Elopak ASA
OSE:ELO
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Good morning, and welcome to Elopak's Q2 2022 presentation. My name is Mirza Koristovic, and I'm Head of Investor Relations since 2 weeks ago. Today's presentation will be held by the CEO, Thomas Kormendi; and the CFO, Bent Axelsen. The presentation will last for approximately 25 minutes and is available on live webcast on our webpage under the IR section. We will have a Q&A session after the presentation where there will be a possibility to ask questions for the audience here in Oslo, as well as for the audience on the webcast through the chat function.
So with that, I leave the word to the CEO, Thomas Kormendi.
Thank you, Mirza, and good morning. Welcome to everyone. It's good to see you live this time, and we finally have meetings where we can meet again. Also, of course, welcome to everyone who is listening in on the web.
We are very happy to present you with Q1 (sic) [ Q2 ] -- before I start on that, I'd like to give you a few introductory words on who are we at Elopak. So first of all, we are, in fact, the leading global liquid carton fresh packaging company. We do that across the world, but primarily in Europe with 80% of our revenue when it's Europe and EMEA, as you'll see in the quarterly report and in Americas, where we primarily sell in North America as well as Central America.
We have a business that is fresh to 80% and aseptic, meaning long life to roughly 20%. As you can see from the chart as well, these figures are, of course, from '21. We have had a solid development in profitability over the years and have been developing relatively stable on the revenue side.
What is very important is that from a company point of view, we have a mission and a vision that is clearly sustainability related. I would like to think, and I'd like to state that we are probably the most sustainable packaging company in this area. And the reason being, we have a vision statement stating chosen by people, packaged by nature. And a vision -- and a mission statement, sorry, that really says we're the only packaging company in this space focusing on carton only.
This is our business. This is what we do, and we do that with strong developments in carton. As you can see, a number of new solutions that we will be talking about. And also doing that in very, very close contact with our customers and always with consumers in mind, but with the overarching strategy of leaving the world unharmed. This is what drives all of our innovations, all of our strategies and all the developments we do.
So then how are we actually doing? So let's look at Q2. So overall, we have had, fair to say, very busy quarter. We have had a very -- a quarter that has been characterized by yet another quarter of strong growth. And I'm saying this on the back of very solid growth in Q1, if you may have seen and even in Q4, very solid growth. So this is now consistently driving the top line across big parts of our business as well as securing the profitability.
We have had a revenue growth around 7% year-on-year. And we can also see that the pricing part that we've been discussing in earlier presentations and earlier meetings has supported our growth by roughly EUR 12 million. With an EBITDA just shy of the 10% with 9.8%, we have, of course, been significantly impacted by raw materials and input costs, which have gone up and to some extent, still are going up. But we've also seen in this period an incredibly strong yet again, result from Americas which is driving both revenue and profitability throughout this quarter as well.
And we have also seen that during the quarter, we have entered India, the fast-growing Indian market. We are seeing already now sales in India and very, very promising results even at this very, very short time. Remember, we only signed this in May.
Finally, we have announced in July that we have exited Russia, and I'll come back to that, more of that later.
Revenues. So very importantly for us and very positively, and you saw my introductory slide on revenue development over the years, we are now seeing that we are driving the revenue growth top line across very big parts of the industry -- of our market, sorry. We are looking at a year-on-year growth of around 7% and we are translating that into an organic growth. So what we could say an underlying organic growth of around EUR 14 million or 6%.
In this period, we have the inclusion of these figures of MENA, so the acquisition we made, but we also have the inclusion of all of Russia, which, as you know, as of March, had 0 revenue for us in the period. So that's why with the underlying is around 6% growth. I'll come back to that a little bit more on European, what that means.
But overall, we -- this is a strong result in revenue terms. It is a result that is driven by market share increase in some cases, and it's driven, of course, clearly, with the pricing initiatives that we have done throughout in -- actually throughout the group.
