4 th quarter 2020 results announcement

TOMRA Systems ASA 23 February 2021 © TOMRA

HIGHLIGHTS FROM THE QUARTER

Key financial highlights

Revenues	•	All time high revenues of 2,742 MNOK (2,569 MNOK in fourth quarter 2019) Adjusted for currency, revenues were: - Up 4% for TOMRA Group - Up 10% in TOMRA Collection Solutions - Up 3% in TOMRA Recycling Mining - Down 5% in TOMRA Food
Gross margin	•	Gross margin 44.5% (up from 43.1% in fourth quarter 2019) - Improved margins in TOMRA Collection Solutions and TOMRA Recycling Mining
Operating expenses	•	Operating expenses of 716 MNOK, down 1% currency adjusted - Positive effect from cost measures
EBITA	•	Record EBITA of 505 MNOK – up from 408 MNOK in fourth quarter 2019
Cash flow	•	Cash flow from operations of 890 MNOK – compared to 600 MNOK in fourth quarter 2019 - All time high cash flow level
Order intake	•	Order intake 1,229 MNOK in TOMRA Food and TOMRA Recycling Mining - Lower activity in TOMRA Recycling Mining compared to the same period last year - Order backlog was 1,470 MNOK, higher by 1% compared to fourth quarter 2019
COVID-19	•	Volumes in North America stabilized, impact on order intake in TOMRA Food and TOMRA Recycling Mining
Dividend	•	The Board proposes a dividend of NOK 3.00 per share

Business update for TOMRA Collection Solutions

Europe

Continued sound situation with good performance and successful roll-out of R1 (multifeed) machine. Positive effects from deposit expansion in the Netherlands. North America

Stable container volumes despite social distancing and partial lockdown measures. Australia

Successful launch in Western Australia, total volumes are above previous year levels. Minor disruption when some depots had to close for a few days due to lockdowns.

1) Legislative updates according to official government statements

2) https://www.rijksoverheid.nl/documenten/rapporten/2020/10/09/bijlage-01-ontwerpbesluit-metalen-drankverpakkingen 3) https://nos.nl/artikel/2367153-kogel-door-de-kerk-per-31-december-2022-statiegeld-op-blikjes.html

Update on new deposit markets1)

The Netherlands – July 2021 and December 2022 (expansion)

‒ In April 2020, the DRS expansion law was approved to include deposit on small plastic bottles as of July 20212) .
‒ In February 2021, the decision of deposit introduction on cans was announced3) . The implementation date is December 31st , 2022 and the deposit value 15 cents.

Slovakia – January 2022

‒ In September 2020, Slovakia announced implementation of a deposit system on beverage packaging as of January 1st, 2022.
‒ In January 2021, the scheme administrator was selected4) .

Latvia – February 2022

‒ In August 2020, Latvia approved the regulatory framework for the deposit system starting February 1st, 2022. It includes glass, plastic and metal and the deposit value is set to 10 cents.
‒ In January 2021, the scheme coordinator was selected5) .

Scotland – July 2022

‒ In May 2020, the Scottish Parliament approved "The Deposit and Return Scheme for Scotland Regulations 2020 No. 154".
‒ The commencement date of July 1st, 2022 was passed into law.

4) https://www.minzp.sk/aktuality/milnik-priprave-zalohoveho-systemu-minister-budaj-predstavil-spravcu-ktory-zavedie-system-zalohovania-pet-flias.html 5) https://www.diena.lv/raksts/latvija/zinas/parakstits-ligums-par-atkritumu-depozita-sistemas-ieviesanu-latvija-14255277

Business update for TOMRA Recycling & Mining

Waste sorting and plastics recycling

Continues to be a healthy sector 1.000
Solid demand for high quality recyclates
Improved plastics prices, yet below pre-COVID levels

Metal recycling and mining

Improved order intake in the recycling segment
Metal prices climbed above 2019 levels
The cyclical mining business continues to be slower than last year

Improved commodity prices Continued demand for high quality recyclates

Illustration1) of price development of virgin PET and recycled PET (rPET)

PET = virgin-derived polyethylene terephthalate rPET= recycled polyethylene terephthalate (comparable to virgin PET)

UK Plastic Packaging Tax

On November 12th , 2020, UK announced the introduction of a new plastic packaging tax of £200 per ton for plastic packaging with less than 30% recycled content2) .

The tax will take effect from April 2022.

EU Plastic Tax On December 14th

, 2020, the Council of the EU unanimously adopted the Own Resources Decision3) , which introduces, among other things, an EU-wide levy on non-recycled plastic packaging of EUR 800 per ton.

