TOMRA Systems — Interim / Quarterly Report 2014

Apr 30, 2014

30.04.2014

HIGHLIGHTS

1Q 2014

• Revenues of 1,065 MNOK (966 MNOK in first quarter 2013). Currency adjusted revenues were:
• Up 1% for TOMRA Group
• Up 4% in TOMRA Collection
• Down 2% in TOMRA Sorting
• Gross margin 43%, down from 44% in first quarter 2013
• Slightly lower gross margin in TOMRA Sorting
• Operating expenses of 356 MNOK (314 MNOK in first quarter 2013)
• Including one time integration cost of 12 MNOK in TOMRA Sorting
• Up 1% adjusted for one time cost and currency
• EBITA of 106 MNOK (113 MNOK in first quarter 2013)
• Including one time integration cost of 12 MNOK in TOMRA Sorting
• Cash flow from operations of 12 MNOK (11 MNOK in first quarter 2013)
• Order intake of 488 MNOK in first quarter 2014 in TOMRA Sorting
• Up from 403 MNOK in first quarter 2013
• All time high order backlog of 574 MNOK in TOMRA Sorting
• Up from 475 MNOK at the end of fourth quarter 2013

TOMRA FIRST QUARTER 2014

CONSOLIDATED FINANCIALS

Revenues in first quarter 2014 amounted to 1,065 MNOK compared to 966 MNOK in first quarter last year. Revenues in Collection Solutions increased by 13% (4% currency adjusted), while revenues in Sorting Solutions increased 6% (down 2% currency adjusted).

Gross margin was 43% in the quarter, down from 44% in the corresponding period last year, negatively influenced by a stronger EUR vs USD in TOMRA Sorting.

Operating expenses increased from 314 MNOK in first quarter 2013 to 356 MNOK in first quarter 2014, including a one time integration cost of 12 MNOK in TOMRA Sorting. Adjusted for currency (stronger EUR and USD vs NOK) and the integration cost, operating expenses increased by 1 percent.

EBITA was 106 MNOK in first quarter 2014 versus 113 MNOK in first quarter 2013.

Ordinary cash flow from operations in first quarter 2013 equaled 12 MNOK, compared to 11 MNOK in first quarter 2013.

The equity ratio was unchanged at 50% during first quarter 2014. At the end of first quarter 2014 NIBD/EBITDA on a rolling 12 month basis was equal to 1.7.

TOMRA Group Financials

(MNOK)	1Q14	1Q13
Revenues
- Nordic	132	131
- Central Europe & UK	406	346
- Rest of Europe	57	31
- North America	383	362
- Rest of World	87	96
Total revenues	1 065	966
Gross contribution	462	427
- in %	43 %	44 %
Operating expenses	356	314
EBITA	106	113
- in %	10 %	12 %
Incl. integration/ onetime costs
- In operating exp.	12	-

BUSINESS AREA REPORTING

TOMRA Collection Solutions

Driven by stronger USD and EUR vs NOK, the business area reported a revenue growth of 13% in first quarter 2014, compared to same quarter last year. In local currencies, revenues were up 4%; slightly down in US, offset by higher activity in Central Europe.

Gross margin was 43% in the quarter, unchanged from same period last year.

Operating expenses increased 1% in local currencies.

EBITA was 110 MNOK, up from 92 MNOK in first quarter 2013, as a consequence of higher volumes, positive currency development, stable margins and good cost control. Currency adjusted, EBITA improved by 7%.

At the end of third quarter 2013, TOMRA announced the launch of T-9, the first of a new generation of reverse vending machines (RVM) based on TOMRA Flow Technology. T-9 features the first ever 360 degree recognition system applied inside an RVM and enables faster and cleaner collection of beverage containers, also including containers that until now could not be collected in RVMs.

Market acceptance has been good, and Tomra expects a significant share of orders received in 2014 to be on this new high-end platform.

Europe

Sales were stable in the Nordic region, and significantly up in Central Europe.

