Tomra Systems A/S/A S/Adr

Good morning, ladies and gentlemen, and welcome to Tomra's first quarter result presentation for 2026. My name is Daniel Sundahl. I'm a head of investor relations in Tomra. We will, as usual, start today's presentation with CEO Tove Andersson giving you the highlights of the quarter, followed by a deep dive into the number from CFO Eva Sagamo. At the end of the presentation, we will take questions from participants in the team's webinar. A link to the webinar can be found in this morning's Stock Exchange release. But without further ado, I give the word to Bob Andersen.

Good morning, and welcome for me as well to our Q1 presentation 2026. We present today a quarter characterized by strong growth in food and collections. but with profitability impacted by short-term product mix effects in all segments and lower volumes in recycling. However, the underlying developments in the quarter in all segments gives us confidence going forward that we are on the right track. Collection delivered record revenues due to deliveries in Poland and Portugal and growth in existing markets. However, with lower margins due to the higher share of RBM sales and the product margins in Poland. In recycling, we continue to see low commercial activity, but progressing according to plan on the cost reduction program. In food, the high commercial activity is continuing, however, with short-term lower margins due to a larger than normal share of third-party peripheral equipment delivered. Let me then take you through the business update for divisions and horizons. The collection had a record quarterly revenues of €208 million, up 15% currency adjusted. Revenue in existing markets was €169 million in the quarter, which represents 5% growth, in line with our ambition. However, when comparing the revenue from existing markets with Q4 last year, it's important to remember the seasonal variations in our throughput volumes. New markets contributed with 49 million euros of revenues in the quarter. In Poland, which was the biggest contributor, installation speed has picked up and deliveries will continue in Q2. By end of Q1, we had more than 4,000 machines installed. As communicated earlier, the initial market in Poland is estimated to be 10,000 to 12,000 machines, with a tail which is difficult to estimate, but can be 5,000 machines or more coming over the next years as collection rates Portugal launched its deposit system on April 10th. It is always exciting when a new country goes live. The initial market is estimated to be 2,500 machines, and we estimate that two-thirds of that market is done. By end of Q1, we had more than 1,000 machines installed in Portugal. We also had Singapore going live in April, April 1st. where we have been awarded one of the three zones representing roughly 350 RVMs. It is a small market, but an important reference for RestorAsia, and we are committed to make it a success. We have a great team in Singapore, and you can see some of them in the picture below, together with the Senior Minister of State from the Ministry of Sustainability and Environment and the Ministry of Education. And talking about new DRS markets, let's look at the pipeline, which we have listed on the bottom right. I will only comment on UK, which is the next big market to go live. The process towards a launch in October next year is progressing as planned. We estimate the initial rollout to be 25,000 locations. Also in UK, there might be a tail of sales in the smaller independent stores. but difficult to estimate how large that market will be as they don't have an obligation to take back beverage containers. There is significant commercial activity ongoing in the UK. All of the large retailers are running or are about to run procurement processes for RBMs, and we expect most contracts to be signed this year, while the rollout will mainly take place as of next year. Based upon experience from the last DRS rollout, where we have achieved a share of the market in line with our ambitions, we feel we are well positioned to win our share of the UK market. Then to the last bullet on the slide, innovation. Innovation is key for us to ensure growth and to maintain our margins. In the quarter, we launched T100, the new version of our flagship model T9. T9 is by far our most sold machine. It's actually the world's most common RVM. So this is a big milestone. I'm confident that the T100 will be as successful in the future as the T9 has been for us in the past. Then over to recycling. In recycling, we had a significant drop in revenues in the quarter due to the weak market sentiment, which caused a decline in orders last year, and due to the lead times, this impacts the revenues in this quarter. As you will see from the bottom left graph, the order intake is also down compared to Q1 2025, but in line with second and third quarter last year. The market sentiment is stable, and it is as we have described in the previous quarters. We have a weak market in North America waste recovery and within plastic recycling due to tariffs, low plastic prices, and general macroeconomic uncertainty. The metal market has remained stable. As you will see from the PET graph below, the PET prices have had a sharp increase the last weeks due to the increased oil prices and blockage of honus. Increased inversion PET prices has also lifted the prices of recycled PET, but not to the same extent. This is positive for our customers, but the impact on investment sentiment will depend on whether high prices are perceived as sustainable. They need predictability of higher prices over time before the investment sentiment will improve. Key for us, given the challenging market, is to take action on the things we can control. The 16 million euro cost reduction program is progressing according to plan, and there will be a gradual effect on our costs during this year, and the full year effect will come next year. In food, we had revenue growth in all main markets, resulting in a revenue of 79 million