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Elopak ASA reported its financial results for the first quarter of 2025, highlighting a milestone in revenue growth and solid performance across its global markets. The company, a leader in sustainable packaging with a market capitalization of $51.9 million, saw significant contributions from its operations in the Americas and India, despite facing potential geopolitical challenges. According to InvestingPro analysis, the stock has shown strong momentum with a 10.3% year-to-date return, though current RSI readings suggest it may be in overbought territory.
Key Takeaways
- Elopak achieved €300 million in revenue for the first time in Q1 2025.
- The Americas reported a remarkable 23% organic growth in revenue.
- The company is expanding its global footprint with new operations in the USA and increased capacity in India.
- Elopak is targeting €2 billion in revenue through its "Repackaging Tomorrow" strategy.
Company Performance
Elopak ASA’s Q1 2025 performance underscores its robust growth trajectory, especially in the sustainable packaging sector. The company’s revenue reached €300 million, marking a significant milestone. The Americas contributed €94 million to this figure, driven by a 23% organic growth rate. In Europe, the Middle East, and Africa (EMEA), revenue remained stable, while India saw a substantial 60% year-on-year growth. InvestingPro data shows the company maintains a healthy financial position with a strong current ratio of 2.35 and an impressive Altman Z-Score of 59.44, indicating very low bankruptcy risk.
Financial Highlights
- Revenue: €300 million, reaching a new high.
- Organic Growth: 5.3%
- EBITDA Margin: 14.4%, with an underlying margin of approximately 15.1%.
- Americas Revenue: €94 million (23% organic growth)
- EMEA Revenue: Stable at €229 million
- India Revenue: 60% year-on-year growth
Outlook & Guidance
Elopak is optimistic about its future performance, expecting continued solid results throughout 2025. The company aims to reach full capacity utilization at its new Little Rock, USA plant by the end of the year. Additionally, Elopak is focusing on expanding its production lines as part of its strategy to achieve €2 billion in revenue. Analysts share this optimistic outlook, with InvestingPro reporting a strong buy consensus and significant upside potential. For deeper insights into Elopak’s growth prospects and comprehensive financial analysis, investors can access the detailed Pro Research Report, part of InvestingPro’s coverage of over 1,400 top stocks.
Executive Commentary
CEO Thomas Kirmendi emphasized the company’s commitment to sustainability, stating, "Everything we do is around the sustainability and providing the world with sustainable packaging." He also expressed confidence in the company’s performance for the year, noting, "We are looking at a full year continued solid performance." CFO Bent Axelsen highlighted the company’s financial resilience, saying, "We have demonstrated before how fast we can deleverage this company."
Risks and Challenges
- Geopolitical uncertainties that could lead to tariff impacts.
- Potential supply chain disruptions affecting production efficiency.
- Market competition, especially following the sale of PACKTIV to Novolex.
- The need to manage inventory levels and working capital effectively.
Elopak’s strategic focus on sustainability and global expansion positions it well for future growth, though it must navigate potential challenges in the geopolitical and competitive landscape. The company has demonstrated its commitment to shareholder value by raising its dividend for three consecutive years, making it an interesting prospect for income-focused investors. Unlock more valuable insights about Elopak and discover similar investment opportunities with InvestingPro, featuring exclusive financial metrics, Fair Value assessments, and professional-grade analysis tools.
Full transcript - Elopak ASA (ELO) Q1 2025:
Christian Hede, Head of Treasury and Investor Relations, EloPac: Good morning, everybody, and welcome to the first quarter twenty twenty five results presentation for EloPac. My name is Christian Hede, and I’m the Head of Treasury and Investor Relations. Today’s presentation will be held by our CEO, Thomas Kirmendi, and our CFO, Bent Axelsen, and will last for around thirty minutes, followed by a Q and A, where people here in the audience and the people watching in online will be able to ask questions. So with that brief introduction, I will hand over to our CEO, Thomas Kermende.