Now looking at EMEA, specifically. The EMEA revenue grew by EUR 4 million with a negative impact of Russia of EUR 16 million in this period. We have, in this period, seen quite some delays on filling machines. So if I compare the same period to last year, we have significantly less filling machine sales really driven by delays, not driven by lower demand, not even driven by a lower backlog, but simply driven by many of our customers had issues in completing their facilities and sites and allowing us to install the filling machines. Equally so, of course, we have filling machine delivery challenges throughout all our markets. But the issue where the delays are mainly, you can have processing equipment that's not ready, piping is not ready, civil works is not ready and that all creates the disruption that we're seeing now.
What's also very important and very positive for us is while we have had significant Roll Fed sales to Russia from our factory in Ukraine, that, of course, we ceased with in -- as of March, as we announced. But meanwhile, we've been able to pick up sales in the other parts of our Europe, mainly around 14% growth on Roll Fed supplying the Western European country -- from a very, very big part from the Ukrainian plant, Fastiv. They've done a fantastic job in -- through the circumstances and there in very challenging environment, actually starting to supply European countries from our plant in Fastiv, very happy about that.
So moving on to Americas. And Americas is, of course, an example of continued very, very strong performance in line with the previous quarters we presented. And here, the result is really -- revenue is really driven by mix, caps and school milk. School milk, we also highlighted in Q1. School milk, of course, with schools opening again, it's a big business. And with changes in the way school meals are subsidized in U.S. and the way schools are administering 2 school meals per day instead of 1, the whole school milk business saw tremendous growth early on this year and even end of last year.
The EBITDA improvements we have really relate to, of course, on one hand, we have the protection right now from the pass-through mechanisms, which protects us when raw materials are going up. But we also have and we have had that continuously strong improvements on the operational side, we have improvements in the plant in Montreal, which are now continuously showing lower and lower waste, which impacts our EBITDA positively, as you see.
More importantly and very, very significant, we see strong demand on filling machines. We have sold year-to-date, 12 filling machines, which is, frankly, compared to earlier years, nothing we have ever been close to before. And we have a demand and expectations on a continuous high demand for filling machines. 12 filling machines year-to-date, I have to say, is actually well ahead of the ambitious strategy we presented during the IPO. We're very happy about the results in Americas as such.
Now I mentioned it before, and let me just get into exactly the mechanisms around what happened in Russia. So as we announced, we discontinued and suspended our activities in Russia in March. We then announced that we were looking at ways of exiting Russia. And throughout Q2, we worked intensely with local management in Russia to find ways of initiating an MBO of the business.
This we did, and we announced that in July that we are now completely exiting Russia, albeit with a buyback option that we retain in the contract. This agreement has to be approved by local authorities in Russia. There is a committee that approves all of divestments and activities like this. That approval is still pending. So for that reason, we are saying that we expect this to be concluded in second half of this year.
And then back on strategy, and this is something that clearly drives our activities. It drives our innovations. It drives our strategic moves, and it links very, very closely to what I initially said, the sustainability-driven strategy that we think from a business point of view, is going to be the winning strategy and is also something that not the least this year with all the heatwaves we've all experienced across Europe, I think we find that the topic around sustainability and environment specifically is something which is very close at heart to most of us.
And what I'd like to say on this is in very, very short terms that we are, in fact, delivering on the various parts. On the Americas part of this, you've seen Americas delivering the third quarter in very, very high growth figures. We see market share increase there. We see more different products coming in there, and we see the filling machine installations, which we presented on a fundamental to create the sustainability in the industry here in order for us to launch innovations, rejuvenate the commoditized market that they have in Americas and can establish a strong position for Elopak in the future. That is happening.
On the aseptic part, I'd just like to come back to that in a little -- in a second. But one comment I can make here is when you look at parts of the aseptic business, not the least, long-life milk, UHT milk, we see very, very good growth in our system actually outperforming any other carton or plastic system for UHT milk. Significantly in South Europe, more machines going in and significantly seeing that the preference and the actual sales of UHT in Pure-Pak aseptic is outperforming any other system.