euros, up 17% currency adjusted. We saw some decline in revenue from the potato segment, which has been our largest category. This was expected, and we have talked about this in previous quarters as well, as we are coming out of a strong investment cycle on potatoes. What is nice to see is that we are able to compensate this decline with growth in other segments. in other categories. Tetris has been particularly strong in the quarter and is now competing with potatoes and being our largest category. This confirms the robustness in our business model and the value of having a diversified portfolio in food. Order intake in the quarter was found on a strong comparison last year. There will always be quarterly variations in order intake. And if you look at the trailing 12 months, the order intake is up 7%. The market sentiment overall is good, and the underlying activity is strong. Innovation is also key in food, and it's nice to see the 4C, which we launched some months back, has been well received in the market for nuts. This was one of the key segments the 4C was developed for. A positive response has confirmed our position as a challenger, well equipped to increase our share of that segment. This is part of our strategy in food to outgrow the market by gaining share in selected segments. Then through Horizon, our portfolio on new businesses consisting today of Seapraise, Reuse and Facebook. After a period of investing into this portfolio, it's nice to see that the revenues are starting to build up. The Horizon portfolio delivered revenues of 10 million euro in the quarter. And looking at the graph, the decline from Q4 is due to the seasonality in sea trays, which typically has a significant portion of the revenue in the last quarter in the year. The business momentum in the market sea trays operate in, that is the smart waste management segment, is strong, and we expect the company to continue their profitable growth journey this year. Reuse is the least mature in our portfolio. For the city solution, the rollout in Lisbon is continuing, while the event solution is still in piloting phase, but with a good pipeline of opportunities. In feedstock, the focus is to ramp up the volumes as other områd plant. We increased the two shifts early this year, and target to be at two-thirds capacity utilization by the end of the year. So overall, continued good progress in all three businesses. That concludes the business update, and I will hand over to our CFO, Eva Sagbo.

Thank you for that, Torve. And let's dig into the figures, starting with the collection. Revenues came in at 208 million euros, up 12% compared to Q1 last year, and up 15% currency adjusted. The performance have been strong in the new markets, with revenues of 49 million euros, with strong contributions from Poland and Portugal. Our existing markets continue with solid performance with underlying growth of 5%, 2% up to currency-adjusted. And looking at the overview per region, North America is seasonally lower in the first quarter on the throughput sales. But also in the quarter, we have added in clink compared to Q1 last year. Our gross margins in collection ended at 39.5%. It's lower than our ambition of being more than 40%. However, explained by then business mix with higher share of RVM sales, of the total sales, and then as well as the lower product margin in Poland, also impacting the gross margin for collection. OPEX ended up compared to Q1 last year, now at 50 million euro in the quarter, explained by the high activity especially in Poland, but also ramping up in the UK. We have added in clink, and then we have also inflation in the period. This results then in an EBITDA in collection of 33 million euros, and it's up from 30 million euros compared to the same period last year. And then looking into the short-term outlook in 2026, and starting then with revenues. And for existing markets, we expect mid-single-digit growth here, according to or in line with our ambition for the existing markets. For new markets, the momentum in Poland continues strong next quarter, but the pace then in Portugal and Romania is then expected to slow down, but continue to contribute throughout the year. And for UK, there is currently high commercial activity, as Tove mentioned, and the deliveries to the UK retailers will start then in 2027. And for our profitability, our target is still to deliver a gross margin above 40% for the full year in 2026. Over to recycling. Recycling came in at 37 million euros, a decline of 19% compared to Q1 last year, following then a decline in orders in 2025. The combination of low revenue volumes, metal projects, and also our fixed cost base results then in a weak gross margin of 40.5% in the quarter. OPEX ended down compared to Q1 last year, now at 20 million euros, and we also added in restructuring costs of 13 million euros as a special item in the quarter. This results then in a negative EBITDA in the recycling of five million euros, then excluding those special items. And looking at the order intake in the quarter, it ended at 41 million euros, low, impacted then by the challenging market sentiment. The level is, however, in line with what we had in 2025, especially for Q2 and also Q3, but down compared to a strong Q1 last year. Order backlog ended at 98 million euros. And then also here, looking into 2026, the short-term outlook. We estimate a 50% conversion ratio of the Q1 order backlog as revenue in Q2. And based on the current market sentiment, we do not expect the revenue growth this year. The majority of the order backlog that we have currently is estimated to be delivered in 2026. And also given the current average lead time we have in production, we expect improved revenue visibility when we end Q2. And then gross margins will continue to be impacted by the low volumes, but we expect already in Q2 a more favorable product mix in recycling. And as we mentioned, the restructuring program is progressing according to plan, where we expect the 16 million gross