TOMRA Systems — Earnings Release 2015

Feb 18, 2016

4 TH QUARTER 2015 RESULTS ANNOUNCEMENT

TOMRA SYSTEMS ASA 4th Quarter Results 18.02.2016

HIGHLIGHTS FROM 2015

Revenues	• Revenues of 6,143 MNOK (4,749 MNOK in 2014) Currency adjusted revenues were: - Up 16% for TOMRA Group - Up 20% in TOMRA Collection Solutions - Up 10% in TOMRA Sorting Solutions
Gross margin	• Gross margin 42%, down from 43% in 2014 - Reduced margins in TOMRA Collection Solutions - Stable margin in TOMRA Sorting Solutions
Operating expenses	• Operating expenses 1,548 MNOK (1,313 MNOK in 2014) - Up 6% adjusted for currency
EBITA	• EBITA of 1,015 MNOK (737 MNOK in 2014)
Cashflow	• Cashflow from operations of 913 MNOK (696 MNOK in 2014)

HIGHLIGHTS FROM THE QUARTER

Revenues	• All time high revenues of 1,816 MNOK (1,400 MNOK in fourth quarter 2014) Currency adjusted revenues were: - Up 16% for TOMRA Group - Up 24% in TOMRA Collection - Up 6% in TOMRA Sorting
Gross margin	• Gross margin 41%, down from 43% in fourth quarter 2014 (currency adjusted) - Lower margin in TOMRA Collection - Slightly improved margin in TOMRA Sorting
Operating expenses	• Operating expenses of 404 MNOK (344 MNOK in fourth quarter 2014) - Up 5% adjusted for currency
EBITA	• All time high EBITA of 347 MNOK (266 MNOK in fourth quarter 2014)
Cashflow	• Strong cashflow from operations of 343 MNOK (312 MNOK in third quarter 2014)
TOMRA Collection	• Good momentum in Germany, due to replacement demand • Nordic market developing positively due to replacement in Sweden
TOMRA	• Order intake of 551 MNOK, compared to 568 MNOK same period last year, unchanged currency adjusted
Sorting	• Order backlog of 659 MNOK, down from 657 MNOK at the end of fourth quarter 2015, down 8% currency adjusted

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

	4th Quarter
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	1,816	1,400	1,561	6,143	4,749	5,298
• Collection Solutions	1,139	817	921	3,803	2,823	3,176
• Sorting Solutions	677	583	640	2,340	1,926	2,122
Gross contribution	751	610	668	2,563	2,050	2,258
in %	41%	44%	43%	42%	43%	43%
Operating expenses	404	344	386	1,548	1,313	1,456
EBITA	347	266	282	1,015	737	802
in %	19%	19%	18%	17%	16%	15%
One time costs in op.exp.	-	8	8	-	33	33

FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE

Amounts in NOK million	31 Dec 2015	31 Dec 2014
ASSETS	7,317	6,625
• Intangible non-current assets	2,891	2,623
• Tangible non-current assets	837	683
• Financial non-current assets	316	307
• Inventory	1,209	913
• Receivables	1,751	1,537
• Cash and cash equivalents	313	436
• Assets held for sale	-	126
LIABILITIES AND EQUITY	7,317	6,625
• Equity	3,945	3,244
• Minority interest	160	115
• Interest bearing liabilities	1,206	1,649
• Non-interest bearing liabilities	2,006	1,593
• Liabilities held for sale	-	24

Ordinary cashflow from operations

• 343 MNOK (312 MNOK in 4Q 2014)

Solidity

• 54% equity
• NIBD/EBITDA = 0.7x (Rolling 12 months)
• Board propose dividend of NOK 1.75 (NOK 1.45 last year)

TOMRA COLLECTION SOLUTIONS

HIGHLIGHTS COLLECTION SOLUTIONS

• Strong quarter with revenues of 1,139 MNOK, up from 817 MNOK in fourth quarter 2014
• Revenues up 24% in local currencies
• Gross margin was 39% in the period
• Down from 42% last year, due to currency and product mix
• Operating expenses of 199 MNOK
  • Up 4% currency adjusted
• EBITA increased from 172 MNOK to 242 MNOK
• Currency adjusted revenues up 39% in Europe
  • Good momentum in Germany, due to replacement demand
  • Nordic market developing positively due to replacement in Sweden
  • Ramp up in Lithuanian, with 525 machines installed as of 1 February 2016 and an additional 250-300 machines to be installed during 1h16

4Q 2014 FULL YEAR 2015

• Strong year with revenues of 3,803 MNOK, up from 2,823 MNOK in fourth quarter 2014
• Revenues up 20% in local currencies
• Gross margin was 40% in the period
• Down from 42% last year, due to currency and product mix
• Operating expenses of 749 MNOK
• Up 6% currency adjusted
• EBITA increased from 561 MNOK to 761 MNOK
• Up 25% currency adjusted

Overall

Europe

America

North • Slightly down in US, due to lower volumes

RAPID ADAPTATION OF NEW PRODUCT PORTFOLIO

More than 50% of current sales are new products

COLLECTION SOLUTIONS FINANCIALS

		4th Quarter		Full year
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	1,139	817	921	3,803	2,823	3,176
• Nordic	152	125		526	417
• Europe (ex Nordic)	616	386		1,809	1,280
• US East/Canada	353	298		1,393	1,094
• Rest of the world	18	8		75	32
Gross contribution	441	342	377	1,510	1,189	1,313
in %	39%	42%	41%	40%	42%	41%
Operating expenses	199	170	192	749	628	705
EBITA	242	172	185	761	561	608
in %	21%	21%	20%	20%	20%	19%
One time costs in op.exp.	-	8	8	-	8	8

