TOMRA Systems — Call Transcript 2025

Good morning from Asker, ladies and gentlemen, and welcome to Tomra's Second Quarter Results Presentation for 2025. As always, CEO Tove Andersen will start today's presentation by giving you the highlights of the quarter, and afterwards CFO Eva Sagemo will dive deeper into the numbers. At the end of the presentation, we will open up for Q&A for participants in the Teams webinar. The Teams webinar link can be found in this morning's Stock Exchange Change Release. We will conclude today's presentation at around 8:45 A.M., but without further ado I give the word to CEO Tove Andersen. Good morning from me as well and welcome to our Q2 Results Presentation. In this quarter we have seen large variation in the market dynamics between our three divisions. In Collection, there has been high activity related to preparation for Poland and Portugal's upcoming deposit return systems, while the quarterly revenue is down compared to the same quarter last year, reflecting the phasing of new deposit markets. Recycling delivers revenues in line with the same quarter last year, but the order intake is weak due to struggling plastic segment and macroeconomic and tariff uncertainty, which is postponed in customers' investment decisions. Food is the highlight in the quarter, delivering a record quarterly EBITDA, a record order intake, and an all-time high order backlog. We do see encouraging signs of an improved market sentiment and the benefits of the restructuring is visible in our P&L. Let me then take you through the different divisions in Collection. The second quarter reflects the phasing of new markets, but let me say a few words about existing markets first. In existing markets, revenues continue to grow at a steady pace. We have been growing 5% in the first half year compared to the first half year last year, which is in line with our strategic ambition. If we then go to new markets, we had an intense rollout period in Austria last year, which meant that the market was well prepared at the Go Live date, which was 1st of January this year. Therefore, activity in Austria has significantly come down, leading to lower revenues in Q2 this year compared to the same quarter last year. In Romania, as also commented in the last quarterly presentations, installations continue due to high collection rates and sales to independent retailers, but at a slower pace this quarter than in Q1. For the second half this year, Poland and Portugal are the key markets. There is high commercial activity in both countries. Some contracts are signed, others are under negotiations, and we expect installations to pick up in the coming half year. If we then turn to the upcoming deposit markets that we have listed here as normal, I will only comment on the changes in this list versus what we presented in the last quarter. First of all, it's good to see that U.K. is progressing well and Scotland has then passed its amended deposit return regulation in June to make sure that that is aligned with U.K., who is planning to go live in October 2027. Also good to see progress in Spain. May 22nd was the deadline to apply to be the system operator of Spain. We have removed Uruguay from the list as we are still waiting for communication regarding updated go live data for that country, but we have added Moldova. They announced in June that the government had adopted an implementation framework for a deposit return system and that the system is to be implemented within one year from the approval of the system operator, but no later than January 2027. Overall, there is a very good pipeline of growth opportunities for our Collection business in the years to come. Over to Recycling. In Recycling, we continue to see setbacks within the plastic recycling segment and in North America, which is the reason for the weak order intake in the quarter. I have talked a lot about the weak European plastic market for many quarters now and we are not seeing an improvement. What has happened in the plastics segment is that we have seen depressed virgin prices fall over two years, as you will see from the graph here, and one reason has been the overcapacity of supply in Asia leading to imports of cheap virgin plastics in Europe. Recycled plastic prices have followed suit, which has put economic pressure on plastics recyclers, and this has again been reinforced by high energy costs, which means that the business case for plastic recycling in Europe is challenging. Currently, there are still very few legal requirements to use recycled plastics. However, this year we have the introduction of the 25% recycled content requirement for plastic bottles in the EU, and as you can also see from the graph, this looks to be supporting a higher increase in the ARPET prices. At the same time, the increased difference in price between recycled and virgin plastic makes it an economically rational option for producers to buy virgin plastics when they need to optimize margins and they don't have legal targets yet. This will change. The mid to long term outlook for this segment is strong and positive. In 2030, the EU Packaging and Packaging Waste Regulation will require up to 35% minimum recycled content in plastic packaging, and this means somewhere between a doubling or tripling of the recycled content versus today. We are very positive about the medium to long term outlook. Adding then to a challenging plastic market is how the global macroeconomic uncertainty and trade war is impacting our U.S. business, which we also talked about in the last quarter. U.S. has been a good market for us the last years, especially in the waste segment due to a strong drive to modernize and automate. So far this year, there has been very low activity in the U.S. due to customers delaying their investment decisions as there is a high uncertainty regarding their CapEx. They need to make an investment decision and put an order today that will be delivered three, six, or nine months ahead, and to do that when you don't know if the tariff will be 10%, 20%, 30% or higher, of course, delays that decision. However, the fundamental drivers as modernization and automation remain intact, but certainty on tariffs is needed to get this market back. On a more positive note, the metals recycling segment has performed well in the quarter. I have talked a lot about the aluminium and our new capabilities of sorting alloys with our Autosort Pulse in previous quarters, which has contributed positively in this segment. On this slide, we have added a bridge below to show the market developments from first half last year to first half this year. As you will see, overall the development is flat, but the metals recycling market excluding North America has increased while both the global plastics market and North America has decreased as a result. The metal segment currently makes up a significantly larger share of what we are delivering to the market these days, which is impacting our margins. Over to food. After a record strong first quarter, food delivers another record quarter with the highest EBITDA, the highest order intake, and the highest order backlog we have had so far. This is due to both our own efforts to restructure the organization to improve profitability and an improving market sentiment. As we mentioned at our Q1 presentation, when plantations area are ready to bear fruit, the urgency to invest in food sorting can be strong. It's very good to see larger scale projects coming back in the fresh food categories because this was the pain point and one of our challenges a few years back. We have had good order intake in the quarter in all three regions. We have received large orders in all three regions, APAC, EMEA, and Americas, and also it's nice to see that that comes in different