TOMRA Systems — Earnings Release 2015

Jul 17, 2015

2 ND QUARTER 2015 RESULTS ANNOUNCEMENT

TOMRA SYSTEMS ASA 17th of July 2015

HIGHLIGHTS FROM THE QUARTER INCLUDE

Orders TOMRA	• All time higher order intake of 646 MNOK in TOMRA Sorting, up from 502 MNOK same period last year
Sorting	• All time high order backlog of 851 MNOK in TOMRA Sorting, up from 822 MNOK at the end of first quarter 2015
	• Revenues of 1,472 MNOK (1,139 MNOK in second quarter 2014) Currency adjusted revenues were:
Revenues	- Up 16% for TOMRA Group
	- Up 13% in TOMRA Collection
	- Up 22% in TOMRA Sorting
	• Gross margin 42%, down from 43% in second quarter 2014
Gross margin	- Slightly down in TOMRA Collection
	- Slightly up in TOMRA Sorting
EBITA	• EBITA of 240 MNOK (158 MNOK in second quarter 2014) - Including 13 MNOK one-time costs in 2014
Cashflow from	• Cashflow from operations of 137 MNOK (136 MNOK in
operations	second quarter 2014)

TOMRA WINS 2014/2015 EUROPEAN BUSINESS AWARD

BUSINESS OF THE YEAR WITH A TURNOVER OF €150M+

• 1 st stage TOMRA was named as one of ten National Champions from Norway.
• 2 nd stage after a voting process TOMRA won the distinction National Public Champion Norway.
• 3 rd stage 110 Ruban d'Honneur recipients were chosen from 709 National Champions (10 for each category).
• 4 th stage after a presentation to the judges the awards culminated with the selection of 11 overall category winners & TOMRA was crowned Business of the Year!

CURRENCY

Revenues and expenses per currency; NOTE: Rounded figures

	EUR*	USD	NOK	SEK	OTHER	TOTAL
Revenues	45 %	30 %	5 %	10 %	10 %	100 %
Expenses	45 %	25 %	10 %	10 %	10 %	100 %
EBITA	45%	50 %	- 15 %	10 %	10 %	100 %
* EUR includes DKK Mainly CNY

FINANCIAL HIGHLIGHTS P&L STATEMENT

		2nd Quarter
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	1,472	1,139	1,264	2,579	2,161	2,391
• Collection Solutions	855	678	758	1,554	1,311	1,460
• Sorting Solutions	617	461	506	1,025	850	931
Gross contribution	622	487	537	1,095	932	1,024
in %	42%	43%	42%	42%	43%	43%
Operating expenses	382	329	361	751	667	729
EBITA	240	158	176	344	265	295
in %	16%	14%	14%	13%	12%	12%
One time costs included in operating expenses	-	13	13	-	25	25

FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE

Amounts in NOK million	30 June 2015	30 June 2014	31 Dec 2014
ASSETS	6,782	5,944	6,625
• Intangible non-current assets	2,610	2,528	2,623
• Tangible non-current assets	687	613	683
• Financial non-current assets	297	293	307
• Inventory	1,113	955	913
• Receivables	1,736	1,358	1,537
• Cash and cash equivalents	339	197	436
• Assets held for sale	-	-	126
LIABILITIES AND EQUITY	6,782	5,944	6,625
• Equity	3,216	2,682	3,244
• Minority interest	138	96	115
• Interest bearing liabilities	1,565	1,740	1,649
• Non-interest bearing liabilities	1,863	1,426	1,593
• Liabilities held for sale	-	-	24

Ordinary cashflow from operations

• 137 MNOK (vs 136 MNOK in 2Q 2014)

Solidity

• 47% equity
• NIBD/EBITDA = 1.25 (Rolling 12 months)
• Dividend of 214 MNOK (1.45 NOK per share) paid out in May 2015

TOMRA Collection Solutions

HIGHLIGHTS COLLECTION SOLUTIONS

COLLECTION SOLUTIONS FINANCIALS

	2nd Quarter				1st Half
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	855	678	758	1,554	1,311	1,460
• Nordic	128	107		246	208
• Europe (ex Nordic)	358	284		630	578
• North America	356	277		655	511
• Rest of the world	13	10		23	14
Gross contribution	347	285	314	638	556	611
in %	41%	42%	41%	41%	42%	42%
Operating expenses	183	154	172	366	314	349
EBITA	164	131	142	272	242	262
in %	19%	19%	19%	18%	18%	18%

