Slide 1: TOMRA Systems ASA Capital Markets Day 2013
TOMRA SYSTEMS ASA CAPITAL MARKETS DAY 2013 1
Slide 2: Positioning TOMRA towards macro trends
POSITIONING TOMRA TOWARDS MACRO TRENDS THE CHALLENGE: THE OPPORTUNITY: 3 billion more middle-class $2.9 trillion of savings in consumers expected to be in the 2030 from capturing the resource global economy by 2030 productivity potential Up to $1.1 trillion At least $1 trillion spent annually on res
Slide 3: The world population and standard of living is increasing dramatically
THE WORLD POPULATION AND STANDARD OF LIVING IS INCREASING DRAMATICALLY
Slide 4: World resources are under unprecedented pressure
WORLD RESOURCES ARE UNDER UNPRECEDENTED PRESSURE
Slide 5: Resource productivity must increase to ensure sustainable development
RESOURCE PRODUCTIVITY MUST INCREASE TO ENSURE SUSTAINABLE DEVELOPMENT
Slide 6: TOMRA creates sensor-based solutions for optimal resource productivity
TOMRA creates sensor-based solutions for optimal resource wali ; productivity —
Slide 7: Leading the resource revolution
K&S TOMRA LEADING THE RESOURCE REVOLUTION
Slide 8: TOMRA's impact on resources and CO2
• Our solutions, in use around the globe, helped keep up to 20 millions of tons of CO₂ from being released into the atmosphere in 2012 • 30 bn used beverage containers are captured every year through our reverse vending machines • Our vertical balers contribute to a daily reduction of 20,000 waste p
Slide 9: 2011-2013: An eventful period
2011-2013: AN EVENTFUL PERIOD 9
Slide 10: TOMRA - a market leader in all active markets
TOMRA - A MARKET LEADER IN ALL ACTIVE MARKETS... 60 % 40 % REVERSE VENDING MATERIAL RECOVERY COMPACTION FOOD RECYCLING MINING Market share: Market share: Market share: Market share: Market share: Market share: ~75% ~60% ~15-20% ~40-50% * ~55-65% ~40-50% * In total food (incl. rice and lane sorting):
Slide 11: Resulting in a sound financial contribution in recent years
…RESULTING IN A SOUND FINANCIAL CONTRIBUTION IN RECENT YEARS… Through implementing our strategy TOMRA achieved solid results • Topline and bottom-line increase over the period • Stable and solid cash generation • Strong balance sheet • Redistribution to shareholders: 40-60% of EPS • Well positioned
Slide 12: Sustainable competitive advantage built on core capabilities
…BY CREATING A SUSTAINABLE COMPETITIVE ADVANTAGE BUILT ON CORE CAPABILITIES… TOMRA Capabilities System Strong company culture and clear vision and mission Differentiating Capabilities Leading Custo- sensor- mized based industry tech solutions Standardized/ modula- rized product design Effective and
Slide 13: Implemented in the way we run our business
…IMPLEMENTED IN THE WAY WE RUN OUR BUSINESS Leadership Technology position in Investing leadership markets and in our applications people Ethical business Focus on core Favorable behavior positioning towards trends Short vs. long Economies Entrepreneurship term focus of scale 13
Slide 14: Ambitious targets for growth and positioning
AMBITIOUS TARGETS FOR GROWTH AND POSITIONING… Collection Solutions Sorting Solutions 1 Growth • Overall revenue growth of 4-8% • Overall revenue growth of 10-15% 2 Profitability • EBITA margins : 17-22% • EBITA margins: 18-23% • Product roadmap to ensure • Product roadmap with several 3 Technology c
Slide 15: To be executed within our strategic direction
…TO BE EXECUTED WITHIN OUR STRATEGIC DIRECTION IT/ Software DEPOSIT TOPLINE GROWTH New Process TECH LEADERSHIP Raw Depot Materials Analytics OP. EFFICIENCY Materials PET ALUMINUM GLASS 15
Slide 16: Ultimately, the Resource Revolution goes beyond a single goal
Ultimately, the Resource Revolution goes beyond a single goal or a set of numbers We all have a stake in getting results – it is a global challenge 16