Thomas Kirmendi, CEO, EloPac: Thank you, Christian and a warm welcome to everyone here in Oslo on, I think actually I can use this one, on this beautiful day. We will go through yet another strong quarter for EloPac and I’m very happy to present to you our results for the beginning of the year. Before we start, just remind everyone what it is that we are doing and the essence of what we’re doing is really sustainable packaging. What we do is replacing plastics. We do that by packaging of essential commodities around the world and then providing consumers around the world with essential nutrition.
Everything we do is around the sustainability and providing the world with sustainable packaging. So that we have that clear, let me just start now on the quarter. And this has been an exceptional positive quarter for us, both in terms of results as you will see, but also in terms of key events that has happened for us in the period and will shape the future to come. Starting with revenue, we now report a result above 300,000,000 for the quarter, which is the first time ever and that is driven by very strong developments in across our business, but as you will see primarily Americas, we have a growth level of 5.3 organic growth, which of course is historically also a very strong level. And that as I said is to the very large extent fueling the growth we have had in Americas for some years now.
We are heading up to more than 20%, twenty three % growth in Americas in our core business with Purepac and the caps, closures, filling machines, etc. The EBITDA for the period is equal to Q4 of last year and that it gives us a margin level of 14.4. Also a strong period given the amount of investments we have been doing and the increased costs we have had over the period as a consequence of exactly the next point, namely the opening of our new factory in Little Rock that we inaugurated only last week exactly. More about that one of course later. Finally in the period, the free cash flow has been impacted partly by the extraordinary costs related to establishing and opening the plant in Little Rock and also some temporary buildup of working cap that you will see later in the presentation from BEND.
An exciting event as well during the period has been the partnership that we have started with Blue Ocean Closures. Blue Ocean Closures is a sustainability tech company from Sweden. They’re delivering fiber based caps enclosures and it’s part of our road to provide more and more sustainable both on the cap on the pack and also on package and also on caps and closures. Now on the revenue side, clearly 6%, five point three % organic growth is a very strong result and it’s driven by on one hand the Americas business in on Purepac mainly and also on CAPS. It’s also driven by an extraordinary strong growth in India.
We looked we have been looking at 60% growth in our business in India year on year and that is fueled by the investments we made end of last year, extending and adding capacity, doubling the capacity, in fact, in India, which then in Q1 of this year has led us to enabled us to offer more products and create more sales in India. We have also seen in the period that the RolledFed business in Europe has been challenged and we’ve also seen that our business in Europe has continued on a high level. In some parts we have been increasing our market share and in other parts the consumption has been somewhat strained. From an EBITDA level, we can say that the EBITDA level we have of 14.4 actually has an underlying margin level of plus 15, around 15.1 And that difference relates to the more than EUR 2,000,000 we have an extraordinary cost related to the new plant in Little Rock. So the underlying business is strong, and we are looking at a business that, excuse me, in Americas continues at a high level and also a pure pack business in the remainder of our organization that continues at a very solid level.
Now we have outlined three priorities in our strategic roadmap, which we call repackaging tomorrow. And for those of you who saw this during the Capital Markets Day, you may remember that these are the paths and the roadmaps that will drive us and lead us to the EUR 2,000,000,000 target that we have set. Number one relates to the realizing global growth. And clearly, the Americas development that we’re seeing now is a very important part of that development. Equally, the developments we see in India is also a very important part in realizing global growth.
And thirdly, we have the MENA, our acquisition back a couple of years back that are now that we are now developing and driving business both with our with the old portfolio, but also adding new products to the region. Secondly, and number two, very importantly, is all around the sustainability where we talk about strengthening our leadership in core. Here, we talk about technology developments, material development, and the Blue Ocean closure is an example how we are fueling that part of the strategy, adding more materials, adding more innovations around the sustainability part of the business. The last part is the plastic to carton shift and this is of course the big part that we strongly believe in and that we see around the world not only here in Norway but now also with other products we have been seeing now that for instance products like Unilever have been launched in Europe on detergents, softeners, etcetera. This is a big big part of our business, a big part of our growth and a big part of how we see the business moving forward.