TOMRA Sorting Solutions

HIGHLIGHTS SORTING SOLUTIONS

Revenues	• Revenues equaled 617 MNOK in second quarter 2015, up from 461 MNOK in second quarter 2014 • Revenues up 22% in local currencies
Gross margin	• Gross margin increased from 44% in second quarter 2014 to 45% in second quarter 2015 • Positive effect from higher revenues
EBITA	• EBITA of 84 MNOK (34 MNOK in second quarter 2014) • Including one-time cost of 13 MNOK in second quarter 2014
Orders	• Order intake of 646 MNOK, up from 502 MNOK during same period last year • Order backlog of 851 MNOK, up from 822 MNOK at the end of first quarter 2015
Business stream food	• Revenues in 2Q15 significantly up from 2Q14 • Order intake slightly down in 2Q15, compared to a strong 2Q14
Business stream recycling	• Revenues in 2Q15 down compared to 2Q14 • Despite continuing low commodity prices, order intake has been good, and above last year
Business stream mining	• Revenues in 2Q15 were up versus same quarter last year. • Order intake significantly up, compared to a low order intake in 2Q14

SORTING SOLUTIONS FINANCIALS

	2nd Quarter				1st Half
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	617	461	506	1,025	850	931
• Europe	280	212		488	375
• North America	219	163		330	309
• South America	9	3		22	9
• Asia	81	48		140	107
• Oceania	17	21		28	26
• Africa	11	14		17	24
Gross contribution	275	202	223	457	376	413
in %	45%	44%	44%	45%	44%	44%
Operating expenses	191	168	182	369	339	366
EBITA	84	34	41	88	37	47
in %	14%	7%	5%	9%	4%	5%
One time costs included op.exp.	-	13	13	-	25	25

BACKLOG DEVELOPMENT AND MOMENTUM

• Despite a high number of orders taken to P/L (617 MNOK in revenues in 2Q15), the order backlog at the end of the quarter is still strong (851 MNOK) due to good order intake (646 MNOK)
• Estimated backlog conversion ratio in 3Q15: 70%- 75%*

Outlook and shareholder structure

Collection Solutions:

• The replacement demand in Germany in assumed to continue and the outlook for third quarter is consequently good. Both revenues and EBITA is expected to be better than both third quarter 2014 and second quarter 2015.

Sorting Solutions:

• Due to the all time high backlog at the end of second quarter 2015, third quarter revenue is expected to be good. The order intake in third quarter is however assumed to go somewhat down, on the back of several quarters with strong order intake.

Currency:

• Reporting in NOK and with some NOK cost base, TOMRA will in general benefit from a weak NOK, measured particularly against EUR. TOMRA will consequently continue to gain from a weak NOK, provided current exchange rate levels are maintained

TOMRA SHAREHOLDER STRUCTURE

	th Top 10 shareholders as of 30 of June 2015					Shareholders	by country
1	Investment AB Latour	35 690 000	24.7%
2	Folketrygdfondet	15 999 512	10.8%		4%	8%
3	Skandinaviska Enskilda A/C Clients account	5 492 889	3.7%	(NOM)	7%		31%
4	Odin Norge	3 403 478	2.3%		9%
5	Nordea Nordic Small	2 995 407	2.0%
6	Verdipapirfondet DnB	2 545 174	1.7%		11%
7	Clearstream Banking	2 484 371	1.5%	(NOM)		30%
8	The Bank of New York BNY Mellon	2 382 126	1.6%	(NOM)
9	J.P. Morgan Chase Ba Nordea Treaty account	2 271 881	1.5%	(NOM)	Sweden	Norway	Great Britain
10	Skandinaviska Enskilda A/C Finnish Resident	2 248 371	1.5%	(NOM)	USA Others	Luxembourg	Finland
	Sum Top 10	76 382 967	51.6%
	Other shareholders	71 637 111	46.8%
	TOTAL (5,725 shareholders)	148 020 078	100.0%

Source: VPS

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Disclaimer

This Document (which may be a presentation, video, brochure or other material), hereafter called Document, may include and be based on, inter alia, forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. The content of this Document may be based on current expectations, estimates and projections about global economic conditions, including the economic conditions of the regions and industries that are major markets for TOMRA Systems ASA and its subsidiaries and affiliates. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions, if not part of what could be clearly characterized as a demonstration case. Important factors that could cause actual results to differ materially from those expectations include, among others, changes in economic and market conditions in the geographic areas and industries that are or will be major markets for TOMRA Systems ASA. Although TOMRA Systems ASA believes that its expectations and the Document are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Document. TOMRA Systems ASA does not guarantee the accuracy, reliability or completeness of the Document, and TOMRA Systems ASA (including its directors, officers and employees) accepts no liability whatsoever for any direct or consequential loss arising from the use of this Document or its contents. TOMRA Systems ASA consists of many legally independent entities, constituting their own separate identities. TOMRA is used as the common brand or trade mark for most of these entities. In this Document we may sometimes use "TOMRA", "TOMRA Systems", "we" or "us" when we refer to TOMRA Systems ASA companies in general or where no useful purpose is served by identifying any particular TOMRA Company