Tomra Systems Asa · OSL:TOM
Tomra Systems Asa — Investor Day (June 2022)
60 slides from Tomra Systems Asa's investor day presentation, Jun 23, 2022
Slide 1: Capital Markets Day 2022
Capital Markets Day 2022 Mülheim-Kärlich, Germany Click to enter name 23 June 2022 Place © TOMRA dd.mm.yy
Slide 2: Agenda
Agenda 08:15 - 08:30 Introduction ‒ Accelerating toward a circular future Tove Andersen, President and CEO 08:30 - 09:45 Business Snapshot ‒ Driving circularity with deposit systems Harald Henriksen, Head of Collection ‒ Food on the frontline of innovation Michel Picandet, Head of Food ‒ Enabling cl
Slide 3: Our vision: Lead the Resource Revolution
At TOMRA, our vision is to Lead the Resource Revolution It is our belief that businesses have the power and responsibility to help manage our planet’s precious resources—today and tomorrow. 3
Slide 4: In a world that needs change, how fast can we go
…in a world that needs change how fast can we at TOMRA go and what would it take? 4
Slide 5: We have built a broad business platform
10.9 billion NOK We have built a FOOD broad business RECYCLING platform… … while keeping a 2.7 billion NOK strong entrepreneurial COLLECTION spirit 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Revenues 5
Slide 6: Uniquely positioned along powerful global megatrends
Megatrends give strong tailwind Climate change and resource scarcity Demographic and social change Technological breakthrough Rapid urbanization TOMRA is uniquely positioned along Unique position powerful global megatrends ✓ Leading market position ✓ Best in class technology ✓ 50 years of know-how ✓
Slide 7: Accelerate growth in core business and develop adjacent opportunities
We will accelerate growth in core business and develop adjacent opportunities 7 7
Slide 8: Our roadmap to accelerate growth
Our roadmap to Collection Recycling Food accelerate growth 8
Slide 9: TOMRA Collection
TOMRA Collection 9
Slide 10: The global leader in reverse vending
50 years of TOMRA experience The global leader in reverse vending 81 000 machines in operation Represented in We have 70% global market share more than 60 countries Collecting 44 billion containers a year 5.7bn NOK revenues in operation 19% EBITA margin 10
Slide 11: Driving market momentum through global advocacy work
We are driving the market momentum through global advocacy work aiming to achieve best practice legislation and trigger demand through innovations Collection targets for Targets for recycled content plastic beverage bottles in plastic beverage bottles EUROPE 77% 90% 25% 30% 2025 2029 2025 2030 AUS N
Slide 12: Legislative outlook supports new and expanded Deposit Return Schemes
Canada provinces Legislative outlook supports new and expanded Deposit US states Expansion and Singapore as modernization Return Scheme Single Use launchpad in South-East Asia (DRS) markets Plastic Directive towards 2030 Australia - States Potentially first one-way DRS in First full DRS Latin Americ
Slide 13: Europe and the Single Use Plastic Directive main driver of new deposit markets
All EU member states to collect 90% of plastic beverage bottles by 2029 Europe and the Single Use Plastic Directive (SUPD) will be the main driver of new deposit markets towards 2030 Existing DRS markets* EU countries 13 * In addition, some markets have refillable deposit systems such as: Austria, B
Slide 14: Strong local presence in existing and upcoming European deposit markets
Establishing local TOMRA entities and building local presence and partnerships early is key in our go to market strategy Strong local presence in existing and upcoming European deposit markets Existing DRS markets* EU countries 14 * In addition, some markets have refillable deposit systems such as:
Slide 15: Global market leader in reverse vending solutions
Global market leader in reverse vending solutions >80 000 10 000- 80 000 # of installed RVMs TRUSTED PARTNER SERVICE NETWORK 5 000- 10 000 500- 5 000 INNOVATION SOLUTIONS CHAMPION PORTFOLIO <500 1-10 11-20 21-30 31-40 >40 15 Number of RVM markets Source: TOMRA estimates and analysis
Slide 16: Customer centricity is at the core of our innovation strategy
Customer centricity Efficient A smart is at the core of our A great recycling investment operations for experience for long-term innovation strategy peace of mind benefits Strategic aspiration: Innovate the most attractive solutions and the best customer experience 16
Slide 17: | | | 'BILASIPULLOJA TAHAN
| | | 'BILASIPULLOJA TAHAN ee Se —AUTOMAATTIN,KIITOS AUKI
Slide 18: RVM Kiosks, Reverse Vending Centres, Single RVMs
RVM Kiosks Reverse Vending Centres Single RVMs Automated Depots Over the Counter Scheme App 18
Slide 19: Global Supply Chain
Current supply chain with country origin on purchased material China Norway Taiwan Sweden Global Supply Poland Chain Germany Optimize global sourcing and production set-up The goal Support the market demands both on capacity and flexibility Dual sourcing strategy in focus to reduce risk and exposure
Slide 20: Our Big Hairy Audacious Goal
Our Big Hairy Audacious Goal 500 BILLION empty beverage containers handled by TOMRA equipment and collected for clean loop recycling 20 20
Slide 21: TOMRA Food
TOMRA Food 21
Slide 22: Robust drivers supporting the market