categories including potatoes, avocados, and citrus. Citrus is one of the categories we have kept a close eye on and regard as a core category in our refocus portfolio. It's a category where our technology provides high value add for the customers and where we are the technology leader with our LUCAi solution. It's a crop where we see potential for customer investments. Citrus represents 17% to 18% of the overall share of fruit consumption and the industry last year has been heavily impacted by climate change and diseases. As it is a tree crop, time to full production is between six to ten years. It's time from planting till you have done a full production, depending on the variety. When it's ready, you will need to have the infrastructure in place for sorting, grading, and packaging. What we're currently seeing in citrus is that America is rebounding and there is an increased interest for automation due to labor challenges. We also see increased capacity requirement in APAC, particularly in Australia because of better climate conditions lately. You get a higher volume that needs to be processed, more plantations, and increased need for automation. It will be interesting to follow the investment cycle of citrus the next years. Despite a great start to the year, our food business is not immune to the tariff uncertainty. We do see some postponements and delayed investment decisions in the U.S. also for food, but to a lesser extent than in recycling, as in some cases there is an urgent need for the investment, it cannot be delayed. In addition, we see growth in other regions compensating for the delays in the U.S., but there is of course also risk in our food business linked to the macroeconomic situation and tariffs. Over to Horizon, our adjacent business building, and I will give an update on our feedstock and our reuse venture. TOMRA Feedstock is where we are focusing on solving the issue on plastic by investing in advanced sorting facilities. We are entering a very exciting phase for our Norwegian plant Umbera as we have started the commissioning. Last month in June, we produced or we had processed 1,880 tonne in the facility and the commissioning is going very well. We see very good yields and we also see very good high priorities. Commissioning will continue during the autumn and we will take over the plant during the second half of this year. On TOMRA Reuse, TOMRA Reuse is where we are focusing on solving the issues linked to takeaway packaging, both littering and CO2 emissions by introducing reuse options. An exciting development in the quarter is the preparations for Lisbon, where we are planning to install 17 return points across the downtown area by October. You will see on this picture that we had the first two reuse installations in Lisbon happening now in June. Also, what we have done in the quarter in reuse is that we have launched or shown our new collection point because our objective in reuse is not to only have solutions for beverage cups, reuse cups, but also for other types of food packaging. You can see bottom right here, this is our new reuse collection point where you can also use it for boxes, bowls, trays, and so forth. This is now piloting, and we have live testing on it ongoing in Europe. Overall, the different ventures in our Horizon portfolio are progressing in line with plans and expectations. With that, I will hand over to our CFO Eva Sagemo. Thank you Tove and we start with the group P&L, for the second quarter, the top line came in at EUR 325 million, down 2% compared to a strong Q2 last year. As we expected, the revenues in Collection were down 12% due to the timing of new markets. Recycling down 1% due to tariffs and macroeconomic uncertainty, and Food up 15% delivering on the estimated conversion ratio from a strong order backlog in the first quarter. Gross margins were in line with Q2 last year, ending at 44%. We maintain strong and good cost control across our divisions with OpEx of EUR 100 million in the quarter, slightly down compared to Q2 last year. That results in an improved profitability, up 2 percentage points, giving an EBITDA of 15% including special items. Looking at Collection, revenues came in at EUR 169 million, down 12% compared to a strong second quarter last year. Sales were up in all regions except for Europe, mainly explained by the lower new market activity in this region. In Q2 last year, we had strong sales from both Austria and Romania, but as expected these are down with Austria going live first of January this year and Romania, as indicated before, continues to roll out reverse vending machines in the market but at a lower pace. Currently, we continue to see an improvement in our gross margin, ending at 42% in the quarter compared to 40% last, and that is explained by the business mix in this quarter. Good cost control in connection with OpEx, down compared to last year, ending at EUR 43 million, resulting in an EBITDA of 16%, same as last year. On lower top line, Recycling came in at EUR 57 million, stable compared to Q2 last year, and as we said in Q1, we estimated a conversion ratio of around 50%, however with a downside risk due to the uncertainty linked to macroeconomic and tariffs. As you can see from the overview, we were down in our main market Europe and also down year-to-date. In North America, gross margins ending at 46%, a weak margin compared to a strong Q2 last year where we had a favorable product and business mix. This quarter, the gross margin is weak due to the product mix being more flakes and metal projects in the P&L. Important to note is that the underlying product margin in Recycling are intact. We have good cost control in Recycling as well. OpEx of EUR 20 million in line with Q2 last year, which resulting then in an EBITDA margin of 11% in Q2. Looking at the order intake, as Tove said, we had a weak order intake in the quarter due to the continued challenging market in Europe, and in the U.S. the order intake was down 37% compared to Q2 last year, ending then at EUR 41 million. That results in a decline in the order backlog of 20%, ending then at EUR 107 million. Looking at the trailing 12 months for order intake in Recycling, we are down 9%. Food came in strong on top line, delivering EUR 94 million of revenue, up 15% compared to Q2 last year. In the quarter, sales were up in all main regions except for the rest of the world. Gross margin ending at 46%, up compared to Q2 last year, explained by high volumes, higher installation revenues, and cost savings realized in the quarter. We had tariff impact in the quarter, as we talked about in Q1, that we expected a bit more than EUR 4 million of tariff impact in the margin. In Q2, we landed at EUR 1.2 million in the quarter, and that is explained by the intermediate tariff reduction between China and the U.S. OpEx in the quarter ended at EUR 27 million, down from Q2 last year, driven mainly by cost savings, resulting in a record EBITDA margin of 18%. We also had a special item this quarter for Food. It was a positive item of EUR 3.7 million related to the restructuring costs. They're coming from lease agreements in New Zealand and now being leases that have been subleased or either terminated, and including the special items, the EBITDA margin ended at 22% in the quarter. As Tove said, we have had the strongest order intake record Food of EUR 106 million in the quarter, up 28% compared to Q2 last year. It has been strong in all regions and includes large orders mentioned, being potatoes, citrus, and avocados, accounting for more than EUR 25 million together. The strong order intake results in also the strongest order backlog recorded, ending at EUR 137 million, up 15% compared to Q2 last year. Looking at the trailing 12 months for order intake in Food, we are up 11%. Cash flow from operations ended at EUR 17 million for the quarter, down from EUR 34 million in the second quarter last year. Year-to-date, we have EUR 83 million compared to EUR 54 million last year year-to-date, and this is really related to timing of inflows. 