TOMRA Systems — Investor Presentation 2019

Jan 8, 2019

SEB NORDIC SEMINAR 2019

Espen Gundersen, CFO and Deputy CEO Copenhagen 08.01.2019

DID YOU KNOW?

• By 2025 solid waste generation will increase by 70% compared to 2010 levels
• 32% of all plastic packaging made ends up in nature every year
• 20% of plastic packaging could be profitably re-used and 50% could be profitably recycled if designed for after use systems
• Continuing current practices there will be more plastic than fish in the ocean by 2050

DID YOU KNOW?

• By 2050, a global population of 9.8 billion will require 70% more food than is consumed today

• We are currently wasting 33% of global food production

• The food industry is worth more than USD 5 trillion annually

• Agriculture accounts for 20% of global greenhouse gas emissions

Sources: Wrap, WEF, Accenture (Future of Food), McKinsey

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OUR BIGGEST GLOBAL CHALLENGES = OUR BUSINESS OPPORTUNITIES

Thematic Support: Future of Food & Circular Economy

The TOMRA Operations

Tangible actions to demonstrate our purpose of business

TOMRA's mission is to create sensor-based solutions for optimal resource productivity, making sustainability profitable – with increased relevance and meaning

TOMRA's Corporate Responsibility Program will support the vision of leading the resource revolution, through the impact of our people, products & services

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Publicly listed on Oslo Stock Exchange (OSEBX: TOM)

TOMRA COLLECTION SOLUTIONS

ELEMENTS OF A MODERN REVERSE VENDING SYSTEM

AN OVERVIEW OF CURRENT DEPOSIT MARKETS*

* In addition, some markets have refillable deposit systems such as: Austria, Belgium, Chile, Czech Republic, France, Hungary, Poland and South Korea

UNDISPUTED MARKET LEADER WITHIN REVERSE VENDING TECHNOLOGY

INCREASING PUBLIC PRESSURE TO REDUCE WASTE AND LITTERING

CLOSING THE PLASTIC PACKAGING LOOP REPRESENTS VAST POTENTIAL

DESIGNING A DEPOSIT SCHEME – LENGTHY PROCESS FROM IDEA TO LAW

CONTAINER DEPOSIT SCHEME – REAFFIRMED AS A PROVEN SOLUTION

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UPDATE ON EU SINGLE-USE PLASTICS DIRECTIVE - REINFORCING EU'S LEADERSHIP ROLE ON ENVIRONMENT

Collaboration across plastics value chain

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

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

A COMMON SENSOR-BASED TECHNOLOGY PORTFOLIO

	RECYCLING	MINING	FOOD
ELECTROMAGNETIC SENSOR (EM) Electro-magnetic properties like conductivity and permeability	X	X	X
LED SPECTOMETRY (LED) Color and spectral properties based on multiple LED light sources in very high optical resolution	X	X	X
NEAR-INFRARED SPECTROSCOPY (NIR) Specific and unique spectral properties of reflected light in the near-infrared spectrum	X	X	X
VISIBLE LIGHT SPECTROMETRY (VIS) Specific and unique spectral propertiesof reflected light in the visible spectrum	X	X	X
X-RAY TRANSMISSION (XRT) Atomic density irrespective of surface properties and thickness	X	X	X
LASER INDUCED BREAKDOWN SPECTROSCOPY (LIBS) Elemental composition	X
X-RAY FLUORESCENCE (XRF) Elemental composition	X	X
INFRARED TRANSMISSION (IRT) Density and shape properties by light absorption			X
IR CAMERA (IR) Heat conductivity and heat dissipation			X
COLOR CAMERA (COLOR) Color properties measured in very high optical resolution	X	X	X
LASER REFLECTION/FLUORESCENCE (LASER) Structural, elemental and biological properties by reflection, absorption and fluorescence of laser light	X	X	X

THE BENEFITS OF BEING TOMRA SORTING

+100 more known competitors

Our position: A solid platform for further growth

FOOD FOR THOUGHT

• By 2050 we will be close to 10bn people
• We will need more food in the next 40 years than all the harvests in history combined
• But farmland is constant – at best
• The food you eat will have travelled more than you have

FOOD: APPLICATIONS AND SENSOR TECHNOLOGY

Chips, French fries, peeled, specialty products, sweet potatoes, unpeeled, washed

LASER, CAMERA, BSI, PULSED LED

Apples, blackberries, blueberries, cherries, cranberries, peaches & pears, raspberries, strawberries, tomatoes

LASER, CAMERA, BSI, PULSED LED

Beans, beets, broccoli, carrots, corn, cucumbers, industrial spinach, IQF vegetables, jalapenos/peppers, onions, peas, pickles