The MENA -- the geographical expansion, of course, throughout this year has been, on one hand, Naturepak, which continues to deliver in line with our plans. And now the addition of GLS, which actually, frankly, is a little bit faster maybe than what we thought. But this is India and clock speed is somewhat different than what we have in Europe. But we look very, very positively on the developments there as well.
We've been talking about plastic to carton, and we continue to see that development as well with the installations we are making now in U.K., not the least, but also in across Europe. But what I would like to address this time is, of course, what really we're spending time now and that has to do with commercial excellence, actually pricing for a very big part.
Now as you saw, we have implemented price increases early this year. You saw the EUR 12 million that we highlighted in the report. That is partly increases that we implemented on the back of raw material costs of last year. Meanwhile, as we have also said in the last report, we have implemented increases again relevant for second half of this year. So these increases are only visible to a very minor degree currently in the figures, but the real impact of these will happen in the second half of this year.
We have increased and also -- meanwhile, of course, we continuously drive ways of reducing our costs. Even though, as we all know, the inflationary pressure on all of our cost is very significant. Not the least, we see very high cost -- remaining high costs in, for instance, electricity and other areas impacting our business.
So what is it we do on innovation sustainability? And I'm presenting this one because we're particularly proud about this one. This is the now launched and commercialized Pure-Pak eSense and we have talked about it. And for those of you who are not very, very familiar in the aseptic world, this is a very, very big thing in the aseptic world. Why? Because aseptic packaging historically have been alu foil, and this is the first time we move from fresh and use the fresh benefits and actually add that to the aseptic part. We have, of course, worked on Pure-Pak aseptic, we have Pure-Pak aseptic, but now we have taken the fresh technology and enabled that in a fresh -- in an aseptic environment. We can then reduce the CO2 by 50% versus an alu foil -- Pure-Pak alufoil pack using renewable PE and using the polyolefin barrier material that we have now. This is launched in Spain with Garcia Carrión, Don Simon, one of the biggest brands in Spain and -- is will be launched with many more customers around the world right now.
Without going into too many technicalities, but what we are seeing and what we're offering is for our customers to be able to do on the same filling machine. And this is where things are a little bit different -- on the same filling machine be either alufoil packs, which can be used when you need very, very long distribution distances and very, very long shelf life and on the same machine also run polyolefin, the eSense, reducing your CO2 and delivering in line with retailers' demand, consumers' demand, et cetera. This is a big thing for us, and we are tremendously frankly, proud that we are now in the market as the first carton -- liquid carton packaging company with a genuine alternative to alufoil.
And with this, I will hand over to you, Bent.
Thank you, Thomas. So as expected and also what we discussed in the Q1 presentation, we saw margin pressure throughout the quarter. This is also compared to a very strong quarter last year, which then took us from EUR 35 million to EUR 25 million.
For EMEA, the input costs remain exceptionally strong. And at the same time, the price increases that Thomas talked about did not really take impact before the very end of the quarter. Part of the results in EMEA is also impacted by the loss contribution in Russia. And our estimate is that we have lost around EUR 4 million to EUR 5 million by not having operations in this market.
Naturepak, which is included in the EMEA numbers, is also progressing according to plan, as Thomas pointed out. So for EMEA as a whole, we landed around EUR 21 million, which is given the circumstances with Russia, given the raw material headwind, is a satisfactory result.
In America, the EBITDA increased around 70% or EUR 4.7 million. This is a combination of margin improvement from a more attractive product mix. It is the growth that Thomas talked about. And at the same time, we benefit from the new UV Flexo printing line, which we installed at the beginning of the year. So this new printing line is progressing according to plan and delivers lower waste. And waste is a really important value driver in our plans. So America is really very strong volume development, strong margin improvement and also productivity improvements.
