TOMRA Systems — Earnings Release 2017

Apr 28, 2017

1 ST QUARTER 2017 RESULTS ANNOUNCEMENT

TOMRA SYSTEMS ASA 1 st Quarter Results 28.04.2017

HIGHLIGHTS FROM THE QUARTER

Revenues	•	Revenues of 1,564 MNOK (1,360 MNOK in first quarter 2016) – Up 19% currency adjusted Adjusted for currency and acquisitions, revenues were: - Up 6% for TOMRA Group - Up 5% in TOMRA Collection Solutions - Up 8% in TOMRA Sorting Solutions
Gross margin	•	Gross margin 40%, down from 42% in first quarter 2016 (currency adjusted) - Slightly lower margin in TOMRA Collection Solutions - Lower margin in TOMRA Sorting Solutions (due to Compac)
Operating expenses	•	Operating expenses of 475 MNOK (421 MNOK in first quarter 2016) - Up 3% adjusted for currency and acquisitions (Compac) - Including 4 MNOK in transaction cost
EBITA	•	EBITA of 158 MNOK (153 MNOK in first quarter 2016)
Cashflow	•	Cash flow from operations of 122 MNOK (118 MNOK in first quarter 2016)
TOMRA Collection	• • •	Still good momentum in Germany, due to replacement demand Strong quarter in North America Replacement in Sweden coming to an end
TOMRA Sorting Solutions	• • •	Compac consolidated into Group accounts, starting 1 February 2017 Order intake (ex Compac) of 682 MNOK, compared to 661 MNOK same period last year, currency adjusted up 7% Order backlog of 1139 MNOK (including Compac ), up from 829 MNOK at the end of first quarter 2016

CURRENCY

Negative impact from stronger NOK vs both USD and EUR.

Revenues and expenses per currency; NOTE: Rounded figures

	EUR*	USD	NOK	NZD	OTHER	TOTAL
Revenues	45 %	40 %	0 %	0 %	15 %	100 %
Expenses	45 %	30 %	5 %	5 %	15 %	100 %
EBITA	45 %	90 %	- 25 %	- 25 %	15 %	100 %

* EUR includes DKK

FINANCIAL HIGHLIGHTS P&L STATEMENT

	1st Quarter
Amounts in NOK million	2017	2016	16 Adj*
Revenues	1,564	1,360	1,313
• Collection Solutions	877	869	838
• Sorting Solutions	687	491	475
Gross contribution	633	574	554
in %	40%	42%	42%
Operating expenses	475	421	409
EBITA	158	153	144
in %	10%	11%	11%

FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE

Amounts in NOK million	31 March 2017	31 March 2016	31 Dec 2016
ASSETS	7,927	7,152	7,115
• Intangible non-current assets	3,177	2,858	2,750
• Tangible non-current assets	856	795	801
• Financial non-current assets	349	306	342
• Inventory	1,211	1,278	1,127
• Receivables	1,808	1,570	1,696
• Cash and cash equivalents	526	345	399
LIABILITIES AND EQUITY	7,927	7,152	7,115
• Equity	4,301	3,915	4,192
• Minority interest	184	166	178
• Interest bearing liabilities	1,174	1,140	760
• Non-interest bearing liabilities	2,268	1,931	1,985

Ordinary cashflow from operations

• 122 MNOK (118 MNOK in 1Q 2016)

Solidity

• 54% equity
• NIBD/EBITDA = 0.5x (Rolling 12 months)
• Dividend of NOK 2.10 (NOK 1.75 last year) due 11 May 2017

TOMRA COLLECTION SOLUTIONS

HIGHLIGHTS COLLECTION SOLUTIONS

Overall	• Revenues of 877 MNOK, up from 869 MNOK in first quarter 2016 - Revenues up 5% in local currencies • Gross margin was 40% in the period - Down from 41% last year, due to product mix • Operating expenses of 207 MNOK - Up from 4% currency adjusted • EBITA of 144 MNOK (up 4% currency adjusted)
Europe	• Currency adjusted revenues up 5% in Europe - Still good momentum in Germany, due to replacement demand - Replacement in Nordic coming to an end
North America	• US up 6% in local currencies - Both throughput volumes as well as RVM sales developed positively in the quarter