Slide 17: TOMRA Collection Solutions
TOMRA Collection Solutions 17
Slide 18: Collection Solutions contributes 60% of total group revenues
TOMRA COLLECTION SOLUTIONS CONTRIBUTES 60% OF TOTAL GROUP REVENUES 60 % 40 % REVERSE VENDING MATERIAL RECOVERY COMPACTION FOOD RECYCLING MINING Share of Group Share of Group Share of Group Share of Group Share of Group Share of Group revenues: revenues: revenues: revenues: revenues: revenues: 43% 13
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Slide 20: The global beverage market
THE GLOBAL BEVERAGE MARKET Global beverage consumption Breakdown of per capita consumption 100% = ~1.6 trillion liters Liters per person per year (global average) North Carbonated soft drinks 31 America Packaged water 25 12 Juice and nectars 12 Asia South Iced tea/coffee 6 12 America 42 Squash and f
Slide 21: The global beverage packaging market
THE GLOBAL BEVERAGE PACKAGING MARKET Size of global packaging market Packaging mix for key categories Billion units per category, 100% = ~1.8 trillion units Percent Carbonated Soft Drinks Beer 10 20 10 23 350 10 450 5 62 60 140 325 Cans Plastics Glass Bulk packs Cans Plastics Glass Draught Iced tea/
Slide 22: Recycling rates for beverage packaging
RECYCLING RATES FOR BEVERAGE PACKAGING Recycling rates for selected packaging categories Estimated global UBC recycling rates Globally: ~70% USA: 65% EU: 66% 40% JPN: 93% Globally: ~35% 35 % USA: 29% EU: 48% JPN: 72% Globally: ~35% USA: 35% EU: 68% JPN: 90% Globally: ~15-20%? USA: 10-15%? EU: 37% In
Slide 23: Recycling of beverage packaging in a deposit system
RECYCLING OF BEVERAGE PACKAGING IN A DEPOSIT SYSTEM 23
Slide 24: Elements of a modern reverse vending system
ELEMENTS OF A MODERN REVERSE VENDING SYSTEM User communication Recognition system Sorting & processing Data administration 24
Slide 25: Reverse vending advantages
REVERSE VENDING ADVANTAGES 25
Slide 26: Annual demand
ANNUAL DEMAND Number of reverse vending machines (backrooms excluded) sold per region in 2012 Units 1 000 8 000 1 500 400 1 100 4 000 Central & Nordic Western & North Other TOTAL Eastern Southern America Europe Europe Source: TOMRA analysis 26
Slide 27: Global installed base (active systems)
GLOBAL INSTALLED BASE (ACTIVE SYSTEMS) Nordic: ~17,000 (TOMRA: ~90%) Central & Eastern Europe: ~46,000 (TOMRA: ~67%) North America: Asia: ~1,000 ~20,000 (TOMRA: ~64%) (TOMRA: ~75%) Western & Southern Europe: ~7,000 (TOMRA: ~94%) South America: ~1,000 (TOMRA: ~90%) All deposit markets Non-refillable
Slide 28: Competitive landscape
COMPETITIVE LANDSCAPE >70,000 10,000- 70,000 # of installed RVS 5,000-10,000 500- 5,000 KANSMACKER, MAX <500 COMPACTION, RVM TECH, DIGI, INCOM, ECO POINT 1-5 6-10 11-20 21-30 >30 Number of RVS markets Annual revenue from RVS sales ESTIMATES Source: TOMRA estimates and analysis 28
Slide 29: Current market dynamics
CURRENT MARKET DYNAMICS 1 Saturated markets, nearly all eligible stores have RVS 2 Store consolidation leads to fewer sold systems 3 Improved efficiency: 1 new system replaces 2 old 4 Smaller competitors competing on price 5 Increased focus on RVS operations among customers creates room for differen
Slide 30: RVM: Our strategy 2013-2018
RVM: OUR STRATEGY 2013 -2018 Defend and nurture core • Increase differentiation towards competition 1 deposit market business • Further reduce the cost of reverse vending systems • Increase scope of existing deposit markets Ensure continued relevance 2 • Assist in developing new deposit markets of d
Slide 31: Ensure sufficient differentiation by delivering on product roadmap
ENSURE SUFFICIENT DIFFERENTIATION BY DELIVERING ON PRODUCT ROADMAP AMBITIONS 2012 2015 31
Slide 32: T-9: The first of a new generation of machines
