TOMRA Systems — Investor Presentation 2016

Mar 17, 2016

DNB MARKETS SME CONFERENCE

Elisabet V. Sandnes VP Investor Relations / M&A 17 March 2016

THE WORLD POPULATION AND STANDARD OF LIVING IS INCREASING DRAMATICALLY

WORLD RESOURCES ARE UNDER UNPRECEDENTED PRESSURE

RESOURCE PRODUCTIVITY MUST INCREASE TO ENSURE SUSTAINABLE DEVELOPMENT

TOMRA WORLDWIDE

CREATING VALUE THROUGH TWO STRONG BUSINESS AREAS

TOMRA Collection Solutions

THE USED BEVERAGE CONTAINER RECYCLING VALUE CHAIN

Generic used beverage container (UBC) recycling value chain

RVM-based UBC recycling value chain

COMPETITIVE LANDSCAPE*

Number of RVS markets

Annual revenue from RVS sales

Source: TOMRA estimates and analysis * Estimates

A COMPLETE TRANSFORMATION OF THE PRODUCT PORTFOLIO IN PROGRESS

2012 Portfolio

2015/2016 Portfolio

RAPID ADAPTATION OF NEW PRODUCT PORTFOLIO

More than 50% of current sales are new products

GERMANY REPLACEMENT UPDATE

POTENTIAL NEW DEPOSIT MARKETS

COLLECTION SOLUTIONS – FINANCIAL DASHBOARD

TARGETS 2013 -2018

Yearly growth 4 – 8%

EBITA-margin 18% – 23%

TOMRA Sorting Solutions

HOW DOES SENSOR BASED SEPARATION WORK?

• High-tech sensors to identify objects
• High speed processing of information (material, shape, size, color, defect, damage and location of objects)
• Precise sorting by air jets or mechanical fingers
• Product specific equipment design often including multiple technologies to maximize sorting efficiency

STRONG REVENUE GROWTH SINCE INCEPTION IN 1996

Revenue development and key milestones MNOK

• Total revenue growth (organic plus inorganic) CAGR of ~32% per year from 2004- 2015
• Average annual organic growth for the same period was ~21%
• Technology base and segment/application knowledge expanded both through acquisitions and inhouse ventures

A COMMON SENSOR BASED TECHNOLOGY PORTFOLIO

Gamma radiation	10-12
	10-11 10-10
X-ray	10-9
	10-8
Ultraviolett (UV)	10-7
Visible light (VIS)	10-6
	10-5
Near Infrared (NIR)	10-4
Infrared (IR)	10-3
	10-2
Microwaves	10-1
	101
Radio waves	102
	103
Alternating current (AC)	104

[m]	Sensor/ Technology	Material Property	Segment
10-12 10-11	RM (Radiometric)	Natural Gamma Radiation	Mining
10-10 10-9	XRT (X-ray transmission) Low Energy X-ray	Atomic Density	Recycling, Mining, Food
10-8 10-7	XRF	X ray fluorescence (Elemental Spectroscopy)	Recycling, Mining
10-6 10-5	COLOR (CCD Color Camera)	Reflection, Absorption, Transmission	Recycling, Mining, Food
10-4 10-3 10-2	Laser attenuation and PM (Photometric)	Monochromatic Reflection / Absorption of Laser Light Scattering analysis of Laser Light	Mining, Food
10-1	NIR / MIR (Near/Medium Infrared Spectrometry)	Reflection, Absorption (Molecular Spectroscopy)	Recycling, Mining, Food
101 102 103	LIBS	Laser induced breakdown spectroscopy	Recycling, Mining
104	EM (Electro Magnetic sensor)	Conductivity, permeability	Recycling, Mining, Food

CROSS UTILIZING OUR PORTFOLIO TECHNOLOGIES

TITECH NIR + ODENBERG platform

Field Potato Sorter

• The NIR technology allows efficient removal of rocks, dirt and rotten potatoes before the potatoes are stored
• The solution opens up sorting of unwashed potatoes in a way that previously was not possible

BEST LASER + TOMRA mining platform

PRO Laser Duo

• The LASER technology allows detection of quartz of all colors. This opens for sorting of quartz itself, and gold bearing quartz mineralization
• The solution is unique in the market and further underlines our technological leadership