COLLECTION SOLUTIONS FINANCIALS

	1st Quarter
Amounts in NOK million	2017	2016	16 Adj*
Revenues	877	869	838
• Nordic	139	158
• Europe (ex Nordic)	383	374
• US East/Canada	342	322
• Rest of the world	13	15
Gross contribution	351	352	338
in %	40%	41%	40%
Operating expenses	207	205	200
EBITA	144	147	138
in %	16%	17%	16%

*2016 actual restated at 2017 exchange rates, estimated ** Adjusted for one-time costs

GERMANY REPLACEMENT UPDATE

TOMRA SORTING SOLUTIONS

HIGHLIGHTS SORTING SOLUTIONS

Revenues	• Revenues equaled 687 MNOK in first quarter 2017, up from 491 MNOK in first quarter 2016 • Organic, currency adjusted revenues up 8% • Includes Compac with 175 MNOK in February and March
Gross margin EBITA	• Gross margin at 41%, down from 45% same period last year • Down 1% ex Compac, due to product mix • EBITA of 30 MNOK (16 MNOK in first quarter 2016)
Orders	• Order intake (ex Compac) of 682 MNOK, compared to 661 MNOK same period last year, currency adjusted up 7% • Order backlog (ex Compac) of 874 MNOK, up from 829 MNOK at the end of first

BUSINESS STREAM UPDATE

FOOD

• Revenues in 1Q17 up from 1Q16 (ex Compac)
• Order intake up quarter over quarter, leading to an all time high order backlog at the end of 1Q17 (ex Compac)
• Compac consolidated from 1 February 2017, ending the quarter with a backlog of 265 MNOK

RECYCLING

• Revenues in 1Q17 slightly down from 1Q16,
• Order intake up quarter over quarter
• Improved order backlog

MINING

• Revenues improved, but from a low level
• Still depressed market for most commodities

SORTING SOLUTIONS FINANCIALS

		1st Quarter
Amounts in NOK million	2017	2016	16 Adj*
Revenues	687	491	475
• Europe	207	205
• North America	252	157
• South America	25	4
• Asia	108	90
• Oceania	57	21
• Africa	38	14
Gross contribution	282	222	216
in %	41%	45%	45%
Operating expenses	252	206	200
EBITA	30	16	16
in %	4%	3%	3%

BACKLOG DEVELOPMENT AND MOMENTUM

• Tomra Sorting Solutions (TSS) without Compac:
• Delivered all time high order intake of 682 MNOK in the quarter, compared to 661 MNOK same quarter last year
• Revenues came in at 512 MNOK (up from 491 MNOK in 1Q16)
• With an all time high order intake, and somewhat limited number of orders taken to P/L, the quarter ends with a healthy order backlog of NOK 874 MNOK
• Compac
• Reported revenues of 175 MNOK in the quarter and ends the quarter with a backlog of 265 MNOK
• Estimated backlog conversion ratio in 2Q17, including Compac: 80%-85%*

OUTLOOK AND SHAREHOLDER STRUCTURE

OUTLOOK

Collection Solutions

• The replacement demand in Germany is assumed to continue, but the replacement in Sweden is now finished

Sorting Solutions

• Currently good momentum in Food Sorting.
• Somewhat higher commodity prices might improve momentum in Recycling and Mining going forward

• Reporting in NOK and with some NOK cost base, TOMRA will be negatively impacted by a strengthening NOK, measured particularly against EUR and USD

Currency

TOMRA SHAREHOLDER STRUCTURE

	Top 10 shareholders as of 05 April 2017	Shareholders by country
1	Investment AB Latour	38 651 000	26.1%
2	Folketrygdfondet	9 529 819	6.4%	3% 5%
3	The Bank of New York BNY Mellon	7 845 000	5.3% (NOM)	5% 6%
4	Skandinaviska Enskilda (Client Account)	4 054 735	2.7% (NOM)	36% 7%
5	Goldman Sachs & Co	3 743 460	2.5% (NOM)
6	Clearstream Banking	2 732 855	1.8% (NOM)	12%
7	Nordea Nordic Small	2 349 276	1.6%	26%
8	ODIN Norge	2 280 188	1.5%
9	Danske Invest Norge c/o Danske capital	2 190 530	1.5% (NOM)	Sweden Norway USA Great Britain Luxembourg Nederland
10	Verdipapirfondet DNB	2 006 435	1.4%	Finland Others
	Sum Top 10	74 862 298	50.6%
	Other shareholders	73 157 780	49.4%
	TOTAL (5,869 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