*2014 actual restated at 2015 exchange rates, estimated ** Adjusted for one-time costs

GERMANY REPLACEMENT UPDATE

TOMRA SORTING SOLUTIONS

HIGHLIGHTS SORTING SOLUTIONS

Revenues	• Revenues equaled 677 MNOK in fourth quarter 2015, up from 583 MNOK in fourth quarter 2014
	— Revenues up 6% in local currencies
Gross	• Gross margin increased from 45% to 46% (currency adjusted)
margin	— Volume and product mix related
	• EBITA of 115 MNOK, up from 100 MNOK last year
EBITA	— Up 11% currency adjusted
	• Order intake of 551 MNOK, compared to 568 MNOK same period last year
Orders

• Order backlog of 659 MNOK, up from 657 MNOK at the end of fourth quarter 2014

4Q 2014 FULL YEAR 2015

• Annual revenues equaled 2,340 MNOK for 2015, up from 1,926 MNOK last year
• Revenues up 10 % currency adjusted

• Gross margin was stable at 45% (currency adjusted)

• EBITA of 290 MNOK, up from 204 MNOK last year

• Up 31% currency adjusted

RECORD DIAMOND RECOVERY USING TOMRA XRT

1,111 carat diamond recovered using TOMRA technology

• In mid November 2015, Lucara Diamond Corp made a recovery of a 1,111 carat type IIa diamond using TOMRA XRT (X-ray transmission) technology
• The diamond is the second largest gem quality diamond in history and the largest ever to be recovered through a modern processing facility
• The machine used to recover the diamond was a TOMRA LDR (large diamond recovery)
• Additionally, during the same week two other large diamonds were also found at the Karowe Mine using the TOMRA XRT equipment – an 813 (6 th biggest ever) carat stone and a 374 carat stone

BUSINESS STREAM UPDATE

FOOD

• Revenues in 4Q15 slightly down from 4Q14
• Order intake up quarter over quarter, leading to a somewhat higher order backlog at the end of 4Q15

RECYCLING

• Revenues in 4Q15 significantly up from 4Q14
• Order intake down quarter over quarter
• High number of orders delivered combined with lower order intake, leads to a significant reduction in the order backlog

MINING

• Revenues in 4Q15 slightly up from 4Q14
• Low order intake in challenging market
• Lack of new orders leads to a low order backlog at the end of 4Q15

SORTING SOLUTIONS FINANCIALS

		4th Quarter			Full year
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	677	583	640	2,340	1,926	2,122
• Europe	305	317		1,089	887
• North America	179	106		685	576
• South America	35	17		92	75
• Asia	132	85		366	238
• Oceania	13	38		52	87
• Africa	13	20		56	63
Gross contribution	310	268	291	1,053	861	945
in %	46%	46%	45%	45%	45%	45%
Operating expenses	195	167	188	763	657	723
EBITA	115	101	103	290	204	222
in %	17%	17%	16%	12%	11%	10%
One time costs in op.exp.	-	-	-	-	25	25

*2014 actual restated at 2015 exchange rates, estimated ** Adjusted for one-time costs

BACKLOG DEVELOPMENT AND MOMENTUM

• TSS delivered all time high revenues in 4Q15 (677 MNOK, up from 583 MNOK in 4Q14)
• The order intake in 4Q15 was 551 MNOK in the quarter (compared to 568 MNOK last year)
• As a consequence of the high number of orders delivered in 4Q15, the order backlog at the end of the quarter ended at 659 MNOK, up from 657 MNOK at the end of 4Q14, but down 8% currency adjusted
• Estimated backlog conversion ratio in 1Q16: 70%-75%*

* Based upon current production and delivery plans, the revenues in 1Q16 are estimated to be approximately 70-75% of order backlog at the end of 4Q15.

OUTLOOK AND SHAREHOLDER STRUCTURE

OUTLOOK

Collection Solutions

• The replacement demand in Germany is assumed to continue in 2016, but first quarter 2016 is expected to be slower than the last quarters in 2015, and more in line with first quarter 2015

Sorting Solutions • Due to a reduced backlog during fourth quarter 2015, first quarter 2016 revenue is expected to be lower than the last quarters in 2015, and more in line with first quarter 2015

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

	Top 10 shareholders as of 06 January 2016	Shareholders	by country
1	Investment AB Latour	36 560 000	24.7%
2	Folketrygdfondet	12 152 055	8.2%
3	Skandinaviska Enskilda (Client Account)	9 338 329	6.3%	(NOM)
4	Nordea Nordic Small	2 995 407	2.0%
5	The Bank of New York BNY Mellon	2 849 428	1.9%	(NOM)
6	Clearstream Banking	2 793 293	1,9%	(NOM)
7	J.P. Morgan Chase (NORDEA Treaty Account)	2 684 049	1.8%	(NOM)
8	ODIN Norge	2 246 781	1.5%
9	Goldman Sachs & Co	2 102 056	1.4%	(NOM)
8	JP Morgan Luxembourg NORDEA	1 863 135	1.1%	(NOM)
	Sum Top 10	75 360 653	50.9%
	Other shareholders	72 659 425	49.1%
	TOTAL (5,875 shareholders)	148 020 078	100.0%

Source: VPS

DISCLAIMER

Copyright

The material in this Document (which may be a presentation, video, brochure or other material), hereafter called Document , including copy, photographs, drawings and other images, remains the property of TOMRA Systems ASA or third party contributors where appropriate. No part of this Document may be reproduced or used in any form without express written prior permission from TOMRA Systems ASA and applicable acknowledgements. No trademark, copyright or other notice shall be altered or removed from any reproduction

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