Let's take a look at the bridge for the quarter that takes us from EUR 35 million to EUR 25 million. So if you look at the first 2 charts, our revenue mix is compensating quite much of the raw material headwind with the unprecedented prices that we have seen. Their net revenue mix of EUR 12 million is then the combination of the price increases that we talked about, the strong performance in America and also the additional profit from the new position in MENA. This EUR 12 million does also include the lost contribution from Russia of EUR 4 million, EUR 5 million.
The raw material impact is EUR 14 million for the quarter, and this is after financial hedges and after our commercial raw material clauses. Both LDPE and aluminum increased sharply in March and April, following the conflict. Later on, they have softened somewhat throughout the quarter. But at the same time, the energy prices started to increase in the middle of the quarter, and we've seen this trend continue into the third quarter.
The group operating cost is up around EUR 6 million. This is according to our own expectations because we see a normalization of the activity level post the pandemic, if we are allowed to say that. We have increased average capacity as a listed company, so we strengthened a few central positions. We also do have the SG&As from Naturepak here, and we still carry the SG&A from Russia, even though we have ceased the operations.
Finally, we also had some operational challenges related to the Ukraine/Russia conflicts and also higher sick leave that also contributed to the higher operating costs. The currency translation effect between dollar and euro that Thomas talked about at revenue level is then around EUR 1.2 million.
If we look at our financial position, we do report a leverage ratio of 3.4 million -- 3.4x which is defined as net debt divided by our adjusted EBITDA. This increased leverage ratio versus Q1 is mainly a result of 2 things. We do have a lower LTM EBITDA because we are swapping a very strong quarter last year with a weaker quarter this year. And secondly, we paid a dividend of EUR 20 million in May.
We do have an increase in operating capital and that is -- typically is the trend in the first half because of seasonality. I think it's also important to notice that when you have a general price increase, this also impacts the capital level.
If you look at -- also another part, as you can probably see from the report is that inventory is also up, and that is also related to the filling machine delays that Thomas talked about. So we have slightly higher inventory than normal on the filling machine, but this we see as a timing effect.
If we look at our operating capital turnover which is comparing the operating capital to the revenues This is at normal level and actually at the same ratio as for 2021.
The net cash flow used for investing activities is around minus EUR 115 million. So this is related to the investment in Naturepak, GLS Elopak. And then we have EUR 22 million for the normal business. This is driven by the exciting filling machine projects in the U.K., plastic to carton. And it's the normal maintenance program that we have in production, which is in line with last year and progressing according to expectation.
The final point I would like to mention here is that we have extended our revolving credit facility by 1 year to May 2024. And you will find more information about that in our stock notice from June 22nd. Generally, we are comfortable with our financing position and also with our financing solutions.
If we go to the outlook. So for the full year, we aim to become a EUR 1 billion revenue company. This is as reported, including Naturepak, not adjusting for Russia. So basically, what you will see in the P&L, hopefully, in the end of the year.
It's challenging to give you a full forecast for the apples-to-apples organic growth. But roughly, we expect that to be around 10% if we try to adjust for the changes in our asset portfolio.
Based on the current raw material and energy picture, we expect that our new price increases will largely cover the increased input costs. But we will pay close attention to those and especially on the energy market, which has been increasing so far in the quarter.
Finally, we -- as every company, we have our supply chain challenges, as Thomas talked about, and especially for the filling machines and the equipment, and we will pay close attention to this and do the mitigating actions needed to navigate the best way out of that.
So this concludes the financial section. So I will leave it back to you, Thomas.
Thank you, Bent. And let me just briefly summarize what we have been presenting here and saying. I think, essentially, what we're saying is that despite -- and it's really despite, a rather challenging environment that we are experiencing on not the least on input cost, but actually not only input cost, also on deliveries, accessibility of products, disturbance is coming out of the Russia/Ukraine situation, et cetera, et cetera, we are content with the result and I'm very happy about the growth that we continue to see in our business.