T-9: THE FIRST OF A NEW GENERATION OF MACHINES • On 23rd September 2013, TOMRA presented the first machine of the new generation of machines to come • T-9 features the first 360 degree recognition system applied in an RVM and a completely new industrial design • The machine is faster, cleaner and ta
Slide 33: The German replacement opportunity
THE GERMAN REPLACEMENT OPPORTUNITY Number of installed machines in Germany (annually) ~8,800 ~2,200 ~1,800 ~2,200 ~2,000 ~2,000 ~1,500 ~1,500 2006 2007 2008 2009 2010 2011 2012 2013 2010 * Not including UNOs. Remainder installed before 2006 TOTAL: 22,000* 33
Slide 34: COGS savings program
COGS SAVINGS PROGRAM Phases of COGS saving program Achieved and estimated savings Percent (of average portfolio cost) 40% Volume benefits and technology development • Moving sourcing from high cost to low cost countries has been the major driver for the Introduction of COGS savings to date new produ
Slide 35: Example: Changes in sourcing setup
EXAMPLE: CHANGES IN SOURCING SETUP COGS distribution by region (sourcing) 100% 90% 30% 80% 43% 47% 47% 70% 60% 60% 80% Rest of the World 35% 50% East Europe 28% 40% 29% 28% Asia 30% 23% 20% 35% 15% 25% 29% 10% 24% 17% 5% 0% 2009 2011 2012 status 2012 plan 2013 plan 2015 ambition Source: TOMRA analys
Slide 36: RVM: Our strategy 2013-2018
RVM: OUR STRATEGY 2013 -2018 Defend and nurture core • Increase differentiation towards competition 1 deposit market business • Further reduce RVS lifetime cost • Increase scope of existing deposit markets Ensure continued relevance 2 • Assist in developing new deposit markets of deposit systems Emb
Slide 37: Ensure continued relevance of automated deposit systems
ENSURE CONTINUED RELEVANCE OF AUTOMATED DEPOSIT SYSTEMS Handling method for deposit containers Share of containers sold with deposit Percent of total Percent of total 15 % 40 % 60 % 85 % Handled with RVS Containers sold with deposit Handled manually Containers sold without deposit ILLUSTRATIVE Sourc
Slide 38: Increase scope of existing deposit markets
INCREASE SCOPE OF EXISTING DEPOSIT MARKETS Beverage categories excluded from deposit systems, but suitable for RVMs Cartons Sports drinks Water Juice 38
Slide 39: New deposit markets
NEW DEPOSIT MARKETS Pilot machines at Whitmuir Farm and Heriot-Watt University North America: Scotland: Eastern Europe: Annual opportunities for Potential for ~2,000 Potential for ~2,000 new bottle bills, e.g. in machines from 2016 and machines in Latvia and Minnesota onwards Lithuania from 2015 /20
Slide 40: RVM: Our strategy 2013-2018
RVM: OUR STRATEGY 2013 -2018 Defend and nurture core • Increase differentiation towards competition 1 deposit market business • Further reduce RVS lifetime cost • Increase scope of existing deposit markets Ensure continued relevance 2 • Assist in developing new deposit markets of deposit systems Emb
Slide 41: Increase number of containers touched
INCREASE NUMBER OF CONTAINERS TOUCHED Number of Reverse Vending Machines Units All beverage containers sold 5 000 000 through RVMs Some containers (asymmetrical, oversized, cartons etc.) cannot be collected in traditional RVMs (TOMRA is now changing All recycled containers the game with our new T-9)
Slide 42: Enter new segments
ENTER NEW SEGMENTS >200,000 Depot segment opportunity 50,000- TOMRA’s current 200,000 sweet spot Price (EUR) 10,000- 50,000 3,000- 5,000 Small stores Hypermarkets, C&C Large depots, Discounters/Supermarkets RCs, small depots etc. counting centers 0.1 -0.3 M UBC/year 0.3 -1 M UBC/year 1-3 M UBC/year
Slide 43: Create new revenue streams from SW/IT
CREATE NEW REVENUE STREAMS FROM SW/IT TOMRAPlus TOMRA ReACT Integrating hardware and software into attractive and engaging combos 43
Slide 44: Engage consumers