North America

Revenues in North America were down 3% measured in local currencies. Severe weather, which brought freezing conditions, had a negative impact on both through-put volumes as well as material recovery volumes. The negative effect was partly offset by strong RVM sales during the first quarter.

(MNOK)	1014	1013
Revenues
- Nordic	130	127
- Central Europe & UK	296	240
- Rest of Europe	6	3
- North America	237	225
- Rest of World		3
Total revenues	676	598
Gross contribution	288	255
- in %	43 %	43%
Operating expenses	178	163
EBITA	110	92
in %	16 %	15 %

BUSINESS AREA REPORTING

TOMRA Sorting Solutions

Revenues in the quarter increased by 6% compared to same quarter in 2013. Adjusted for currency effects, revenues were down 2%.

Gross margin decreased from 47% in first quarter 2013 to 45% in first quarter 2014, negatively influenced by a stronger EUR vs USD. Operating expenses increased in the same period from 145 MNOK to 171 MNOK, negatively influenced by integration costs of 12 MNOK. Adjusted for integration cost and currency, operating expenses were unchanged.

EBITA decreased from 27 MNOK in first quarter 2013 to 3 MNOK in first quarter 2014, due to higher operating expenses.

TOMRA Sorting Solutions

(MNOK)	1Q14	1Q13
Revenues
- Nordic	2	4
- Central Europe & UK	110	106
- Rest of Europe	51	28
- North America	146	137
- Rest of World	80	93
Total revenues	389	368
Gross contribution	174	172
- in %	45 %	47 %
Operating expenses	171	145
EBITA	3	27
- in %	1 %	7 %
Incl. integration/ onetime costs
- In operating exp.	12	-

After three consecutive quarters with lower order intake, the value of signed orders during both fourth quarter 2013 and first quarter 2014 has increased significantly. Order intake during first quarter 2014 totaled 488 MNOK, up from 403 MNOK during the same quarter last year.

As a consequence of higher order intake and somewhat fewer orders taken to P/L, the order backlog at the end of first quarter 2014 is at an all time high measured in NOK (574 MNOK, up from 475 MNOK at the end of fourth quarter 2013).

Business streams

Food

Revenues in the Food business stream were slightly lower in first quarter 2014 compared to first quarter 2013, due to lower order backlog at the beginning of the quarter. Reasonable order intake during first quarter 2014 improved the order backlog .

Order intake TOMRA Sorting

Recycling

Revenues were slightly higher in first quarter 2014 compared to first quarter 2013, due to higher order backlog at the beginning of the quarter.

Order intake has developed positively in waste recycling the last quarters and there has been continuous signs of improvements within this sub segment. Activity within metal recycling has however been negatively influenced by lower metal prices over a longer period, and activity remains low.

Mining

As a result of a strategic focus on industrial minerals, gem stones and standard products, Mining experienced a significant increase in order intake in first quarter 2014, compared to the last eight quarters.

TOMRA has signed an agreement with Outotec for supply of Outotec-branded sorting solutions for the mining and metallurgical industry. By combining TOMRA's sorting equipment and Outotec's comprehensive application and comminution expertise, customers can be offered energy-efficient process solutions that help them to increase productivity, decrease costs and thereby extend the life of their mining operations, increasing the overall value of their deposit.

Post merger integration

TOMRA Sorting has been executing an integration plan for improving operational efficiency and productivity.

This includes centralizing all process analytics activities in Belgium (moving it from Ireland, Germany and Norway), relocating F&A activities from Ireland to Belgium, centralizing Service for Benelux in Belgium and a proposal to move production from Belgium to Slovakia.

The process should be completed by the end of 2014. Integration cost of 12 MNOK has been booked in first quarter 2014. An additional 13 MNOK is estimated to be recorded in second quarter 2014. The initiatives are assumed to generate yearly savings of close to 30 MNOK per year, starting in 2015.

MARKET OUTLOOK

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.

TOMRA Collection Solutions

In Collection Solutions no new markets are expected to generate significant revenues in the coming quarters and activity is consequently assumed to be stable.

