TOMRA Systems — Interim / Quarterly Report 2014

Jul 18, 2014

2 ND QUARTER 2014 RESULTS ANNOUNCEMENT

TOMRA SYSTEMS ASA 18th of July 2014

HIGHLIGHTS FROM THE QUARTER INCLUDE

Revenues	• Revenues of 1,187 MNOK (1,177 MNOK in second quarter 2013) Currency adjusted revenues were: - Down 3% for TOMRA Group - Down 1% in TOMRA Collection - Down 8% in TOMRA Sorting
Gross margin	• Gross margin 43%, up from 42% in second quarter 2013 - Stable margin in TOMRA Collection - Improved margin in TOMRA Sorting
Operating expenses	• Operating expenses of 348 MNOK (323 MNOK in second quarter 2013) - Up 2% adjusted for currency and one-time costs
EBITA	• EBITA of 156 MNOK (172 MNOK in second quarter 2013) - Including 13 MNOK one-time costs
Cashflow from operations	• Cashflow from operations of 136 MNOK (120 MNOK in second quarter 2013)
Orders TOMRA Sorting	• Order intake of 502 MNOK in TOMRA Sorting, compared to 419 MNOK same period last year • All time high order backlog of 615 MNOK in TOMRA Sorting, up from 574 MNOK at the end of first quarter 2014

2

FINANCIAL HIGHLIGHTS P&L STATEMENT

	2nd Quarter			1st Half
Amounts in NOK million	2014	2013	13 Adj*	2014	2013	13 Adj*
Revenues	1,187	1,177	1,230	2,252	2,143	2,280
• Collection Solutions	726	699	731	1,402	1,297	1,383
• Sorting Solutions	461	478	499	850	846	897
Gross contribution	504	495	514	966	922	975
in %	43%	42%	42%	43%	43%	43%
Operating expenses	348	323	337	704	637	678
EBITA	156	172	177	262	285	297
in %	13%	15%	14%	12%	13%	13%
One time costs included in operating expenses	13	8	8	25	8	8

** Adjusted for one-time costs

FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE

Amounts in NOK million	30 June 2014	30 June 2013	31 Dec 2013
ASSETS	5,944	5,572	5,623
• Intangible non-current assets	2,528	2,396	2,487
• Tangible non-current assets	613	599	608
• Financial non-current assets	293	266	267
• Inventory	955	917	874
• Receivables	1,358	1,259	1,224
• Cash and cash equivalents	197	135	164
LIABILITIES AND EQUITY	5,944	5,572	5,623
• Equity	2,682	2,407	2,741
• Minority interest	96	94	83
• Interest bearing liabilities	1,740	1,735	1,557
• Non-interest bearing liabilities	1,426	1,336	1,242

Ordinary cashflow from operations

• 136 MNOK - (120 MNOK in 2Q 2013)

Cashflow from investments (ex M&A)

• 68 MNOK - (62 MNOK 2Q 2013)

Solidity

• 47% equity
• NIBD/EBITDA = 1.8 (Rolling 12 months)
• Dividend of 200 MNOK (1.35 NOK per share) paid out in May 2014

TOMRA Collection Solutions

HIGHLIGHTS COLLECTION SOLUTIONS

COLLECTION SOLUTIONS FINANCIALS

	2nd Quarter			1st Half
Amounts in NOK million	2014	2013	13 Adj*	2014	2013	13 Adj*
Revenues	726	699	731	1,402	1,297	1,383
• Nordic	138	145		268	272
• Central Europe & UK	286	276		582	516
• Rest of Europe	9	3		15	6
• US East/Canada	281	267		518	492
• Rest of the world	12	8		19	11
Gross contribution	302	291	306	590	546	585
in %	42%	42%	42%	42%	42%	42%
Operating expenses	173	164	170	351	327	346
EBITA	129	127	136	239	219	239
in %	18%	18%	19%	17%	17%	17%

T-9 ROLLOUT SLIGHTLY AHEAD OF SCHEDULE: THE MACHINE IS WELL RECEIVED IN THE MARKET

T-9 in Finland

• K-Supermarket placed a full-page ad in Finland's largest newspaper to announce that they have installed the T-9
• "We are putting a new RVM into use at the end of this week. The fastest and most reliable RVM on the market
• the TOMRA T-9" Store owner

T-9: Targeting high end – high volume retail

• 2014 Ambition: Delivery of 1000 machines
• 487 has left the factory YTD

ENTERING THE DEPOT SEGMENT

Economies of scale on modular design and in-house R&D

• Part of the TOMRA Collection strategy is to target new business models
• The depot market has been a market where TOMRA is not present
• To target this market we are developing a new depot solution based on standard components from existing TOMRA technology portfolio
• First pilot currently out for prototype testing in Norway
• Couple more systems to be installed for testing in US during the year
• Market estimated to around 50- 100 MNOK annually
• Limited numbers of competitors in the segment
• TOMRA targets a leading position