ENGAGE CONSUMERS ’ Activity: Running Log activity Statistics, performance tracking yt Share, compete, inspire! CHALLENGE IE TOMRA 44
Slide 45: Evolving the business model over time
EVOLVING THE BUSINESS MODEL OVER TIME Potential phases in monetizing the ReACT platform PHASE 3: MONETIZE RVS USER COMMUNITIES PHASE 2: MONETIZE RVS TRANSACTIONS PHASE 1: DRIVE RVS DEPLOYMENT HARDWARE-BASED BUSINESS SOFTWARE-BASED BUSINESS MODEL MODEL 45
Slide 46: RVM: Our strategy 2013-2018
RVM: OUR STRATEGY 2013 -2018 Defend and nurture core • Increase differentiation towards competition 1 deposit market business • Further reduce RVS lifetime cost • Increase scope of existing deposit markets Ensure continued relevance 2 • Assist in developing new deposit markets of deposit systems Emb
Slide 47: Target new material streams
TARGET NEW MATERIAL STREAMS 47
Slide 48: Why TOMRA? - Potential synergies
WHY TOMRA? - POTENTIAL SYNERGIES • Leverage existing customer • Leverage network of field • Leverage existing relationships and sales technicians production capacity, channels to sell new • Leverage back-end systems warehousing etc. solutions for monitoring, dispatching • Tap into sourcing network •
Slide 49: Markets: order of priority
ORDER OF PRIORITY 2. MARKET DEVELOPMENT 4. DIVERSIFICATION «Develop new deposit New «Introduce solutions for markets» new material streams» «Expand scope of existing Markets deposit systems» 3. PRODUCT 1. MARKET DEVELOPMENT PENETRATION «Enter depot/C&C/RC Existing «Maintain market share segment» by
Slide 50: A shift in mindset - a shift in growth profile
A SHIFT IN MINDSET – A SHIFT IN GROWTH PROFILE From collection of used bottles and cans to smart collection of many kinds of materials From hardware solutions only to integrated ? solutions with software as a key driver From a “box pushing” business model to volume- and transaction-based models From
Slide 51: TOMRA Sorting Solutions
TOMRA Sorting Solutions IE TOMRA
Slide 52: Sorting Solutions contributes about 40% of total group revenues
TOMRA SORTING SOLUTIONS CONTRIBUTES ABOUT 40% OF TOTAL GROUP REVENUES 60 % 40 % REVERSE VENDING MATERIAL RECOVERY COMPACTION FOOD RECYCLING MINING Share of Group Share of Group Share of Group Share of Group Share of Group Share of Group revenues: revenues: revenues: revenues: revenues: revenues: 43%
Slide 53: Strong revenue growth since inception in 1996
STRONG REVENUE GROWTH SINCE INCEPTION IN 1996 Revenue development and key milestones BEST acquired EURm 227* • Total revenue growth (organic plus inorganic) of ~37% per year from 2004-12 Ultrasort Odenberg acquired acquired — Organic growth for the same period was ~21% • Technology base and CommoDas
Slide 54: Market size and potential
MARKET SIZE AND POTENTIAL Total annual market size Market growth EUR million • Market expected to grow at rate of around 7-9% per year • A large part of growth from unlocking ~1 320 of dormant potential – only possible by developing new applications and technologies • Some growth in “old world”, but
Slide 55: Adoption of sensor-based sorting at different maturity levels
ADOPTION OF SENSOR-BASED SORTING AT DIFFERENT MATURITY LEVELS Maturity/ industry adoption FOOD RECYCLING MINING* Time * In certain mining sub-segments, such as industrial minerals and diamonds, sensor-based sorting is a more mature technology 55
Slide 56: Sorting value proposition
SORTING VALUE PROPOSITION 56
Slide 57: Seasonality and cyclicality in TOMRA Sorting
SEASONALITY AND CYCLICALITY IN TOMRA SORTING Illustration of annual revenue distribution The macro environment impacts sales Q1 Q2 Q3 Q4 • Food: Higher activity towards the end of the year • Recycling: The more the prices either decline as clients want deliveries close to the harvesting or fluctuate
Slide 58: How does sensor based separation work?