35% equity ratio, gearing of 1.8 times, and a return on capital employed, trailing now above our long term target of 18%. Happy to announce that Scope Ratings affirmed our ratings for Tomra in June at a stable, being business risk profile of triple B plus and a financial risk profile at a. Our weighted average debt maturity is now at 4.2 years and we end the quarter with a EUR 92 million undrawn liquidity buffer for Tomra. Then over to the outlook. There is a high, and we start with Collection as normal. There is a high activity related to deposit return systems in new markets and growth in existing markets. Short and mid term performance will depend upon the timing of new markets in addition to replacement sales, introduction of new innovation, and variations in product and business mix. The growth prospects in 2025 are dependent on developments in upcoming deposit markets such as Poland and Portugal. However, we estimate the existing markets to grow approximately 5% year over year. Gross margins should continue to stay above 40% and we also expect good cost control to continue in recycling, I mean in Collection. However, with quarterly OpEx variations dependent on investments into new markets where we have an annual ramp up OpEx run rate of approximately EUR 20 million. Outlook for Recycling, the regulation and demand for recycled materials is expected to create growth opportunities. Short and mid term performance will largely depend upon installation volumes and variations in product and business mix. The market sentiment is currently affected by a soft European plastic recycling market, trade tensions, and a high degree of macroeconomic uncertainty. This leads to increased uncertainty in the timing of orders. Revenues in 2025 are dependent on developments in this market environment and how customers will react to these challenges. Based on the order backlog at the end of the second quarter, a 40% conversion ratio is estimated to be recognized as revenue in the coming quarter. However, given the market uncertainty, orders may be postponed over quarters and for gross margins. Volumes and product mix have an impact which can also be seen historically. There is a currently higher share of metal recycling installations in our backlog which generally then have lower gross margins than other product segments. Gross margins may also be negatively impacted by tariffs, all dependent on sales into the U.S., and we expect the business division to maintain good cost control also going forward. Outlook for Food, the need for optimization and increased quality and safety requirements create opportunities and we are experiencing an improved market sentiment. However, the current macroeconomic uncertainty may impact customers' investment willingness. Also here, revenue growth in 2025 has potential to reach mid single digit levels and based on the order backlog at the end of the second quarter, a 55% conversion ratio is estimated to be recognized as revenue in the third quarter. However, also here, given the market uncertainty, orders may be postponed or over quarters. The cost reduction program has improved our gross margins in Food. However, we will continue to see quarterly variations in the gross margin depending on volume and product mix. As we said, tariffs have impacted the margins in Q2 and it may continue to impact gross margins also going forward. Following last year's cost reduction program, the target is to achieve an EBITDA margin of 10% to 11% in 2025. The outlook for Horizon consists of our venture activities in feedstock and reuse, in addition to the newly acquired smart waste company C-Trace. While the underlying operating expenses for feedstock and reuse are expected to remain in line with 2024 levels, there will be an increase in costs related to the feedstock plant in Norway, which goes into operations end of this year. The total OpEx run rate for feedstock and reuse is estimated south of EUR 20 million for full year 2025. When we talk about the investments or the CapEx of Horizon, it's approximately EUR 40 million for this year, so EUR 40 million for 2025. That is mainly related to our two feedstock plants where we have currently spent around EUR 10 million. I think I end here, Daniel, and hand it over to you. Thank you, Tove, and thank you, Eva. Before moving over to the Q&A, I would like to mention that Områ, our Norwegian feedstock plant, will officially open on the 5th of November. We're happy to invite everyone who's interested to join this ceremonial event to contact Investor Relations. We're also, of course, happy to organize other investor site visits to view the plant in live operations. Stay tuned for that as well. With that, we will open up for Q&A. I see that we have a few questions coming in already. The first question is coming from Adela Dashian in Jefferies. Please go ahead. Adela, I think you are muted. There we go. Now we hear you. Perfect. A few questions for me. Firstly, if we start with Recycling, are you able to just clarify your expectations for revenues this year? I mean, given the decline in order backlog and also the indicated conversion ratio, it seems like you would have to take a pretty strong pickup in H2 to achieve full year growth. What's your visibility on that, what you currently have in the pipeline? What gives you confidence in a potential rebound already in the second half? Year-to-date, we have had revenues in Recycling of a bit. More than EUR 100 million. The data point that we have indicated for the coming quarter is 40% conversion ratio of the order backlog. That's the data point that we have given. We have also said it's an uncertainty in the market related to the macroeconomic situation. The tariffs and revenues for 2025 will depend on how customers will react to these challenges. Would it be fair to say that with that conversion ratio you're currently not expecting growth in 2025? I can just repeat myself, Adela, that it's a very uncertain market, and these are the data points that we can give at this point in time. If we move to Food, very strong margin development here in Q2. Do you feel like the current full year target might be a bit too conservative? Because as it stands now, it looks like you're not expecting double digit margins in H2 despite the restructuring benefits and strong order momentum. What would then be driving a more cautious outlook? Yeah, so the profitability in Food, it's very high, it's very strong and good. Now in Q2, it's a mix of many things. Of course, as I said, volume plays a part, the product mix plays a part, and the business mix plays a part. That's what, when we say, when we talk about gross margins, we indicate that it will be quarterly variations. Of course, with the cost reduction program that we had over the last year, we have seen improvements in the margins in Food. With the current order backlog, is there a mix variation, a more negative mix in H2 that makes you feel like you will not achieve double digit margins? We don't necessarily go into the details of the order backlog, but what I can say is that we have the target still of reaching the EBITDA of 10 to 11% for the full year in Food. Okay. Lastly, on Collection, are you able to provide us with an update on how things are progressing in Poland? Maybe specifically what go to market model that's been adopted or is being planned to be adopted. Maybe also an update on how you would characterize your competitive positioning versus both local and regional players? Yeah, so it's a very exciting time