We also see that we have a couple of things that really, really characterizes Elopak and the businesses we're in. We are -- when we move into, let's say, somewhat more challenging times from an inflationary point of view, we think we are in a very resilient business. We are the kind of product that you buy, whether or not you need to decrease on some other products because of the economic environment.
Milk is a base product. Food is a base product. These are the products that remain resilient throughout more difficult times. And we think that the strategy we have in place we are now proving again that we're delivering on it. We have very strong deliveries in Americas. We are on track. The integration of our business is on track in both Morocco and in Saudi and in fact, also in India.
The agreement in India was signed through in this period, and the business is up and running. We are delivering customers already in India. And we're seeing really, really good progress on sales and revenue there.
And finally and very importantly, of course, and it's something that you can imagine occupies a very big part of our life, is that we are implementing price increases to offset the significant cost increases that we're also experiencing in this period. That is all happening, and we're also here on track on what we said that we would be doing during the Q1 presentation.
So all in all, we are pushing ahead and content with where we are right now and very happy about the deliveries on top line that we are seeing. With that, I think I will leave to you, Mirza, and questions to the room.
Thank you for your presentation, Thomas and Bent. We will now go into the Q&A session. We will begin with the audience here in Oslo before we take on the ones on the webcast. And for the journalists that are present here today, we will set aside a few minutes immediately after the Q&A session. So let's begin. [Operator Instructions] Any first questions, no? All right.
I actually don't see any questions on the webcast either. So you have -- we have one from the audience, yes. There you go.
Fredrik from Boldhaven Management. Three questions, please. The first is on Americas. You mentioned that you're seeing exceptional demand there in way above your targets or your ambitions. Why is that, do you think? And what's driving that? That's the first question.
Similarly, on India, you also mentioned that, that's running perhaps ahead of your initial expectations as well. What should we expect for top line and bottom line contribution from India in this year and next?
And then finally, on Russia, you mentioned that you've handed over operational control, but the deal hasn't closed yet. So are you seeing any contribution? Or are you also carrying the excess fixed cost for now? Or is that handed over to the management?
Thank you, Fredrik, and I think we can both answer. Let me start with the first one on Americas. Why are we seeing the positive development?
I'd like to think that we're doing a good job. But beyond that, we actually have very good products. That is the simple truth. We have very, very good products. We have great filling machines. We have the best filling machines in this industry for the market. And that is recognized partly by the ones who installed one, are now going for the second ones. But also, this is an industry where it's understood and it's rumored.
So we have a strong filling machine portfolio. We have a brand-new factory, let's say, a very new factory in Montreal. And we have a dedicated team who is clearly driving with sustainability products in mind. So I think these are the fundamentals.
The third fundamental or fourth, if you like, of course, is that the market, which is right now dominated by one big supplier is looking for alternatives. And we are then the other guy keeping the first guy honest and actually offering a great alternative. I think that is the main reason. But primarily, our team in U.S. is doing a great job. That is actually the simple truth of this.
Before we -- I just want to say on India and then I hand over to you on India and Russia. India is unique in many, many, many ways. It's the world's biggest milk market. It is -- and we all know it's the world's biggest -- very soon to be the world's biggest country in number of people. But it's also the world's highest packaging growth market in the world. And it's a market that is transforming from partly being plastic in various formats, mainly pouch for milk and into garden. And it's driven also in India by sustainability, and it's also driven in India by higher quality, bigger different consumer expectations, urbanization, retail building, et cetera. So all of that are the underlying growth drivers for the Indian market.
Meanwhile, it is, of course, an economy where the purchasing power is very, very constrained. And what's happening in India is that the very, very small sizes, extremely -- are literally extremely small sizes, 100-milliliter packs, are the ones that are primarily selling. So what we are seeing in our business as well in the early days now is a very, very solid growth in these very, very small sizes which is allowing you to, from a consumer point of view, for the purchases.