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 multipl
Slide 59: Cutting-edge technology driven by significant investments in R&D
CUTTING-EDGE TECHNOLOGY DRIVEN BY SIGNIFICANT INVESTMENTS IN R&D… SENSOR PORTFOLIO Electromagnetic Sensor (EM) Radiometry (RM) Material property detected: Material property detected: Natural • In-house R&D department with more than electromagnetic properties like Gamma-Radiation 20% of all employees
Slide 60: Products serving a wide range of detection parameters
…TO DEVELOP PRODUCTS SERVING A WIDE RANGE OF DETECTION 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 wa
Slide 61: Efficiency in product development: common sorting platform
EFFICIENCY IN PRODUCT DEVELOPMENT: COMMON SORTING PLATFORM Before After Benefits TITECH BEST Odenb. … Food Recycl. Mining • Faster development Hardware Hardware time, and faster time to Processing Processing market Statistics Statistics • Economies of scale Interfaces Interfaces • Reusability of Sen
Slide 62: Cross utilizing our portfolio technologies
CROSS UTILIZING OUR PORTFOLIO TECHNOLOGIES TITECH NIR + ODENBERG BEST LASER + TOMRA TITECH NIR + BEST LASER platform mining platform Field Potato Sorter PRO Laser Duo Nimbus BSI • The NIR technology allows • The LASER technology • An NIR sensor has been added efficient removal of rocks, allows detec
Slide 63: Sorting Solutions: Our strategy
SORTING SOLUTIONS: OUR STRATEGY Food Recycling Mining More than doubling of emerging markets revenue (but North America and Europe still 60% of business in 2018) New applications representing Significant expansion of sales 1 Revenue growth 25% of revenue in 2018 15 M€ growth in new segments network
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Slide 65: Growth in global food demand will spur investments in automation
GROWTH IN GLOBAL FOOD DEMAND WILL SPUR INVESTMENTS IN AUTOMATION Drivers and trends • Increasing food consumption in emerging markets, more mid-class consumers • Industry focus on increased productivity and reducing costs through automation & quality control • Higher quality demands from the consume
Slide 66: Market size food sorting
MARKET SIZE FOOD SORTING* Total annual market size Market growth EUR million • Total market for food sorting growing around 6- 8% per year • Approximately a third of total growth is dormant potential ~1 100 — only unlocked by development of new applications and technologies • New world share grows b
Slide 67: An increasing share of potatoes are processed and sorted
AN INCREASING SHARE OF POTATOES ARE PROCESSED AND SORTED Potato production per year Million metric tons Global potato production 370 Urbanization and growing incomes drive growth for packaged and processed potatoes Potatoes for human 250 Demand for packaged and processed consumption potatoes drive i
Slide 68: Food competitive landscape
FOOD COMPETITIVE LANDSCAPE >3,000 TOMRA competitive positioning # of installed machines • Size (revenues) • Widest range of applications (150+) 1,000- 3,000 • Broadest technology base • Geographic reach (~80 countries) • Market share in targeted segments • Transformative solutions (Q-Vision) • Marke
Slide 69: TOMRA has the broadest footprint within the food sorting universe
TOMRA HAS THE BROADEST FOOTPRINT WITHIN THE FOOD SORTING UNIVERSE Free fall Belt Lane SK NDF PFV FV FF Other Rice, Nuts & Processed Fresh Fresh Fruits Confectionary, Seeds & Dried Fruit Fruits & Veg Vegetables etc. Kernels Circa 40%* of annual Circa 30%* of annual Circa 25%* of Circa 5%* of global s
Slide 70: Our broad coverage and technology base is setting us apart
OUR BROAD COVERAGE AND TECHNOLOGY BASE IS SETTING US APART DRIED FRUIT NUTS FRESH CUT FRUIT VEGETABLES MEAT POTATOES SEAFOOD • Apricots • Almonds • Baby • Apples • Beans • Bacon bits • Washed • Mussels FOOD • Craisins • Cashews leaves • Blackberries • Beet • Beef • French fries • Scallops • Figs • H