now in Poland, a lot of activities going on. We have a good and strong team in place in Poland with more than 50 people already. We have signed some contracts, and we are in negotiations related to other contracts, and we have talked about in the past that we have had discussions both on throughput models in Poland and sales and service. What we are seeing currently is that it's tilting more towards sales and service. We think currently that the majority of the business models will be a traditional contract linked to then selling the equipment and doing the service afterwards. How is competitiveness right now? Is it the same as you've already established in previous quarters, or are you seeing it intensifying more? I think it's always very competitive in these new markets that are being launched. I think when we looked at the competitive situation in Poland a year back, you had the mix, the more local players, new local players, and the more international ones. What we have seen now is that the small local players find it very difficult to compete in the market. The ones that we're seeing active now are the traditional competitors that we see in all markets. We are very confident in the service that we are offering to the customers. We have 50 years of history, we have the largest experience and background from different markets. We have the broadest portfolio, we have the best software solution, we have the most reliable products. We have also developed some specific products for Poland because many stores in Poland will not be able to have the reverse vending machines inside, so they want to have them outside. We have launched a new product now specifically for Poland. So. We believe that we are very well positioned to take a significant share of the Polish market. Great, thank you. I'll jump back in the queue. Thank you, Adela. Next question will come from Maria Dasina in Barclays. Please go ahead. Hi. Morning. Here on behalf of Gaurav, Jane, just one question from me on Food. Obviously, last quarter you were expecting around $4 million tariff impacts. Is there any color you can give us here on what you're expecting for Q3? I don't know if there's any more color you can give us in terms of the improvement in Food. How much of that can be attributed to the restructuring program versus improved market sentiment? I don't know if there's anything you can share on that. Yeah. If we start with the restructuring program, we had a target to save EUR 30 million and what we said was that one third of that should go into the gross margins. As we have said today, we have quarterly variations in the gross margin depending on volume, product mix, and business mix. This quarter we had the tariffs in of EUR 1.2 million impacting the margin negatively with more than 1% going forward. Of course, that depends on, first of all, that the tariffs are being fully landed. You can have predictability into what that means for the shipments into the U.S., but also Incoterms plays a role in how you also negotiate with your customers. What I would like to say is that tariffs might impact the margins going forward, all dependent on what we have in the order backlog and what we would sign on orders in the U.S. going forward at which term. It's a bit difficult to estimate precise what will be the tariff impact in Q3 and Q4. We just need to come back to that. If I can just add one comment. What we have done in Food, because in Food we have been exposed both to Chinese and European tariffs into the U.S. because we had some products also being produced in China during now Q3. We will also have that capability in Europe to produce what we are currently producing in China, so that we are able to flex between those two production locations based on the tariff situation. Great, thanks so much. Thank you, Maria. Next question will come from Elliott Jones in Danske Bank. Please go ahead, Elliott. Hey, good morning guys. Thanks for taking my questions. Just starting on Collection, you noted I think gross margins at 42%, 2 percentage point increase year-on-year. Is there a reason to kind of think that these margin levels will be kind of lower from this level as we move through the year? I know you have the kind of baseline target of above 40%, but just trying to get a kind of idea of, I don't know, maybe the mix or how we can expect to see this gross margin develop through the year. Yeah. Gross margin should stay above 40%, and we will have quarterly variations depending on what we sell in the quarter. We had the positive business mix now in Q2 related to throughput volumes, less new sales of machines. Of course, that impacts the gross margins going into the second half. We expect the new markets to pick up with Poland and with Portugal. When you sell more machines into a quarter, that also impacts the gross margins in Collection. Think about the more than 40% gross margin for Collection for the full year. Got it. Just on Poland, good to hear that you guys are signing contracts and things are developing. I'm just digging a bit deeper there. Are you expecting kind of a meaningful set of installations in Q3 and Q4, or is this just based on the contracts you've seen and signed? Is this kind of a market whereby it's nothing in Q3 and a big rush in Q4, just to get a bit of color there. In Portugal, just quickly, how are things looking there with regards to a similar question, but how ready the market is prior to go live? Are you expecting decent installation rates before the go live date in Portugal, or is that one where it's going to be a big rush in Q1, for example, and then a longer tail? Yeah. If you start on with Poland, the official go live date is October 1st. We have always said that we think there will be a three month grace period, which means that this will go live first of January next year. Also, what we have said is that we believe that the rollout there will be more similar to Romania where you will have a longer rollout. However, at the same time, we do believe that installations will pick up significantly during second half. We have ramped up production to be ready to do that. As commercial negotiations are progressing, our expectations is that installations will pick up during second half in Portugal. You can say Portugal has a later go live date than Poland, but are a bit more advanced in the commercial discussions. It's also different than Poland because in Poland you have the additional complexity of many system operators. The system operator in Portugal has been known for quite some time, so there we see that it's more mature than Poland. We have signed contracts with three of the large players in Poland as the majority now in Portugal as the majority supplier. We would also then expect installations in Portugal to happen during second half year and then continuing next year as well. Great. Sorry, two further questions on Spain. I think there's been some kind of progress there and you mentioned that as well. Is it, I think the consensus is that Spain is, was definitely going to be delayed quite significantly. Would you agree with that or are you seeing progress there that actually makes you think that there could be, you know, we could be hitting the ground on time in Spain and things are actually looking good for kind of a Q4 launch there? The final question is on food. Again, just in terms of orders, you spoke out a more positive environment. Is there any reason to suggest this is a massive one off or if things don't change, could you expect similar order intake levels in Q3 and Q4? Yeah. In Spain, I guess also our expectations were that when this kicked in and they were going to go live within two years, there would be some delays because we often see that in markets. However, when you see how Spain is progressing