We have of course also experienced here now a quite a busy period when it comes to the geopolitical arena and not the least tariffs which have been discussed quite at length. So I thought I’d just give you a little update on where we stand with the tariffs in The US. Now firstly, it’s very important to note that everything we use in US, America’s essential is based on US And I’m coming back to the almost, but basically we we are sourcing in Americas and using in Americas. From our plant in Canada, Seventy Percent of what we produce there is being exported into The US.
The boat comes from US, it’s converted in Canada re exported into US. That business is not impacted by tariffs because there is an agreement called the USMCA, which is an agreement between The United States, Mexico and Canada that means that materials such as ours produced in Canada is exempt from tariffs. We have some imports but rather limited from the Dominican and these imports on the other hand are impacted by our 10% tariffs to The US. Our filling machines that we use in US are currently impacted by another 10%. They come from Japan And as it stands now, today, this is 10%.
This may, of course, change. As you know, there are ongoing discussions on trade agreements, and potentially, this may even increase to 24 but where we stand now it is 10%. Very importantly though is we have as I said before just opened a brand new plant in US serving the American market and given that more than 9093% of the material we use in that plant is sourced out of US it’s clearly going to be a very efficient factory also from a tariff point of view should that change. Having said that, we are continuing to monitor the situation on tariffs. We think we are in a really, really good situation with or without tariffs, I would say, given our new plant in Little Rock.
And we’re just incredibly excited with the fact that Purepac which actually originates from US now also is back and being produced in The US. So with that, let’s just have a brief look at what this means. So we, as I said, had the pleasure really to open and inaugurate the plant only exactly actually a week ago today. At a grand opening in Little Rock, we had customers from around the country, we had suppliers from including international suppliers flying in and we had a lot of dignitaries from evidently Little Rock, this state and around. It’s been a fantastic journey for us and I cannot stress how happy we are that we are opening on time and within budget.
We’re running now, we’re producing now and really, really excited to spend Q2 of actually increasing and scaling up the production. So with this, I will hand over to Bent, please.
Bent Axelsen, CFO, EloPac: Thank you, Thomas. I think we can say that with the turbulence we had in the geopolitical arena, EloPac has navigated very well and demonstrated our resilience with both revenue growth, as Pointer Thomas pointed out, and solid profitability. Let’s dive into the operating segments, starting with EMEA. So in EMEA, we are reporting stable revenues and continued satisfactory and good strong profitability. Revenues are NOK $229,000,000 and EBITDA is 36,000,000.
If we look at the revenues, we are reporting stable volumes for Purepac in EMEA, where we see growth in the Central Part of Europe and a little bit of phasing in a decline in the northern part. And however, for Rolledfed, we are continuing to see the strong competition that we have reported earlier. So we do have a decline for Rolledfed the European markets. When you look at this year’s revenues compared to last year’s, this development is also impacted by the relatively strong quarter in MENA 1 Year ago, where revenues were really high because of the timing of Ramadan plus other impacts like the Red Sea conflict. So that has made the baseline a little bit higher.
But in India, we are seeing a continued strong demand, and revenues grew by 60%, and this is enabled by the capacity installment. As you may remember, we doubled the capacity in the second half of twenty twenty four. If you take a look at the EBITDA, the product margins, they remain strong for especially for our pure pack and cartons and closures. If we look at the roll fed business in India with the 60% revenues, that has a dilutive effect to the average margin because, one, roll fed margins, generally speaking, have lower margin compared to those of Purepac cartons. And in Q1, the margins on Ralfed in India were a little bit lower compared to last year.
