TOMRA Systems

Earnings Release • Apr 26, 2024

1 st quarter 2024 results announcement

Click to enter name Place dd.mm.yy TOMRA Systems ASA 26 April 2024 © TOMRA

Quarterly highlights

Financial highlights

Revenues	• Total revenue of 3,322 MNOK (3,239 MNOK in 1Q 2023). Adjusted for currency, revenues were: — Flat for TOMRA Group — Up 15% in Collection — Down 16% in Recycling — Down 15% in Food
Gross margin	• Gross margin at 40% – (40% in 1Q 2023) — Improvement in Collection compared to last year, while negatively impacted by low volumes in Recycling and Food.
Operating expenses	• Operating expenses of 1,157 MNOK adjusted for special items (1,027 MNOK in 1Q 2023) — Flat development compared to 4Q 2023
EBITA, adj.	• EBITA, adjusted for special items of 176 MNOK, down from 277 MNOK in 1Q 2023
Special items	• One-off costs of 18 MNOK in 1Q 2023 relating to Food restructuring
Cash flow	• Cash flow from operations of 228 MNOK (509 MNOK in 1Q 2023)
Order intake and backlog	• Recycling order intake of 881 MNOK (959 MNOK in 1Q 2023) and order backlog of 1,459 MNOK (1,309 MNOK in 1Q 2023) • Food order intake of 924 MNOK (954 MNOK in 1Q 2023) and order backlog of 1,380 MNOK (1,243 MNOK in 1Q 2023)

Our strategy is to accelerate growth in core and develop adjacent opportunities while becoming a fully circular business and safe, fair and inclusive

Our ambitions towards 2027

• Revenue growth 15% CAGR
• EBITA margin at 18%
• Dividend payout 40-60% of EPS
• Capital structure Investment Grade
• Net Zero holistic sustainability strategy

Creating sensor-based solutions for optimal resource productivity - transforming how we obtain, use, and reuse resources

⁵ Publicly listed on Oslo Stock Exchange (OSEBX: TOM)

Collection Business update

• Strong sales in all regions and continued sales into the recently launched markets Hungary, Romania, and Ireland.
• Good throughput volume development in Victoria, which went live in November 2023.
• Early success with new product portfolio including the R2 infeed solution and the RollPac backroom solution.
• The governments of the UK have agreed to implement an aligned DRS in October 2027.

Market tests have started for TOMRA R2

Continued revenue growth up 15% (currency adj.) compared with 1Q 2023

Tasmania – 2H 2024

The Tasmanian bottle bill was passed in 2022 with implementation expected in second half 2024 (link).

Uruguay – December 2024

A deposit return scheme for beverage containers is in process of implementation, originally planned to commence by the end of 2024 (link).

Austria – 1 January 2025

Introduction of deposit on single-use beverage containers (link).

Poland – 1 January 2025

A DRS law was published by the Government of Poland on 12 September 2023 (link). The system will allow multiple system operators with the first one having been assigned in March 2024 (link).

Singapore – 1 April 2025

In March 2023, the parliament passed legislation for a deposit return scheme for beverage containers. (link).

Recycling Business update

• Revenues in line with expected lower backlog conversion ratio, driven by a higher share of large projects with longer lead times.
• Softer market sentiment continues in European plastics recycling.
• First sales of AUTOSORT PULSE machines with dynamic LIBS technology (laser induced breakdown spectroscopy) for sorting aluminum scrap by alloy.
• Launch of TOMRA's AI-based OBTAIN for ore sorting and GAINnext add-on application to the AUTOSORT for foodgrade plastics sorting of PET, PP and HDPE.

Strong order backlog up 9% (currency adj.) compared with 1Q 2023

Price development (illustrative) of virgin PET and recycled PET (rPET)

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

EU PPWR

Latest update

On 24 April 2024, the EU Parliament adopted the Packaging and Packaging Waste Regulation (PPWR), a comprehensive legislation adding new obligations across the value chain which add to the current Single-Use Plastics Directive (SUPD) and Packaging and Packaging Waste Directive (PPWD).