savings to materialize gradually throughout the following quarters, and then with full effect in 2027. Then moving over to food, food revenues came in at 79 million euros, which is up 13% compared to Q1 last year, and up 17% currency-adjusted. Performance was up in all main markets, and also 4 million better than estimated conversion ratio, mainly due to timing of deliveries. Gross margins for the quarter came in at 40.8%, which is down below last year's strong performance. And this temporary decrease was mainly due to the product mix, with a higher proportion of third-party equipment sales, linked to then large packhouse projects that we had coming in as orders last year. OPEX ended up compared to Q1 last year, so slightly up, ending now at 28 million euros, and that is mainly due to inflation. And this results then in an EBITDA of four million euros, up from three million euros in the same quarter last year. And also here, looking at the order intake in the quarter, it ended at 80 million euros, a decrease from the same period last year, however, then on strong comparables. The underlying market activity is strong, and the trailing 12-month order intake is up 7%. And the order backlog ended strong at 137 million euros. And then looking into the 2026 outlook, we estimate... a 70% conversion ratio of the Q1 order backlog as revenues in Q2. And for the full year, revenues is estimated to grow mid to high single digit. And as we have seen in Q1, the product mix effect is expected to continue also in Q2, but then to return to mid 40s in the second half of the year. And then we have a look at Horizon. Revenues came in at 10 million euros, more than doubling from Q1 last year. We have a strong momentum in seed trades, but also here we see now the positive contribution from OMRO being now in production. Gross margins in the quarter are 48.4%. It's lower compared to Q1 last year, explained then by depreciations of our OMRO assets. OPEX flat compared to Q1 last year of 6 million euros. And that results in a negative EBITDA of 2 million euros, however, then with a positive EBITDA for OMRA. And then looking into the short-term outlook also for Horizon, C-Trade is expected to deliver double-digit revenue growth this year with an EBITDA of more than 20%. And for feedstock, as Omra is scaling up its production, which is then estimated to reach two-thirds of its full capacity this year, we expect a positive EBITDA contribution from the plant this year, and then going into 2027 with a positive EBITDA. And then if you look at the whole horizon activities, OPEX is expected to be around 30 to 35 million euros for the full year, and then capex of around 10 million euros for the full year. And then combining the results from all of our divisions, the group achieved total revenues of 334 million euros in the quarter. It's a 9% increase compared to Q1 last year, and 12% increase if you adjust for currency. The gross margin was 40.2% in the quarter. It's down compared to the same quarter last year, explained then by product, project, and business mix, where some of those are short-term in nature. OPEX standing at €108 million in the quarter is up compared to the same period last year, but that is mainly explained by then higher activity levels in new markets. We have added in clink, but also had inflation in the period. And this results then in EBITDA of €26 million for the group, in line with what we had in Q1 last year, adjusting then for those special one-offs. Cash flow and capital. Cash flow from operations of €60 million in the quarter. It's down from €65 million in the same quarter last year, on then lower results and a higher working capital. Looking at cash flow from investments, in the quarter, it's 25 million euros, trending in line with the estimated run rate for the full year, which we have communicated to be around 100 million euros, where most of those investments will be then into our core business divisions. Our working capital of 18% end of the quarter is up compared to same quarter last year, reflecting then the high activities in new DRS markets. But it's down compared to end of 2025, and we also expect that to come further down as orders are being delivered and payments being collected, and especially in collection. Our ROKI ended at 15% at the end of the quarter. It's down compared to same quarter last year. Then reflecting inorganic investments, but also the strategic business building that we're doing, and also the lower profitability in recycling. And also here, looking ahead, we anticipate an improvement in returns as we then get the positive impact from the investments that we have done, and we are also able to lift the profitability in recycling. Financing. Our average debt maturity end of the quarter is 4.2 years, with a liquidity buffer of around 100 million euros in undrawn facilities. And our equity ratio at the end of the quarter was 35%. It's down compared to the same quarter last year, but stable from end of 2025. And we still have a good headroom in the equity. Our gearing at the end of the quarter was 2.37 times up from same quarter last year and also up from end of 2025, which then reflects recent debt finance acquisitions. And then looking ahead, the equity ratio is expected to be impacted by the dividend payments, which is now planned for Q2 in May. However, we will still be covenant intact and then also expect improvement in the following quarters of 2026. And then for the gearing, it's expected to be gradually reduced with the earnings and cash flow from contributions also here in the following quarters. And then this slide brings the outlook together, both on the short-term outlook, but also on Toma's long-term drivers. And I will not go through this since I just covered it on the previous slides, but just want to emphasize the strong long-term drivers for Toma, being then decarbonization, regulation, modernization and optimization, but also demographics and resource scarcity. And with that, I will hand it back to you, Daniela.