TOMRA Sorting Solutions

The business area ended first quarter 2014 with an all time high order backlog, but as part of this backlog has somewhat longer delivery times, revenues in second quarter 2014 are expected to be somewhat below second quarter 2013.

A more favorable market and product mix is expected to lead to a somewhat improved gross margin in second quarter 2014, compared to second quarter 2013.

Integration cost of 13 MNOK is to be taken in second quarter 2014 (in addition to the 12 MNOK recorded in first quarter 2014). The initiatives are assumed to generate yearly savings of close to 30 MNOK per year, starting 2015.

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, provided current exchange rate levels are maintained.

THE TOMRA SHARE

The total number of issued shares at the end of fourth quarter 2013 was 148,020,078 shares, including 144,685 treasury shares. The total number of shareholders decreased from 6,014 at the end of fourth quarter 2013 to 5,894 at the end of first 2014. Norwegian residents held 22% of the shares at the end of first quarter 2014.

TOMRA's share price increased from NOK 56.50 to NOK 57.50 during first quarter 2014.

The number of shares traded on the Oslo Stock Exchange in the period was 9 million compared to 11 million in the same period in 2013.

SUBSEQUENT EVENTS

New loan facility

Tomra entered on 29 April into a 120 MEUR Multicurrency Revolving Credit Facility with DNB and SEB as Mandated Lead Arrangers, each providing 50% of the facility amount.

The facility is split in two tranches of 60 MEUR each, with a tenor of 3+1+1 years and 5+1+1 years. The funds will be used to refinance existing debt and general corporate purposes.

Annual General Assembly

The annual general assembly took place 29 April at TOMRA's Headquarters in Asker, Norway. All agenda items were approved in accordance with the Board's recommendations, including a dividend of NOK 1.35 per share (up from NOK 1.25 last year).

Asker, 30 April 2014

The Board of Directors TOMRA SYSTEMS ASA

Svein Rennemo Stefan Ranstrand Chairman of the Board President & CEO

Condensed Consolidated interim financial statements

STATEMENT OF PROFIT AND LOSS		1st Quarter		Full year
(MNOK)	Note	2014	2013	2013
Operating revenues	(5)	1 064.8	965.9	4 602.1
Cost of goods sold		587.0	525.3	2 562.3
Depreciations/write-down		15.8	14.0	60.9
Gross contribution		462.0	426.6	1 978.9
Operating expenses		333.4	291.7	1 180.9
Depreciations/write-down		22.6	22.2	92.0
EBITA before other items	(5)	106.0	112.7	706.0
Amortizations		27.9	25.7	105.0
EBIT (Results from operating activities)	(5)	78.1	87.0	601.0
Net financial income		(8.8)	(9.2)	(39.9)
Profit before tax		69.3	77.8	561.1
Taxes		17.0	20.2	139.0
Profit from continuing operations		52.3	57.6	422.1
Discontinued operations		-	-	(9.7)
Net profit		52.3	57.6	412.4
Non-Controlling interest (Minority interest)		(4.1)	(5.6)	(35.7)
Earnings per share (EPS)		0.33	0.35	2.55

STATEMENT OF OTHER COMPREHENSIVE INCOME	1st Quarter		Full year
(MNOK)	2014	2013	2013
Net profit for the period	52.3	57.6	412.4
Other comprehensive income
Other comprehensive income that may be reclassified to profit or loss
Translation differences	(65.3)	69.0	300.3
Other comprehensive income that will not be reclassified to profit or loss
Remeasurements of defined benefit liability (assets)	0.0	0.0	(27.0)
Total comprehensive income	(13.0)	126.6	685.7
Attributable to:
Non-controlling interest	2.8	9.0	42.5
Shareholders of the parent company	(15.8)	117.6	643.2
Total comprehensive income	(13.0)	126.6	685.7