now, there is no reason why they shouldn't be able to go live as planned in Q4 2026. This we just need to monitor. I think the key thing now is that we see that they are taking the steps that you need to take to get ready for the launch of a deposit return system. They now have had this tender out for then applying to be a system operator. They will evaluate that. I think we'll learn more as we go. The positive thing is that we see that they are progressing. On the order intake question for Food, we had very strong order intake now in Q2, and it is important to mention that we had large orders into that order intake of more than EUR 25 million. That's important to note when you model going forward. What we have said is that we see an improvement in the market. We see orders coming in in the regions in the different categories, but it is also still a risk within the Food market because we have also seen postponement there on the investment willingness due to the uncertainty generally in the world. We always say, you know, there will be quarterly variations. We always recommend you to look at the trailing 12 months. We also say that when the order intake has been good. If you look at that trailing 12 months for food, I think it's up 11%. 11%, yeah. That's great. Thank you very much, guys. Thank you, Elliott. As there are no further questions in line, we have reached the end of this presentation. The next time we will be here is in exactly three months on 17th October. In the meantime, we wish you a wonderful summer. Have a nice day. Goodbye.

Speaker 1: Good morning from Asker, ladies and gentlemen, and welcome to Tomra's Second Quarter Results Presentation for 2025. As always, CEO Tove Andersen will start today's presentation by giving you the highlights of the quarter, and afterwards CFO Eva Sagemo will dive deeper into the numbers. At the end of the presentation, we will open up for Q&A for participants in the Teams webinar. The Teams webinar link can be found in this morning's Stock Exchange Change Release. We will conclude today's presentation at around 8:45 A.M., but without further ado I give the word to CEO Tove Andersen. Good morning from Asker, ladies and gentlemen, and welcome to Tomra's Second Quarter Results Presentation for 2025. good morning from asker ladies and gentlemen and welcome to tomra's second quarter results presentation for 2025 As always, CEO Tove Andersen will start today's presentation by giving you the highlights of the quarter, and afterwards CFO Eva Sagemo will dive deeper into the numbers. as always ceo tove andersen will start today's presentation by giving you the highlights of the quarter and afterwards cfo eva sagemo will dive deeper into the numbers At the end of the presentation, we will open up for Q& A for participants in the Teams webinar. at the end of the presentation we will open up for q& a for participants in the teams webinar The Teams webinar link can be found in this morning's Stock Exchange Change Release. the teams webinar link can be found in this morning's stock exchange change release We will conclude today's presentation at around 8:45 A.M., but without further ado I give the word to CEO Tove Andersen. we will conclude today's presentation at around 8:45 a.m but without further ado i give the word to ceo tove andersen

Speaker 5: Good morning from me as well and welcome to our Q2 Results Presentation. In this quarter we have seen large variation in the market dynamics between our three divisions. In Collection, there has been high activity related to preparation for Poland and Portugal's upcoming deposit return systems, while the quarterly revenue is down compared to the same quarter last year, reflecting the phasing of new deposit markets. Recycling delivers revenues in line with the same quarter last year, but the order intake is weak due to struggling plastic segment and macroeconomic and tariff uncertainty, which is postponed in customers' investment decisions. Food is the highlight in the quarter, delivering a record quarterly EBITDA, a record order intake, and an all-time high order backlog. We do see encouraging signs of an improved market sentiment and the benefits of the restructuring is visible in our P&L. Good morning from me as well and welcome to our Q2 Results Presentation. good morning from me as well and welcome to our q2 results presentation In this quarter we have seen large variation in the market dynamics between our three divisions. in this quarter we have seen large variation in the market dynamics between our three divisions In Collection, there has been high activity related to preparation for Poland and Portugal's upcoming deposit return systems, while the quarterly revenue is down compared to the same quarter last year, reflecting the phasing of new deposit markets. in collection there has been high activity related to preparation for poland and portugal's upcoming deposit return systems while the quarterly revenue is down compared to the same quarter last year reflecting the phasing of new deposit markets Recycling delivers revenues in line with the same quarter last year, but the order intake is weak due to struggling plastic segment and macroeconomic and tariff uncertainty, which is postponed in customers' investment decisions. recycling delivers revenues in line with the same quarter last year but the order intake is weak due to struggling plastic segment and macroeconomic and tariff uncertainty which is postponed in customers' investment decisions Food is the highlight in the quarter, delivering a record quarterly EBITDA, a record order intake, and an all-time high order backlog. food is the highlight in the quarter delivering a record quarterly ebitda a record order intake and an all-time high order backlog We do see encouraging signs of an improved market sentiment and the benefits of the restructuring is visible in our P&L. we do see encouraging signs of an improved market sentiment and the benefits of the restructuring is visible in our p&l Let me then take you through the different divisions in Collection. The second quarter reflects the phasing of new markets, but let me say a few words about existing markets first. In existing markets, revenues continue to grow at a steady pace. We have been growing 5% in the first half year compared to the first half year last year, which is in line with our strategic ambition. If we then go to new markets, we had an intense rollout period in Austria last year, which meant that the market was well prepared at the Go Live date, which was 1st of January this year. Therefore, activity in Austria has significantly come down, leading to lower revenues in Q2 this year compared to the same quarter last year. Let me then take you through the different divisions in Collection. let me then take you through the different divisions in collection The second quarter reflects the phasing of new markets, but let me say a few words about existing markets first. the second quarter reflects the phasing of new markets but let me say a few words about existing markets first In existing markets, revenues continue to grow at a steady pace. in existing markets revenues continue to grow at a steady pace We have been growing 5% in the first half year compared to the first half year last year, which is in line with our strategic ambition. we have been growing 5% in the first half year compared to the first half year last year which is in line with our strategic ambition If we then go to new markets, we had an intense rollout period in Austria last year, which meant that the market was well prepared at the Go Live date, which was 1st of January this year . if we then go to new markets we had an intense rollout period in austria last year which meant that the market was well prepared at the go live