When I say it's ahead of our expectations, it's really ahead in terms of number of packs and in terms of the speed of when -- how things are being implemented. When it comes to the financials, we have not given a financial figure on this. Let's be honest, it is early days. It's not from a group point of view massively impacting this year. So I think just what we are saying is we have a strong belief in this market. We're very happy that we are now in. We think we have a great partner with GLS. And we are committed to developing and driving it towards more milk and more milk in our systems, of course, in both Pure-Pak and also our Roll Fed solutions.
Yes. And just to support what Thomas said on the financials. It's still not financially significant. I think we covered it with a couple of slides in the Q1 presentation where we had some numbers which I can't recall exactly now, but maybe we can go back to also some of these pages to see what we gave there.
With regards to Russia, we are not going to carry the fixed costs from the third quarter onwards. So this will be reported as a discontinued operation. So it will not be consolidated into our books going forward.
All right. We have received some questions on the webcast. So Ole Martin Westgaard from DNB. Can you comment on how the volume development has been in Q2? And what your implicit expectations are for the second half?
Right, so you could look at it like this. Volume in Europe depends a little bit on categories, of course. But volume in fresh milk Europe has not been growing throughout Q2. And that is driven by essentially a rather constrained consumption in milk, which we have seen for many, many, many years and is still the case.
That milk volume is moving over to plant-based for some degree, but it's not offsetting completely the lower consumption in milk. In Americas, the milk consumption is actually not increasing but we are just taking more shares in Americas. We are also taking share actually in Europe. But that's not visible at this moment in figures. It's something that we will be experiencing at a later stage. But we are seeing that and we are seeing that our systems in Europe as well, the new filling machines will come, we have launched, are highly in demand, and that's really what's going to drive this in the future.
When it comes to the volume in aseptic milk, Pure-Pak aseptic, as I mentioned in this -- during the presentation, we do see growth. We have seen that for a long time. I keep arguing that this is the highest growth of any carton-based system in aseptic milk. And that is validated again through figures from -- market figures from mainly Spain, where we see that our customers who have these systems are outperforming customers with alternative packaging systems, be it plastic and/or carbon.
Thank you. And from Martin Melbye, ABG. There are several questions. So first one, what was the EBITDA effect from Naturepak in Q2? And then, what is the quarterly cost going forward for the Ukrainian plant and Russia? And please indicate Q3 quarter-over-quarter changes in aluminum, PE and energy costs based on current spot prices.
Right. So let's start with -- if you look at the Naturepak as such, we don't disclose the financials at that detailed level. But it's progressing according to plan. And maybe we can go back to the fourth quarter where we disclosed the 2020 EBITDA of Naturepak, which was around EUR 11 million. So that will give you a guide on what the quarterly results is for Naturepak approximately.
With regards to, say, operating cost in Russia/Ukraine, I think the number that I can share is that the run rate that -- for Russia that we will not take with us going forward is around EUR 600,000 -- EUR 500,000, EUR 600,000 per month. So that is the run rate for Russia that we've had in the second quarter that we will not have in the third quarter going forward.
With regards to, say, the raw material expectations, we don't comment on, say, outlook for raw materials as such. So we are observing that PE and alu have been softening in the second quarter. There are, say, discrepancies in forecast going forward between different, say, financial analysts going in both directions. So it's really, really difficult to have a view on it.
What we have seen is that the energy has increased throughout the third quarter. So this is probably, say, one to follow.
One thing that I would like to remind when it comes to raw materials is we usually have, say, inventory effect, a lag of around 2, 3 months. So if you want to model our raw materials, you look at 3 months -- 2, 3 months ago, and that gives you, say, a hint for raw material development in our books going forward. And for energy, that is not the case, then it's basically spot without any timing delay.
Thank you. Several analysts have asked questions about costs. And we have covered this. So I'm just going through, one from Robin Santavirta from Carnegie. How much of your cost base is energy or energy costs hedged?