LASER, CAMERA, BSI, PULSED LED

FRUIT FRESH CUT SEAFOOD MEAT

Baby leaves, iceberg lettuce, spinach, spring mix

LASER, CAMERA

Almonds, cashews, hazelnuts, macadamias, peanuts, pecans, pistachios, walnuts

LASER, CAMERA, X-RAY

Mussels, scallops, seaweed, shrimps, tuna, pet food

LASER, CAMERA, BSI, X-RAY,

INTERACTANCE SPECTROSCOPY

POTATOES VEGETABLES NUTS DRIED FRUIT

Apricots, cranberries, dates, figs, prunes, raisins

LASER, CAMERA, BSI, X-RAY

SEEDS & GRAINS

Barley, coffee, corn, dry beans, lentils, oat, pulses, pumpkin, sunflower and watermelon seeds, wheat

LASER, CAMERA, BSI, X-RAY

GUMMIES

LASER, CAMERA

TOBACCO

LASER, CAMERA

Bacon bits, beef, chicken

breasts, hot dogs, IQF meat, pork, pork rind, sausages, pet food

LASER, CAMERA, BSI, INTERACTANCE SPECTROSCOPY

TOMRA HAS ESTABLISHED THE BROADEST FOOTPRINT WITHIN FOOD SORTING

²² *Approximately 5% of annual global sorter sales revenue comes from other segments, like confectionary

FOOD VALUE CHAIN IS GETTING MORE COMPLEX AND DRIVES THE FOOD MARKET TOWARDS NEW SOLUTIONS

RESOURCES ARE FINITE

• Today: we are paying to get rid of our waste through landfill fees and incineration
• We are wasting perfectly good materials that can be reused
• Tomorrow: The Circular Economy is a driver for change
• Creating value out of waste
• That is what the Circular Economy is all about

AUTOMATION IN RECYCLING WITH TOMRA SORTING UNITS

FROM A LEGISLATIVE PUSH TO A MARKET PULL…

Large companies committing to use recycled raw materials = increased demand for recycled offtake

INDUSTRIALIZING THE PROCESS FOR RECYCLED PLASTIC

GOALS

• Create a demand for the plastic through a process
• Output to be of high quality in order to replace virgin material
• Extract plastics from all waste streams (incl. landfill and incineration) to satisfy demand
• Feasibility proven, working with multiple partners on commercialization

INTELLIGENT MINE

• Mining is an old industry. But chances are that it will it look very different in 10 years time
• Energy intensity and water stress are major drivers…
• …for disruptive technology forces to reshape the industry
• Commodity prices and capex impact the investment sentiment

THE CONCEPT OF SENSOR-BASED SORTING IN MINING

Mining process: Industrial minerals

• 15% to 50% of the ROM can be rejected in an early stage of the process (application dependent)
• These low grade waste rocks don't need to be transported, crushed, grinded or further treated

Mining process: Metal mining

Current segment Potential new segment

MINING: APPLICATIONS AND SENSOR TECHNOLOGY

INDUSTRIAL MINERALS DIAMONDS FERROUS METALS

Calcite, quartz, feldspar, magnesite, talc, dolomite, limestone, rock salt, phosphates, potash

COLOR, XRT, NIR

Diamonds, emeralds, rubies, sapphires, tanzanite

COLOR, XRT, NIR

Iron, manganese, chromite

XRT, EM, NIR

NON-FERROUS METALS FUEL SLAG

Copper, zinc, gold, nickel, tungsten, silver, platinum group metals

XRT, COLOR, EM, NIR

Coal, oil shale

XRT

Stainless steel slag, carbon steel slag, ferro silica slag, ferro chrome slag, non- ferrous slag

XRT, EM

HISTORICAL GROUP FINANCIALS AND TARGETS

GROUP FINANCIALS DEVELOPMENT – SOLID TRACK RECORD

EBITA and margin Earnings per share

EPS from continued operations, excluding other items

GROUP FINANCIAL TARGETS 2018-2023 – OUR AMBITIONS AFFIRMED

INITIATIVES ON NEW CONTAINER DEPOSIT MARKETS

Western Australia	Scotland	England
• Beverage containers accounts for 35% of all litter in WA • Deposit value: 0.1 AUD (150mL – 3L) • Utilize curbside recycling and other existing waste services • Draft position statement for collection infrastructure published in January 2019	• September 2017, First Minister Nicola Sturgeon announced a deposit return scheme for drink containers • Aims to increase recycling rates from current levels of 50% • Consultation round ended 25th of September 2018	• March 2018, UK Environment Secretary Michael Gove announced plans for a deposit return scheme • December 2019, UK Waste and Resource Strategy was published • Consultation expected to start early 2019
Estimated Startup: Early 2020	Estimated Startup: 1/7/2020	Estimated Startup: 2023