The same you can say for our filling machines. So we have increased the revenues related to filling machines in EMEA. And as you know, the margins on filling machines are lower compared to packaging materials. So technically speaking, that also has some dilution effects. R and D costs are increasing, in line with the repackaging tomorrow strategy.
And that will, in the short term, impact the margins, but it will enable the future growth that we have committed to in our midterm targets. If we move to Americas, we report €94,000,000 And as a fun fact, this is more than double the revenues compared to four years ago when we got listed. So I think this is fun to look at and it’s not only about year over year comparison, but if you take the bigger perspective that shows the progress that we have demonstrated in America and the progress that is to come. So we are super proud of that. If we look at the comparison versus last year, the revenue growth is the organic revenue growth is 23%.
And you see the difference here, that is basically the currency exchange rates between dollar and euro. This growth comes from growth in the core segments, fresh dairy segment. It is increasing share of wallet with existing customers, also acquiring new customers and the growth we see across all product segments within the fresh dairy area as well. So how did we manage this growth? This was enabled by increased import from our joint ventures, import from Europe, but we also managed to improve the production output of the Montreal plant.
When we look at the EBITDA for Americas, we need to interpret the figures, as Thomas pointed out. We have these preproduction costs of And if we calculate the EBITDA margins without those production in the preproduction costs, the margin is 22%, and that is quite comparable to what we normally report for the Americas segment. Part of the picture here is also the import that we are making from the JVs and Europe, they have a significantly lower margin compared to having those produced in Canada or Little Rock in the future. As Thomas pointed out, as of now, we are exempted from tariffs.
There no tariffs. Tariffs have not affected any of our figures for Q1. But I just want to point out that for three days in March, the tariffs were actually paid when importing product to The US. So it also proves the unpredictability of the trading regime these days. Now if you look at the bridge for the group, we are going from the NOK 46,000,000 last year to the 44,600,000.0 this year.
Mentally remember that we have the 2,000,000 in cost related to Little Rock that we didn’t have last year. I will comp I have pointed out the main drivers already, so let’s see how we can complement the picture somewhat. If you look at the net revenue mix, which obviously is driven largely by the growth in America, We also have successfully implemented the price increases in Europe for the year 2025. Raw materials are do have positive impact in our P and L, and that is related to a positive inventory turn effect in our books. On the operating cost sides, we pointed out the used plant, the increased R and D spend.
In addition, we have the inflation of our cost base. Now let’s take a look at our cash flow. So in this quarter, we are reporting a cash flow from operation of EUR 5,000,000. And as you can see from the chart, there is a significant increase in working capital in this quarter. In the report, we have explained this in quite detail to show you the drivers of this development.
I will point down the two most important drivers of this. One is that we have a temporary increase related to filling machine payments. So we have account payables with different timings. We have commissioning with different timings and so on prepayments. And in this quarter, that had an increase and that is almost half of this 34.
We believe that to be a temporary impact on the filling machine and we are committed to the commissioning targets as we say. The second main point is that we are building inventory for the ramp up in The U. S. Plant. And as a part of the picture here, also need to remember that end of last year, the inventories were particularly low because of the supply chain incident we had in mid last year, and we are also normalizing inventory levels.
So those are the two key explanation factors and there are other phasing effects that we are describing in the report. On a general note, with our working capital initiatives, we are confident to bring working capital levels to better levels in the months to come. The cash flow from in investments, those are driven by two things. We have invested EUR 11,000,000 in related to The U. S.
Plant, a little bit line one, mainly line two. And we also started the replacement of converters in Netherlands, which is a part of the investment program to enable repackaging tomorrow. Filling machine investment is at normal levels. Finally, we have cash flow from financing activities of SEK 6,500,000.0, and that consists of the lease payments, interest payments, but also positive supply chain financing effects. That brings us to the capital structure and our return on capital.
