121016 investor presentation final

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  1. 1. TOMRAINVESTORPRESENTATION TOMRA SYSTEMS ASA 19th October 2012
  2. 2. TOMRA was founded on an innovation in 1972that began with design, manufacturing and saleof reverse vending machines (RVMs) for automatedcollection of used beverage containers 2
  3. 3. Today, TOMRA creates sensor-based solutions foroptimal resource productivity helping our customersincrease their financial results and reduce theirenvironmental impact3
  4. 4. TOMRA has installations in over 80 marketsworldwide and had total revenue of ~3.7 billion*NOK in 2011TOMRA has ~2,200 employees and is publicly listedon the Oslo Stock Exchange* Excluding BEST4
  5. 5. The TOMRA Group continues to innovate andprovide cutting-edge solutions for optimal resourceproductivity within two main business areas:Collection Solutions (reverse vending, materialrecovery and compaction)Sorting Solutions (recycling, mining and food)5
  6. 6. A TINY BLUE AND GREEN OASIS OF LIFE INA COLD UNIVERSE. DAVID SUZUKI
  7. 7. THE WORLD POPULATION AND STANDARDOF LIVING IS INCREASING DRAMATICALLY
  8. 8. WORLD RESOURCES ARE UNDERUNPRECEDENTED PRESSURE
  9. 9. RESOURCE PRODUCTIVITY MUST INCREASETO ENSURE SUSTAINABLE DEVELOPMENT
  10. 10. THE DAWN OF THE RESOURCE REVOLUTIONSOURCE: McKinsey10
  11. 11. The resource revolution is abouttransforming how we obtain, use, and reuse resourcesfor sustainable economic growth and improved qualityof life for all. 11
  12. 12. At TOMRA we have always thought this way.From inventing the worlds first reverse vendingmachine in 1972 to providing the mostinnovative sensor-based sorting systems today. 12
  13. 13. TOMRA IS TRANSFORMING HOWWE OBTAIN OUR RESOURCES
  14. 14. Our sorters can reduce water consumptionwith 3-4 cubic meters per ton oreOur sorters can reduce energy consumptionin mining by 15%Our sorters can increase recovery of valuableminerals by up to 25%14
  15. 15. TOMRA IS TRANSFORMING HOWWE USE OUR RESOURCES
  16. 16. Our optical sorters can analyze 25 tons of product perhour, maximizing yield and recovery while reducingwaste, energy, and chemical useWe recover 5% - 10% of the produce, through higher yields andbetter utilization, reducing pressure on the food chainThats approximately 25,000 trucks per year in potatoes alone16
  17. 17. TOMRA IS TRANSFORMING HOWWE REUSE OUR RESOURCES
  18. 18. 30 billion used beverage containers are every yearcaptured by our reverse vending machinesOur optical waste sorter can analyze and sort a footballstadium covered with waste in less than 15 minutes715,000 tons of metal is recovered every year byour metal recycling machinesOur vertical balers enable daily savings of ~20,000transport movements, 160,000 liters of fuel andup to 50% of customers waste handling costs 18
  19. 19. TOMRA CREATES SENSOR-BASED SOLUTIONS FOROPTIMAL RESOURCE PRODUCTIVITY
  20. 20. Today we see more opportunities for optimalresource productivity than ever before20
  21. 21. WASTE INTO VALUE
  22. 22. YIELD INTO USAGE
  23. 23. SOURCE INTO RESOURCE
  24. 24. PURPOSE INTO PROFITS
  25. 25. PROFITS INTO PROGRESS
  26. 26. TOMRA invests 8% of its yearly revenue in R&D, toprogress and create solutions to move past the falsechoice between the earth and the economy 26
  27. 27. TOMRA: Leading the resource revolution 27
  28. 28. TOMRA IN SHORT
  29. 29. THE TOMRA TRANSFORMATION JOURNEY 20002004 2008 2012FROM: TO:5%16% 40% 100% 95%84%60% Collection Collection CollectionA house ofCollectionA brandedbrands SortingSortingSortinghouse29
  30. 30. CREATING VALUE THROUGH TWO STRONG BUSINESSAREAS Sorting Solutions Two strong areas for value creationA larger part of TOMRA 40% 60% StableHigh growth High marginsHigh marginsCollection Sorting Low cyclicality Medium cyclicality High technology - sustainable businessSource: Rounded proforma figures after acquisition30