date which was 1st of january this year Therefore, activity in Austria has significantly come down, leading to lower revenues in Q2 this year compared to the same quarter last year. therefore activity in austria has significantly come down leading to lower revenues in q2 this year compared to the same quarter last year In Romania, as also commented in the last quarterly presentations, installations continue due to high collection rates and sales to independent retailers, but at a slower pace this quarter than in Q1. For the second half this year, Poland and Portugal are the key markets. There is high commercial activity in both countries. Some contracts are signed, others are under negotiations, and we expect installations to pick up in the coming half year. If we then turn to the upcoming deposit markets that we have listed here as normal, I will only comment on the changes in this list versus what we presented in the last quarter. First of all, it's good to see that U.K. is progressing well and Scotland has then passed its amended deposit return regulation in June to make sure that that is aligned with U.K., who is planning to go live in October 2027. In Romania, as also commented in the last quarterly presentations, installations continue due to high collection rates and sales to independent retailers, but at a slower pace this quarter than in Q1. in romania as also commented in the last quarterly presentations installations continue due to high collection rates and sales to independent retailers but at a slower pace this quarter than in q1 For the second half this year, Poland and Portugal are the key markets. for the second half this year poland and portugal are the key markets There is high commercial activity in both countries. there is high commercial activity in both countries Some contracts are signed, others are under negotiations, and we expect installations to pick up in the coming half year. some contracts are signed others are under negotiations and we expect installations to pick up in the coming half year If we then turn to the upcoming deposit markets that we have listed here as normal, I will only comment on the changes in this list versus what we presented in the last quarter. if we then turn to the upcoming deposit markets that we have listed here as normal i will only comment on the changes in this list versus what we presented in the last quarter First of all, it's good to see that U.K. is progressing well and Scotland has then passed its amended deposit return regulation in June to make sure that that is aligned with U.K., who is planning to go live in October 2027. first of all it's good to see that u.k is progressing well and scotland has then passed its amended deposit return regulation in june to make sure that that is aligned with u.k who is planning to go live in october 2027 Also good to see progress in Spain. May 22nd was the deadline to apply to be the system operator of Spain. We have removed Uruguay from the list as we are still waiting for communication regarding updated go live data for that country, but we have added Moldova. They announced in June that the government had adopted an implementation framework for a deposit return system and that the system is to be implemented within one year from the approval of the system operator, but no later than January 2027. Overall, there is a very good pipeline of growth opportunities for our Collection business in the years to come. Over to Recycling. In Recycling, we continue to see setbacks within the plastic recycling segment and in North America, which is the reason for the weak order intake in the quarter. Also good to see progress in Spain. also good to see progress in spain May 22nd was the deadline to apply to be the system operator of Spain. may 22nd was the deadline to apply to be the system operator of spain We have removed Uruguay from the list as we are still waiting for communication regarding updated go live data for that country, but we have added Moldova. we have removed uruguay from the list as we are still waiting for communication regarding updated go live data for that country but we have added moldova They announced in June that the government had adopted an implementation framework for a deposit return system and that the system is to be implemented within one year from the approval of the system operator, but no later than January 2027. they announced in june that the government had adopted an implementation framework for a deposit return system and that the system is to be implemented within one year from the approval of the system operator but no later than january 2027 Overall, there is a very good pipeline of growth opportunities for our Collection business in the years to come. overall there is a very good pipeline of growth opportunities for our collection business in the years to come Over to Recycling. over to recycling In Recycling, we continue to see setbacks within the plastic recycling segment and in North America, which is the reason for the weak order intake in the quarter. in recycling we continue to see setbacks within the plastic recycling segment and in north america which is the reason for the weak order intake in the quarter I have talked a lot about the weak European plastic market for many quarters now and we are not seeing an improvement. What has happened in the plastics segment is that we have seen depressed virgin prices fall over two years, as you will see from the graph here, and one reason has been the overcapacity of supply in Asia leading to imports of cheap virgin plastics in Europe. Recycled plastic prices have followed suit, which has put economic pressure on plastics recyclers, and this has again been reinforced by high energy costs, which means that the business case for plastic recycling in Europe is challenging. Currently, there are still very few legal requirements to use recycled plastics. I have talked a lot about the weak European plastic market for many quarters now and we are not seeing an improvement. i have talked a lot about the weak european plastic market for many quarters now and we are not seeing an improvement What has happened in the plastics segment is that we have seen depressed virgin prices fall over two years, as you will see from the graph here, and one reason has been the overcapacity of supply in Asia leading to imports of cheap virgin plastics in Europe. what has happened in the plastics segment is that we have seen depressed virgin prices fall over two years as you will see from the graph here and one reason has been the overcapacity of supply in asia leading to imports of cheap virgin plastics in europe Recycled plastic prices have followed suit, which has put economic pressure on plastics recyclers, and this has again been reinforced by high energy costs, which means that the business case for plastic recycling in Europe is challenging. recycled plastic prices have followed suit which has put economic pressure on plastics recyclers and this has again been reinforced by high energy costs which means that the business case for plastic recycling in europe is challenging Currently, there are still very few legal requirements to use recycled plastics. currently there are still very few legal requirements to use recycled plastics However, this year we have the introduction of the 25% recycled content requirement for plastic bottles in the EU, and as you can also see from the graph, this looks to be supporting a higher increase in the ARPET prices. At the same time, the increased difference in price between recycled and virgin plastic makes it an economically rational option for producers to buy virgin plastics when they need to optimize margins and they don't have legal targets yet. This will change. The mid to long term outlook for this