TITECH NIR + BEST LASER

Nimbus BSI

• An NIR sensor has been added to the NIMBUS machine platform
• The new machine increases our competitiveness in the nuts segment

Several more projects on combining technologies into new products in the pipeline

OUR BROAD COVERAGE AND TECHNOLOGY BASE IS SETTING US APART

	DRIED FRUIT	NUTS	FRESH CUT	FRUIT	VEGETABLES	MEAT	POTATOES	SEAFOOD
FOOD	• Apricots • Craisins • Figs • Prunes • Raisins	• Almonds • Cashews • Hazelnuts • Macadamias • Peanuts • Pecans • Pistachios • Seeds • Walnuts	• Baby leaves •Iceberg lettuce • Spinach • Spring mix	• Apples • Blackberries • Blueberries • Cherries • Citrus • Cranberries • Peaches & pears • Raspberries • Strawberries • Tomatoes	• Beans • Beet • Broccoli • Carrots • Corn • Cucumbers • IQF vegetables • Jalapenos/ Peppers • Onions • Peas • Pickles	• Bacon bits • Beef •IQF meat • Pork • Pork rind	• Washed • French fries • Unpeeled • Peeled • Potato chips • Specialty products • Sweet	• Mussels • Scallops • Shrimps
SENSOR TECHNOLOGY	LASER NIR VIS X-RAY	LASER CAMERA X-RAY	LASER CAMERA	LASER CAMERA NIR VIS	LASER CAMERA NIR VIS	LASER CAMERA NIR	LASER CAMERA NIR VIS	LASER CAMERA NIR VIS X-RAY

TOMRA HAS THE BROADEST FOOTPRINT WITHIN THE FOOD SORTING UNIVERSE

* TOMRA estimates

Circa 5% of annual global sorter sales revenue comes from other segments, like confectionary

FOOD COMPETITIVE LANDSCAPE

* Total Food sorting (also including rice and lane sorting): 12-15%

OUR CUSTOMERS

We are active in five continents and 80 markets

• 6 of the 10 largest, global food companies are our customers
• We have ~2,000 customers globally

TSS Food provides sorting solutions for:

• Growers: Harvester mounted tomato, onion and garlic sorters
• ~5% of our customers
• Packers: Sorting of many different types of fruit and vegetables by color, size, shape, defect, blemish, damage or foreign objects
• ~30% of our customers
• Processors: Sorting of processed potatoes (French fries, chips), fruits and vegetables
• ~65% of our customers

RECYCLING: APPLICATIONS AND SENSOR TECHNOLOGY

	HOUSEHOLD WASTE	PACKAGING	C & D	AUTOMOBILE SHREDDER	ELECTRONIC SCRAP
MATERIAL	• Hard plastics • Plastic film • Mixed paper • RDF • Metals • Organics/ Biomass	• Plastics • Plastic film • Cardboard • Mixed paper • Deinking paper • Metal	• Inert material • Plastic film • Metals • Wood • Paper & Cardboard • Plastics	• NF metal • Stainless steel • Copper cables • Copper • Brass • Aluminum • Meatball sorting	• Printed circuit boards • Non-ferrous metal concentrates • Cables • Copper • Brass • Stainless steel • Meatball sorting
SENSOR TECHNOLOGY	NIR VIS XRT	NIR VIS EM	NIR VIS XRT EM	NIR VIS XRT EM COLOR XRF	XRT EM NIR COLOR XRF

Mixed paper PE/PP flakes Cleaned wood Copper Wire Brass

RECYCLING COMPETITIVE LANDSCAPE

TOMRA competitive positioning

• Largest installed base
• Highest revenues
• Broadest technology platform
• Highest number of applications and markets served
• Leading brand
• Market share: 55-65%

