Tomra Systems Asa · OSL:TOM
Tomra Systems Asa — Investor Presentation (April 2022)
77 slides from Tomra Systems Asa's investor presentation, Apr 29, 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION TOMRA Systems ASA April 29, 2022 © TOMRA
Slide 2: TOMRA is well-positioned towards megatrends
TOMRA is well-positioned towards megatrends 1 Pioneer in sensor-based and digital technologies 2 Leading market position – fit for growth Recycling Collection Food Mining #1 #1 #1 #1 3 Solutions for optimal resource productivity 4 Strong financial performance, people & culture Revenues Circular Econ
Slide 3: Did you know?
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 curr
Slide 4: Only 2% of plastic packaging is reused for same/similar products
Only 2% of the planet’s annual plastic packaging production is reused for the same/similar products OUR AMBITION: 40% Collected for Recycling 30% Closed Loop Recycling 4
Slide 5: Did you know?
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 accounts for around 10% of global GDP • Agriculture accounts for 20% of global greenhouse gas emissions Sources:
Slide 6: New ways of feeding a fast-growing demanding population
New ways of feeding a fast-growing DEMANDING population… …AUTOMATE…CONTROL…AND INNOVATE Sources: Brookings 6
Slide 7: Company vision: Leading the Resource Revolution
At TOMRA, our company vision is Leading the Resource Revolution It is our belief that businesses have the power, responsibility, and vested interest to help manage our planet’s precious resources—today and tomorrow. 7
Slide 8: TOMRA's sustainability strategy
TOMRA commits to ensure positive sustainability impact both internally and externally TOMRA’S SUSTAINABILITY STRATEGY TOMRA has in 2020 undertaken work to update its sustainability strategy, to prioritize and focus corporate sustainability efforts where they matter most and will have the greatest im
Slide 9: TOMRA at a glance
TOMRA AT A GLANCE 9
Slide 10: TOMRA at a glance
4600+ EMPLOYEES Publicly listed on Oslo Stock Exchange (OSEBX: TOM) 10.9 BILLION NOK GLOBALLY REVENUES IN 2021 TOMRA COLLECTION TOMRA RECYCLING MINING TOMRA FOOD REVERSE VENDING MATERIAL RECOVERY RECYCLING MINING PROCESSED FRESH FOOD FOOD 10
Slide 11: Creating value through three business areas
Creating value through three business areas 2021 Revenue 2021 EBITA 100% 100% 19% 30% TOMRA FOOD 80% 80% 22% 60% 17% 60% TOMRA RECYCLING MINING 40% 40% 59% 53% 20% 20% TOMRA COLLECTION 0% 0% Food Recycling Mining Collection Food Recycling Mining Collection 11
Slide 12: The TOMRA transformation journey
The TOMRA transformation journey 2011 2012 2008 Sale of Californian material handling TOMRA acquires BEST, leading 2016 business. With the divestment the US food sorting machine producer. Through its transformation TOMRA acquires With the acquisition of BEST, journey TOMRA has moved operation became
Slide 13: TOMRA's three business areas
TOMRA’s three business areas TOMRA COLLECTION TOMRA RECYCLING MINING TOMRA FOOD REVERSE VENDING RECYCLING PROCESSED FOOD Share of ‘21 sales ~43% ~15% ~17% Employees 1,856 575 826 Customers Grocery retailers Material recovery plants, scrap dealers, metal shredder operators Food growers, packers and p
Slide 14: Installed base worldwide
Installed base worldwide TOMRA COLLECTION TOMRA RECYCLING MINING AND FOOD REVERSE VENDING RECYCLING MINING PROCESSED FOOD FRESH FOOD Nordic ~16,200 EMEA ~5,850 EMEA ~35 EMEA ~4,200 EMEA ~1,850 Germany ~30,000 Americas ~1,250 Americas ~49 Americas ~3,250 Americas ~1,600 Other Europe ~15,100 APAC ~1,1
Slide 15: TOMRA Collection
TOMRA COLLECTION 16
Slide 16: Did you know?