So we have a stable EBITDA year over year. When we say LTM, so last twelve months. But with the investment program we have in Little Rock and also the production plants in Europe And with the temporary increase in working capital, the leverage ratio is 2.3%. We will work we work very systematically to bring that down because we also have, say, future cash flow effects related to the remainder of the investment program in Little Rock. That is around $22,000,000 bringing to the 95,000,000 frame as communicated.
And we also have dividend payments both in this quarter Q2 and also in the second half of the year. Moving over to return on capital employed. We are reporting 15%, and that is mainly driven by building the capital employed, the balance sheet. We have all the balance sheet impacts from Little Rock, and we are really, really waiting to get the contribution from this exciting investment. So that wraps up the financial part.
So Thomas, please.
Thomas Kirmendi, CEO, EloPac: Thank you, Bent. And that actually also wraps up our presentation today. As you can see, we are highlighting Little Rock. This is the biggest event we have, of course, for the quarter. It’s a fantastic plant, I can say, and we are really excited to continue ramping up production during Q2.
We’re also closing a quarter with exceptionally strong revenue growth, more than 5%, more than EUR 300,000,000 revenues, first time ever for us as a company, and with a solid EBITDA level of a underlying performance above the 15%. Our balance sheet, as you saw from Ben, remains solid even though we are investing and have invested quite substantially both in Americas but also in Europe now. And we then have a temporary build off the working capital. All in all, looking ahead, we see that our strong performance from Q1 will continue. So we are looking at a full year continued solid performance.
Thank you very much. Christian?
Christian Hede, Head of Treasury and Investor Relations, EloPac: Thank you, Thomas. Thank you, Bent. Another strong quarter and exciting times ahead with opening of the new U. S. Plant.
So with that, we will move to Q and A, taking questions from the audience first. So if you raise your hand, I will come with the microphone to you. Please state your full name and the company that you represent.
Marcus Gabelli, Analyst, Pareto: Yeah. Thank you. Marcus Gabelli from Pareto. So you mentioned that the good results in Americas today is is somewhat contributed to Montreal, higher up there, and also the the JV in Mexico. Could you provide some color more like specifically on what you did in Montreal that that led to this to this good result and how sustainable is that moving forward?
Thomas Kirmendi, CEO, EloPac: Right. I think you because we have been in we have been presenting and being faced with a situation where we were running out of capacity in Montreal. I think that’s what you alluding to and clearly that’s why we are building the plant in Little Rock. So what happened during last year is that we had we’re running the plant. We then had a disruption in our supply chain during the year that Bent also mentioned.
For us, that meant that we to prioritize to supply customers the best we could. In some cases, it was very, very, very difficult. And it also meant that we needed to produce smaller batches in order to satisfy pretty much everyone’s needs. Now when we have the possibility of organizing ourselves better, we can produce longer series, we can make it more efficient, we can simply get more output of the factory. The shorter runs you do, the more changeover time you have and the lower the OEE level in the plant you get.
So we get better OEE, we get better output and we have a higher efficiency. Is that sustainable? I absolutely believe it is because it’s the right way of doing it.
Marcus Gabelli, Analyst, Pareto: Thank you. And just one more question regarding Americas. So as you said, Bank, leverage level might be a bit inflated, if you can call it that, right now with CapEx and working capital. How should we think about or how do you think about you know, another FID in the markets regarding your leverage level? Is that something you you will need to to get down to, let’s call it, comfortable levels before you think about FID?
Or is that something you you could see yourself doing while building down the leverage?
Bent Axelsen, CFO, EloPac: So when you say FID, mean further expansion, right?
Marcus Gabelli, Analyst, Pareto: Yes, yes.
Bent Axelsen, CFO, EloPac: So first of all, we are comfortable with the current leverage ratio. And we have demonstrated before how fast we can deleverage this company. Since the working capital movement, much of that is temporary. You can if you play with a number, right, if you are fundamentally, the working capital should probably move million $6,000,000 for this quarter. So the rest, I regard as temporary.
That’s the price of Line three.