Slide 71: Uniquely positioned to serve the entire value chain
WE ARE UNIQUELY POSITIONED TO SERVE THE ENTIRE VALUE CHAIN WITH OUR PRODUCT PLATFORM Sales of potato-related products account for about 25% of the sales in the food division 71
Slide 72: Our customers
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: So
Slide 73: Specialty products applications
SPECIALTY PRODUCTS APPLICATIONS Peeling RAW MATERIALS TOBACCO 10 % APPLICATIONS • Virgin plastics • Threshing lamina Meat (Process Analytics) • Synthetic rubber • Threshing stems 15 % • Virgin wood • Oriental leaf • Specialty chemicals • Primary lamina Raw materials and tobacco • Primary stems Veget
Slide 74: Payback calculation food machine
PAYBACK CALCULATION FOOD MACHINE* From manual sorting of bell peppers to automation • Investment: 2 machines EUR 660k • Customer reduces manual labor by ~80% • Reduction in input materials of ~30% • Reduction of waste by 25% • Delivering an increased output of ~25% Total annual benefits for the cust
Slide 75: Integration in food progressing as planned
INTEGRATION IN FOOD PROGRESSING AS PLANNED • Very good progress in integrating R&D and operations departments • Creating a common, well- functioning sales team with an agreed ambitious joint strategy • New products already launched benefiting from the wide in-house technology portfolio we have We ar
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Slide 77: Global drivers for the recycling segment
GLOBAL DRIVERS FOR THE RECYCLING SEGMENT Drivers and trends • Consumption and industry production level increase • Favorable changes in regulatory framework (DSD, WEEE, ELV, etc) • Commodity price levels and fluctuation • Access to financing • Demand for recycled raw materials • Increasing labor cos
Slide 78: Market size recycling
MARKET SIZE RECYCLING Total annual market size Market growth EUR million • Market expected to grow at around 7-9% per year, lower than previous expectations due to economic slowdown • Demand in old world flattening, while new markets expected to drive growth • Existing segments will serve as a base,
Slide 79: Only a small fraction of MSW is currently sorted
ONLY A SMALL FRACTION OF MSW IS CURRENTLY SORTED Municipal solid waste production per year Million metric tons Total global MSW production 2 000 A large, although declining, fraction of MSW is today not MSW collected 1 300 even collected # sorters MSW suitable for sensor- The majority of collected M
Slide 80: 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 • Highest number of applications and markets served • Leading brand • Market share: 55-65% 0-1,000 10-25 25-50 >50 mark
Slide 81: Recycling: applications and sensor technology
RECYCLING: APPLICATIONS AND SENSOR TECHNOLOGY HOUSEHOLD AUTOMOBILE ELECTRONIC WASTE PACKAGING C&D SHREDDER SCRAP MATERIAL • Hard plastics • Plastics • Inert material • NF metal • Printed circuit • Plastic film • Plastic film • Plastic film • Stainless steel boards • Mixed paper • Cardboard • Metals
Slide 82: Payback calculation recycling machine
PAYBACK CALCULATION RECYCLING MACHINE Background: Autosort • Waste management plant in UK • Annual throughput of 130,000 tons per annum (two shifts of 8 hours at 90% availability) • By installation of sorters, 30 manual workers can be replaced • Additional benefit through higher material recovery: €
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Slide 84: 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 Sensor Based Sorting • 15% to 50% of the ROM Waste Beneficiation Plant: can be
Slide 85: Global drivers for the mining segment
