TOMRA Systems — Interim / Quarterly Report 2016

Oct 21, 2016

3 RD QUARTER 2016 RESULTS ANNOUNCEMENT

TOMRA SYSTEMS ASA 3 rd Quarter Results 21.10.2016

HIGHLIGHTS FROM THE QUARTER

Revenues	• Revenues of 1,715 MNOK (1,748 MNOK in third quarter 2015) Currency adjusted revenues were: - Down 4% for TOMRA Group - Down 5% in TOMRA Collection Solutions - Down 2% in TOMRA Sorting Solutions
Gross margin	• Gross margin 43%, up from 41% in third quarter 2015 (currency adjusted) - Improved margin in TOMRA Collection Solutions - Stable margin in TOMRA Sorting Solutions
Operating expenses	• Operating expenses of 408 MNOK (393 MNOK in third quarter 2015) - Up 2% adjusted for currency
EBITA	• EBITA of 331 MNOK (324 MNOK in third quarter 2015)
Cashflow	• Cash flow from operations of 348 MNOK (384 MNOK in third quarter 2015)
TOMRA Collection	• Good momentum in Germany, due to replacement demand • Still high activity in the Nordic market, due to replacement in Sweden
TOMRA Sorting Solutions	• Order intake of 613 MNOK, up from 572 MNOK same period last year, currency adjusted up 5% • Order backlog of 793 MNOK, down from 816 MNOK at the end of second quarter 2016
Subsequent event	• TOMRA to acquire New Zealand Sorting Machine Manufacturer Compac

CURRENCY

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	2016	2015	15 Adj*	2016	2015	15 Adj*
Revenues	1,715	1,748	1,779	4,844	4,327	4,575
• Collection Solutions	1,079	1,110	1,129	3,037	2,664	2,811
• Sorting Solutions	636	638	650	1,807	1,663	1,764
Gross contribution	739	717	731	2,071	1,812	1,920
in %	43%	41%	41%	43%	42%	42%
Operating expenses	408	393	400	1,268	1,144	1,212
EBITA	331	324	331	803	668	708
in %	19%	19%	19%	17%	15%	15%
One time costs included in operating expenses	6	-	-	6	-	-

*2015 actual restated at 2016 exchange rates, estimated

FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE

Amounts in NOK million	30 Sept 2016	30 Sept 2015	31 Dec 2015
ASSETS	7,206	7,318	7,317
• Intangible non-current assets	2,745	2,816	2,891
• Tangible non-current assets	755	721	837
• Financial non-current assets	322	309	316
• Inventory	1,235	1,158	1,209
• Receivables	1,815	1,918	1,751
• Cash and cash equivalents	334	396	313
LIABILITIES AND EQUITY	7,206	7,318	7,317
• Equity	3,925	3,648	3,945
• Minority interest	173	136	160
• Interest bearing liabilities	980	1,439	1,206
• Non-interest bearing liabilities	2,128	2,095	2,006

Ordinary cashflow from operations

• 348 MNOK (384 MNOK in 3Q 2015)

Solidity

• 54% equity
• NIBD/EBITDA = 0.5 (Rolling 12 months)

TOMRA COLLECTION SOLUTIONS

HIGHLIGHTS COLLECTION SOLUTIONS

COLLECTION SOLUTIONS FINANCIALS

	3rd Quarter			YTD
Amounts in NOK million	2016	2015	15 Adj*	2016	2015	15 Adj*
Revenues	1,079	1,110	1,129	3,037	2,664	2,811
• Nordic	164	128		508	374
• Europe (ex Nordic)	493	563		1,355	1,193
• North America	408	385		1,120	1,040
• Rest of the world	14	34		54	57
Gross contribution	455	431	440	1,262	1,069	1,132
in %	42%	39%	39%	42%	40%	40%
Operating expenses	194	184	187	617	550	582
EBITA	261	247	253	645	519	550
in %	24%	22%	22%	21%	19%	20%

*2015 actual restated at 2016 exchange rates, estimated

GERMANY REPLACEMENT UPDATE

TOMRA SORTING SOLUTIONS

HIGHLIGHTS SORTING SOLUTIONS

Product launch

• The newest member of the TOMRA product family, TOMRA 5B was released 10th of October