segment is strong and positive. In 2030, the EU Packaging and Packaging Waste Regulation will require up to 35% minimum recycled content in plastic packaging, and this means somewhere between a doubling or tripling of the recycled content versus today. We are very positive about the medium to long term outlook. However, this year we have the introduction of the 25% recycled content requirement for plastic bottles in the EU, and as you can also see from the graph, this looks to be supporting a higher increase in the ARPET prices. however this year we have the introduction of the 25% recycled content requirement for plastic bottles in the eu and as you can also see from the graph this looks to be supporting a higher increase in the arpet prices At the same time, the increased difference in price between recycled and virgin plastic makes it an economically rational option for producers to buy virgin plastics when they need to optimize margins and they don't have legal targets yet. at the same time the increased difference in price between recycled and virgin plastic makes it an economically rational option for producers to buy virgin plastics when they need to optimize margins and they don't have legal targets yet This will change. this will change The mid to long term outlook for this segment is strong and positive. the mid to long term outlook for this segment is strong and positive In 2030, the EU Packaging and Packaging Waste Regulation will require up to 35% minimum recycled content in plastic packaging, and this means somewhere between a doubling or tripling of the recycled content versus today. in 2030 the eu packaging and packaging waste regulation will require up to 35% minimum recycled content in plastic packaging and this means somewhere between a doubling or tripling of the recycled content versus today We are very positive about the medium to long term outlook. we are very positive about the medium to long term outlook Adding then to a challenging plastic market is how the global macroeconomic uncertainty and trade war is impacting our U.S. business, which we also talked about in the last quarter. U.S. has been a good market for us the last years, especially in the waste segment due to a strong drive to modernize and automate. So far this year, there has been very low activity in the U.S. due to customers delaying their investment decisions as there is a high uncertainty regarding their CapEx. They need to make an investment decision and put an order today that will be delivered three, six, or nine months ahead, and to do that when you don't know if the tariff will be 10%, 20%, 30% or higher, of course, delays that decision. However, the fundamental drivers as modernization and automation remain intact, but certainty on tariffs is needed to get this market back. Adding then to a challenging plastic market is how the global macroeconomic uncertainty and trade war is impacting our U.S. business, which we also talked about in the last quarter. adding then to a challenging plastic market is how the global macroeconomic uncertainty and trade war is impacting our u.s business which we also talked about in the last quarter U.S. has been a good market for us the last years, especially in the waste segment due to a strong drive to modernize and automate. u.s has been a good market for us the last years especially in the waste segment due to a strong drive to modernize and automate So far this year, there has been very low activity in the U.S. due to customers delaying their investment decisions as there is a high uncertainty regarding their CapEx. so far this year there has been very low activity in the u.s due to customers delaying their investment decisions as there is a high uncertainty regarding their capex They need to make an investment decision and put an order today that will be delivered three, six, or nine months ahead, and to do that when you don't know if the tariff will be 10%, 20%, 30% or higher, of course, delays that decision. they need to make an investment decision and put an order today that will be delivered three six or nine months ahead and to do that when you don't know if the tariff will be 10% 20% 30% or higher of course delays that decision However, the fundamental drivers as modernization and automation remain intact, but certainty on tariffs is needed to get this market back. however the fundamental drivers as modernization and automation remain intact but certainty on tariffs is needed to get this market back On a more positive note, the metals recycling segment has performed well in the quarter. I have talked a lot about the aluminium and our new capabilities of sorting alloys with our Autosort Pulse in previous quarters, which has contributed positively in this segment. On this slide, we have added a bridge below to show the market developments from first half last year to first half this year. As you will see, overall the development is flat, but the metals recycling market excluding North America has increased while both the global plastics market and North America has decreased as a result. The metal segment currently makes up a significantly larger share of what we are delivering to the market these days, which is impacting our margins. Over to food. On a more positive note, the metals recycling segment has performed well in the quarter. on a more positive note the metals recycling segment has performed well in the quarter I have talked a lot about the aluminium and our new capabilities of sorting alloys with our Autosort Pulse in previous quarters, which has contributed positively in this segment. i have talked a lot about the aluminium and our new capabilities of sorting alloys with our autosort pulse in previous quarters which has contributed positively in this segment On this slide, we have added a bridge below to show the market developments from first half last year to first half this year. on this slide we have added a bridge below to show the market developments from first half last year to first half this year As you will see, overall the development is flat, but the metals recycling market excluding North America has increased while both the global plastics market and North America has decreased as a result. as you will see overall the development is flat but the metals recycling market excluding north america has increased while both the global plastics market and north america has decreased as a result The metal segment currently makes up a significantly larger share of what we are delivering to the market these days, which is impacting our margins. the metal segment currently makes up a significantly larger share of what we are delivering to the market these days which is impacting our margins Over to food. over to food After a record strong first quarter, food delivers another record quarter with the highest EBITDA, the highest order intake, and the highest order backlog we have had so far. This is due to both our own efforts to restructure the organization to improve profitability and an improving market sentiment. As we mentioned at our Q1 presentation, when plantations area are ready to bear fruit, the urgency to invest in food sorting can be strong. It's very good to see larger scale projects coming back in the fresh food categories because this was the pain point and one of our challenges a few years back. We have had good order intake in the quarter in all three regions. We have received large orders in all three regions, APAC, EMEA, and Americas, and also it's nice to see that that comes in different categories including potatoes, avocados, and citrus. After a record strong first quarter, food delivers another record quarter with the highest EBITDA, the highest order intake, and the highest order backlog we have had so far. after a record