DID YOU KNOW? • 1 million plastic bottles are bought around the world every minute • Less than half of all purchased plastic bottles are collected for recycling • Approximately 42bn beverage containers are captured by TOMRA every year… • …representing only less than 3% of all beverage containers sol
Slide 17: The tides are shifting
But the tides are shifting. There is a desire for change Consumer demand Legislative push for Market pull from large for responsible new plastic waste brand owners and beverage plastic use options strategies companies 18
Slide 18: Overview of current deposit markets
An overview of current deposit markets* Northwest Territories (2005) Quebec Norway Sweden (1984) (1984) (1999) Yukon (1992) Finland Iceland (1996) (1989) Newfoundland Ontario (1997) Denmark Estonia (2007) (2002) (2005) Latvia British Columbia (2022) (1970) Prince Edwardian Lithuania Netherlands (201
Slide 19: Upcoming deposit markets on the move
Upcoming deposit markets on the move Quebec: Scotland: Deposit Return System to be Container deposit scheme implemented 2023 planned to start August 2023 England: Consultation ongoing for Connecticut: a deposit scheme Expansion of existing Ireland: anticipated to be Romania: deposit system in Deposi
Slide 20: Deposit return systems are extremely effective at capturing items
Deposit return systems are extremely effective at capturing items for recycling 1 1 2 Compiled from deposit System Operators and “PET Market in Europe: State of Play,” 1 Aluminum, Glass, Plastic.. “Beverage Market Data Analysis 2017,” Eunomia. 2020. Data available upon request. Container Recycling I
Slide 21: High collection rates achieved in two years' time
High collection rates achieved in two years’ time • Return rate and deposit value* for various container deposit schemes Return rates in Lithuania Return rate Deposit value in EUR 98% 95% 92% 92% 92% 92% Prior to container 34% deposit 66% scheme 43% ~40% End of 74% year 1 0.25 0.25 0.21- 0.31 No dep
Slide 22: The centralized DRS model: How it works
CENTRALIZED, NON-PROFIT ADMINISTRATION AND OPERATIONS The centralized DRS model: How it works The return-to-retail obligation provides a convenient network Consumers are incentivized to of return locations. participate through a meaningful deposit value. Trust is built into the system’s processes th
Slide 23: Reinvestment of unredeemed deposits and material revenue
Reinvestment of Profit and loss overview of Norway’s unredeemed deposits Central System Administrator (2019) and material revenue within the system In Norway over 80% of the system’s costs are covered by unredeemed deposits and material revenue 24
Slide 24: Recycled content requirements complement deposit return systems
Recycled content requirements complement deposit return systems Market values for recycled material Lack of a stable market leads Content requirements raise and are volatile, making investment in to a lack of supply for high-quality stabilize a key funding stream collection/recycling risky recycled
Slide 25: Four principles of high-performing deposit return systems
The four principles of high-performing deposit return systems PERFORMANCE CONVENIENCE PRODUCER RESPONSIBILITY SYSTEM INTEGRITY A collection target for a The redemption system is Producers manage, finance Trust is built into the broad scope of beverage easy, accessible and fair and invest in the syst
Slide 26: Reverse vending technology in a high performing DRS
Reverse vending technology in a high performing DRS User communication Recognition system Sorting & processing Data administration 27
Slide 27: Business model expertise across deposit systems
Business model expertise across deposit systems Financing Retail Sales & Service model Throughput model High recurring Upfront revenue Revenue Profitable Swift roll-out Location service concept Proven track record Aligned interests Retailer purchases and takes the TOMRA owns and operates the ownersh
Slide 28: A split-responsibility model
A "split-responsibility" model is when a network operator provides redemption points and ensures recycling Roles and responsibilities in the New South Wales Australia deposit return system 29
Slide 29: Cash flow profiles of the two business models
Cash flow profiles of the two business models Illustrative cash flow profiles per machine Cash flow Higher initial sales Throughput model return profile Higher CAPEX needs Higher recurring revenue Up-front investment Bigger risk Year 0 Time More responsibility Sales & Service Throughput Higher net p
Slide 30: Flexibility and scalability to enable new business models
Flexibility and scalability to enable new business models and new market entry Redemption centers, small depots etc. Large depots, counting centers PRICE Discounters/Supermarkets Small stores 0.1 -0.3 M UBC/year 0.3 -1 M UBC/year 1-3 M UBC/year 3-5 M UBC/year 5 -15 M UBC/year 15 -50 M UBC/year CONTA
Slide 31: Advanced digital platform leveraged across stakeholder groups
Advanced digital platform leveraged across stakeholder groups TOMRA Productivity Gain Consumer Engagement API/Data System Integration DIGITAL PLATFORM Retail Productivity Gain 32
Slide 32: Market leader in reverse vending solutions
Market leader in reverse vending solutions 80 000 10 000- 80 000 Innovation champion # of installed RVMs 5 000- 10 000 500- 5 000 Digital platform Trusted partner <500 Annual revenue from RVM sales 1-10 11-20 21-30 31-40 >40 Number of RVM markets Leading technology Service network Solutions portfoli
Slide 33: TOMRA Recycling Mining
die. 0 TOMRA RECYCLING MINING -_ *
Slide 34: How does sensor-based separation work?