Next steps:

The EU Council needs to formally approve the agreement before it can enter into force. This will earliest happen in 4Q 2024 (est.).

Key requirements will then need to be complemented by detailed and technical acts of secondary legislation in the coming years.

Key provisions which are relevant for TOMRA

Recycled content (plastics)

Minimum % of recycled content from post-consumer waste	2030	2040
Single use plastic beverage bottles	30%	65%
Contact-sensitive packaging:
- PET as major component	30%	50%
- PET not as major component	10%	25%
Other types of packaging	35%	65%

Obligations to provide the option of reusable packaging within a system for reuse (aim for 10% reuse offer from 2030) for take-away beverages and ready-prepared food.

Deposit return systems

By 1 Jan 2029, requirement to set up DRS to ensure >90% collection of single use plastic beverage bottles and metal cans.	By 2030, 10% of beverage containers placed on the market are to be in reusable packaging. The PPWR encourages the integration of reuse into DRS collection infrastructure.

Reuse obligations Waste management

By 2030, all packaging must be recyclable by design. By 2035, it must be recyclable in practice using installed infrastructure and established processes which ensure that >55% of packaging per material category gets recycled.

Note: The above is based on a preliminary assessment and provisions may contain derogations.

Food Business update

• Low revenues in 1Q due to seasonal variation in combination with a soft order intake in the third quarter 2023.
• Weak market sentiment continues in fresh food categories while the potato category continues to perform well.
• Cost reduction and restructuring program is progressing according to plan.
• New technology showcased at Fruit Logistica Berlin, including TOMRA's AI powered Neon for blueberries and LUCAi for fresh fruit including cherries and apples.

Growing order backlog up 8% (currency adj.) compared with 1Q 2023

NOK millions

TOMRA Horizon

Feedstock presentation

TOMRA Feedstock Closing the gap in plastic recycling

TOMRA Textiles Closing the loop on textiles

TOMRA Reuse Systems for reusable packaging

More plastics in Europe need to be recycled

Too little plastic waste is being recycled

Post-consumer plastics waste treatment in Europe

Too little recycled plastics is used in new products

Source of plastics converted into new plastic products in Europe

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Only half of post-consumer plastics waste is separately collected and sorted for recycling

Post-consumer plastics waste value chain in Europe

Illustrative and simplified

A new advanced sorting step in the value chain can enable circularity of millions of tons of plastic waste

Supporting drivers across the value chain for circular plastics

Regulatory push for more plastics recycling

Creating supply and demand for recycled plastics

EU PPWD requires plastics packaging recycling rate to increase by 40%

Additional relevant regulatory frameworks: EU Plastic tax, PPWR (proposed), Carbon taxes, EU Waste Framework Directive

Industry committing to GHG emission reduction

Creating demand for recycled plastics

Global brands target a doubling of recycled content in products by 2030 to save GHG emissions

Chemical recycling capacity is increasing

Creating demand for recyclates

Total installed input capacity growth in chemical recycling in Europe, thousand tons

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Source: Eurostat Source: The Global Commitment 2023 Progress Report, Ellen MacArthur

Source: ICIS @ Chemical Recycling Europe Forum 2023. Verified by internal TOMRA analysis

TOMRA is investing into two advanced Feedstock sorting plants

Germany

• 100% TOMRA owned
• EUR ~ 50-60 million
• Capacity ~ 80.000 tons p.a.
• Output: >10 different polymer fractions
• Operational end of 2025 est.
• 10-15% IRR target¹

Norway

• Joint Venture 65% TOMRA / 35% Plastretur
• EUR ~ 32 million TOMRA investment
• Capacity ~ 90.000 tons p.a.
• Output: 8 different polymer fractions
• Operational in 2025 est.
• 15-20% IRR target¹

Long-term offtake agreements signed with industry leaders

TOMRA will provide stable supply of high-quality feedstock for chemical and mechanical recycling

Feedstock produced by TOMRA will be processed at OMV's ReOil recycling plants in Austria.

