentially one big supplier in the market -- competitors in the market into us for all the reasons we elaborate on technology and et cetera, et cetera. And in the parts of our business in MENA, we are gaining market share simply because we have a better offering. We have a local presence in the market, which, in these markets, are fundamentally key also in India that you are there at -- in the market and can provide this. So it's a mix of substrate in some markets, but primarily, it's a market share. It's simply growing our market share. I don't know, Bent, do you want to add?

Well, I agree. The America growth plan is bankable. The line 1 is sold out. I think -- to be honest, I think that America has gone much better than what we hoped for in the IPO. And remember, when we talked about the strategy back then, we said we're going to get the position in MENA. We're going to get the position in India. Now we're going to scale up this position. So having that new attractive footprint will enable the double growth that you are referring to.

Jeppe, Arctic Securities. You are targeting a top line in Americas of just below EUR 500 million in 3 to 5 years. Is that including Phase 2? And when can we expect an FID on Phase 2?

That's a good question. We have -- the thing is like this. When we built the factory, we scaled it as we said, similarly to the large-size plant we have in Montreal. And we want to face it in a commercially sound way, get the contracts, establish the production capacity. So when you look at these figures, it does include us continuing on our development plan of adding more capacity. Otherwise, we can't deliver those figures with current capacity or even line 1.

I mean if you look at our CapEx plan, that includes the CapEx needed to deliver on the targets that Lionel reported. So there will not be more CapEx to deliver the top line that we already have communicated. It's all linked together.

And given the growth opportunity in Americas, do you have any increased competition from, for example, Tetra Pak or other competitors?

Well, we see the Americas is really characterized with relatively few players now at size. You have some very small ones as well, but at size. Tetra Pak is one. Pactiv Evergreen is one. Pactiv Evergreen is in a special situation because they sold off or are in the process of selling off their plants. The -- it's been announced that the buyer is, but it's still to be confirmed and approved by the competition authorities. So there are, of course, changes happening in the market. Tetra Pak, who's been there many, many years, are focusing on the aseptic business, and we find that they have not put a lot of energy into our kind of business in the recent years, which means technology-wise, they don't have the filling machine technology we have. They don't have the plant -- they don't have the technology in their plants, they're very old, that we have. They don't get the operational efficiency that we can get, et cetera. So we think we're in a good position.

Yes. Last question from me. During your IPO, you focused on the aseptic business. Could you describe how that has developed and why you are not that focused on that going forward?

Yes, we are. And it's developed well to the extent. As I said, we've launched the second platform, the Pure-Fill platform. We have just placed the machine now in 5 different markets in Europe. We are actually, in our figures, assuming also here a higher-than-market growth. We are looking at a growth level around 6%, 6.5% annually. This is way above market growth. And I've been stating that as a fact, but it's a very, very clear assumption that with the Pure-Pak aseptic system as well, we have the highest growth of any carton-based aseptic system right now. We put in the Pure-Fill. We are the only large-size 2-liter aseptic packaging system that exists, at least exists with good functionality. So there is good interest around it. We are bringing it out. And we have -- we actually have big plans on the aseptic side.

Any more questions? Yes.

Would you dare a question from a special envoy from NAV, in other words, a pensioner? I think you have put too little emphasis on what the last guy also asked about competition. I know it's more than Tetra Pak in this family. You have another company called SIG Combibloc, which is -- has done a lot of acquisitions also in the fresh segment, especially in Asia. And I think it's -- and if you're going to gain market share in Europe, you have to fight with these people in Tetra Pak and SIG Combibloc and maybe also the Chinese coming into Europe. How are you going to do that with a stagnant market? I think not a lot of investment capacity for dairies since you have said that the volume of, for example, milk is going down.

Good. Great question. So I think SIG -- as you say, SIG, Tetra Pak are both well-known competitors of ours. SIG is, from a European perspective, aseptic only. They do, they have bought some -- and I stress, some fresh business in China, Korea as well. And as they also want to start up in Australia. But it's really only these 2 markets. So we do not see SIG anywhere on fresh beyond that. We do see Tetra Pak, of course. And when we win market share, somebody else loses it. That's how it works, right? And why are we winning it? Because we have -- we are dedicated and focused on the chilled market. The team we have, the innovation we have means that we have a better portfolio. We have great filling machines. We have the most hygienic filling machines. We can guarantee long shelf lives, and we have a portfolio that is fit for purpose also here. When it comes to the Chinese, everybody in the world, whatever industry you're in, this is, of course, the theme. Also in our industry, the Chinese have established capacity in Europe, have added more capacity in Europe. And we see, of course, a lot of competition from the Chinese suppliers in Europe, in the Middle East and, eventually, also in India. In India, there are many, many other competitors as well, but it is clear that the Chinese are focusing on roll fed at this moment only.