How does sensor-based separation work? Feeding of High-tech sensors to identify objects unsorted material Precise ejection by ultra fast air jets Product specific equipment design often including multiple technologies to maximize sorting efficiency High-speed processing of information (material, sha
Slide 35: Automation with TOMRA units
Automation with TOMRA units 36
Slide 36: A common sensor-based technology portfolio
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 X X X EM sources in very high optical resolution LED NEAR-
Slide 37: Recycling: applications and sensor technology
Recycling: applications and sensor technology MUNICIPAL SOLID WASTE PACKAGING UPGRADING PLASTICS Hard plastics, plastic film, Plastics, plastic film, PET, PE, PP, flakes mixed paper, RDF, cardboard, mixed paper, metals, deinking paper, metal NIR, VIS, EM organics/biomass NIR, VIS, EM NIR, VIS, XRT,
Slide 38: Mining: applications and sensor technology
Mining: applications and sensor technology INDUSTRIAL MINERALS DIAMONDS FERROUS METALS Phosphate-silica removal, lime- Kimberlite-waste removal, Iron ore grading, hematite pre- stone-silica removal, quartz up- diamond ROM conc., diamonds conc., manganese pre-conc., grade, MgO2-silica removal, final
Slide 39: First-class customer service worldwide
FIRST-CLASS CUSTOMER SERVICE WORLDWIDE for highest sorting performance for lowest downtime for plannable costs Having the best systems is not enough without a dedicated service team to keep them running in top condition. Unlocks new opportunities Secure access to information 40
Slide 40: Recycling: competitive landscape
Recycling: competitive landscape >3,000 TOMRA competitive positioning # of installed machines • Largest installed base • Highest revenues 1,000- 3,000 • Broadest technology platform on WR • Highest number of applications and markets served • Leading brand • Market share: 55-60% 0-1,000 10-25 25-50 >
Slide 41: Mining: competitive landscape
Mining: competitive landscape >200 TOMRA competitive positioning # of installed machines • Wide geographical coverage • Broadest technology platform 50-200 • Leading brand • Market share: 40-50% 0-50 10-25 25-50 >50 markets markets markets Revenue from sensor- based sorting Geographic presence Sourc
Slide 42: Resources are finite
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 abo
Slide 43: The circular economy drives a legislative push
The circular economy drives a legislative push… Continued ambitious EU regulations and recycling targets: • From Green Fence to National Sword: Short-term Attract capital and drives investments demand for recycling solutions in waste exporting countries “A common EU target for recycling 70% of packa
Slide 44: 2018 Circular Economy Package promoting recycling
…promoting recycling Description Targets and measures • A common EU target for recycling Waste • Rules on how waste should be managed in the EU. It provides general 60% of municipal waste by 2030 Framework principles for doing so, such as the Waste Hierarchy, Polluter Pays Principle Directive and Ex
Slide 45: …and a market pull
…and a market pull 100% reusable, recyclable or compostable plastic packaging by 2025 Follow their lead Large companies committing to use recycled raw materials = increased demand for recycled offtake Source: Ellen McArthur Foundation @ World Economic Forum 46
Slide 46: Circular Economy – Innovating through collaboration
Circular Economy – Innovating through collaboration Post Pre- Washing Flake Compoun Productio consumer sorting ding n waste sortin g The demo plant covers the process from post consumer waste to production of recycled polymers. PET PE PE PE PP PP PVC PUR PS Other 8% 30% 19% 10% 8% 6% 19% PET is the
Slide 47: Recycling: market growth expectations