Source: TOMRA estimates and analysis

MINING: APPLICATIONS AND SENSOR TECHNOLOGY

	INDUSTRIAL MINERALS	BASE & Fe METALS	FUEL/ ENERGY	PRECIOUS METALS	DIAMONDS & GEMS	METAL SLAG
	• Calcite	•Copper	• Coal	• Gold	• Diamonds	• Stainless steel
COMMODITY	• Quarts	• Zinc	• Uranium	• Platinum	• Tanzanite	• Copper
	• Feldspar	• Nickel			• Colored	• Chrome
	• Magnesite	• Tungsten			gemstones
	• Talcum	• Iron
	• Dolomite	• Manganese
	• Salt	• Chromite
		XRT	XRT
SENSOR TECHNOLOGY	COLOR XRT	COLOR	RM	XRT COLOR	COLOR XRT	XRT XRF
	NIR	EM		XRF	XRF	EM
	XRF	NIR		NIR	NIR
	Calcite	Copper	Coal	Gold	Diamonds	Ferro Silica Slag

MINING COMPETITIVE LANDSCAPE

TOMRA competitive positioning

• Wide geographical coverage
• Broadest technology platform
• Leading brand
• Pioneering in developing high volume sorter in corporation with Rio Tinto
• Market share: 40-50%

FINANCIAL DASHBOARD – SORTING SOLUTIONS

TARGETS 2013 -2018

Yearly organic growth 10-15%

Geographical expansion

EBITA-margin 18-23%

(i) In markets served. Total food sorting (incl. rice and lane sorting*) 12-15%

33

KEY FINANCIALS DEVELOPMENT

EBITA and margin Earnings per share

BACKLOG DEVELOPMENT AND MOMENTUM

• TSS delivered all time high revenues in 4Q15 (677 MNOK, up from 583 MNOK in 4Q14)
• The order intake in 4Q15 was 551 MNOK in the quarter (compared to 568 MNOK last year)
• As a consequence of the high number of orders delivered in 4Q15, the order backlog at the end of the quarter ended at 659 MNOK, up from 657 MNOK at the end of 4Q14, but down 8% currency adjusted
• Estimated backlog conversion ratio in 1Q16: 70%-75%*

* Based upon current production and delivery plans, the revenues in 1Q16 are estimated to be approximately 70-75% of order backlog at the end of 4Q15.

OUTLOOK

Collection Solutions

• The replacement demand in Germany is assumed to continue in 2016, but first quarter 2016 is expected to be slower than the last quarters in 2015, and more in line with first quarter 2015

Sorting Solutions • Due to a reduced backlog during fourth quarter 2015, first quarter 2016 revenue is expected to be lower than the last quarters in 2015, and more in line with first 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

FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE

Amounts in NOK million	31 Dec 2015	31 Dec 2014
ASSETS	7,317	6,625
• Intangible non-current assets	2,891	2,623
• Tangible non-current assets	837	683
• Financial non-current assets	316	307
• Inventory	1,209	913
• Receivables	1,751	1,537
• Cash and cash equivalents	313	436
• Assets held for sale	-	126
LIABILITIES AND EQUITY	7,317	6,625
• Equity	3,945	3,244
• Minority interest	160	115
• Interest bearing liabilities	1,206	1,649
• Non-interest bearing liabilities	2,006	1,593
• Liabilities held for sale	-	24

Ordinary cashflow from operations

• 343 MNOK (312 MNOK in 4Q 2014)

Solidity

• 54% equity
• NIBD/EBITDA = 0.7x (Rolling 12 months)
• Board propose dividend of NOK 1.75 (NOK 1.45 last year)

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

CURRENCY EXPOSURE

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

10% change in NOK towards other currencies will impact;

	Revenues	Expenses	EBITA
EUR*	4.5%	4.5%	4.5%
USD	3.0%	2.5%	5.0%
SEK	1.0%	1.0%	1.0%
OTHER	1.0%	1.0%	1.0%
ALL	9.5%	9.0%	11.5%

* EUR includes DKK

HEDGING POLICY

• TOMRA hedges B/S items that will have P/L impact on currency fluctuations
• TOMRA can hedge up to one year of future predicted cash flows. Gains and losses on these hedges are recorded in the finance line, not influencing EBITA

COLLECTION SOLUTIONS – SEGMENT FINANCIALS

Revenue development NOK million

Gross and EBITA margin development Percent

SORTING SOLUTIONS – SEGMENT FINANCIALS

Revenue development NOK million

Gross and EBITA margin development Percent

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