  31. 31. TOMRAS TWO BUSINESS AREAS*TOMRA Collection Solutions TOMRA Sorting Solutions Reverse Vending Machines RecyclingKey activities Sale and service of solutions for automated collection of used beverageHigh speed identifying, sorting and processing of information: containers with deposit in retail stores material, shape, size, color, defect, damage and location of objectsShare of 11 sales ~46% ~11%Employees960175CustomersGrocery retailersMaterial recovery facilities, scrap dealers, metal shredder operatorsMarket share~65%~50-60% Compaction MiningKey activities On of the worlds largest manufacturer The leading provider of sensor-based of vertical balers sorting systems for the mining industryShare of 11 sales ~4%~3%Employees75 50CustomersRetail, manufacturing industry, restaurant, catering & hotel, warehouse & distribution Mining companiesMarket share~15-20% in active markets ~40-60%Material Recovery FoodKey activities Pick-up, transportation and processing of used beverage containers and Optical sorting and processing operation of a network of collection sites in USAsolutions for foodShare of 11 sales ~13% Odenberg: ~7% (acquired in 2011) /BEST: ~16% (acquired in 2012)Employees400Odenberg: 175 / BEST: 310CustomersGrocery retailers and beverage manufacturers Food growers, packers and processorsMarket share~60% in USA (markets served)~25%* Proforma 2011 as if BEST should have been part of TOMRA31
  32. 32. TOMRA INSTALLED BASETOMRA Collection Solutions TOMRA Sorting Solutions INSTALLED UNITS INSTALLED UNITS INSTALLED UNITS INSTALLED UNITSINSTALLED UNITS INSTALLED UNITS Nordic~15,000 Nordic~16,000 Europe 1850 Europe70 Europe ~1,150 Europe ~1,950 Germany ~23,000 UK~17,000 Asia220 US / Canada 35 US/Canada ~1,350US/Canada~1,050 Other Europe~12,000 Other Europe~26,000 US / Canada 500 Australia 20 Asia ~120 Asia/Oceania ~330 Japan~500 Asia/Oceania ~4,000 Other 380 South Africa45 Other~100 South America ~120 North America ~15,000 North America~4,000 Other 20 Middle East/ ~350 South America ~1000 Middle East/Africa ~500Africa TOTAL ~67,000 TOTAL~67,500TOTAL 2,950 TOTAL 190TOTAL~2,720 TOTAL~3,80032
  33. 33. USING THE POWER OF BUSINESS TO DO GOOD EMPLOYEESETHICAL BUSINESS BEHAVIOUR 81% of our employees say Member of UN Global Compact TOMRA is a Great Place to since end 2009 Work Implementing ethicalpolicies worldwide ENVIRONMENT INCREASING CUSTOMER VALUES We contribute to avoided emissions of Productivity about ~10mill tons Revenues CO2 annually Quality33
  34. 34. TOMRA IN DEPTH
  35. 35. TOMRA Collection Solutions 35
  36. 36. TOMRA REVERSE VENDING TRANSFORMING BEHAVIOR
  37. 37. THE USED BEVERAGE CONTAINER RECYCLINGVALUE CHAINGeneric used beverage container (UBC) recycling value chainRVM-based UBC recycling value chain RVM SERVICE/ DATA ADMIN/ MATERIALMATERIAL MATERIAL MATERIALTECHNOLOGY SUPPORT CLEARINGPICK-UP PROCESSING BROKERAGE RECYCLING37
  38. 38. RVM PRODUCT PORTFOLIO38
  39. 39. RVM VALUE PROPOSITION RVMs reduce need for manual labour and willtypically have a payback period of 12-18Reduced costsmonths for medium sized stores Improved logistics and handling RVMs keep track of all deposit transactions in Germany alone the total transaction volume Clearing ofhas an annual value in excess of ~4 bn EURdeposits RVMs have several fraud detection features toprevent paying out deposit on non-eligiblecontainers RVMs make it convenient and easy forHighconsumers to return their empty containersconsumer convenience RVMs are clean and efficient and ensurecorrect redemption of containers39
  40. 40. MARKET STRUCTURES AND BUSINESS MODELS Mandatory Non-refillables account for 75% of all containers sold and are popular due to 1 (non-refillable) simplified distribution/manufacturing and consumer marketing aspects deposit markets Some markets have MANDATORY deposit systems to ensure proper collection ofcontainers RVMs are used to make these systems more effective and efficient Voluntary (refillable) Refillable containers account for ~25% of all containers sold and have traditionally 2 deposit marketsbeen used by local and regional breweries outside NA Refillable containers are typically part of a VOLUNTARY deposit system toincentivize consumers to return containers for reuse RVMs are used to make this system more effective and efficient Other incentive-based In markets without deposit there might still be a need to organize collection of 3 marketsempty containers, either to support overall recycling targets/ambitions or to (non-deposit)demonstrate corporate social responsibility Although the rationale for using RVMs varies from market to market, RVMs can ingeneral be used to facilitate the collection process 40
