TOMRA Systems

Investor Presentation • Oct 22, 2024

3 rd quarter 2024 results announcement

TOMRA Systems ASA 22 October 2024 © TOMRA

Quarterly highlights

Financial highlights

Revenues	• Total revenue of 326 MEUR (308 MEUR in3Q 2023). Compared to 3Q 2023 revenues were: ‐ Up 6% for TOMRA Group ‐ Up 14% in Collection ‐ Down 18% in Recycling ‐ Up 12% in Food
Gross margin	• Gross margin at 43% (43% in 3Q 2023) ‐ Improvement in Collection and Food, lower in Recycling on lower volumes
Operating expenses	• Operating expenses of 97 MEUR adjusted for special items (96 MEUR in 3Q 2023) ‐ Lower OPEX level compared to the last three quarters
EBITA, adj.	• EBITA, adjusted for special items of 44 MEUR (38 MEUR in 3Q 2023)
Special items	• One-off costs of 0.5 MEUR relating to Food restructuring (11 MEUR in 3Q 2023)
Cash flow	• Cash flow from operations of 99 MEUR (-25 MEUR in 3Q 2023)
Order intake and backlog	• Recycling order intake of 61 MEUR (58 MEUR in 3Q 2023) and order backlog of 134 MEUR (108 MEUR in 3Q 2023)
	• Food order intake of 73 MEUR (61 MEUR in 3Q 2023) and order backlog of 114 MEUR (87 MEUR in 3Q 2023)
Other	• TOMRA's science-based targets have been validated by SBTi

Collection Business update

• Strong quarter with continued growth and good margins.
• Existing markets: Good throughput volumes in North America, launch of R2 in September and good sales of Rollpac.
• New markets: High activity continued in Austria, continued installations in Romania, Hungary nearing completion of initial rollout.
• TOMRA appointed sole provider for upcoming DRS in Tasmania, making Australia the world's first complete DRS continent. Launch of TOMRA's RVM solutions in Victoria successfully completed.

Austria – 1 January 2025 Introduction of deposit on single-use beverage containers (link).

Continued revenue growth up 14% compared with 3Q 2023

Poland – 1 January 2025

A DRS law was published by the Government of Poland on 12 September 2023 (link). Preparations are under way with licensing of system operators.

Tasmania – mid 2025

TOMRA appointed sole reverse vending solutions provider for upcoming deposit return scheme (link).

Singapore – 1 April 2026

In March 2023, the parliament passed legislation for a deposit return scheme. The scheme operator has been licensed with launch date 1 April 2026. (link).

Uruguay – December 2024

A deposit return scheme is in process of implementation. Originally planned to commence by the end of 2024 (link), an updated start date is expected (link).

Recycling Business update

• Revenues in line with expected lower backlog conversion ratio, driven by a higher share of large projects with longer lead times.
• All-time high order backlog, with significant deliveries planned for 4Q 2024.
• Softer market sentiment continues in European plastics recycling. Good activity in waste sorting and new applications including alloy sorting with TOMRA's Autosort PULSE and wood sorting.

Strong order backlog up 25% compared with 3Q 2023

Price development (illustrative) of virgin PET and recycled PET (rPET)

PET = virgin-derived polyethylene terephthalate rPET= recycled polyethylene terephthalate (comparable to virgin PET)

Food Business update

• 12% revenue growth compared to 3Q 2023 with higher sales in both Europe and South America.
• Market sentiment varies by region and category. The strong cycle in potatoes continues.
• Cost reduction and restructuring program is progressing well. Focus on closer proximity to customers in local markets is showing early signs of success.

Good progress on cost savings gross margin recovery

Gross margin, %

36

38

40

42

44

3Q20	3Q21	3Q22	3Q23	3Q24
------	------	------	------	------

Financials and outlook

[EUR millions] Group P&L Highlights

	3rd Quarter		Year-to-Date 9 Months
Amounts in EUR million	2024	2023	2024	2023
Revenues	326	308	950	934
Collection	189	166	571	500
Recycling	59	72	163	195
Food	78	70	220	239
Gross contribution	141	134	403	393
in %	43%	43%	42%	42%
Operating expenses	97	96	300	285
EBITA, adj.	44	38	103	108
in %	13%	12%	11%	12%
Special items*	-1	-11	-3	-11
EBITA	43	27	100	98
in %	13%	9%	11%	10%

Collection P&L Highlights

	3rd Quarter		Year-to-Date 9 Months
Amounts in EUR million	2024	2023	2024	2023
Revenues	189	166	571	500
Northern Europe	22	23	73	73
Europe (ex Northern)	85	76	276	232
North America	57	51	150	141
Rest of the world	24	17	72	54
Gross contribution	78	67	231	196
in %	41%	40%	41%	39%
Operating expenses	44	39	135	117
EBITA	34	28	96	80
in %	18%	17%	17%	16%

