TOMRA Systems — Interim / Quarterly Report 2015

Oct 21, 2015

3 RD QUARTER 2015 RESULTS ANNOUNCEMENT

TOMRA SYSTEMS ASA 3rd Quarter Results 21.10.2015

HIGHLIGHTS FROM THE QUARTER INCLUDE

Revenues	• All time high revenues of 1,748 MNOK (1,188 MNOK in third quarter 2014) Currency adjusted revenues were: - Up 30% for TOMRA Group - Up 40% in TOMRA Collection - Up 16% in TOMRA Sorting
Gross margin	• Gross margin 41%, down from 42% in third quarter 2014 (currency adjusted) - Lower margin in TOMRA Collection - Improved margin in TOMRA Sorting
Operating expenses	• Operating expenses of 393 MNOK (302 MNOK in third quarter 2014) - Up 15% adjusted for currency
EBITA	• All time high EBITA of 324 MNOK (206 MNOK in third quarter 2014)
Cashflow	• All time high Cashflow from operations of 384 MNOK (236 MNOK in third quarter 2014)
TOMRA Collection	• Good momentum in Germany and Sweden due to replacement demand • Contract signed with Lithuanian deposit administrator
TOMRA Sorting	• Order intake of 572 MNOK, compared to 550 MNOK same period last year • Order backlog of 785 MNOK, down from 851 MNOK at the end of second quarter 2015

CURRENCY

stronger USD and EUR, partly offset by negative CNY effect

Revenues and expenses per currency; NOTE: Rounded figures

	EUR*	USD	NOK	SEK	OTHER	TOTAL
Revenues	45 %	30 %	5 %	10 %	10 %	100 %
Expenses	45 %	25 %	10 %	10 %	10 %	100 %
EBITA	45%	50 %	- 15 %	10 %	10 %	100 %
* EUR includes DKK Mainly CNY

FINANCIAL HIGHLIGHTS P&L STATEMENT

	3rd Quarter			YTD
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	1,748	1,188	1,346	4,327	3,349	3,737
• Collection Solutions	1,110	695	795	2,664	2,006	2,255
• Sorting Solutions	638	493	551	1,663	1,343	1,482
Gross contribution	717	508	566	1,812	1,440	1,590
in %	41%	43%	42%	42%	43%	43%
Operating expenses	393	302	341	1,144	969	1,070
EBITA	324	206	225	668	471	520
in %	19%	17%	16%	15%	14%	14%
One time costs in op.exp.	-	-	-	-	25	25

FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE

Amounts in NOK million	30 Sept 2015	30 Sept 2014	31 Dec 2014
ASSETS	7,318	5,963	6,625
• Intangible non-current assets	2,816	2,479	2,623
• Tangible non-current assets	721	616	683
• Financial non-current assets	309	285	307
• Inventory	1,158	923	913
• Receivables	1,918	1,488	1,537
• Cash and cash equivalents	396	172	436
• Assets held for sale	-	-	126
LIABILITIES AND EQUITY	7,318	5,963	6,625
• Equity	3,648	2,790	3,244
• Minority interest	136	91	115
• Interest bearing liabilities	1,439	1,565	1,649
• Non-interest bearing liabilities	2,095	1,517	1,593
• Liabilities held for sale		-	24

Ordinary cashflow from operations

• 384 MNOK (236 MNOK in 3Q 2014)

Solidity

• 50% equity
• NIBD/EBITDA = 1.0 (Rolling 12 months)

TOMRA Collection Solutions

HIGHLIGHTS COLLECTION SOLUTIONS

	• Exceptionally strong quarter with revenues of 1,110 MNOK, up from 695 MNOK in third quarter 2014
	- Revenues up 40% in local currencies
	• Gross margin was 39% in the period
Overall	- Down from 42% last year, due to currency and product mix
	• Operating expenses of 184 MNOK
	- Up from 12% currency adjusted, mainly due higher activity and bonus accruals
	• EBITA increased from 147 MNOK to 247 MNOK
	• Currency adjusted revenues up 60% in Europe
	- Good momentum in Germany, due to replacement demand
Europe	- Nordic market developing positively due to replacement in Sweden
	- Contract signed with Lithuanian deposit operator
North America	• Stable performance in US

COLLECTION SOLUTIONS FINANCIALS

	3rd Quarter
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	1,110	695	795	2,664	2,006	2,255
• Nordic	128	84		374	292
• Europe (ex Nordic)	563	316		1,193	894
• US East/Canada	385	285		1,040	796
• Rest of the world	34	10		57	24
Gross contribution	431	291	325	1,069	847	936
in %	39%	42%	41%	40%	42%	42%
Operating expenses	184	144	164	550	458	513
EBITA	247	147	161	519	389	423
in %	22%	21%	20%	19%	19%	19%