  41. 41. COMPETITIVE LANDSCAPEAnnual revenuefrom RVM>65,000 Number of installed RVMs 10,000-20,000 2,500-5,00030Number of RVM marketsSource: TOMRA estimates and analysis 41
  42. 42. TOMRA COLLECTION: OUR STRATEGY1 Protect and defend Cost leadership existing business Increased differentiationSpur growth in Accelerated machine replacement2 existing markets Incremental revenue streams on installed base New deposit markets3 Succeed in new markets Viable non-deposit business models 42
  43. 43. COST LEADERSHIP AMBITION Overall ambition to reduce COGS on new RVMs by 40% from 2010 to 2015 20% by aggressive sourcing and production strategy 70% of sourcing from low-cost countries Flexible and quicker assembly close to main markets 15% by technology and design for low cost manufacturing Modularity building block principle Smarter design , e.g. combining processors and sensors 5% by other means New production techniques Automation Volume43
  44. 44. RECENT TOMRA INNOVATIONS T-820 TouchMultiPac SoftDrop MK3 Flake Setting new standards in Taking uptime to new levels Enabling simpler store Boosting operational uptime usability foroperations and logistical efficiency consumer, owner and operatorTOMRAPlus DMRDoublefeed A new management tool for Minimizing border fraud Customer-specific solution proactive admin of your issues in Michiganenabling space-efficient reverse vending systems operations 44
  45. 45. PRESENT AND PROSPECTIVE DEPOSIT SCHEMESCanadaEuropeSaskatchewanNorwayScotlandManitobaIceland SpainAlberta FinlandOntario SwedenNorthwest Territories Croatia Czech RepublicNunavut Germany MontenegroYukon Denmark SerbiaPrince Edward IslandNetherlands LithuaniaNova Scotia IsraelLatviaNew Brunswick EstoniaNewfoundlandQuebecUSA AustraliaCaliforniaFlorida Northern TerritoryOregonGeorgia South AustraliaConneticutNorth CarolinaNew YorkVirginiaGeneral AustraliaMassachusettesKentuckyVermont MissouriMaineHawaiiIowaMichigan States / provinces with a States / provinces in States / provinces in running deposit systemadvanced discussion Initial discussions 45
  46. 46. TOMRA Sorting Solutions46
  47. 47. STRONG REVENUE GROWTH SINCE INCEPTION IN 1996 Total revenue growth (organic plusRevenue development and key milestones Acquired 31st of May 2012 inorganic) of ~35% per year fromEUR million2004-11 Organic growth for the same period was ~22%Ultrasortacquired Odenberg Technology base and acquired segment/application knowledge expanded both through acquisitions and in-house ventures >120 CommoDas Growth driven by: acquired Price increases in food, commodities & landfill costs TITECHReal Vision TITECH Visionsort AS Systems acquired by Favorable changes in regulatory established acquiredTOMRA framework (DSD, WEEE, ELV, etc) QVision AS Strong sales and service network 14.50.5established Technology leadership Higher quality and food safety1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 demands47
  48. 48. OUR CORE TECHNOLOGY: THE EYES AND BRAINS OFSORTING AND PROCESSING High-tech sensors are utilized to identify objects on a conveyor belt High speed processing of information: material, shape, size, color, defect, damage and location of objects Precise sorting by air jets or mechanical fingers 48
  49. 49. A COMMON SENSOR BASED TECHNOLOGY PORTFOLIOSensor/Material PropertySegment[m] Technology10-12 RM (Radiometric) Natural Gamma RadiationMining Gamma-10-11radiation10-10 XRT (X-ray transmission) Atomic Density Recycling, Mining, FoodLow Energy X-ray X-ray10-910-8XRFX ray fluorescence (ElementalRecycling, MiningUltraviolett (UV) 10-7 Spectroscopy)10-6COLOR (CCD Color Camera) Reflection, Absorption,Recycling, Mining, FoodVisible light (VIS)10-5 Transmission10-4Near Infrared (NIR) Laser attenuation andMonochromatic Reflection Mining, Food10-3PM (Photometric) /Absorption of Laser Light Infrarot (IR)10-2 Scattering analysis of Laser Light Microwaves 10-1NIR / MIR (Near/Medium Reflection, Absorption Recycling, Mining, FoodInfrared Spectrometry) (Molecular Spectroscopy)101LIBS Laser induced breakdownRecycling, MiningRadio waves 102spectroscopy103Alternating current EM (Electro- Conductivity,Recycling, Mining, Food104 (AC) Magnetic sensor) permeability49