STATEMENTS OF FINANCIAL POSITION	31 March		31 Dec
(MNOK)	2014	2013	2013
ASSETS
Intangible non-current assets	2 485.1	2 333.9	2 486.8
Tangible non-current assets	585.8	566.2	607.9
Financial non-current assets	297.1	227.9	266.6
Inventory	936.0	884.6	873.5
Receivables	1 278.3	1 145.6	1 224.3
Cash and cash equivalents	79.0	153.3	164.1
TOTAL ASSETS	5 661.3	5 311.5	5 623.2
EQUITY & LIABILITIES
Equity	2 732.0	2 412.1	2 740.9
Non-controlling interest	85.4	81.3	82.6
Deferred taxes	113.5	114.3	97.4
Long-term interest bearing liabilities	989.0	1 542.7	1 004.4
Short-term interest bearing liabilities	504.5	18.2	552.1
Other liabilities	1 236.9	1 142.9	1 145.8
TOTAL EQUITY & LIABILITIES	5 661.3	5 311.5	5 623.2

Condensed Consolidated interim financial statements (continued)

STATEMENT OF CASHFLOWS		1st Quarter		Full year
(MNOK)	Note	2014	2013	2013
Profit before income tax		69.3	77.8	561.1
Changes in working capital		(42.0)	(81.8)	(136.3)
Other operating changes		(15.1)	15.4	142.2
Total cash flow from operations		12.2	11.4	567.0
Cashflow from purchase of subsidiaries		0.0	3.7	3.7
Cashflow from sales of subsidiaries/reclass Tomra Japan		(7.7)	0.0	0.0
Other cashflow from investments		(61.6)	(40.4)	(234.4)
Total cash flow from investments		(69.3)	(36.7)	(230.7)
Cashflow from sales/repurchase of treasury shares	(3)	7.0	10.2	0.6
Dividend paid out	(2)	0.0	0.0	(185.0)
Other cashflow from financing		(28.1)	(12.6)	(177.8)
Total cash flow from financing		(21.1)	(2.4)	(362.2)
Total cash flow for period		(78.2)	(27.7)	(25.9)
Exchange rate effect on cash		(6.9)	3.8	12.8
Opening cash balance		164.1	177.2	177.2
Closing cash balance		79.0	153.3	164.1

EQUITY (MNOK)	Paid in capital	Transl. reserve	Actuarial Gain / (Loss)	Retained earnings	Total majority equity	Minority interest	Total Equity
Balance per 31 December 2013	1 066.1	(24.8)	(27.0)	1 726.6	2 740.9	82.6	2 823.5
Net profit				48.2	48.2	4.1	52.3
Changes in translation difference		(64.0)			(64.0)	(1.3)	(65.3)
Remeasurement defined benefit liability			0.0		0.0		0.0
Dividend non-controlling interest							0.0
Purchase of treasury shares					0.0		0.0
Treasury shares sold to employees	0.1			6.8	6.9		6.9
Dividend to shareholders					0.0		0.0
Balance per 31 March 2014	1 066.2	(88.8)	(27.0)	1 781.6	2 732.0	85.4	2 817.4

EQUITY	1st Quarter		Full year
(MNOK)	2014	2013	2013
Opening balance	2 740.9	2 283.3	2 283.3
Net profit	48.2	52.0	376.7
Translation difference	(64.0)	65.6	293.5
Remeasurement defined benefit liability	0.0	1.0	(27.0)
Dividend paid	0.0	0.0	(184.9)
Net purchase of own shares	6.9	10.2	(0.7)
Closing balance	2 732.0	2 412.1	2 740.9

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 1 DISCLOSURE

This quarterly report has been prepared in accordance with IAS34, and in accordance with the principles used in the annual accounts for 2013. The quarterly reports do not however include all information required for a full annual financial statement of the Group and should be read in conjunction with the annual financial statement for 2013. The quarterly reports have not been audited. The quarterly reports require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. The significant judgments made by management in preparing these condensed consolidated interim financial statements in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ending 31 December 2013.