Can I have one more? How come the competitors who are focusing on aseptic have a much better EBITDA percent than you managed to have and look forward to in the fresh segment?

So historically, aseptic business has been characterized by system sales. And in some cases, you would call it lock-in systems of you sell a filling machine, and you have to supply the packaging material for that specific provider. That has guaranteed, in the industry, a high margin level. In our industry, historically, on the fresh side, we are a solution seller. We sell solutions, and in many cases, you could technically use other suppliers to supply the filling machine. In reality, we see in Europe that when we sell filling machines, by far, the majority, and I am guessing 90%, will be using our material. In U.S., it's not the case. It's an open system. You buy a filling machine, and you buy packaging material. It's a very, very disassociated system in U.S. What we are selling now is we are trying to convince our customers, and Lionel, as you've seen, has done it very well, to say that if you buy our filling machines, you also get so much more value of choosing our caps and closures and packaging material. That is actually happening, but not because they have to, but because they want to. So it makes it very difficult to compare aseptic margins with fresh markets because the fundamentals are so different.

And maybe I'll also add, Elopak has a slightly different business model compared to some of our peers. We are selling more filling machines compared to renting them out. We are into the roll-fed business that have lower margin but low capital intensity. And this is why we have industry-leading capital -- return on capital employed. And many will claim that return on capital employed is an equally interesting metric as EBITDA margin. So I think different metrics have different strengths and weaknesses, and that's why we also start -- we'll start to report on the return on capital employed as a very important complementary metric for how to assess profitability.

I just checked SIG's EBITDA margin while I'm sitting here, and that's first half this year, 23.5%. And then a small question, a technical question. What sort of printing technology do you implement in the U.S.? Is it only flexo? Or is it something else?

No, it is litho printing we typically have in U.S. That's the market requirement. As you know, in many, many other places -- actually, all other places, frankly, we have what we call UV flexo, which is a photographic flexo printing and with a number of advantages versus litho, but it's the market standard in U.S.

More questions? No. So then I will move to the questions that we've received online. And we have quite a few. We have quite a few from Charlie Muir-Sands from BNP, and I'll read them one by one. What will be the major driver or target mix for your target -- for your targeted margin expansion, geo or product mix, for example?

So I can take that question. So as I showed in the chart, you see the split between global growth, leadership in core and plastic to carton. So when I'm answering this question, I'm answering this in a 3 to 5 perspective. So in the short term, the global expansion is the most important part. Why? Because we have already invested in MENA. That's EUR 83 million. We have already invested in India. That's EUR 12 million, EUR 16 million. So we are further in the progress. In these regions, that -- we have margins that are higher than the average of the group. And that is more a regional dimension more than a product dimension, I would say.

Thank you, Bent. Then second question from Charlie. How do you expect costs to evolve for your key inputs, especially liquid packaging boards? Is your margin target predicated on assumption of ability to pass on via pricing for whatever might happen in '25?

I can take that, too. So typically, we don't speculate on where we think raw materials are moving. But let me explain, in America, we have a pass-through clause in our contracts, so it's a different setup. So there -- it's rather mechanical. So here, we have protected our margins almost 1:1 within the year. In Europe, that's where we always have a margin exposure, that we are also protecting ourselves through financial instruments and a little bit with the commercial contracts for some of our customers. I think the key answer to the question is that over the last 3 years, we have had raw material rather that nobody has seen before. We have proved that we can manage raw material volatility, and we will continue to do so. So this is a part of doing our day-to-day business, and we have demonstrated our ability to do so.

Thank you, Bent. How much CapEx is required to support your accelerated growth ambitions? Also from Charlie.

And also Bent.

Thank you. This is fun. So you will get some, Thomas.

No, I'm fine.

So just to recap, over the time period from '25 to '28, the CapEx will be around 5% to 7% of the expected revenue, of the organic revenue. In the first couple of years, we will be on the higher end of that range, and we will approach 5% in the end of the midterm period. Maintenance CapEx will be around EUR 25 million, which is, I would say, a normal typical level given the portfolio that we are having going in the next 3 to 5 years.

Thank you, Bent. Growth projections, and I think he is then referring to the growth projections in the market slides. So are they real, so volume growth? Or are they nominal, so value growth? And how does that compare to previous decades?

So -- maybe you can't hear it if it's on the Web. It's a volume growth projection. And if you -- how does it compare to previous decades? Well, actually, on the fresh side, what we are talking is flattish. The reality on fresh, there has been some years a little bit down, a little bit up. But the underlying assumption in our figures doesn't include any consumption increase on the fresh side.