  50. 50. CUTTING-EDGE TECHNOLOGY DRIVEN BYSIGNIFICANT INVESTMENTS IN R&DSENSOR PORTFOLIO In-house R & D department with morethan 305 peopleElectromagnetic Sensor (EM)Radiometry (RM)Material property detected:Material property detected: Partnership with leading R&Delectromagnetic properties likeradioactivityconductivity and permeabilityinstitutions: SINTEF, CTR, FraunhoferILT; universities like RWTH and BrusselsCCD Color Camera (COLOR) IR Camera (IR) 8% of revenue invested in R&D Material property detected: heatMaterial property detected:color properties in the color areconductivity and heat dissipation 15 test centers worldwideas red, green and blueX-ray Transmission (XRT) X-ray Fluorescence (XRF)Material property detected: specific Material Property detected:atomic density irrespective of size, elemental compositionmoisture or pollution levelVisible Light Spectrometry (VIS) Near-Infrared Spectrometry (NIR)Material property detected: visibleMaterial property detected: specific andspectrum for transparent and opaqueunique spectral properties of reflectedmaterialslight in the near-infrared spectrumLaserInfrared Transmission (IRT)Material property detected:Material property detected:scattering of laser lightlight absorptionTest center in Koblenz, Germany 50
  51. 51. WHY SENSOR-BASED SORTING? Increase purity of Increaserecovery of Increase yieldINCREASEsellable materials valuable metals, minerals, Increase throughputREVENUES Increase recovery ratediamonds and gems from ores Increase capacity New technology give access to old dumpsREDUCE Reduce labor Reduce energy ReducelaborCOSTS requirements consumption requirements Lower operating and Reduce water consumption Loweroperating andservice costs Less wear and tear service costs Less rocks needs crushing ReducewasteOTHER Consistentquality of Less environmental impactFood safetyBENEFITSoutput streams Reduce carbon footprintIncreased and consistent Increaseflexibility of Easier permitting quality and safetyproduction lineIncreased flexibility of Monitor material production linecompositionProduction reporting and analysis51a part of TOMRA
  52. 52. ADOPTION OF SENSOR-BASED SORTING AT DIFFERENTMATURITY LEVELSMaturity/industryadoption FOODRECYCLINGMINING* Time* In certain mining sub-segments, such as industrial minerals and diamonds, sensor-based sorting is a more mature technology.52
  53. 53. MARKET SIZE AND POTENTIALTotal annual market size for different sensor-based sorting segmentsEUR million ~850-900~500-550 Food 650 Mining Metal 400 Waste602070409050 2010 2015 Source: TOMRA estimates and analysis53
  54. 54. TOMRA SORTING: OUR STRATEGY Aggressively target promising regions and markets 1 Expand geographically Leverage market presence across entire portfolio Continue to invest heavily in R&D 2Maintain technologyleadership position Bring new and enabling technology to the market Further develop web of partners Utilize our market leader position to maximize economies of scale effect 3Cost leadership Effective sourcing in combination with product friendly R&D M&A to consolidate market New verticals/business streams in sensor-based sorting 4and enter new business Increase footprint and scale through consolidation streams *Now added through latest acquisition of BEST* 54
  55. 55. TOMRA SORTING FOOD SECURING QUALITY, EFFICIENCY, AND PRODUCTIVITY
  56. 56. AFTER ACQUIRING BEST TOMRA HAS A BROADFOOTPRINT WITHIN THE FOOD SORTING UNIVERSE#1 #1SKNDF PFV FVFF OtherSeeds & Nuts &ProcessedFreshFresh FruitsConfectionary,KernelsDried Fruit Fruits & VegVegetablesetc. Circa 40%* of annualCirca 30%* of annual Circa 25%* ofCirca 5%* ofglobal sorter sales global sorter sales annual globalannual globalrevenue revenuesorter sales sorter sales revenuerevenue* TOMRA estimates 56
