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Investor Presentation INVESTOR PRESENTATION TOMRA SYSTEMS ASA 17.07.2020 © TOMRA We live in an age with the highest level of consumption our planet has ever seen 2 Using more resources than ever before. More than our planet can continue to sustain. 3 TOMRA is well-positioned towards megatrends 1 Solutions for optimal resource productivity 2 Leading market position – fit for growth Circular Economy Future of Food Collection Recycling Solutions Sorting Mining Food Sorting #1 Sorting #1 #1 #1 3 Pioneer in sensor-based and digital technologies 4 Strong financial performance, people & culture Revenues 10 000 8 000 6 000 MNOK 4 000 2 000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 4 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 current practices there will be more plastic than fish in the ocean by 2050 Sources: Wrap, Ellen McArthur Foundation, World Bank 5 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 6 Significant untapped potential to reuse good materials PLASTIC STEEL PAPER PACKAGING ~14% ~70-90% ~50-60% RECYCLED RECYCLED RECYCLED TODAY¹ TODAY¹ TODAY¹ VALUE VALUE VALUE PROPOSITION* PROPOSITION* PROPOSITION* $ 50–80 BN $ 70–150 BN $ 30–40 BN Total volume of plastic packaging is 78 mln tonne annually Worldwide steel production is currently about 1,600 ~80 % of produced paper is potentially recyclable, ~400 mln whereof ~14% is currently recycled, meaning ~67 mln tonne lost. mln tonne annually. 70-90% recycling means ~1,100- tonne annually x 80% = 320 mln t/a potentially recyclable paper With a volume yield of 72% and a weighted average price of 1,450 mln tonne recycled and 160-480 mln tonne in the market. Today, ~58 % or 230 mln t/a are recycled, means 1,100–1,600 USD/t, the total value proposition is in the range of lost. Assuming ~90% yield in process with market 90 mln tonnes are lost. If this is recovered and goes into the USD 50-80 bn. Please note that this is a conservative estimate price of ~500 USD/t equals USD 70-220 bn, so paper recycling process there will be between 10-30% fibre loss, based on a narrow definition of total annual plastic packaging conservative range USD 70-150 bn assuming on average 20%. The value of newsprint paper is ~400- volume. Applying a wider definition can increase the value 600 USD/t, let´s assume 500 USD/t = ~90 mln t/a x 80% x 500 proposition up to USD 170-190 bn. USD/t = USD36 bn * TOMRA ESTIMATES 1) THE NEW PLASTICS ECONOMY, Ellen MacArthur foundation, 2017 7 2) Prices from Statististica.com Circular economy – redefining value creation CLEAN LOOP RECYCLING Business case for plastics CLOSED LOOP RECYCLING Value increase 2.5-7x Data driven Data on collection legal oversight volumes and per ton recycling €1400 Production Clear PP/PE TOMRA COLLECTION €1000 per ton SOLUTIONS Clear PET Distribution TOMRA SORTING per ton SOLUTIONS €500 AUTOMATED Mixed PET COLLECTION Consumption WASTE KERBSIDE RECYCLING COLLECTION LOW QUALITY Down-cycling €200 per ton COMMODITY Mixed Plastic Incineration Landfill 8 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: Wrap, WEF, Accenture (Future of Food), McKinsey 9 New ways of feeding a fast-growing DEMANDING population… To ensure an efficient food production there is an increased need to… …AUTOMATE… Increase Reduce Protect brand value Yield waste Enhance food quality and safety Meet …MONITOR… consumer …AND INNOVATE demands …throughout the value chain By 2030, Asia could represent 1/3 of the global middle class population Production Distribution Consumption Sources: Brookings 10 TOMRA to play a difference in the FUTURE OF FOOD production Processed HARVESTING PROCESSING Retail FMCG AT SOURCE PACKING REPACK Fresh eCommerce GRADE STORE DATA GENERATED THROUGH THE VALUE CHAIN SERVE MULTIPLE PURPOSES Determine taste, Ripeness Improved Farming Reduce food waste Traceability & Defects Uniform Quality Increase Yield Optimise storage Maximise use 11 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. 