Robust drivers supporting the market Population growth and rise of the middle class Continued loss and waste of food Shift to automation and digital tools North America, Europe Latin America Asia and Oceania and South Africa Cyclical investments in different categories, regions and seasons 22 Automa
Slide 23: TOMRA Food with a strong value proposition
TOMRA Food with a strong value proposition Why Automate Why TOMRA Know-how Technology Partnerships Food safety Quality Yield increase Expertise to Best-in-class With local improvement transform the sorting and understanding, global food industry grading solutions, know-how and long- and digital insi
Slide 24: Focus on core food categories
Focus on core food categories Potatoes Nuts & Dried Fruit Vegetables Apples Citrus Berries 24
Slide 25: Leading market position
Leading market position Total Food Sorting and Grading Market: ~1.5-2.0 EURbn >3k # of installed machines Addressable Food market: ~1.2 EURbn Chute 1-3k TOMRA 2021: ˜0.3 EURbn Lane 0-1k Belt Overall market share 25-30% 10-25 25-50 >50 markets markets markets Geographic presence Based on TOMRA analys
Slide 26: Clear strategic direction and priorities
Clear strategic direction and priorities Maximize Operational Growth Excellence 26 26 26
Slide 27: Maximize growth
Core Anchor North America 25-60% Accelerate Europe Maximize growth Expansion Services and digital Increase recurring revenues Grow market share Deliver advanced digital solutions <20% Estimated market share 27
Slide 28: Operational excellence
Supply chain optimization Go-to-market Global sourcing and resilience Operational Productivity Continuous improvement excellence Scale and synergies Customer focus Customer engagement Value proposition Technology management Technology leadership Modularization Customer focus 28 Digital Best-in-class
Slide 29: Every Resource Counts
Every Resource Counts 50% Post-harvest food loss reduction by 2030 29
Slide 30: TOMRA Recycling
TOMRA Recycling 30
Slide 31: Legislative push and market pull towards a circular economy
There is a legislative push and market pull towards a circular economy Ellen MacArthur Foundation Global Commitment Extended Producer Responsibility policy is a key element, complemented Several strong commitments have been made; however, by quotas, taxes, bans, and mandatory recycled content target
Slide 32: Packaging waste and EU recycling targets
Example: Norway Target 2025=50% recycling Target 2030=55% recycling Packaging waste including EPS [Ton] EU member states need to meet PPWD1 targets for plastic recycling Total waste generated Material recycled EU target Material recycled, new measurement point 1 Packaging and Packaging Waste Directi
Slide 33: Strong industry commitment to use recycled polymers
Strong commitment from the industry to use recycled polymers Selected global commitments (non-exhaustive) “Our ambition is to use 1 million tons of plastic 1 waste a year in our global chemical plants by 2025” million tons “Produce and market 2 million tons of recycled 2 and renewable based polymers
Slide 34: Sorting is essential for a circular economy
Sorting is essential for a circular economy Waste sorting segment Recycling segment Mining segment Recover materials for recycling from both Upgrade material to pure fractions Recovery and ore sorting source separated and mixed household for high quality recycling to reduce environmental waste impac
Slide 35: Solutions enable recovery of recyclables from different waste streams
Our solutions enable recovery of recyclables from different waste streams AVL Leipzig, Germany Mixed Waste Sorting Plant IVAR, Norway A modern packaging sorting plant can contain up to 60 NIR sorters Our solutions can also recover valuables from residual waste streams 35 35
Slide 36: Technology and innovations push the boundaries of recycling sorting
Our technology and innovations continue to push the boundaries of the recycling sorting market New segments for automated sorting Increase of automation and performance Capacity growth Total recycling sensor-based 7% sorting equipment market: ~400 million EUR Out of scope for TOMRA addressable marke
Slide 37: Our solutions close the loop by enabling high quality recycling
Our solutions close the loop by enabling high quality recycling Plastics Wood sorting Textile sorting Alloy sorting We are actively pushing the We are investing into the development of solutions for new segments boundaries of plastics recycling by: • Demonstrating advanced mechanical recycling • Sup
Slide 38: We have two strategic priority areas
We have two strategic priority areas Accelerate growth Provide leading solutions and innovations Increase the recovery Enable high quality closed Utilize cutting edge Deep market expertise of recyclables loop recycling sensor technology and partnership Exploit the power Develop digital of deep learn
Slide 39: Enabling closed loop recycling solutions
Our commitment towards plastic packaging by 2030 We are here to 30% of post-consumer plastic packaging is recycled in a closed-loop enable closed loop recycling solutions - material stream by material stream 39 39
Slide 40: Corporate strategy and sustainable growth
Corporate strategy and sustainable growth 40