  57. 57. FOOD: APPLICATIONS AND SENSOR TECHNOLOGY POTATO FRUITVEGETABLE MEAT/SEAFOODFOOD Whole Tomato Beet Beef Field Citrus Corn Pork Seed Dried fruits Carrot Seafood Table/ware Nuts Green bean Sweet Peach & pear Jalapenos/ Processed Pepper Peeled Onion Pickles CucumbersSENSOR NIRNIRNIR NIRTECHNOLOGY VISVISVIS VIS DRIED FRUITNUTS FRESH CUT FRUITVEGETABLESPOTATOSEAFOODFOOD Apricots Almonds Iceberg Apples Peas Chips Scallops Raisins Cashews Mixed salad Apricots Beans Flakes Mussels Figs Hazelnuts Leaves Blackberries Broccoli French fries Shrimp Prunes Macademias Spinach Blueberries Carrots Craisins Peanuts Spring Mix Cherries Corn Pecans Cranberries Garlic Pistachios Pineapple Mixed vegetables Seeds Raspberries Walnuts StrawberriesSENSOR LASERLASERLASER LASERCAMERALASERLASER CAMERATECHNOLOGY X-RAYX-RAYCAMERACAMERA LASER / FLUOCAMERA X-RAY57
  58. 58. SORTING UNWASHED POTATOES: WORKING PRINCIPLE The Field Potato Sorter is ODENBERGs first venture into the unwashed potato market The machine uses unique near infra-red technology to remove soil clods, stones and rotten potatoes, in addition to the foreign material commonly found in fields such as golf balls, plastics, wood etc The FPS sorter should be used after a soil remover and is designed to fit existing grading equipment or be used as a standalone unit and can operate on harvested potato crop before and after storage The system also provides online potato size data for logging, plus sorter operating information58
  59. 59. FROM FARM TO FORKPROVIDING SOLUTIONS THROUGHOUT THE VALUE CHAIN 59
  60. 60. VALUE PROPOSITION Up to 100% reduction on manual labor alternativeOperational Productivity Increase ~ 20% Efficiency In many cases sorting cannot be completed manually dueReducesto product size or defect types Costs Yield improvement > 1.5% Protects customers reputations. Automated controlAssuredhelps protect against undesirables or harmful items Consumerentering the food chain. Mitigates against the cost andFood Quality damage of failure, recalls, etc& Safety Legislation for food quality becoming more and more demanding with full traceability High precision and multiple sort grades (by size & quality) maximizes raw product utilization and product sales value Increases Easy to achieve customer requirements regardless ofRevenueincoming product quality. Analyses the crop quality, size and line efficiency as it sorts. Provides real time data to customers to become more productive (effective real time control), maximizing yield and select/monitor suppliers. 60
  61. 61. FOOD: SORTING MARKET SIZE AND POTENTIAL*Total annual market sizeEUR millionGrowth potential Market expected to grow at an annual rate of 5-8%overall Drivers More sophisticated and demanding consumers with more disposable income and changing eating habits Tendency to more processed, packed and frozen food supporting maximum customer convenience and globalization of brands & products of processed food 650-750 Food supply constraints calls for optimal resources productivity500 More focus on food safety, sorting out foreign objects Consolidation in the retail and processing sectors Improving yield and quality Reducing labor costs Globalization & increasing export Verifiable quality & safety processes20122017 Traceability RequirementsSource: TOMRA estimates and analysis* Updated after BEST acqusition61
  62. 62. STRENGTHENING OF MARKET POSITIONING AFTERACQUISITION OF BESTSize and presence Before BESTSize and presence New positioning >3,000 >3,500# of installed machines # of installed machines1,000- 1,000-3,5003,500 0-1,0000-1,00010-25 25-50 >5010-25 25-50 >50 markets markets marketsmarkets markets markets Geographic presenceGeographic presenceRevenue fromsensor-based sortingSource: TOMRA estimates and analysis62
  63. 63. TOMRA SORTING RECYCLING -TRANSFORMING EFFICIENCY AND QUALITY