Based on existing modules from current portfolio and in-house R&D

The new TOMRA technology portfolio: A door opener for new segments

TOMRA Sorting Solutions

HIGHLIGHTS SORTING SOLUTIONS

Revenues	• Revenues equaled 461 MNOK in second quarter 2014, down from 478 MNOK in second quarter 2013 • Revenues down 8% in local currencies
Gross margin	• Gross margin increased from 43% in second quarter 2013 to 44% in second quarter 2014
EBITA	• EBITA of 34 MNOK (51 MNOK in second quarter 2013) • Including one-time cost of 13 MNOK in second quarter 2014
Orders	• Order intake of 502 MNOK, compared to 419 MNOK same period last year • All time high order backlog of 615 MNOK, up from 574 MNOK at the end of first quarter 2014
Business stream food	• Revenues in 2Q14 down from 2Q13, due to lower order backlog at the beginning of the quarter • Improved order intake during 2Q14 has increased the backlog
Business stream recycling	• Slightly higher revenues in 2Q14 than in 2Q13 • Positive development in order intake within waste recycling, still slow within metals
Business stream mining	• Strategic focus upon industrial minerals, gem stones and standard products • Significant improvement in order intake

SORTING SOLUTIONS FINANCIALS

	2nd Quarter			1st Half
Amounts in NOK million	2014	2013	13 Adj*	2014	2013	13 Adj*
Revenues	461	478	499	850	846	897
• Nordic	3	10		5	14
• Central Europe & UK	164	176		274	282
• Rest of Europe	45	22		96	50
• US East/Canada	163	168		309	305
• Rest of the world	86	102		166	195
Gross contribution	202	204	208	376	376	390
in %	44%	43%	42%	44%	44%	43%
Operating expenses	168	153	161	339	298	320
EBITA	34	51	47	37	78	70
in %	7%	11%	9%	4%	9%	8%
One time costs included in operating expenses	13	8	8	25	8	8

BACKLOG DEVELOPMENT AND MOMENTUM

Comments

• The order backlog declined in the period 1Q13- 3Q13, explained by
• Large US order signed in 2012 and delivered in 2013
• Generally lower order intake in the first three quarters of 2013
• Resulting in a low order backlog end 3Q13
• Good order intake last three quarters combined with stronger NOK and fewer orders taken to P/L in first half 2014
• Leading to all time high order backlog at the end of 2Q14
• Continued high order intake through 3Q14 important to increase revenues in 2014 compared to 2013
• Estimated backlog conversion ratio in 3Q14: 80- 85%*

13

THE COMMON SORTING PLATFORM: SHARING MODULES ACROSS ALL BUSINESS STREAMS

Synergies in action

• On the back of in-house initiatives and through M&A TOMRA Sorting has accumulated an extensive portfolio of sorting technologies
• The common sorting platform: next step to gain efficiencies in product development
• What is it? The common sorting platform includes everything that is not specific for one TSS business stream or machine like
• Communication infrastructure (interfacing)
• Configuration (sorting parameters)
• Core functionality (modularity, shared functionalities and common standards)
• Shared modules for sensing, processing and ejection

Advantages

• 1. Reduced purchasing and operational costs
• 1. Reduced inventory
• 1. Increased development speed shorter time to market
• 1. Higher efficiency in R&D through efficient reuse of modules
• 5. IPR protection, reducing risk of duplication
• 1. Standardization of working environment
• 1. Higher efficiency in service

A modular approach: Reuse and reduce

Outlook and shareholder structure

OUTLOOK

Long term trends:

• The long term demand for better resource productivity is a result of megatrends such as population increase, a growing middle class consumer base and greater urbanization. TOMRA, as a leader in sensor based solutions, is favorably positioned to capitalize on these trends

Collection Solutions:

• No new markets are expected to generate significant revenues in the coming quarters and activity is consequently assumed to be stable and in line with previous quarters
• As usual the second half of the year is expected to be stronger than the first half, for both revenues and profit

Sorting Solutions:

• The combination of a stronger order intake three consecutive quarters combined with a limited number of orders taken to P/L, has led to an all time high order backlog at the end of second quarter 2014
• Revenues and profit in TOMRA Sorting are consequently expected to improve significantly is second half of 2014, compared to first half 2014

Currency:

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

TOMRA SHAREHOLDER STRUCTURE

	th of July 2014 Top 10 shareholders as of 4	Shareholders by country
1	Investment AB Latour	35 690 000	24.1%
2	Folketrygdfondet	14 720 124	9.9%
3	Jupiter European Fund	9 355 330	6.3%
4	Skandinaviska Enskilda A/C Clients account	6 128 025	4.1% (NOM)
5	Nordea Nordic Small	4 363 024	2.9%
6	ODIN Norge	3 542 532	2.4%
7	JP Morgan Chase Bank Nordea Treaty account	3 225 831	2.2% (NOM)
8	State Street Bank AN A/C Client Omnibus F	2 586 777	1.7% (NOM)
9	Skandinaviska Enskilda A/C Finnish Resident	2 437 539	1.6% (NOM)
10	The Bank of New York BNY Mellon	2 355 441	1.6% (NOM)	Total shares held abroad: 77.1%
	Sum Top 10	82 049 182	55.4%
	Other shareholders	63 615 455	44.6%
	TOTAL (5,854 shareholders)	148 020 078	100%

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