Thank you, Thomas, and thank you, Lionel. Then we have a couple of questions also from Charlie, all related to our sustainability strategy and ambitions. So first question from Charlie is a target 100% designed for recycling. What percentage does Elopak achieved today?

Maybe we'd ask Emilie to answer that.

Yes. Thank you. We are, as I said, also around 70% within the proposed grading of the PPWR. And also, we see that we have an additional 20% that is very near this proposed grading.

Thank you, Emilie. And I think you might stay on for the next one. Could you give an example of a carton that is designed for recycling today? And which ones are not? Just to give a sort of a reference or differentiation.

Uwe, you want to take that?

Shall we?

We can share responsibility.

Yes. So I would start. Of course, a lot the designed for recycling has also to do with the aluminum-free technology, which we already highlighted. So this is a good example where we can say this is good for recycling. We have to keep in mind when we define for recyclability that also recycling technology will evolve. This is what we have highlighted in one of our slides where we work in collaboration with the industry.

Thank you, Uwe. What are the implications of Suzano buying liquid paperboard mill from Pactiv? Do you see them as a better supplier or a potential new competitor?

Well, we certainly see them as a supplier. It's early days. The deal has not been, as I said, ratified or approved. Suzano is a well-known company, particularly in Brazil. Huge company, actually. So we are not looking at this as a competitive move. They're buying the paper plants, only the paper manufacturing, not the converting business, to our understanding at least. So we are believing that this will be a valuable supplier in the future as well.

Thank you, Thomas. Then also a follow-up question from Charlie. It relates to our D-PAK. So how have D-PAK sales performed versus flexible plastic pouches and refill solutions aiming to reduce plastic use?

So we're going to ask Dirk to comment on that.

Well, when we look to the D-PAK, then of course, refill solutions on the market is predominantly pouch for the time being. And we have in the, let's say, past 2, 3 years, just started to reintroduce our D-PAK solution into the market. And we have, of course, set plans to win market share against pouch, of course. And for 2024, we can say that we are on track, and we believe that we can finish the year as we have planned.

We could also add, as you've seen, I can't remember, it's in the video where we saw it, you showed it that when you ask consumers, 97% prefer the D-PAK as a refill pack versus a plastic pouch. That is, I mean, by any standard, pretty amazing, actually.

Okay. Thank you, Dirk and Thomas. So a couple of more questions that we received. So how does the EUR 2 billion ambition by 2030 reconcile to 4% to 6% organic growth? 6% implies EUR 1.7 billion. So do you plan to bolt on EUR 300 million of M&A?

That computes in my calculation, so the answer is yes.

And the follow-up on that question is, how would you fund this, cash or debt or equity?

Yes. So if you look at the organic growth plan in the midterm targets, all the organic growth plan, we will use our own balance sheet because you see that we are deleveraging the company below 2. So that's good. When it comes to -- that means that for every year, the M&A capacity with our own balance sheet will be strengthened. And we will be comfortable buying companies as long as we keep clear south of 3, so we need to have a good buffer to 3. So we are comfortable as long as we are south of 3 when it comes to using the balance sheet. If we want to do a transformative move, then it's natural to use equity because we are a company that is committed to our investment-grade rating.

Thank you, Bent. And then we have one final question, and it comes from [ Marty Goral ] from UBS. And I'll do this one by one again. What do you expect in terms of pricing for both the chilled and aseptic carton in 2025?

So let me just answer it by not answering it, frankly, because at this moment in time, we are not prepared to come out with that. This is a -- we will come back to that in due time.

And then the second question from [ Marty ], if understood right, in your Indian plan, you plan to grow mainly in fresh and not much in aseptic. Is that correct? And if so, what's the reason behind it?

No, it's not correct. We are continuing to grow our Roll Fed business in India. What we're doing now is we are adding to that growth the Pure-Pak business. Think of it like this. We are, as we speak, adding more capacity on Roll Fed because we have the growth in Roll Fed. The Roll Fed business is the foundation of the business. The reason we are there is because it's a massive market in its own right. So with that, we will have the platform to build our Pure-Pak business.

Perfect. And I think that concludes the questions that we received on the Web today. So Thomas, would you like to...

So once again, I know you are very hot by now. I am. But there's good news for you because there's lunch upstairs. Let me just say on behalf of the entire Elopak team, both of those presenting here today and all the ones who did the work behind us, thank you very much for spending your morning with us. We are very, very encouraged by the amount of interest we are seeing in the company. And we want to thank you, and I'm happy to answer questions, should you have more questions, during lunch upstairs. Thank you.

Thank you.