Feedstock produced by TOMRA will be processed at Borealis' mechanical recycling operations in Europe for Borcycle M products.

Additional offtake agreements are in place. In total, over half of the output from TOMRA's German Feedstock plant has offtake agreements secured.

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1. FCF calculation (post tax). No debt financing. Timeline of 25 years.

TOMRA Feedstock offers an attractive alternative business model for long-term value creation

Target IRR¹ > 15% on projects ROCE > 15 %

in steady state²

Sorting and recovery

70-80 %

yield

Payback period

^~8-9

years

Note: All figures are based on a generic plant. The actual economics of plants will vary and depend on specific circumstances in the setup. 1) After tax, no debt. Standard FCF calculation.

2) Increases over time as depreciation decreases.

3) Pricing risk on different polymer fractions may be managed through offtake agreements.

in steady state²

~ 18 %

Incoming waste is typically subject to

EUR 30-60 / ton

gate fee

)

Financials and outlook

Revenues Group P&L Highlights [NOK millions]

	1st Quarter
million Amounts in NOK	2024	2023	Adj* 2023
Revenues	3 322 ,	3 239 ,	3 316 ,
Collection	2 153 ,	1 828 ,	1 871 ,
Recycling	529	615	631
Food	688	794	811
contribution Gross	1 334 ,	1 303 ,	1 334 ,
in %	40%	40%	40%
Operating expenses	1 157 ,	1 027 ,	1 047 ,
, adj EBITA	176	277	287
in %	5%	9%	9%
Special items**	-18
EBITA	158	277	287
in %	5%	9%	9%

*2023 actual restated at 2024 exchange rates, estimate **Food restructuring costs

Collection P&L Highlights

	1st Quarter
in million Amounts NOK	2024	2023	Adj* 2023
Revenues	2 153 ,	828 1 ,	871 1 ,
Northern Europe	276	268
(ex Northern) Europe	108 1 ,	872
North America	488	457
of the world Rest	280	231
contribution Gross	863	701	720
in %	40%	38%	38%
Operating expenses	515	421	427
EBITA	348	280	292
in %	16%	15%	16%

*2023 actual restated at 2024 exchange rates, estimate

Recycling P&L Highlights ⁴⁸⁵

	1st Quarter
in million Amounts NOK	2024	2023	Adj* 2023
Revenues	529	615	631
Europe	244	325
Americas	169	156
Asia	84	106
of the world Rest	32	29
contribution Gross	252	311	319
in %	48%	51%	50%
Operating expenses	245	207	214
EBITA	7	103	105
in %	1%	17%	17%

*2023 actual restated at 2024 exchange rates, estimate

[NOK millions] Food P&L Highlights

	1st Quarter
million Amounts in NOK	2024	2023	Adj* 2023
Revenues	688	794	811
Europe	185	223
Americas	324	418
Asia	103	77
of the world Rest	75	76
contribution Gross	255	293	298
in %	37%	37%	37%
Operating expenses	321	343	350
, adj EBITA	-65	-49	-52
in %	-9%	-6%	-6%
Special items**	-18
EBITA	-83	-49	-52
in %	-12%	-6%	-6%

*2023 actual restated at 2024 exchange rates, estimate **Food restructuring costs

1Q22 1Q23 1Q24

1Q22 1Q23 1Q24

Balance sheet and cash flow [NOK millions]

	31 Mar	December 31
in million Amounts NOK	2024	2023	2023
ASSETS	17	14	16
	272	777	513
	,	,	,
Intangible	4	4	4
non-current	723	400	570
assets	,	,	,
Tangible	3	2	3
non-current	534	838	212
assets	,	,	,
Financial non-current assets	734	606	692
Inventory	2	2	2
	954	718	669
	,	,	,
Receivables	4	3	4
	212	496	202
	,	,	,
Cash and cash equivalents	1 115 ,	719	1 168 ,
LIABILITIES	17	14	16
AND	272	777	513
EQUITY	,	,	,
Equity	7	7	6
	176	070	904
	,	,	,
liabilities Lease	1 620 ,	1 444 ,	1 568 ,
Interest-bearing liabilities	3 671 ,	2 200 ,	3 358 ,
Non-interest-bearing liabilities	4 804 ,	4 063 ,	4 683 ,