Right. So good question. So energy is normally, I say a fractional cost in the Elopak systems. So in a percentage, I think if you take the cost of material from our P&L and if you look at our energy costs, that's a energy component is now between 2%, 3% of the cost of material in our P&L. And energy prices have doubled compared to our expectations.
When it comes to hedging, we do some hedging through a broker for parts of the consumption, but that is a rather minor part. So broadly speaking, we are buying spots with some exceptions in some of our plants.
Thanks, Bent. And regarding the lost contribution from Russia of EUR 4 million to EUR 5 million. How much of that negative impact was SG&A, which should no longer hurt your earnings in coming quarters?
Yes. So that will be the EUR 600,000 per month.
That's clear. From Moomal Irfan. Can you also please talk about your hedging strategy for aluminum and PE, given prices are off the peaks?
Right. So if you start with Americas, it's the simplest explanation because then the commercial contracts are protecting us versus the margins. So America is, broadly speaking, back to back with some, say, phasing impacts.
When it comes to Europe, the strategy is twofold. One is to do commercial raw material clauses where that makes sense. So in Elopak, we are doing that for parts of the closure business in particular. Where we do not have commercial closure contracts, then we do the financial hedges. And if you put this together in Elopak today around 30% of the PE position is hedged either financially or commercially.
And what we're going to do in the future, it's something, of course, it's difficult to say. I mean we wish that, of course, we would have been more protected, but that is not very relevant insight. So that is obviously a part of the things that we will look at together with, say, the commercial plan for next year.
Thank you. And moving away from the costs a little bit. On your eSense carton, can you please talk about the cost difference versus using aluminum layer?
I just want to say, we would not comment on that specifically. This project is not driven by cost reduction. That's not the main driver here. This project is driven by ensuring that we do the world's best aseptic low CO2 carton available. That is what drives this project. With very, very high aluminum prices, clearly, there is an advantage, but it's not the main driver in the project here.
And from Doug Finhansen. Expected fiscal year -- or full year 2022 impact of Russia exit?
Yes. That number, I don't have that from the top of my head. But I think in order to kind of get an idea of that, maybe the best thing will be to look at our, say, stock notice from March where we said -- say, the Russia/Ukraine business in combination was around EUR 9 million EBITDA. So we don't have that specific number. But obviously, it will be a number that we will come back to when the books are closed for the year.
All right. And any development on the joint venture with Nippon Paper in Australia?
Well, we have a close cooperation with Nippon. As you know, Nippon is our supplier, a big supplier in U.S. and Americas and a very significant growing supplier for us. Nippon is also a shareholder in Elopak. And we have a signed strategic align -- a strategic contract with them on -- a strategic cooperation agreement, that's what it's called, on how we will develop the business together. And that is -- relates to both the sourcing side, new projects, new technologies, et cetera, but it's nothing I can specifically say around Australia and VisiPak.
Thank you. And from George Borrows from BNP Paribas Exane. Can the Pure-Pak eSense aseptic carton package both high and low acid liquids?
Yes, it can. This is going to -- this is a project that is positioned as a alternative to alufoil aseptic packaging. And the example I showed on the presentation is a low acid plant-based product. And equally so, we will be seeing high acid juices in the eSense moving forward.
Thanks. And has the first EMP filling line been installed with customers as of today?
Well, the first filling line, we have now renamed it into Pure-Fill. So we will refer to it as of now as Pure-Fill, will be placed at customer site within the second half of this year.
Thank you. And last one from webcast also from George Borrows. Is the 10% organic growth of your full year revenue guidance at constant currency or including foreign exchange tailwind?
So that is without adjusting for any currency effects between the dollar and euro. So not a constant currency basis.
Good. Thank you. And any more questions here in Oslo?
I don't see any more questions. So thank you very much for your attention, and have a nice day.
Thank you. Thank you very much.