COLLECTION SOLUTIONS: GERMANY REPLACEMENT UPDATE

DEVELOPMENT IN ORDER INTAKE AND ORDER BACKLOG

REVENUES

ORDER INTAKE ORDER BACKLOG

• TOMRA Sorting Solutions (TSS):
• Revenues of 1,112 MNOK, up from 831 MNOK last year
• Order intake of 1,105 MNOK in the quarter, compared to 964 MNOK last year
• Despite all time high revenues in the quarter, a strong order intake led to healthy order backlog of 1,579 MNOK by the end of third quarter
• Estimated backlog conversion ratio in 4Q18: 80%*

OUR FOOD SORTING CUSTOMERS

HIGHLIGHTS FROM THE QUARTER

• Revenues of 2,247 MNOK (1,855 MNOK in third quarter 2017) – up 21% Adjusted for currency and acquisitions, revenues were:
- Up 14% for TOMRA Group
- Up 9% in TOMRA Collection Solutions
- Up 20% in TOMRA Sorting Solutions
• Gross margin 44%, up from 43% in third quarter 2017
- Stable margins in TOMRA Collection Solutions
- Improved margins in TOMRA Sorting Solutions
• Operating expenses of 587 MNOK (496 MNOK in third quarter 2017)
- Higher activity
- BBC and New South Wales
• EBITA of 408 MNOK – up 35% from third quarter 2017
• Cash flow from operations of 433 MNOK (375 MNOK in third quarter 2017)
• Higher activity in North America, offset by somewhat lower activity in Europe
• Ramp-up in New South Wales completed
• Order intake of 1,105 MNOK, up from 964 MNOK same period last year (up 6% organic)
• Order backlog of 1,579 MNOK, up from 1,226 MNOK at the end of third quarter 2017

CURRENCY

Revenues and expenses per currency: NOTE: Rounded figures

	EUR*	USD	NOK	NZD	OTHER	TOTAL
Revenues	45 %	45 %	0 %	0 %	10 %	100 %
Expenses	40 %	30 %	5 %	5 %	20 %	100 %
EBITA	50 %	100 %	- 20 %	- 20 %	-10 %	100 %

* EUR includes DKK

FINANCIAL HIGHLIGHTS P&L STATEMENT

	rd 3 Quarter		YTD 9 months
Amounts in NOK million	2018	2017	17 Adj*	2018	2017	17 Adj*
Revenues	2,247	1,855	1,896	6,129	5,391	5,404
• Collection Solutions	1,135	1,024	1,044	3,124	2,876	2,897
• Sorting Solutions	1,112	831	852	3,005	2,515	2,507
Gross contribution	995	799	819	2,633	2,266	2,258
in %	44%	43%	43%	43%	42%	42%
Operating expenses	587	496	502	1,776	1,499	1,520
EBITA	408	303	317	857	767	738
in %	18%	16%	17%	14%	14%	14%

FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE

Amounts in NOK million	30 Sept 2018	30 Sept 2017	31 Dec 2017
ASSETS	9,117	8,214	8,437
• Intangible non-current assets	3,653	3,314	3,412
• Tangible non-current assets	1,129	848	998
• Financial non-current assets	327	307	349
• Inventory	1,400	1,204	1,197
• Receivables	2,322	2,067	1,887
• Cash and cash equivalents	286	474	594
LIABILITIES AND EQUITY	9,117	8,214	8,437
• Equity	4,577	4,326	4,594
• Minority interest	156	174	143
• Interest bearing liabilities	1,487	1,214	1,280
• Non-interest bearing liabilities	2,897	2,500	2,420

Ordinary cashflow from operations

• 433 MNOK (375 MNOK in third quarter 2017)

Solidity

• 50% equity
• NIBD/EBITDA = 0.8x (Rolling 12 months)

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

SHAREHOLDER STRUCTURE

	Top 10 shareholders as of 03 January 2019				Shareholders by country
1	Investment AB Latour	39,000,000	26.3 %
2	Folketrygdfondet	11,685,490	7.9 %		6%
3	The Bank of New York, Stichting Depositary	7,845,000	5.3 %	(NOM)	6%
4	State Street Bank and Trust Comp	4,533,615	3.1 %	(NOM)	7%
5	CLEARSTREAM BANKING S.A.	3,731,437	2.5 %	(NOM)
6	Goldman Sachs & Co. LLC	3,570,804	2.4 %	(NOM)	12%
7	NORDEA NORDIC SMALL CAP FUND	2,064,233	1.4 %
8	DANSKE INVEST NORSKE INSTIT. II.	1,848,242	1.2 %		14%
9	Lannebo Småbolag	1,843,304	1.2 %		23%
10	JPMorgan Chase Bank, N.A., London	1,659,690	1.1 %	(NOM)
	Sum Top 10	77,781,815	52.5%		Sweden Norway USA
	Other shareholders	70,238,263	47.5%		Others
	TOTAL (7,975 shareholders)	148 020 078	100.0%

Copyright

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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