TOMRA SYSTEMS ASA ADR 2026 Q2
Earnings Overview & AI Insights

Earnings Performance

Summary of Financial Performance: TOMRA reported Q2 group revenue of EUR 405 million, up 25% year over year, with EBITDA of EUR 57 million, up 30%. Collection was the main growth driver with revenue of EUR 246 million (+45%) and EBITDA of EUR 44 million. Recycling revenue declined to EUR 51 million (-11%) with EBITDA of EUR 5 million, while Food revenue rose to EUR 99 million (+5%) but margins compressed. Horizon revenue more than doubled to EUR 10 million, though EBITDA remained slightly negative. Group gross margin was 41.3%, down from 44.3% due to mix effects, especially higher RVM sales and third-party equipment in Food. Operating cash flow improved to EUR 38 million, supported by higher profitability and working capital movements.

Company Outlook & Strategy: Management expects stronger second-half Collection revenues of EUR 400 million-EUR 440 million and full-year gross margin around 40%, with margins improving above 40% in H2. Recycling full-year revenue is guided at EUR 200 million-EUR 215 million, while Food is expected at EUR 340 million-EUR 360 million. Horizon full-year revenue is targeted at EUR 45 million-EUR 50 million. The company emphasized long-term growth from regulation, circular economy trends, and selective expansion in new markets. A major strategic move is the exploration of divesting the mining subdivision to sharpen focus on core recycling segments.

Key Industry Trends: Deposit return systems continue to expand across Europe and beyond, with strong momentum in the U.K., Portugal, Singapore, and Poland. Poland is seen as a large, competitive market with growth potential from continued rollout and a shift toward higher-volume systems over time. In Recycling, higher metal prices and supply-security concerns are supporting demand, while PPWR legislation in Europe is expected to materially increase recycling capacity needs. In Food, customer investment is being delayed by financing costs and market uncertainty, though planting trends remain supportive of future sorting demand.

Operational Highlights: Collection saw strong execution in new markets, with Poland as the standout and a growing installed base in the U.K. The company signed a major U.K. customer for about 2,700 machines and was appointed majority provider to another retailer for about 1,200 machines. In Poland, TOMRA has installed over 7,000 RVMs out of roughly 13,000 total market units and expects phase II growth from smaller stores and service revenue. Cost actions in Recycling are on track, including consolidation of production and warehousing in Slovakia and completion of workforce reductions. Horizon’s c-trace grew 26% year to date with EBITDA above 20%, and Områ already turned EBITDA positive earlier than planned. The first permanent event reuse solution was installed in Oslo.

Challenges & Risks: Recycling remains affected by subdued market sentiment, which has depressed orders and revenues despite improving order intake. Food is facing slower pipeline conversion, especially for large projects, due to financing constraints and uncertainty in the Americas. Margins in Collection were pressured by an unfavorable mix of new-market RVM sales, especially in Poland. Management also noted that recovery timing in Recycling remains uncertain even though structural drivers are positive. Leverage increased due to recent debt-financed acquisitions, though liquidity and covenant headroom remain solid.

Key Analyst Questions & Responses: The transcript only shows the start of Q&A, with Barclays’ Morayo Adesina asking the first question, but the actual analyst questions and management responses are not included in the provided text.