Marcus Gabelli, Analyst, Pareto: Okay. Thank you.
Jeppe, Analyst, Arctic: Jeppe, Arctic. You mentioned that some of the revenue effects came from price adjustment in Europe. Looking towards your competitor, Tetra Pak. Rumors has said that they increased prices by 3%. What can we expect from your price adjustments in 2025?
Thomas Kirmendi, CEO, EloPac: So we did increase price across the board in 2025. We have implemented our price increases. I’m not going to comment exactly on the amount nor range, but we have done it and we’ve successfully completed the plan we had for the price increase. The price increases relate simply to, as we’ve seen here, inflation continues, of course. We have board increases.
So that’s essentially the background for the price increases. But we are through it, we’ve done it and are happy with the execution of it.
Jeppe, Analyst, Arctic: And regarding Markus, a question on FID on or FID beyond Line one and two, given the geopolitical uncertainty, given the economics on the line or each incremental line? And also the market balance in The U. S, why or why not does it make sense to invest in a third and a fourth line?
Thomas Kirmendi, CEO, EloPac: We’re not saying it doesn’t make sense, right? We’re just saying that we built the facility that you saw on the video, which is a fantastic facility actually, and it’s built for a lot more capacity than what we will have right now. So I don’t think it’s unreasonable to think that at some point, we would want to increase capacity, but we also want to do it in a controlled way. You know, the thing is we’re adding new customers. We’re adding more volume from existing customers.
We are onboarding plants, dairies, etcetera. All of that is actually a lot of work and a lot of people getting involved, a lot of testing, etcetera. And we just want to make sure that we can do what we say and deliver to our customers and and ensure that they get the quality that they expect from EloPac. So it’s a big plant. And at some point, it would be nice to see that being fully utilized, but we take it step by step.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Any further questions here from the audience before I move to the questions that we received online? No? Okay. So we have a couple of questions coming in. Hakon Fugler, SEB.
I will do them one by one.
Bent Axelsen, CFO, EloPac: Thank you.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Do you see any logistical impact from potential tariffs in the quarter?
Bent Axelsen, CFO, EloPac: Yes, we have discussed that internally. And I think from, say, operational perspective, I cannot recall that we have any issues. Has there been any front loading orders in Q1 awaiting tariffs in April? That could have been, but at least from what we have understood from the organization is that those effects are rather limited. But it’s also difficult to really get the truth when it comes to these things.
And then you need to know what’s in customer’s mind, and that is not always clear to us.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Thank you, Bent. Second question from Ochlan. What is the negative Ramadan impact in Q1? And do you expect carton sales to improve for H2 in EMEA?
Bent Axelsen, CFO, EloPac: Okay. So I can answer I can maybe comment and you can complement. I think it’s not a negative effect this year. I think I’d rather say that the impact was very positive last year. So you got the full effect of Ramadan in Q1.
The timing is different between years. So I would definitely not say that MENA revenues are weak this quarter. If you compare to Q4, they are quite comparable. So that makes it, say, not that obvious that we see a significant increase into Q2 since this impact was more a last year impact. Thomas, I’m not sure if you
Thomas Kirmendi, CEO, EloPac: have any I actually agree. I think if you look at MENA sorry, EMEA and the volume in EMEA, I think we will see because we have projects and contracts that will come on board. We will continue to see the market share growth that we have had over the last, at least, year, maybe two years. But this is also being offset, and it is now, with some consumption decline in major markets. And with our market share, of course, it impacts our volume.
So I don’t think necessarily we’re going to see a big jump. But overall, I think the EMEA business is doing well and will continue to do well for the remainder of the year with ups and downs a little bit where you look.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Thank you. Following up with another question from Ocon. How much of Americas revenue growth stems from EU imports? And has there been any I think you answered the last part of it. So how much of the revenue growth that we’ve seen in Americas comes from imports from the EU and JVs?