  64. 64. RECYCLING: APPLICATIONS AND SENSOR TECHNOLOGY HOUSEHOLD AUTOMOBILE ELECTRONIC WASTE PACKAGINGC&DSHREDDER SCRAPMATERIAL Hard plastics Plastics Inert material NF metal Printed circuit Plastic film Plastic film Plastic film Stainless steelboards Mixed paper Cardboard Metals Copper cables Non-ferrous metalconcentrates RDF Mixed paper Wood Copper Metals Deinking paper Paper & Brass Cables Organics/ Metal Cardboard Aluminum CopperBiomass Plastics Meatball sorting Brass Stainless steel Meatball sortingSENSOR NIR NIRNIRNIRXRTTECHNOLOGY VIS VISVISVISEM XRT EM XRTXRTNIREM EM COLOR COLORXRF XRFMixed paper PE/PP flakes Cleaned wood Copper WireBrass64
  65. 65. AUTOMATED WITH TOMRA SORTING UNITSNIR for packaging waste BalerFocus on the PET stream,PPMixed Paper cleaningPE Colored PE Natural ONP Cleaning PET Manual sorting for oversize materials Sorting of Municipal Solid Waste, Cyprus ONP DoublePackaging Deck ScreenBallistics(removing films)Input65
  66. 66. RECYCLING: VALUE PROPOSITION Reduces manual labor by up to 75 % Low operating and maintenance costs andReduces reduced space requirements costs Avoids high turnover of personnel High precision Increases Easy to adapt to changing needs and sorting revenues tasks High volume sorting Ensuresconsistent, s Machines enables longer hour operationstable and Reduced accidents and less strain on staff fast operations Constant quality and performance Some sorting tasks impossible/difficult formanual sorters66
  67. 67. RECYCLING: SORTING MARKET SIZE AND POTENTIALTotal annual market sizeEUR millionGrowth potential160 Market expected to grow at an annualrate of 10-15% overall TITECH expects to maintain its overall 70 market share 90Drivers Increased demand for raw material 40 Higher labor costs Higher commodity prices 90 Legislation (landfills, ELV, WEEE etc.) 50 Adoption of technology in new markets (Asia, Latin America, Eastern Europe) New applications such as flake sorting 2010 2015Waste MetalSource: TOMRA estimates and analysis 67
  68. 68. RECYCLING COMPETITIVE LANDSCAPE Waste recyclingMetal recycling High HighCost advantageCost advantage Low Low LowHigh Low HighTechnological advantage Technological advantageSource: TOMRA analysis68
  69. 69. TOMRA SORTING MINING FINDING MINDFUL SOLUTIONS
  70. 70. MINING: APPLICATIONS AND SENSOR TECHNOLOGYINDUSTRIAL BASE &FUEL/PRECIOUS DIAMONDSMINERALS Fe METALS ENERGY METALS & GEMS METAL SLAG COMMODITY CalciteCopper Coal Gold Diamonds Stainless steel Quarts Zinc Uranium Platinum Tanzanite Copper Feldspar Nickel Colored Chrome Magnesite Tungsten gemstones Talcum Iron Dolomite Manganese Salt Chromite SENSOR COLORXRT XRTXRTCOLORXRT TECHNOLOGY XRTCOLOR RM COLORXRTXRFNIREM XRFXRFEMXRFNIRNIRNIR CalciteCopper CoalGoldDiamonds Ferro Silica Slag70
  71. 71. THE CONCEPT OF SENSOR-BASED SORTING IN MININGRun of Mine Primary CrushingSensor Based SortingBeneficiation PlantMilling Screening DMS FlotationFacts (estimated) 15% to 50% of the ROM can be rejected in an Tailings (fines)early stage of the process (application dependent) These low grade waste rocks dont need to be crushed, grinded and further treatedProduct71
  72. 72. MINING: VALUE PROPOSITION Lower head grade can be processedIncreased access to Better utilization of existing depositsresources Old dumps turn into resources Significant capacity increase of the traditional beneficiation plant Cost savings Energy costs savings Less wear and tear and chemicals costsEnviron- Better carbon footprint mental Reduction of acid mine drainagebenefits Less pollution72
  73. 73. MINING: SORTING MARKET SIZE AND POTENTIALTotal annual market sizeEUR millionGrowth Potential Market expected to grow at anannual rate of around 20-30% overall Commodas Ultrasort expects tomaintain its overall market share60Drivers Increasing demand for commodities from emerging markets Increased pressure on costs but 20high/increasing energy and water costs 20102015Source: TOMRA estimates and analysis 73
  74. 74. MINING COMPETITIVE LANDSCAPEHigh Cost advantageLow Low High Technological advantageSource: TOMRA analysis74
  75. 75. Financial performance and targets75