Recycling: market growth expectations MARKET DEFINITION RECYLING CAGR 10-12% Sensor-based sorting equipment • excluding cullet glass sorting • excluding peripheral equipment and turn-key solutions AFFECTING FACTORS Tightening regulation Access to capital Commodity price Consumer awareness fluctuatio
Slide 48: Intelligent Mine
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
Slide 49: The concept of sensor-based sorting in mining
The concept of sensor-based sorting in mining Mining process: Mining process: Industrial minerals Metal mining Run of Mine (ROM) Run of Mine (ROM) Primary Crushing Primary Crushing Secondary Crushing Sensor Based Sorting Waste Sensor Based Sorting • 15% to 50% of the ROM Beneficiation Plant: can be
Slide 50: Mining: market growth expectations
Mining: market growth expectations Total annual market size MARKET DEFINITION MINING Sensor-based sorting equipment CAGR 15% • is still a technology to be accepted • growth is conditional on new applications and technologies being developed AFFECTING FACTORS Political climate Access to capital Commo
Slide 51: TOMRA Food
TOMRA FOOD 52
Slide 52: Food for thought
FOOD FOR THOUGHT • 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 Sources: WEF Sources: Wrap, WEF, Accenture (Future of Food), McKinsey, FAO 53
Slide 53: Automation continues on a good growth trajectory
Automation continues on a good growth trajectory Robotics become cheaper, more Ensure advanced and quality and user-friendly safety From… To… Improve efficiency Higher labor cost and labor shortages Leverage data insight 54
Slide 54: Creating value in various parts of the food process
Creating value in various parts of the food process 55
Slide 55: Food: applications and sensor technology
Food: applications and sensor technology POTATOES VEGETABLES NUTS DRIED FRUIT SEEDS & GRAINS Chips, French fries, peeled, Beans, beets, broccoli, carrots, Almonds, cashews, hazelnuts, Apricots, cranberries, dates, Barley, coffee, corn, dry specialty products, sweet corn, cucumbers, industrial macada
Slide 56: Our products are detecting a wide range of parameters
Our products are detecting a wide range of parameters Color Shape & Size Removal of discolorations in mono- Sort on length, width, diameter, area, and mixed-color material broken-piece recognition, … Blemishes Biometric Characteristics Objects with spots or other (small) Sort based on water content
Slide 57: New sensor technologies will unlock new opportunities
New sensor technologies will unlock new opportunities… • From measuring visual appearance... … to measuring Internal defects Taste Shelf life / Freshness Food hazards 58
Slide 58: Top Food Categories
Top Food Categories Potatoes Nuts & Dried Fruit Vegetables Apples Citrus Berries Cherries Fresh Cut Avocados Kiwifruit Grains & Seeds 59
Slide 59: Three ways of sorting within the Food segment
Three ways of sorting within the Food segment Chute or Channel sorter Free fall (Channel / Chute) Application Seeds, rice, grains Sensor tech. Camera (simple) Revenue share* Approx. 60% Lane grading Belt Application Prepared /preserved Belt inspection veg. and fruit Sensor tech. Several (complex) Re
Slide 60: TOMRA has established the broadest footprint within food sorting
TOMRA has established the broadest footprint within food sorting Free fall Belt Lane SK NDF PFV Fresh Rice, Seeds & Nuts & Processed Fruits, Fruit, Vegetables Kernels Dried Fruit Veg & Potatoes & Potatoes CHANNEL CHUTE BELT AIR LANE/MULTI-DROP SINGULATED SORTING BULK SORTING *Approximately 5% of ann
Slide 61: Food competitive landscape
Food competitive landscape Freefall >3,000 Belt TOMRA competitive positioning • Broadest and deepest technology # of installed machines base 1,000- • Widest range of categories and 3,000 applications • Most comprehensive geographic reach (~80 countries) 0-1,000 10-25 markets 25-50 markets >50 market
Slide 62: Recycling, Mining and Food connected sorters
Recycling, Mining and Food Connected Sorters TOMRA Insight Users 01/2018 01/2019 01/2020 01/2021 01/2022 63
