Tomra Systems Asa · OSL:TOM
Tomra Systems Asa — Investor Presentation (July 2022)
84 slides from Tomra Systems Asa's investor presentation, Jul 15, 2022
Slide 1: Investor Presentation
Investor Presentation TOMRA Click to Systems ASA enter name 15 July 2022 Place © TOMRA dd.mm.yy
Slide 2: 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. 2
Slide 3: TOMRA at a glance
4600+ 10.9 BILLION NOK EMPLOYEES REVENUES IN 2021 GLOBALLY Publicly listed on Oslo Stock Exchange (OSEBX: TOM) Collection Recycling Food 3
Slide 4: Our transformation journey
Our transformation journey 2011 COLLECTION 2012 FOOD 2016 FOOD 2008 RECYCLING Sale of Californian material handling TOMRA acquires BEST, leading TOMRA expands into lane business. With the divestment the US food sorting machine producer. sorting, acquiring New Zealand TOMRA acquires With the acquisit
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: Creating value through three divisions
2021 Revenue 2021 EBITA Creating value 100 % 100 % 19% FOOD through three 80 % 30% 80 % divisions 60 % 17% 60 % 22% RECYCLING 40 % 40 % 59% 53% 20 % COLLECTION 20 % 0% 0% Collection Recycling Food Collection Recycling Food
Slide 7: Divisions and segments
Divisions and segments 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 process
Slide 8: Installed base worldwide
Installed base worldwide COLLECTION RECYCLING 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 ~1,100 South Africa ~52
Slide 9: TOMRA is uniquely positioned along powerful global megatrends
Number 1 in all markets globally 70% COLLECTION 25% FOOD 55% RECYCLING TOMRA is uniquely positioned along powerful global Climate change and resource scarcity megatrends Demographic and social change Technological breakthrough Rapid urbanization Click to enter name Place dd.mm.yy
Slide 10: TOMRA Collection
TOMRA Collection — 10
Slide 11: The global leader in reverse vending
50 years of TOMRA experience The global leader in reverse vending 81 000 machines in operation market We are Represented in more than leader globally 60 countries Collecting 44 billion containers a year 5.7bn NOK revenues in operation 19% EBITA margin 11
Slide 12: An 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 (2016
Slide 13: Upcoming deposit markets
Upcoming deposit markets Quebec: Scotland: Deposit Return System to be Container deposit scheme modernized in 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 Deposit Return S
Slide 14: Driving market momentum through global advocacy work
We are driving the market momentum through global advocacy work aiming to achieve best practice deposit systems and generate 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
Slide 15: High collection rates achieved in two years' time
High collection rates achieved in two years’ time Return rate Deposit value in EUR Return rates in Lithuania 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 deposit No deposit 0.1-0.4 0.09 0.1 0.05 End of year 2 92% *Deposit values
Slide 16: The 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 17: 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 17
Slide 18: Legislative outlook supports new and expanded DRS markets
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 19: Europe and the Single Use Plastic Directive
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 19 * In addition, some markets have refillable deposit systems such as: Austria, B
Slide 20: 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 20 * In addition, some markets have refillable deposit systems such as:
Slide 21: 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 21 Number of RVM markets Source: TOMRA estimates and analysis
Slide 22: 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 22
Slide 23: Business model expertise across deposit systems
Business model expertise across deposit systems Financing Retail Sales & Service model Throughput model Upfront equipment High recurring revenue Revenue Recurring service Location revenues Swift roll-out Proven track record Aligned interests Retailer purchases and takes the TOMRA owns and operates t
Slide 24: 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 More risk Year 0 Time More responsibility Sales & Service Throughput Higher net pre
Slide 25: 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 26: 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 26
Slide 27: | | | 'BILASIPULLOJA TAHAN
| | | 'BILASIPULLOJA TAHAN ee Se —AUTOMAATTIN,KIITOS AUKI
Slide 28: RVM Kiosks, Reverse Vending Centres, Single RVMs
RVM Kiosks Reverse Vending Centres Single RVMs Automated Depots Over the Counter Scheme App 28
Slide 29: 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 30: 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 30 30
Slide 31: TOMRA Recycling
TOMRA Recycling 31
Slide 32: 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 33: Packaging waste including EPS
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 34: Strong commitment from the industry 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 35: 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 36: 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 37: A broad sensor-based technology portfolio