GLOBAL DRIVERS FOR THE MINING SEGMENT • Energy costs and water stress are major drivers • Demand of all commodities is expected to grow with increased population and urbanization in the drivers seat • Increasing labor costs in emerging world drive adoption of automatic sorting technologies • Mining
Slide 86: Market size mining
MARKET SIZE MINING Total annual market size Market growth EUR million • Capex is forecasted to decline 2013 – 2014 (down 20% versus 2012) • Expected to pick-up again during 2015 • Sensor based machines sales expected to grow at around 15% per year — Growth is however conditional on new applications
Slide 87: Large potential in high volume segments such as coal
LARGE POTENTIAL IN HIGH VOLUME SEGMENTS SUCH AS COAL Coal production per year Million metric tons Total global coal production Some coal does not need to be 7 500 upgraded before use Sensor-based sorting competes with other, established, Coal that needs upgrading 3 000 methods for upgrading, such as
Slide 88: Mining competitive landscape
MINING COMPETITIVE LANDSCAPE >200 TOMRA competitive positioning # of installed machines • Wide geographical coverage • Broadest technology platform 50-200 • Leading brand • Pioneering in developing high volume sorter in corporation with Rio Tinto • Market share: 40-50% 0-50 10-25 25-50 >50 markets m
Slide 89: Mining: applications and sensor technology
MINING: APPLICATIONS AND SENSOR TECHNOLOGY INDUSTRIAL BASE & FUEL/ PRECIOUS DIAMONDS MINERALS Fe METALS ENERGY METALS & GEMS METAL SLAG • Calcite •Copper • Coal • Gold • Diamonds • Stainless steel COMMODITY • Quarts • Zinc • Uranium • Platinum • Tanzanite • Copper • Feldspar • Nickel • Colored • Chr
Slide 90: Payback calculation mining machine
PAYBACK CALCULATION MINING MACHINE Background: PRO Secondary/Tertiary XRT • Poly-metallic ore in Scandinavia • Before installation the customer mines, transports and processes 700kt per year • By installation of sorters, the amount ore to be treated can be reduced by 155kt per year • As an additiona
Slide 91: Update on the Rio Tinto R&D partnership
UPDATE ON THE RIO TINTO R&D PARTNERSHIP Background • TOMRA and Rio Tinto agreed in Q1 2012 to form a 5 year strategic R&D partnership with the aim to develop commercial scale sorting systems for upgrading bulk minerals • This partnership is focused on scaling up Rio Tinto's iron ore and copper sorti
Slide 92: Financial development and targets
Financial development and targets 92
Slide 93: Group key financials development
GROUP KEY FINANCIALS DEVELOPMENT Revenues Gross Contribution and margin 4 500 2 000 50% 4 000 1 800 45% 1 600 40% 3 500 1 400 35% 3 000 1 200 30% MNOK MNOK 2 500 1 000 25% 2 000 800 20% 1 500 600 15% 1 000 400 10% 500 200 5% 0 0 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004 2005 2006 200
Slide 94: Collection Solutions financials 2004-2013
COLLECTION SOLUTIONS FINANCIALS 2004-2013 Revenues Gross Contribution and margin 3 500 1 200 45% 3 000 40% 1 000 35% 2 500 800 30% 2 000 25% MNOK MNOK 600 1 500 20% 400 15% 1 000 10% 200 500 5% 0 0 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 95: Sorting Solutions financials 2004-2013
SORTING SOLUTIONS FINANCIALS 2004-2013 Revenues Gross Contribution and margin 1 800 900 70% 1 600 800 60% 1 400 700 50% 1 200 600 500 40% MNOK 1 000 MNOK 800 400 30% 600 300 20% 400 200 10% 200 100 0 0 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 96: 2010-2015 targets: from 2010 to date
2010-2015 TARGETS: FROM 2010 TO DATE TARGETS 2010 -2015 3 segments Yearly growth 4 – 8% merged into 2 40% reduced COGS on new RVMs EBITA-margin 17%-22% from 2012 – targets adjusted accordingly TARGETS 2010 -2015 Yearly growth 10 – 15% Geographical Expansion EBITA-margin 18%-23% 96
Slide 97: How did it go?