Slide 63: Global Leader
Global Leader Sorting & Artificial Grading Intelligence Data & Service & Analytics Support 64
Slide 64: Our food sorting customers
Our food sorting customers PROCESSED FOOD INDUSTRY FRESH PRODUCE INDUSTRY 65
Slide 65: TOMRA Food Locations
TOMRA Food Locations 1400+ TOMRA FOOD TEAM 32 GLOBAL OFFICES 4 PRODUCTION FACILITIES PRESENCE 80 countries 66
Slide 66: Market growth expectations – food
Market growth expectations – food MARKET DEFINITION FOOD CAGR 6-8% Sensor-based sorting and grading equipment • Including color sorting • Excluding peripheral equipment and turn-key solutions Fresh and processed segment AFFECTING FACTORS Weather Raw material pricing conditions Manual labor availabil
Slide 67: Historical group financials and targets
HISTORICAL GROUP FINANCIALS AND TARGETS 68
Slide 68: Group financials development – solid track record
Group financials development – solid track record Revenues Gross contribution and margin 12,000 5,500 50% 5,000 45% 10,000 4,500 40% 4,000 35% 8,000 3,500 30% MNOK 3,000 MNOK 6,000 25% 2,500 20% 4,000 2,000 1,500 15% 2,000 1,000 10% 500 5% 0 0 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 202
Slide 69: Currency risk and hedging policy
Currency risk and hedging policy Measured against NOK *Average 1Q22 vs 1Q21 10% change in NOK towards other 110 currencies will impact: 105 Revenues Expenses EBITA USD/NOK +3.9%* 100 EUR* 4.5% 4.0% 7.0% USD 3.5% 2.5% 8.0% 95 OTHER2 2.0% 3.0% -4.0% EUR/NOK -3.3%* 90 ALL 10.0% 9.5% 11.0% 1Q21 2Q21 3Q2
Slide 70: Financial highlights | Balance sheet and cash flow
Financial highlights | Balance sheet and cash flow 31 March 31 Dec 2022 2021 2021 Amounts in NOK million ASSETS 11,821 10,806 11,589 Intangible non-current assets 3,742 3,737 3,790 Tangible non-current assets 2,269 2,263 2,197 Financial non-current assets 388 362 347 Inventory 1,921 1,571 1,883 Rece
Slide 71: TOMRA Collection – segment financials
TOMRA Collection – segment financials Revenues Gross contribution and margin 6,000 2,600 50% 5,500 2,400 45% 5,000 2,200 40% 4,500 35% 2,000 30% 4,000 1,800 MNOK MNOK 25% 3,500 1,600 20% 3,000 1,400 15% 2,500 1,200 10% 2,000 1,000 5% 1,500 800 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 202
Slide 72: TOMRA Recycling Mining – segment financials
TOMRA Recycling Mining – segment financials Revenues Gross contribution and margin 1,950 1,050 0.6 1,900 0.5 1,850 1,000 1,800 0.4 950 1,750 MNOK MNOK 0.3 1,700 900 1,650 0.2 1,600 850 0.1 1,550 1,500 800 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011 2012 2013 2014 2015 2016 2017 201
Slide 73: TOMRA Food – segment financials
TOMRA Food – segment financials Revenues Gross contribution and margin 3,500 1,500 0.45 3,000 0.4 1,400 0.35 2,500 1,300 0.3 2,000 1,200 0.25 MNOK MNOK 1,500 1,100 0.2 0.15 1,000 1,000 0.1 500 900 0.05 0 800 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011 2012 2013 2014 2015 2016 2017
Slide 74: Our ambitions 2018 - 2023
Circular Economy Our ambitions 2018 - 2023 Dividend Revenue payout growth EBITA- Capital margin Structure ROCE new Future of Food >10% CAGR 40-60% projects Maintain on average of EPS Towards investment >18% grade profile >20% 75
Slide 75: EU Taxonomy – preliminary assessment
EU Taxonomy – preliminary1) assessment (a) climate change mitigation (b) climate change adaptation Collection and transport of non-hazardous waste in source segregated fractions Climate (c) sustainable use and protection change of water and mitigation marine Material recovery from non-hazardous reso
Slide 76: Shareholder structure
Shareholder structure Top 10 shareholders as of 31 March 2022*) Shareholders by country**) 1 Investment AB Latour 31 200 000 21,1 % 2 Folketrygdfondet 12 511 785 8,5 % 11% 3 APG Asset Management 7 094 564 4,8 % 6% 33% 4 BlackRock 6 013 502 4,1 % 6% 5 Candriam 3 785 372 2,6 % 9% 6 Handelsbanken 3 518
Slide 77: 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