A number of new standards, amendments to standards and interpretations are not effective for the company for the period ending 31 March 2014, and have not been applied in preparing these consolidated financial statements:

IFRS 9 Financial Instruments and related amendments to IFRS 7 regarding transition IFRS 14 Regulatory Deferral Accounts

We do not expect any material effects in our financial statement of the new standards.

Revenue recognition: Revenues from sales and sales-type leases of the company's products are generally recognized at the time of installation. Revenues from service contracts and operating leases of the company's products are recognized over the duration of the related agreements. Other service revenues are recognized when services are provided.

Seasonality: The Material Recovery operations, and to some extent the US Reverse Vending operations, are influenced by seasonality. The seasonality mirrors the beverage consumption pattern in the US, which normally is higher during the summer (2Q and 3Q) than during the winter (1Q and 4Q). Also the food segment within Sorting Solutions is influenced by seasonality, with somewhat higher activity during the harvest season in the northern hemisphere.

Financial exposures: TOMRA is exposed to currency risk, as only ~3% of its income is nominated in NOK. A strengthening/ weakening of NOK toward other currencies of 10% would normally decrease/increase operating profit by 10-20%. An increase in NIBOR and EURIBOR of 1 percentage point, would increase financial expenses by ~NOK 14 million per year.

Segment reporting: TOMRA has divided its primary reporting format into two business segments: Collection Solutions and Sorting Solutions. In addition, the corporate overhead costs are reported in a separate column. The split is based upon the riskand return profile of the Group's different activities; also taking into consideration TOMRA's internal reporting structure.

• Collection Solutions consists of the former Collection Technology (development, production, sales and service of Reverse Vending Machines and related data management systems) + Material Recovery (pick-up, transportation and processing of empty beverage containers on behalf of beverage producers/fillers on the US East Coast and in Canada) + Compaction (small and mid-size compaction machines)
• Sorting Solutions consists of the business lines food, recycling and mining, all providing advanced optical sorting systems
• Group Functions consists of costs related to corporate functions at TOMRA's headquarters.

Assets and liabilities are distributed to the different business segments, except for cash, interest-bearing debt and tax-positions, which are allocated to Group Functions. There are no material segment revenues from transactions with other segments. There are no material related party transactions in 2014.

NOTE 2 DIVIDEND PAID

Paid out May 2012: 1.05 NOK x 147.9 million shares = NOK 155.3 million Paid out May 2013: 1.25 NOK x 147.9 million shares = NOK 184.9 million

NOTE 3 CHANGE IN ACCOUNTING PRINCIPLES – IFRS 11 Joint Arrangements

In accordance with IFRS 11, TOMRA has changed accounting principles for joint arrangements. Tomra Japan Ltd. has up until 2013 been proportionally consolidated in the Group accounts. From 2014, the equity method will be applied. When making the assessment, the structure of the arrangement, the legal form, the contractual terms of the arrangement and other relevant facts and circumstances have been taken into consideration.

Tomra Japan Ltd. was included in the balance sheet and income statement with the following amounts:

Amounts in NOK million	31.12.2012	31.12.2013
Intangible non-current assets	0.1	0.2
Tangible non-current assets	20.5	23.9
Financial non-current assets	0.1	0.1
Inventory	20.7	13.4
Receivables	4.3	6.3
Cash and cash equivalents	6.5	7.7
TOTAL ASSETS	52.2	51.5
Equity	0.3	1.8
Non-controlling interest	0.0	0.0
Deferred taxes	0.0	0.0
Long-term interest bearing liabilities	17.3	34.9
Short-term interest bearing liabilities	4.3	5.1
Other liabilities	30.3	9.7
TOTAL EQUITY & LIABILITIES	52.2	51.5

Amounts in NOK million	2013
OPERATING REVENUES	26.6
Cost of goods sold	13.4
Employee benefits expenses	3.9
Ordinary depreciation	4.6
Other operating expenses	2.3
TOTAL OPERATING EXPENSES	24.2
OPERATING PROFIT	2.4
Net financial items	0.8
PROFIT FOR THE PERIOD	1.6

TOMRA considers the impact of the transition to IFRS 11 Joint Arrangements to be immaterial, and has therefore not restated the 2013 figures.