  76. 76. KEY FINANCIALS DEVELOPMENT Revenues Gross Contribution and margin 4,000 1,80046% 3,500 1,60044% 3,000 1,40042% 1,200 2,50040%NOKmNOKm 1,000 2,00038%800 1,50036%600 1,000400 34%500 200 32% 0 030%2007 20082009 201020112007 2008 20092010 2011 EBITA and marginEarnings per share 80020%3.0 70018%2.5 600NOK per share 2.0 50016%NOKm 400 1.5 30014% 1.0 20012%0.5 100 010%0.0 20072008 2009 201020112007200820092010 201176
  77. 77. FINANCIAL HIGHLIGHTSBALANCE SHEET, CASH FLOW AND CAPITAL STRUCTURE 30 Sept 30 Sept 31 Dec Ordinary cashflow from operationsAmounts in NOK million201220112011 181 MNOK in 3Q 2012 versus 299ASSETS5,346 4,1383,999MNOK in 3Q 2011 Intangible non-current assets 2,328 1,4051,391Cashflow from investments Tangible non-current assets 551 567 527 Minus 939 MNOK, of which Financial non-current assets272 286 264893 MNOK relates to the Inventory 826 639 627 acquisition of BEST. Receivables 1,273 1,1221,012Solidity Cash and cash equivalents96 119 178 42% equityLIABILITIES AND EQUITY5,346 4,1383,999 NIBD/EBITDA = 1.9 (Rolling 12months) Equity2,142 2,0302,141 Minority interest7880 76BEST Kwadraat NV Interest bearing liabilities1,641 782 741 Fully consolidated from 2 July 2012 Non-interest bearing liabilities1,485 1,2461,041 77
  78. 78. FINANCING Utilized 1641 MNOK20001800 50Committed and uncommitted credit lines 501600Eksportfinans (A) DNB (B) DNB/SEB (C)1400 750 C Type 3 year term loan5 year revolving3 year revolving creditInterest bearing debt credit facilityfacility1200 Established July 2011January 2011July 20121000 ExpireJuly 2014January 2016July 2015 Amount NOK 500 million NOK 500 millionEUR 100 million 800 (~NOK 750 million) 500B Repayment BulletBullet Bullet 600 Interest Floating, 3mFloating, 1-12 m Floating, 1-9 m 400 Margin52 bps above NIBOR 60 - 90 bps above 110 165 aboveNIBOR/EURIBOREURIBOR 500 A Pledge NegativeNegativeNegative 200 Covenants 30% Equity30% Equity30% Equity 078
  79. 79. CURRENCY EXPOSURE Revenues and expenses per currency; NOTE: Rounded figures EUR*USD NOK SEKOTHERTOTAL Revenues 50 % 30 % 5% 10 %5% 100 % Expenses 45 % 25 %15 %10 %5% 100 % EBITA80%60 %- 55 %10 %5% 100 % * EUR includes DKK 10% change in NOK towards other currencies will impact;Revenues ExpensesEBITA EUR* 5.0% 4.5%8.0% HEDGING POLICY TOMRA hedges B/S items that will have USD3.0% 2.5%6.0% P/L impact on currency fluctuations SEK1.0% 1.0%1.0% TOMRA can hedge up to one year of future predicted cash flows. Gains and OTHER0.5% 0.5%0.5% losses on these hedges are recorded in ALL9.5% 8.5%15.5% the finance line, not influencing EBITA* EUR includes DKK 79
  80. 80. COLLECTION SOLUTIONS SEGMENT FINANCIALSRevenue development Gross and EBITA margin developmentNOK million Percent3000504541 42412500 38394035200030150025192016 161000 13131510 500 5 0 0 2007 20082009 201020112007200820092010 2011Q1Q2 Q3Q4Full yearGM EBITA 80
  81. 81. COLLECTION SOLUTIONS FINANCIAL DASHBOARD Material MaterialRVM Orwak RVM Orwak Recovery RecoveryDashboardIndustry growth Market share0-5%0-3%3-5%65%80%25% GeographicalRecurring diversityrevenue~75% 90-100%25% 20-30 markets 10 markets 30 marketsProfitability Cyclicality(ROCE)~35%~15% 10-15% LowLowMediumTARGETS 2010 -2015Yearly growth 4 8%40% reduced COGS on new RVM machines from 2010 to 2015EBITA-margin 17%-22%81
  82. 82. SORTING SOLUTIONS SEGMENT FINANCIALSRevenue development Gross and EBITA margin developmentNOK million Percent100070 6462 62 900 5860 54 800 70050 60040 500 2830 26 400 22 300171820 20010 100 0 0 2007 20082009 201020112007200820092010 2011Q1Q2 Q3Q4Full yearGM EBITA 82
  83. 83. FINANCIAL DASHBOARD SORTING SOLUTIONS Dashboard RecyclingMiningFoodIndustryMarket shareGrowth 10-15%50-60 %40-60 % 25%RecurringGeographicalrevenuediversity 10-15% 40-50 markets 20-30 markets 45-50 marketsProfitability (ROCE) 30-40%Cyclicality HighHighMediumTARGETS 2010 -2015Yearly organic growth 10-15%Geographical expansionEBITA-margin 18-23% 83
  84. 84. 843Q122Q121Q124Q113Q112Q111Q114Q103Q102Q101Q104Q093Q092Q091Q09ORDER BACKLOG DEVELOPMENT4Q083Q08 Tomra Sorting2Q081Q084Q073Q072Q071Q074Q063Q062Q061Q064Q053Q052Q051Q054Q043Q042Q041Q046005004003002001000NOK million
  85. 85. Appendices 85
  86. 86. TOMRA MATERIAL RECOVERY TRANSFORMING EFFICIENCY