So
Bent Axelsen, CFO, EloPac: we don’t disclose the split between Europe and joint ventures. But I think roughly speaking, you can say import and increased output is roughly fifty-fifty, roughly fifty-fifty. But I think the import from JVs are somewhat higher than the import from Europe.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Thank you, Bett. The last question from Hakon so far. What can we expect of filling machine deliveries in 2025 for Americas?
Thomas Kirmendi, CEO, EloPac: We expect the development we’ve had the last few years to be in line this year as well. We see good traction, good demand in filling machine. For us, it’s a question of ensuring that we install them, commission them, get them out in the market. Sometimes that there can be some delays in this. But overall, I don’t see any reason why this year should be different than previous year when it comes to filling machines to the market.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Thank you, Thomas. Then we have some questions from Charlie Murray Sands, BNP. I’ll start again doing one by one. Was there a demand pull forward in Americas in Q1? Or is the run rate is this the run rate that you expect through ’25?
Thomas Kirmendi, CEO, EloPac: Yes. Think Ben answered before.
Bent Axelsen, CFO, EloPac: Yes. So I think in all honesty, I think the demand has been there for some time. So I think the explanation for the revenue growth is that we find make one ways to enable it. So by continuing to import and to find productivity improvements. So the way what we expect is that we will do now we will now do the ramp up.
We were gearing up Little Rock day by day. And gradually, we will replace those imports with domestic production in The U. S. And the growth to be expected in America is in line with what we have talked about before that by the end of this year, we will reach the practical capacity utilization full capacity utilization in Little Rock, so by the end of the year.
Thomas Kirmendi, CEO, EloPac: On Line one?
Bent Axelsen, CFO, EloPac: On Line one. Line one, yes.
Thomas Kirmendi, CEO, EloPac: And as you know, we’re installing Line two to be up and running next year. So overall, this moves along with in line with plan.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Thank you. Another question from Charlie. What startup costs do you expect for the rest of the financial year 2025 for Little Rock?
Bent Axelsen, CFO, EloPac: Yes. So in this quarter, we have the costs. I think in moving forward, I think the second quarter will be more neutral, I would say, and then we will start to generate positive EBITDAs from second half and onwards. And then we will aim by the end of the year to have margin EBITDA margin on Little Rock in line with the rest of America for the end of year in isolation.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Thank you, Wen. A couple of more questions from Charlie here. What share of Line two in Little Rock is now pre sold?
Thomas Kirmendi, CEO, EloPac: So we’re not very we’re actually, are not disclosing that. But where we are on the volume right now is we have enough demand for us to fill the line. We are currently not actively filling it and it’s back to the point I made before. We want to make sure Little Rock is up and running. We want to make we think of it like this.
It’s a greenfield as you saw in the movie. We have a lot of new people. We have to ensure that we get the quality, the efficiency, everything like we want it to be before we sell and commit too much. So we are running the expansion of Line 2 a little bit more carefully than what maybe demand would say we should do.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Thank you, Thomas. And then we have one final question from Charlie here, which I think is the last one that we received. And that relates to the competitive landscape in The U. S. So are there any changes in the competitive situation with the sale of PACKTIV to Novolex?
Thomas Kirmendi, CEO, EloPac: Look, it’s difficult to say, right? The sale has been confirmed and has been approved. And of course, clearly, you talk when we talk to our customers and future customers, they are very clearly looking for what that sale will mean for the market. I think for us it’s too early to be specific of what it means. Thankfully, and we’re very happy about that, the demand on our side, the interest in the filling machines, in filling up Little Rock in working with us has certainly not diminished in any way.
Christian Hede, Head of Treasury and Investor Relations, EloPac: Perfect. Thank you, Thomas. Thank you, Bent. I think that concludes the questions that we’ve received from the audience online. So unless there are any final questions here from the crowd, we will round off today’s results presentation.
Thank you, everybody, for
Thomas Kirmendi, CEO, EloPac: joining Thank you, everyone.
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