A broad sensor-based technology portfolio RECYCLING FOOD ELECTROMAGNETIC SENSOR (EM) Electro-magnetic properties like conductivity and permeability X X LED SPECTOMETRY (LED) Color and spectral properties based on multiple LED light X X EM sources in very high optical resolution LED NEAR-INFRARED SPE
Slide 38: Automation with TOMRA units
Automation with TOMRA units 38
Slide 39: 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 40: Mining industry needs a leap towards a more sustainable future
The essential nature of mining means that the industry needs to make a leap towards a more sustainable future 40
Slide 41: Ore sorting solutions reduce the mining footprint
Our ore sorting solutions enable the mining industry to reduce their footprint Ore sorting is used to: • Reduce operational impact and footprint by splitting the “good” and the “bad” materials early in the process • Extend the lifetime of a mine • Reclaim valuables for stock piles 41
Slide 42: 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 42 42
Slide 43: 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 44: 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 45: 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 46: Commitment towards plastic packaging by 2030
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 46 46
Slide 47: TOMRA Food
TOMRA Food 47
Slide 48: 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 48 Automa
Slide 49: 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 50: Food Categories
Food Categories Potatoes Nuts & Dried Fruit Vegetables Apples Citrus Berries Cherries Fresh Cut Avocados Kiwifruit Grains & Seeds 50
Slide 51: 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) Lane grading Belt Application Prepared /preserved Belt inspection veg. and fruit Sensor tech. Several (complex) On belt inspection Lane Appli
Slide 52: 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 52 *Approximately 5% of
Slide 53: 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 54: Leading technology position
Leading technology position Sorting & Artificial Grading Intelligence Data & Service & Analytics Support 54
Slide 55: Our food sorting customers
Our food sorting customers PROCESSED FOOD INDUSTRY FRESH PRODUCE INDUSTRY 55
Slide 56: Clear strategic direction and priorities
Clear strategic direction and priorities Maximize Operational Growth Excellence 56 56 56
Slide 57: 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 57
Slide 58: 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 58 Digital Best-in-class
Slide 59: Every Resource Counts
Every Resource Counts 50% Post-harvest food loss reduction by 2030 59
Slide 60: Corporate strategy and sustainable growth
Corporate strategy and sustainable growth 60
Slide 61: 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 MNOK 3 000 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 62: 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 63: 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 63 63
Slide 64: 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 64 64
Slide 65: 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 65
Slide 66: 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 66
Slide 67: 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 68: 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 68
Slide 69: Recycling and Food
Recycling and Food Connected Sorters TOMRA Insight Users 01/2018 01/2019 01/2020 01/2021 01/2022 69
Slide 70: Accelerate growth in core business and develop adjacent opportunities
Our strategy is to accelerate growth in core business and develop adjacent opportunities 70 70
Slide 71: Our ambitions going forward
Accelerate growth in core Our ambitions going forward Develop adjacent business 71 71
Slide 72: How fast can we at TOMRA go and what would it take?
…in a world that needs change how fast can we at TOMRA go and what would it take? 72
Slide 73: 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% 73 Important note: financial ambitions should not be inferred as guiding
Slide 74: Our dividend policy
Our 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 2020 2021 Cash Flow from
Slide 75: Our ambition is to keep an investment grade status
Our ambition is to 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 75 75 75
Slide 76: 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 77: 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 78: 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 78
Slide 79: Shareholder structure
Shareholder structure Top 10 shareholders as of 30 June 2022*) Shareholders by country**) 1 Investment AB Latour 62 400 000 21,1 % 2 Folketrygdfondet 23 399 710 7,9 % 13% 3 APG Asset Management 14 189 128 4,8 % 25% 6% 4 BlackRock 11 556 173 3,9 % 7% 5 Candriam 7 573 768 2,6 % 6 Handelsbanken 7 357 9
Slide 80: TOMRA is uniquely positioned along global megatrends
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 80 80
Slide 81: For a sustainable planet for generations to come
For a sustainable planet for generations to come 81 81
Slide 82: We have an obligation to grow
we have an obligation to grow 82 82
Slide 83: 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 84: www.tomra.com
www.tomra.com