THE NEW TOMRA 5B: NEXT GENERATION FOOD SORTING MACHINE

TOMRA 5B

• The TOMRA 5B optical belt sorting machine was built on the legacy of the TOMRA Genius sorter which holds a leadership position in the vegetable, potato and fruit processing industries worldwide
• User-friendly design, excellent performance, and state-of-theart hygiene features that comply with the latest standards and regulations

BUSINESS STREAM UPDATE

FOOD

• Overall good momentum
• Revenues in 3Q16 in line with 3Q15
• Order intake up quarter over quarter

RECYCLING

• Continuing low commodity prices have a somewhat negative effect on performance
• Revenues in 3Q16 in line with 3Q15,
• Order intake stable quarter over quarter

MINING

• Depressed market in all commodities, except for diamonds
• Revenues and order intake stable at a low level

SORTING SOLUTIONS FINANCIALS

	3rd Quarter			YTD
Amounts in NOK million	2016	2015	15 Adj*	2016	2015	15 Adj*
Revenues	636	638	650	1,807	1,663	1,764
• Europe	302	296		810	784
• North America	207	176		611	506
• South America	16	35		33	57
• Asia	89	94		246	234
• Oceania	12	11		67	39
• Africa	10	26		40	43
Gross contribution	284	286	291	809	743	788
in %	45%	45%	45%	45%	45%	45%
Operating expenses	198	199	203	615	568	604
EBITA	86	87	88	194	175	184
in %	14%	14%	14%	11%	11%	10%

*2015 actual restated at 2016 exchange rates, estimated

BACKLOG DEVELOPMENT AND MOMENTUM

• Order intake of 613 MNOK in the quarter (up from 572 MNOK same quarter last year)
• Revenues were 636 MNOK (compared to 638 MNOK in 3Q16
• Order backlog of 793 MNOK, down from 816 MNOK at the end of second quarter 2016
• Estimated backlog conversion ratio in 4Q16: 85-90%*

* Based upon current production and delivery plans, the revenues in 4Q16 are estimated to be approximately 85-90% of order backlog at the end of 3Q16

The way forward together

• Compac CEO Mike Riley and TOMRA CEO Stefan Ranstrand at the PMA Fresh summit convention in Orlando Florida 14th of October (2 days after announcement)
• Positive initial feedback from the client universe and our combined workforce

TOMRA: THE BROADEST FOOTPRINT IN FOOD SORTING

BULK SORTING

SINGULATED SORTING

OUTLOOK AND SHAREHOLDER STRUCTURE

OUTLOOK

Collection Solutions

• The replacement demand in Germany is assumed to continue into 2017, but the replacement in Sweden is expected to come to an end during fourth quarter 2016

Sorting Solutions • Currently good momentum in Food, but low commodity prices are negatively influencing Recycling and Mining

Currency

• Reporting in NOK and with some NOK cost base, TOMRA will in general benefit from a weak NOK, measured particularly against EUR

Q&A

TOMRA SHAREHOLDER STRUCTURE

	th Top 10 shareholders as of 30 of September 2016	Shareholders by country
1	Investment AB Latour	38 130 000	25.8%
2	Skandinaviska Enskilda A/C Clients account	10 344 242	7.0% (NOM)	3% 4% 6%
3	Folketrygdfondet	9 529 819	6.4%	5%
4	The Bank of New York BNYM, Stitching Dep	4 860 701	3.3% (NOM)	36% 7%
5	Goldman Sachs & Co	2 985 697	2.0% (NOM)	11%
6	The Bank of New York BNYM	2 917 659	2.0% (NOM)
7	Clearstream Banking	2 619 713	1.8% (NOM)	29%
8	Nordea Nordic Small	2 349 276	1.6%
9	Odin Norge	2 280 188	1.5%	Sweden Norway USA
10	Danske invest Norske C/O Danske Capital A	2 108 830	1.4%	Great Britain Luxembourg Nederland Finland Others
	Sum Top 10	78 126 125	52.8%
	Other shareholders	69 893 953	47.2%
	TOTAL (5,683 shareholders)	148 020 078	100.0%

Sweden	Norway	USA
Great Britain	Luxembourg	Nederland
Finland	Others

Source: VPS

DISCLAIMER

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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