Recycling P&L Highlights ^{39 48}

	3rd Quarter		Months Year-to-Date 9
in million Amounts EUR	2024	2023	2024	2023
Revenues	59	72	163	195
Europe	35	33	96	97
Americas	6	15	26	43
Asia	15	12	28	34
of the world Rest	4	11	12	21
contribution Gross	30	39	82	101
in %	51%	54%	50%	52%
Operating expenses	20	20	62	58
EBITA	10	19	20	43
in %	17%	26%	13%	22%

[EUR millions] Food P&L Highlights

	3rd Quarter		Months Year-to-Date 9
in million Amounts EUR	2024	2023	2024	2023
Revenues	78	70	220	239
Europe	29	20	72	73
Americas	31	32	98	112
Asia	9	7	26	21
of the world Rest	9	12	24	33
contribution Gross	33	28	93	96
in %	43%	40%	42%	40%
Operating expenses	27	31	84	94
, adj EBITA	6	-3	9	2
in %	8%	-4%	3 9%	1%
items* Special	-1	0	-3	0
EBITA	6	-3	6	2
in %	7%	-4%	3%	1%

*Food restructuring costs

Balance sheet and cash flow

	30 Sept	December 31
million Amounts in EUR	2024	2023	2023
ASSETS	1 489 ,	1 418 ,	1 469 ,
Intangible non-current assets	407	393	407
Tangible non-current assets	319	248	286
Financial non-current assets	61	61	62
Inventory	253	258	237
Receivables	355	413	374
Cash and cash equivalents	93	45	104
LIABILITIES AND EQUITY	1 489 ,	1 418 ,	1 469 ,
Equity	600	622	614
liabilities Lease	140	127	139
Interest-bearing liabilities	337	300	299
Non-interest-bearing liabilities	411	369	417

Cashflow from operations

• Cash flow from operations of 99 MEUR in 3Q 2024 (-25 MEUR in 3Q 2023)

Solidity and gearing

• 40% equity ratio
• NIBD/EBITDA (rolling 12 months) of 1.9x

Return on Capital Employed

Financial position

Currency risk and hedging policy

USD/EUR average 3Q24 vs 3Q23: -1.0%

Revenues and expenses per currency:

	EUR	USD	NOK	OTHER1	TOTAL
Revenues	50 %	25 %	0 %	25 %	100 %
Expenses	50 %	20 %	5 %	25 %	100 %

Assets and liabilities per currency:

	EUR	USD	NOK	OTHER1	TOTAL
Assets	45 %	20 %	5 %	30 %	100 %
Liabilities	50 %	10 %	15 %	25 %	100 %

¹ Most important: AUD, NZD

NOTE: Estimated and rounded figures

Currency sensitivity

A strengthening/ weakening of EUR towards other currencies of 10% would normally decrease/increase EBITA by ~5%.

Hedging policy

CASHFLOW AND P/L

• TOMRA can hedge up to one year of future predicted cash flows. Gains and losses on these hedges are recorded as net financial items, not influencing EBITA

B/S

• TOMRA only hedges B/S items where exchange rate fluctuations could have P/L impact. Gains and losses on B/S hedging are recorded in accordance with IAS 21 and will normally not have P/L impact

Outlook

Collection	• High activity related to new and expanding markets. • Quarterly performance will be dependent upon timing of new initiatives.
Recycling	• Currently softer market sentiment leading to slower short-term growth. • Demand for recycled materials is expected to create attractive growth opportunities. • Based on the order backlog at the end of the third quarter, a 75% conversion ratio is estimated to be recognized as revenues in the fourth quarter.
Food	• Challenging macroeconomic environment is delaying customer investments. • Need for automation and increased quality and safety requirements create opportunities mid and long term. • Full savings effect of 30 MEUR cost reduction program expected by end of 2024. • Based on the order backlog at the end of the third quarter, a 80% conversion ratio is estimated to be recognized as revenues in the fourth quarter.
Other	• Capital expenditures from Horizon activities of approx. 50 MEUR are expected in 2024, primarily related to the two Feedstock sorting plants.
Currency	• TOMRA's global operations exposes the financial results to currency fluctuations. TOMRA will generally benefit from a stronger USD due to the revenue exposure.

Copyright

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Disclaimer

This Document (which may be a presentation, video, brochure or other material), includes and may be based on forward-looking information and statements that are subject to unknown risks and uncertainties that could cause actual results to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. The content of this Document is based on current management 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", "anticipates", "intends", "goals", "strategy" or similar expressions, if not part of what could be clearly characterized as a demonstration case, although not all forward-looking statements contain such terms. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. 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 guarantee or assurance that those expectations will be achieved, or that future results or events will be consistent with any such opinions, forecasts, or estimates. TOMRA Systems ASA does not guarantee the accuracy, reliability, or completeness of the Document, neither expressed or implied, and no reliance should be placed on it. Except as required by applicable securities laws, we undertake no obligation to update or revise these statements based on new information, future developments or otherwise. TOMRA Systems ASA (including its directors, officers and employees) assumes no liability related to 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 trademark 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 TOMRA Company.

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