*2014 actual restated at 2015 exchange rates, estimated ** Adjusted for one-time costs

LITHUANIAN CONTRACT

TOMRA enters into agreement with Lithuanian Deposit System Administrator

• TOMRA has signed an agreement with the Lithuanian Deposit System Administrator USAD
• The agreement includes placement of up to approximately 1,000 reverse vending machines in the Lithuanian market by 2016
• The machines placed will be a mix between the large capacity machine T-9, medium capacity machine T-63 and the small capacity machine UNO
• The machines will be owned by TOMRA and rented out on a volume-based lease
• Start-up of the Lithuanian deposit system: 1st of February 2016
• The new deposit system will include glass, PET and metal packaging (cans)
• The first installation (pictured) is a pre-fabricated "kiosk" placed outside of a retail location

GERMANY REPLACEMENT UPDATE

TOMRA Sorting Solutions

HIGHLIGHTS SORTING SOLUTIONS

BUSINESS STREAM UPDATE

FOOD

• Revenues in 3Q15 significantly up from 3Q14
• Order intake slightly down quarter over quarter, leading to a somewhat lower order backlog at the end of 3Q15

RECYCLING

• Revenues in 3Q15 significantly up from 3Q14
• Order intake good, despite challenging markets
• Momentum in Metal recycling segment remains low

MINING

• Revenues in 3Q15 slightly up from 3Q14
• Low order intake in challenging market

SORTING SOLUTIONS FINANCIALS

	3rd Quarter				YTD
Amounts in NOK million	2015	2014	14 Adj*	2015	2014	14 Adj*
Revenues	638	493	551	1,663	1,343	1,482
• Europe	296	195		784	570
• North America	176	161		506	470
• South America	35	49		57	58
• Asia	94	46		234	153
• Oceania	11	23		39	49
• Africa	26	19		43	43
Gross contribution	286	217	241	743	593	654
in %	45%	44%	44%	45%	44%	44%
Operating expenses	199	151	170	568	490	536
EBITA	87	66	71	175	103	118
in %	14%	13%	13%	11%	8%	8%
One time costs in op.exp.	-	-	-	-	25	25

BACKLOG DEVELOPMENT AND MOMENTUM

• The order intake in 3Q15 was, as expected, somewhat down compared to the last four quarters, currency adjusted
• However, supported by a strong USD and EUR, the order intake measured in NOK was up from 550 MNOK in 3Q14 to 572 MNOK in 3Q15
• With all time high revenues in TSS (638 MNOK in 3Q15), and somewhat lower order intake, the order backlog at the end of the quarter ended at 785 MNOK, down from 851 MNOK at the end of 2Q15.
• Estimated backlog conversion ratio in 4Q15: 80%-85%*

* Based upon current production and delivery plans, the revenues in 4Q15 are estimated to be approximately 80-85% of order backlog at the end of 3Q15.

Outlook and shareholder structure

Collection Solutions:

• The replacement demand in Germany is assumed to continue and the outlook for fourth quarter is consequently good, although revenues and EBITA will both be significantly below the exceptionally strong third quarter 2015

Sorting Solutions:

• Due to a high backlog at the end of third quarter 2015, fourth quarter revenue is expected to be good
• Orders taken to P/L in fourth quarter are assumed to be higher than orders received during the same quarter, leading to a reduction in the order backlog by the end of fourth quarter 2015

Currency:

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

TOMRA SHAREHOLDER STRUCTURE

	Top 10 shareholders as of 5th of October 2015	Shareholders by country
1	Investment AB Latour	36 560 000	24.7%
2	Folketrygdfondet	15 804 282	10.7%
3	Skandinaviska Enskilda (Client Account)	6 159 306	4.2% (NOM)
4	Clearstream Banking	3 174 003	2.1% (NOM)
5	Nordea Nordic Small	2 995 407	2.0%
6	ODIN Norge	2 931 688	2.0%
7	J.P. Morgan Chase (Nordea Treaty Account)	2 649 212	1.8% (NOM)
8	The Bank of New York BNY Mellon	2 609 897	1.8% (NOM)
9	Skandinaviska Enskilda (SEB AIF Swedish)	1 932 695	1.3% (NOM)
8	Verdipapirfondet DNB	1 863 135	1.3%
	Sum Top 10	76 679 625	51.8%
	Other shareholders	71 340 453	48.2%
	TOTAL (5,671 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