NOTE 4 NET PURCHASE OF OWN SHARES

Net purchase of own shares	# shares	Average price		Total (MNOK)
Full year 2012
Gross purchased	200 000	NOK	54.00	10.8
Sold to employees	(181 368)	NOK	56.25	(10.2)
Net purchased	18 632			0.6
Full year 2014
Sold to employees	(123 104)	NOK	56.25	(6.9)
Net purchased	(123 104)	NOK	56.25	(6.9)

NOTE 5 OPERATING SEGMENTS

SEGMENT	Collection Solutions		Sorting Solutions		Group Functions		Group Total
(MNOK)	1Q14	1Q13	1Q14	1Q13	1Q14	1Q13	1Q14	1Q13
Revenues
- Nordic	130	127	2	4			132	131
- Central Europe & UK	296	240	110	106			406	346
- Rest of Europe	6	3	5 1	2 8			5 7	3 1
- North America	237	225	146	137			383	362
- Rest of World	7	3	8 0	9 3			8 7	9 6
Total revenues	676	598	389	368			1 065	966
Gross contribution	288	255	174	172			462	427
- in %	43 %	43 %	45 %	47 %			43 %	44 %
Operating expenses	178	163	171	145	7	6	356	314
EBITA	110	9 2	3	2 7	(7)	(6)	106	113
- in %	16 %	15 %	1 %	7 %			10 %	12 %
EBIT	101	8 4	-16	9	(7)	(6)	7 8	8 7
- in %	15 %	14 %	-4 %	2 %			7 %	9 %
Assets	2 357	2 201	3 070	2 828	234	283	5 661	5 312
Liabilities	726	616	486	470	1 632	1 732	2 844	2 818

NOTE 6 INTERIM RESULTS

INTERIM RESULTS
(MNOK)	1Q14	4Q13	3Q13	2Q13	1Q13
Operating revenues (MNOK)	1 065	1 228	1 231	1 177	966
EBITA (MNOK)	106	204	217	173	113
EBIT (MNOK)	7 8	178	189	147	8 7
Sales growth (year-on-year) (%)	10 %	3 %	12 %	24 %	16 %
Gross margin (%)	43 %	44 %	42 %	42 %	44 %
EBITA margin (%)	10 %	17 %	18 %	15 %	12 %
EPS (NOK)	0.33	0.77	0.82	0.61	0.35
EPS (NOK) fully diluted	0.33	0.77	0.82	0.61	0.35

About TOMRA

TOMRA was founded on an innovation in 1972 that began with design, manufacturing and sale of reverse vending machines (RVMs) for automated collection of used beverage containers.

Today TOMRA has ~150,000 installations in over 80 markets worldwide and had total revenues of ~4.6 billion NOK in 2013.

The Group employs ~2,500 globally, and is publicly listed on the Oslo Stock Exchange. (OSE: TOM).

The TOMRA Group continues to innovate and provide cutting-edge solutions for optimal resource productivity within two main business areas: Collection Solutions (reverse vending, material recovery and compaction) and Sorting Solutions (recycling, mining and food sorting).

For further information about TOMRA, please see www.tomra.com

North America South America	$-11,000$ $^{\sim}1,050$	North America Middle East/Africa	-4,200 $-500$			Uther	-25	Middle East/ Africa	$-515$
TOTAL	$-70,900$	TOTAL CONTRACTOR	$^{\sim}71,000$	TOTAL	$-3,470$	TOTAL	$-200$	CASSAS TOTAL	$-7,000$

The results announcement will be held April 30th, 16:30 CET and available on live webcast from TOMRA HQ, Drengsrudhagen 2, 1372 Asker. This and previous releases are available athttp://tomra.com/en/investor-relations/financial-information.

For further information contact:

Espen Gundersen, Deputy CEO / CFO, Tel: +47 97 68 73 01