Slide 41: Accelerating growth in our core business
Accelerating growth in our core business Strategic priorities Collection Recycling Food Growth focus New DRS markets Grow with market Market share and geographic Product driven innovation in existing markets Push market boundaries with technology expansion within key categories Supply chain resilien
Slide 42: Strategy built on organic growth with core business as main engine
Our strategy is built on organic growth with the main engine being the core business ➢ Accelerate growth in core ➢ Develop adjacent business We have a solid market and capital position, and we will utilize this platform to develop adjacent business 42 42
Slide 43: Ideally positioned to develop adjacent opportunities
Ideally positioned to develop adjacent opportunities TOMRA’s competitive edge, Strong macro trends and market position and technology emerging business models can be applied in areas beyond within circular economy and our current operations resource efficiency 43 43
Slide 44: What are we looking for
Business models with What are we the potential to become a sizeable business, ripe for looking for scaling over the next few years Opportunities where Potential for strong capital returns and steady-state TOMRA has a competitive profitability in line with advantage to succeed TOMRA’s targets 44
Slide 45: Examples of what we are exploring
Enabling automation in Digital business models textiles recycling Examples of what we are exploring Collection systems for Closing the gap in reusable packaging plastic recycling 45
Slide 46: The gap in plastics recycling
The gap in plastics recycling Majority of plastics are lost today Demand for recycled plastics • In Europe alone, 24 million tons of plastics are GAP • Already a strong demand for recycled plastics will lost to incineration and 14 million tons to landfill increase significantly in the next few years
Slide 47: Closing the circularity gap
Closing the circularity gap Suppliers Customers Mixed plastics fraction needs Connecting the value chain Sorted polymer fractions to be made available by (e.g., HDPE, PS, PP, etc.) to incinerators, landfills, and be supplied to recyclers with other sources the right quality 47
Slide 48: Our ambitions going forward
Accelerate growth in core Our ambitions going forward Develop adjacent business 48 48
Slide 49: Ambition to grow above 10% and expand margins towards 18%
Our ambition has been to grow above 10% and expand margins towards 18% Revenues EBITA NOK billions NOK billions +13% +10% 16.2% 14.4% 14.8% 15.3% Revenue 14.6% EBITA- growth margin 10.9 9.3 9.9 8.6 1.8 7.4 >10% CAGR 1.5 Towards 1.3 1.4 on average 1.1 >18% 2017 2018 2019 2020 2021 2017 2018 2019 2020
Slide 50: We have maintained a solid balance sheet position
We have maintained a solid balance sheet position Dividend Capital Return on policy structure investment Dividend payout of 40-60% Maintain investment grade 20% ROCE on new projects 6.0 2.0x 5.0 29% 29% 28% 25% 4.0 NOK per share 60% 22% 3.0 1.0x 40% 2.0 17% 15% 15% 14% 15% 1.0 0.0 2017 2018 2019 202
Slide 51: Accelerate growth to 15% and reach 18% EBITA margin by 2027
We aim to accelerate growth to 15% and reach 18% EBITA margin by 2027 Revenue EBITA growth Accelerate growth in core margin Mitigate inflationary pressure at 15% Develop adjacent business Efficiency and business mix CAGR 18% 51 Important note: financial ambitions should not be inferred as guiding
Slide 52: We will maintain the current dividend policy
We will maintain the current dividend policy Operating cash flow growth of 15% CAGR NOK billions 15% 2.0 1.5 Dividend payout Solid operating cash flow 1.0 1.8 1.7 1.3 0.5 1.0 1.0 0.1 40 – 60% Moderated capital needs in core 0.0 -0.5 -0.6 -0.5 -0.5 of EPS -0.7 -0.5 -0.4 -1.0 -0.4 -1.5 2017 2018 2019
Slide 53: And keep an investment grade status
And keep an investment grade status Financial Risk Profile A- A Scope Ratings June 2022 Business Risk Profile Capital BBB+ structure Low gearing and financial risk Investment Target green bonds for financing grade Green Bond Framework 53 53 53
Slide 54: Lead the Resource Revolution
Double the avoided emissions enabled by TOMRA products in use Commitment to net zero emissions and setting science-based LEAD THE targets (to be externally verified by 2024) RESOURCE REVOLUTION >80% reduction in operational 100% renewable electricity transport emissions While >90% sustainable materi
Slide 55: Our ambitions 2022 – 2027
Our ambitions 2022 – 2027 Revenue EBITA Dividend Capital Net Zero growth margin payout structure Holistic 15% at 40 – 60% Investment sustainability CAGR 18% of EPS grade strategy Click to enter name Place dd.mm.yy 55
Slide 56: We have set bold ambitions to double our business
We have set bold ambitions TOMRA is uniquely to double our business in the positioned along next five years global megatrends ➢ Accelerate growth in core ➢ Develop adjacent business 56 56
Slide 57: For a sustainable planet for generations to come
For a sustainable planet for generations to come 57 57
Slide 58: We have an obligation to grow
we have an obligation to grow 58 58
Slide 59: Copyright and 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 Docum
Slide 60: www.tomra.com
www.tomra.com