The tax shall apply from January 2021.

2) https://www.gov.uk/government/publications/introduction-of-a-new-plastic-packaging-tax/introduction-of-a-new-plastic-packaging-tax 3) https://data.consilium.europa.eu/doc/document/ST-10046-2020-INIT/en/pdf

Business update for TOMRA Food

**) Includes best estimates of market size for high volume sub-categories in developing markets. TOMRA's market share in our focus sub-categories and regions is up to ~80%

Circular Economy – Innovating through collaboration

TOMRA and Borealis, in collaboration with Zimmerman, opened a demo plant for advanced mechanical recycling with the purpose of generating material for brand owners and converters to qualify, validate and prove fit for use in their applications.

The demo plant covers the process from post consumer waste to production of recycled polymers.

PET is the main polymer type in the market for high quality recycled plastics. However, PET accounts for less than 10% of plastic packaging*. Proving other polymer types is an important enabler of plastic circularity.

Styrenics Circular Solutions, which TOMRA is a part of, successfully tested mechanical recycling of polystyrene (PS) for food contact.

FINANCIALS AND OUTLOOK

Currency risk and hedging policy

Revenues and expenses per currency:

	EUR¹	USD	NOK	OTHER²	TOTAL
Revenues	45 %	35 %	0 %	20 %	100 %
Expenses	40 %	25 %	5 %	30 %	100 %

Assets and liabilities per currency:

	EUR¹	USD	NOK	OTHER²	TOTAL
Assets	45 %	15 %	10 %	30 %	100 %
Liabilities	55 %	15 %	10 %	20 %	100 %
¹ EUR includes DKK	² Most important: AUD, NZD, RMB, CAD, SEK, GBP and JPY				NOTE: Estimated and rounded figures

¹ EUR includes DKK NOTE: Estimated and rounded figures

10% change in NOK towards other currencies will impact:

	Revenues	Expenses	EBITA
EUR*	4.5%	4.0%	7.0%
USD	3.5%	2.5%	8.0%
OTHER**	2.0%	3.0%	-4.0%
ALL	10.0%	9.5%	11.0%

HEDGING POLICY

CASHFLOW AND P/L

• TOMRA can hedge up to one year of future predicted cash flows. Gains and losses on these hedges are recorded at the finance line, not influencing EBITA

B/S

• TOMRA only hedges B/S items where exchange rate fluctuations could have P/L impact. Gains and losses on B/S hedging are recorded in accordance with IAS 21 and will normally not have P/L impact

Financial highlights | P&L statement

		th 4 Quarter			Full Year
Amounts in NOK million	2020	2019	2019 Adj*	2020	2019	2019 Adj*
Revenues	2,742	2,569	2,648	9,941	9,346	9,997
Collection Solutions	1,426	1,265	1,302	4,936	4,633	4,939
Recycling Mining	438	413	426	1,694	1,692	1,818
Food	878	891	920	3,311	3,021	3,240
Gross contribution	1,221	1,108	1,137	4,366	4,085	4,358
in %	45%	43%	43%	44%	44%	44%
Operating expenses	716	700	726	2,844	2,704	2,887
EBITA	505	408	411	1,522	1,381	1,471
in %	18%	16%	16%	15%	15%	15%

TOMRA Collection Solutions financials

	th 4 Quarter				Full Year
Amounts in NOK million	2020	2019	2019 Adj*	2020	2019	2019 Adj*
Revenues	1,426	1,265	1,302	4,936	4,633	4,939
Northern Europe	223	160		778	618
Europe (ex Northern)	608	498		1,923	1,708
North America	407	428		1,590	1,718
Rest of the world	188	179		645	589
Gross contribution	598	506	521	2,042	1,928	2,048
in %	42%	40%	40%	41%	42%	41%
Operating expenses	302	290	299	1,161	1,120	1,191
EBITA	296	216	222	881	808	857
in %	21%	17%	17%	18%	17%	17%

TOMRA Recycling Mining financials

	th 4 Quarter				Full Year
Amounts in NOK million	2020	2019	2019 Adj*	2020	2019	2019 Adj*
Revenues	438	413	426	1,694	1,692	1,818
Europe	247	226		1,041	1,000
America	61	59		196	225
Asia	79	91		289	303
Rest of the world	51	37		168	164
Gross contribution	237	206	211	910	888	954
in %	54%	50%	49%	54%	52%	52%
Operating expenses	135	132	138	534	503	540
EBITA	102	74	73	376	385	414
in %	23%	18%	17%	22%	23%	23%

Based upon current production and delivery plans, the revenues in 1Q21 are estimated to be approximately 60% of order backlog at the end of 4Q20