  87. 87. TOMRAS INTEGRATED VALUE CHAIN IN NORTHAMERICA RVMSERVICE/DATA ADMIN./ MATERIALMATERIAL MATERIALTECHNOLOGYSUPPORTCLEARING HOUSE PICK-UP PROCESSING BROKERAGE RVM BUSINESS MATERIAL RECOVERY BUSINESS In the US, offering an integrated solution to the customer is required in order to sell RVM technology 87
  88. 88. MID-WEST, EAST COAST & QUEBEC OPERATIONSIn addition to RVM sales/service, TOMRA is ~560 MNOK in revenues inalso involved in:2011 Own transportation network Logistics management:in some states, outsourcedPick-up and transportation to 3rd parties in other statesof collected containers Processing of UBCs in own Material processing: facilities plus outsourcedSorting, cleaning, shredding/flaking/facilitiescrushing and baling materials intorecyclable fractions Annual volumes processed (pounds): Material marketing/trading: Sale and Alu 130+ mill.trading of processed materials on behalf of Glass 500+ mill.industry, Plastic 130+ millwhich owns the collected materialsBottlers pay a fee to TOMRA linkedto volume of containers picked-up, processedand marketed88
  89. 89. TOMRA COMPACTION SMALL SPACES CREATE BIG SOLUTIONS
  90. 90. VALUE CHAIN IN THE BUSINESS STREAM COMPACTIONSORTING AND PICK-UP: TO RECYCLINGMATERIALCOMPACTIONBALES ANDSTATION ORRECYCLINGAT SOURCE BRIQUETTES RECYCLING PLANT 90
  91. 91. COMPACTION: THE CONCEPT91
  92. 92. MARKET SEGMENTSThe four main market segments: Revenue breakdown on customer segments: Public Fast inst.food, service, other FOOD RETAIL NON-FOOD RETAIL Waste International6 Management3 food retailers 8 2825Industry13Regional foodretailers MANUFACTURING HOTELS AND17 INDUSTRYRESTAURANTS Non-food retailers92
  93. 93. TOMRA - taking a bigger role in theresource revolution93
  94. 94. DISCLAIMERCopyrightThe material in this Document (which may be a presentation, video, brochure or other material), hereafter called Document , includingcopy, photographs, drawings and other images, remains the property of TOMRA Systems ASA or third party contributors where appropriate. No part of thisDocument may be reproduced or used in any form without express written prior permission from TOMRA Systems ASA and applicable acknowledgements.No trademark, copyright or other notice shall be altered or removed from any reproductionDisclaimerThis Document (which may be a presentation, video, brochure or other material), hereafter called Document, may include and be based on, interalia, forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. The content of thisDocument may be based on current expectations, estimates and projections about global economic conditions, including the economic conditions of theregions and industries that are major markets for TOMRA Systems ASA and its subsidiaries and affiliates. These expectations, estimates and projectionsare generally identifiable by statements containing words such as expects, believes, estimates or similar expressions, if not part of what could beclearly characterized as a demonstration case. Important factors that could cause actual results to differ materially from those expectations include, amongothers, changes in economic and market conditions in the geographic areas and industries that are or will be major markets for TOMRA Systems ASA.Although TOMRA Systems ASA believes that its expectations and the Document are based upon reasonable assumptions, it can give no assurance thatthose expectations will be achieved or that the actual results will be as set out in the Document. TOMRA Systems ASA does not guarantee theaccuracy, reliability or completeness of the Document, and TOMRA Systems ASA (including its directors, officers and employees) accepts no liabilitywhatsoever for any direct or consequential loss arising from the use of this Document or its contents. TOMRA Systems ASA consists of many legallyindependent entities, constituting their own separate identities. TOMRA is used as the common brand or trade mark for most of these entities. In thisDocument we may sometimes use TOMRA, TOMRA Systems, we or us when we refer to TOMRA Systems ASA companies in general or where nouseful purpose is served by identifying any particular TOMRA Company 94