HOW DID IT GO? Tomra Collection Solutions TARGETS 2010 -2015 Yearly growth 4 – 8% 40% reduced COGS on new RVMs EBITA-margin 17%-22% 2010-2013: CAGR 3% 2010-2013: AVE. EBITA%18 Tomra Sorting Solutions TARGETS 2010 -2015 Yearly growth 10 – 15% Geographical Expansion EBITA-margin 18%-23% 2010-2013: CAG
Slide 98: Choosing TOMRA's financial targets
CHOOSING TOMRA’S FINANCIAL TARGETS EBITDA% Dividend Growth% EBIT% A jungle of financial Gross EBITA% R&D payout Service parameters in corporate Margin spending as a % of Weighted communication... Return Average Return On sales On Cost of Capital Return On Net Debt/ Equity Capital Employed Invested E
Slide 99: Targets Collection Solutions
TARGETS COLLECTION SOLUTIONS Growth targets: EBITA targets: 2010-2015 target: 4-8% 2010-2015 target: 17-22% 2013-2018 target: 4-8% (unchanged) 2013-2018 target: 17-22% (unchanged) NOTE: 2013 figures comprise actual YTD September 13 + 4Q13 market consensus. Should not be read as guidance 99
Slide 100: Targets Sorting Solutions
TARGETS SORTING SOLUTIONS Growth targets: EBITA targets: 2010-2015 target: 10-15% 2010-2015 target: 18-23% 2013-2018 target: 10-15% (unchanged) 2013-2018 target: 18-23% (unchanged) NOTE: 2013 figures comprise actual YTD September 13 + 4Q13 market consensus. Should not be read as guidance 100
Slide 101: Financial highlights: balance sheet, cash flow and capital structure
FINANCIAL HIGHLIGHTS BALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE Cashflow (NOKm) 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Total From operations 540 550 566 525 457 375 526 346 243 381 4 509 From Investing (201) (209) (150) (229) (163) (182) (143) (140) (65) (136) (1 617) Free cashflow af
Slide 102: Financing
FINANCING Utilized 1654 MNOK 2000 1800 50 Committed and uncommitted credit lines 50 1600 Eksportfinans (A) DNB (B) DNB/SEB (C) 1400 750 C Type 3 year term loan 5 year revolving 3 year revolving credit Interest bearing debt credit facility facility 1200 Established July 2011 January 2011 July 2012 10
Slide 103: Dividend payout (EU fine adjusted)
3. DIVIDEND PAYOUT (EU FINE ADJUSTED) New dividend policy Dividend policy (Since AGM 2012): • Ambition is to distribute 40 - 60% of earnings per share. • When deciding the annual dividend level, the Board of Directors will take into consideration: — Expected cash flow — Capital expenditure plans — A
Slide 104: A comment on return on capital employed
A COMMENT ON RETURN ON CAPITAL EMPLOYED ROCE ex. intangibles ROCE incl. intangibles Capital employed is calculated as EBITA/Net assets: • (Net assets = Total Assets – Total debt, adjusted for cash, interest bearing debt, and tax items) • 2010 ROCE for TCS is adjusted for EU fine TOMRA has delivered
Slide 105: Currency exposure
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% 65 % - 30 % 10 % 10 % 100 % * EUR includes DKK 10% change in NOK towards other currencies will impact; Reve
Slide 106: IE TOMRA
IE TOMRA
Slide 107: Collection Solutions - Financial dashboard
COLLECTION SOLUTIONS – FINANCIAL DASHBOARD Material Material RVM Compaction RVM Compaction Recovery Recovery Dashboard Industry growth Market share 0-10% 0-3% 3-5% 75% 60% 25% Geographical Recurring diversity revenue ~75% 90-100% 25% 20-30 markets 10 markets 30 markets Profitability Cyclicality (ROC
Slide 108: Financial dashboard - Sorting Solutions
FINANCIAL DASHBOARD – SORTING SOLUTIONS Dashboard Food Recycling Mining Industry Market share Growth 5-15% 40-50 %⁽ⁱ⁾ 55-65 % 40-50 % Recurring Geographical revenue diversity 15-20% 45-50 markets 40-50 markets 20-30 markets Profitability (ROCE)* 45-55% Cyclicality Medium High High TARGETS 2013 -2018
Slide 109: Copyright and disclaimer
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