12 Some of the biggest global challenges are TOMRA’s business opportunities Stefan Ranstrand President and CEO Tomra Group 13 • Our solutions, in use around the globe, helped keep ~17 millions of tons of CO₂ from being released into the atmosphere in 2019 • More than 40 bn used beverage containers are captured every year through our reverse vending machines • Our steam peelers process ~15 million tons of potatoes per year with a 1% yield improvement over other alternatives • ~715,000 tons of metal are recovered every year by our metal-recycling machines 14 TOMRA AT A GLANCE 15 4500+ Publicly listed on Oslo Stock Exchange (OSEBX: TOM) 9.3 EMPLOYEES BILLION NOK GLOBALLY REVENUES IN 2019 FOOD RECYCLING MINING REVERSE VENDING MATERIAL RECOVERY 16 Creating value through two strong business areas 2019 Revenue 2019 EBITA 100 % 100 % • High growth 80 % • High margins 80 % 50% • Medium cyclicality 45% 60 % 60 % Technology leadership - sustainable business 40 % 40 % • Stable 50% • High margins 55% 20 % • Low cyclicality 20 % 0 % 0 % Collection Sorting Collection Sorting 17 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 operation became With the acquisition of BEST, journey TOMRA has moved Ultrasort - specialists less exposed to TOMRA has by far the widest reach from a business of many in sensor-based 2005 movements in within the food sorting universe. brands to one brand with mining technology. many areas of expertise. TOMRA acquires commodity prices. 2004 We are one TOMRA. Orwak Group, a TOMRA scquires TITECH, the leading provider 2018 world's leading provider of of compaction 2011 for a variety of optical recognition and sorting TOMRA acquires Odenberg, 2016 TOMRA compliments its food materials. 2014 technology for the waste rounding out the offering to sorting portfolio with the industri and TOMRA's include food optimization. Divestment of Orwak. TOMRA expands into lane acquisition of BBC Technologies, transformation journey starts. Further portfolio focus sorting, acquiring New Zealand a leading provider of precision 2006 on sensor-based based Compac, confirming grading systems for TOMRA acquires Commodas - a leading technology. TOMRA's position as the blueberries and supplier within the field of sensor-based leading provider other small fruits. products for mining and metal recycling. of sorting technology into the food industry. FROM: 2000 2004 2008 2012 2019 TO: 5 % 18 % 40 % 50 % 50 % 100% 95 % 82 % 60 % Helping the world LEADING THE Collection recycle Collection Collection Collection RESOURCE Collection Sorting Sorting Sorting Sorting REVOLUTION 18 TOMRA’s two business areas FOOD REVERSE VENDING Share of ‘19 sales ~32% ~39% Employees 1,445 1,905 Customers Food growers, packers and processors Grocery retailers Market share Bulk: ~25% Lane: ~25% Over 70% RECYCLING MATERIAL RECOVERY Share of ‘19 sales ~16% ~11% Employees 260 590 Customers Material recovery facilities, scrap dealers, metal shredder operators Grocery retailers and beverage manufacturers Market share ~55-60% ~60% in USA (markets served) MINING Share of ‘19 sales ~2% Employees 80 Customers Mining companies Market share ~40-50% TOMRA SORTING GROUP FUNCTIONS & SHARED STAFF Employees 250 19 Installed base worldwide REVERSE VENDING RECYCLING MINING FOOD BULK FOOD LANE Nordic ~15,100 EMEA ~4,500 Europe ~20 EMEA ~3,400 EMEA ~1,580 Germany ~29,500 Americas ~990 US / Canada ~46 Americas ~3,025 Americas ~1,220 Other Europe ~15,000 Asia ~940 Australia ~10 APAC ~780 APAC ~950 North America ~16,900 Other ~30 South Africa ~46 Rest of the world ~7,600 Other ~41 TOTAL ~84,100 TOTAL ~6,460 TOTAL ~163 TOTAL ~7,205 TOTAL ~3,750 Food Lane includes Compac and BBC 20 Strengthen presence in China Established in China since 2010 3 business streams active in China 2 wholly own subsidiary 2 joint ventures 3 test centers Beijing: 2 assembly workshop - Joint venture 300 employees Qingdao: - Service hub Kunshan: - Sorter production - Test center - R&D center - Supply hub (Compac) Lanzhou: Hangzhou: - Service hub - Service hub Xiamen: - China headquarters Chengdu: - R&D center - Service hub - Test centers - Sub-assembly workshop - Joint venture - Global supply hub Kunming: - Service hub Taiwan: - Service hub 21 TOMRA COLLECTION SOLUTIONS 22 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 • More than 40bn beverage containers are captured by TOMRA every year… • …representing only less than 3% of all beverage containers sold in 2018 Source: Euromonitor, GlobalData 23 But the tides are shifting. There’s a desire for change… Consumer demand Legislative push for Market pull from large for responsible
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