Cash flow from operations, YTD

Cashflow from operations

• Cash flow from operations of 228 MNOK in 1Q 2024 (509 MNOK in 1Q 2023)

Solidity and gearing

• 42% equity ratio
• NIBD/EBITDA (rolling 12 months) of 1.9x

Financial position

Debt maturity profile

• Weighted average debt maturity of 1.9 years
• Interest-bearing bonds are swapped to EUR and is exposed to EUR/NOK exchange rate fluctuations

Not including 300 MNOK unused cash-pool overdraft facility

Current funding sources

• TOMRA has unused credit lines of approx. 444 MNOK
• Senior unsecured bonds (no financial covenants) of 1,600 MNOK (swapped to EUR) are listed on Oslo Stock Exchange
  • Green Bonds portion amount to 1,000 MNOK
• Successful placement of 1,000 MNOK new senior unsecured green bonds, issued 3 April 2024.
• The financial covenant related to the bank debt is minimum equity ratio of 30 %

Currency risk and hedging policy

Revenues and expenses per currency:

	EUR	USD	NOK	OTHER1	TOTAL
Revenues	50 %	25 %	0 %	25 %	100 %
Expenses	50 %	20 %	10 %	25 %	100 %

Assets and liabilities per currency:

	EUR	USD	NOK	OTHER1	TOTAL
Assets	45 %	20 %	5 %	30 %	100 %
Liabilities	50 %	10 %	15 %	25 %	100 %

NOTE: Estimated and rounded figures

Change of presentation currency in 2Q 2024

As of the second quarter 2024, TOMRA will change its presentation currency and report in EUR. This will better reflect the underlying performance in the business and reduce currency volatility in reported numbers.

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

Outlook

Collection . • High activity related to new and expanding markets. • Quarterly performance will be dependent upon timing of new initiatives. Recycling • Currently softer market sentiment leading to slower short-term growth. • Demand for recycled materials is expected to create attractive growth opportunities. • Based on the order backlog at the end of the first quarter, a 45% conversion ratio is estimated to be recognized as revenues in the second quarter. Food • Challenging macroeconomic environment is delaying customer investments. • Need for automation and increased quality and safety requirements create opportunities mid and long term. • Full savings effect of 30 MEUR (~350 MNOK) cost reduction program expected by end of 2024. • Based on the order backlog at the end of the first quarter, a 65% conversion ratio is estimated to be recognized as revenues in the second quarter. Other • Capital expenditures from Horizon activities of 40-50 MEUR are expected in 2024, primarily related to the two Feedstock sorting plants. Currency • As of the second quarter 2024, TOMRA will change its presentation currency and report in EUR.

September 5th, 2024 Alicante, Spain

TOMRA Capital Markets Day 2024

Join us for a for full day to gain valuable insights into TOMRA's strategy

Registrations will open on 29 April, 10:00am

More information on the IR section of TOMRA.com

Watch insightful presentations and engage with TOMRA's management team

Experience TOMRA's solutions firsthand at a guided TOMRA Food customer visit

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), includes and may be based on forward-looking information and statements that are subject to unknown risks and uncertainties that could cause actual results to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. The content of this Document is based on current management 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", "anticipates", "intends", "goals", "strategy" or similar expressions, if not part of what could be clearly characterized as a demonstration case, although not all forward-looking statements contain such terms. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. 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 guarantee or assurance that those expectations will be achieved, or that future results or events will be consistent with any such opinions, forecasts, or estimates. TOMRA Systems ASA does not guarantee the accuracy, reliability, or completeness of the Document, neither expressed or implied, and no reliance should be placed on it. Except as required by applicable securities laws, we undertake no obligation to update or revise these statements based on new information, future developments or otherwise. TOMRA Systems ASA (including its directors, officers and employees) assumes no liability related to 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 TOMRA Company.

www.tomra.com

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