TOMRA Food financials

	th 4 Quarter				Full Year
Amounts in NOK million	2020	2019	2019 Adj*	2020	2019	2019 Adj*
Revenues	878	891	920	3,311	3,021	3,240
Europe	194	197		875	767
America	405	407		1,521	1,426
Asia	62	94		291	293
Rest of the world	217	193		624	535
Gross contribution	386	396	405	1,414	1,269	1,357
in %	44%	44%	44%	43%	42%	42%
Operating expenses	254	255	266	1,050	991	1,065
EBITA	132	141	139	364	278	292
in %	15%	16%	15%	11%	9%	9%

Based upon current production and delivery plans, the revenues in 1Q21 are estimated to be approximately 70% of order backlog at the end of 4Q20

Financial highlights | Balance sheet and cash flow

		31 December
Amounts in NOK million	2020	2019
ASSETS	10,977	10,868
Intangible non-current assets	3,846	3,788
Tangible non-current assets	2,371	2,330
Financial non-current assets	353	406
Inventory	1,492	1,596
Receivables	2,383	2,288
Cash and cash equivalents	532	460
LIABILITIES AND EQUITY	10,977	10,868
Equity	5,591	5,247
Lease liabilities	1,104	1,102
Interest-bearing liabilities	1,414	1,880
Non interest-bearing liabilities	2,868	2,639

Cashflow from operations

• All time high cash flow of 890 MNOK in the fourth quarter (600 MNOK in fourth quarter 2019)

Solidity and gearing

51% equity ratio
NIBD/EBITDA (Rolling 12 months)
o 0.5x without IFRS 16 / 0.9x including IFRS 16

Dividend

o The Board proposes an ordinary dividend of NOK 3.00 per share, up from NOK 2.75 last year

TOMRA has a solid financial position

Weighted average debt maturity of 3.0 years
All interest-bearing is swapped to EUR and is exposed to EUR/NOK exchange rate fluctuations.

Not including 300MNOK cash-pool overdraft facility

Debt maturity profile Current funding sources

TOMRA has a satisfactory liquidity situation with available unused credit lines of approx. 1 460 MNOK
A senior unsecured bonds (no financial covenants) of 1 000 MNOK (swapped to EUR) is listed on Oslo Stock Exchange
The financial covenant related to the bank debt is minimum equity ratio of 30 %

Mapping of new reporting segments

Old segments	2020	2020	New segments
Figures in NOK million	Total	Total	Figures in NOK million
Tomra Collection Solutions			Tomra Collection Solutions
Total revenues	4 936	4 936	Total revenues
Gross contribution	2 042	2 042	Gross contribution
- %	41 %	41,4 % - %
Operating expenses	1 161	1 161	Operating expenses
EBITA before other items	881	881	EBITA
- %	18 %	17,8 % - %
Amortizations	123	123	Amortizations
EBIT before other items	758	758	EBIT
- %	15 %	15 % - %
Tomra Sorting Solutions			Tomra Recycling Mining
Total revenues	5 005	1 694	Total revenues
Gross contribution	2 324	910	Gross contribution
- %	46 %	54 % - %
Operating expenses	1 534	534	Operating expenses
EBITA before other items	790	376	EBITA
- %	16 %	22,2 % - %
Amortizations	99	13	Amortizations
EBIT before other items	691	363	EBIT
- %	14 %	21 % - %
Group Functions			Tomra Food Solutions
Total revenues	0	3 311	Total revenues
Gross contribution	-	1 414	Gross contribution
- %	-	43 % - %
Operating expenses	149	1 050	Operating expenses
EBITA before other items	-149	364	EBITA
- %	-	11,0 % - %
		86	Amortizations
		278	EBIT
			8 % - %

			Group Functions
		0	Total revenues
		-	Gross contribution
			- - %
		99	Operating expenses
		-99	EBITA
			- - %

Outlook

Collection Solutions	• Overall good momentum in TOMRA Collection • New potential outbreaks of COVID-19 could have negative impact • Expansion in Netherlands expected to have a positive impact
Recycling/Mining	• Underlying momentum assumed to continue • Deviations between business streams due to impact of lower commodity prices and industrial demand
Food	• Regional differences dependent upon severity of COVID-19 outbreak • The fresh food segment assumed to continue better than the processed food segment
Currency	• Reporting in NOK and with some NOK cost base, TOMRA will in general benefit from a weak NOK, particularly measured against EUR • With significant revenues in USD and costs in EUR, TOMRA Sorting Solutions is exposed to USD/EUR

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 trademark 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