strong first quarter food delivers another record quarter with the highest ebitda the highest order intake and the highest order backlog we have had so far This is due to both our own efforts to restructure the organization to improve profitability and an improving market sentiment. this is due to both our own efforts to restructure the organization to improve profitability and an improving market sentiment As we mentioned at our Q1 presentation, when plantations area are ready to bear fruit, the urgency to invest in food sorting can be strong. as we mentioned at our q1 presentation when plantations area are ready to bear fruit the urgency to invest in food sorting can be strong It's very good to see larger scale projects coming back in the fresh food categories because this was the pain point and one of our challenges a few years back. it's very good to see larger scale projects coming back in the fresh food categories because this was the pain point and one of our challenges a few years back We have had good order intake in the quarter in all three regions. we have had good order intake in the quarter in all three regions We have received large orders in all three regions, APAC, EMEA, and Americas, and also it's nice to see that that comes in different categories including potatoes, avocados, and citrus. we have received large orders in all three regions apac emea and americas and also it's nice to see that that comes in different categories including potatoes avocados and citrus Citrus is one of the categories we have kept a close eye on and regard as a core category in our refocus portfolio. It's a category where our technology provides high value add for the customers and where we are the technology leader with our LUCAi solution. It's a crop where we see potential for customer investments. Citrus represents 17% to 18% of the overall share of fruit consumption and the industry last year has been heavily impacted by climate change and diseases. As it is a tree crop, time to full production is between six to ten years. It's time from planting till you have done a full production, depending on the variety. When it's ready, you will need to have the infrastructure in place for sorting, grading, and packaging. Citrus is one of the categories we have kept a close eye on and regard as a core category in our refocus portfolio. citrus is one of the categories we have kept a close eye on and regard as a core category in our refocus portfolio It's a category where our technology provides high value add for the customers and where we are the technology leader with our LUCAi solution. it's a category where our technology provides high value add for the customers and where we are the technology leader with our lucai solution It's a crop where we see potential for customer investments. it's a crop where we see potential for customer investments Citrus represents 17% to 18% of the overall share of fruit consumption and the industry last year has been heavily impacted by climate change and diseases. citrus represents 17% to 18% of the overall share of fruit consumption and the industry last year has been heavily impacted by climate change and diseases As it is a tree crop, time to full production is between six to ten years. as it is a tree crop time to full production is between six to ten years It's time from planting till you have done a full production, depending on the variety. it's time from planting till you have done a full production depending on the variety When it's ready, you will need to have the infrastructure in place for sorting, grading, and packaging. when it's ready you will need to have the infrastructure in place for sorting grading and packaging What we're currently seeing in citrus is that America is rebounding and there is an increased interest for automation due to labor challenges. We also see increased capacity requirement in APAC, particularly in Australia because of better climate conditions lately. You get a higher volume that needs to be processed, more plantations, and increased need for automation. It will be interesting to follow the investment cycle of citrus the next years. Despite a great start to the year, our food business is not immune to the tariff uncertainty. We do see some postponements and delayed investment decisions in the U.S. also for food, but to a lesser extent than in recycling, as in some cases there is an urgent need for the investment, it cannot be delayed. What we're currently seeing in citrus is that America is rebounding and there is an increased interest for automation due to labor challenges. what we're currently seeing in citrus is that america is rebounding and there is an increased interest for automation due to labor challenges We also see increased capacity requirement in APAC, particularly in Australia because of better climate conditions lately. we also see increased capacity requirement in apac particularly in australia because of better climate conditions lately You get a higher volume that needs to be processed, more plantations, and increased need for automation. you get a higher volume that needs to be processed more plantations and increased need for automation It will be interesting to follow the investment cycle of citrus the next years. it will be interesting to follow the investment cycle of citrus the next years Despite a great start to the year, our food business is not immune to the tariff uncertainty. despite a great start to the year our food business is not immune to the tariff uncertainty We do see some postponements and delayed investment decisions in the U.S. also for food, but to a lesser extent than in recycling, as in some cases there is an urgent need for the investment, it cannot be delayed. we do see some postponements and delayed investment decisions in the u.s also for food but to a lesser extent than in recycling as in some cases there is an urgent need for the investment it cannot be delayed In addition, we see growth in other regions compensating for the delays in the U.S., but there is of course also risk in our food business linked to the macroeconomic situation and tariffs. Over to Horizon, our adjacent business building, and I will give an update on our feedstock and our reuse venture. TOMRA Feedstock is where we are focusing on solving the issue on plastic by investing in advanced sorting facilities. We are entering a very exciting phase for our Norwegian plant Umbera as we have started the commissioning. Last month in June, we produced or we had processed 1,880 tonne in the facility and the commissioning is going very well. We see very good yields and we also see very good high priorities. Commissioning will continue during the autumn and we will take over the plant during the second half of this year. In addition, we see growth in other regions compensating for the delays in the U.S., but there is of course also risk in our food business linked to the macroeconomic situation and tariffs. in addition we see growth in other regions compensating for the delays in the u.s but there is of course also risk in our food business linked to the macroeconomic situation and tariffs Over to Horizon, our adjacent business building, and I will give an update on our feedstock and our reuse venture. over to horizon our adjacent business building and i will give an update on our feedstock and our reuse venture TOMRA Feedstock is where we are focusing on solving the issue on plastic by investing in advanced sorting facilities. tomra feedstock is where we are focusing on solving the issue on plastic by investing in advanced sorting facilities We are entering a very exciting phase for our Norwegian plant Umbera as we have started the commissioning. we are entering a very exciting phase for our norwegian plant umbera as we have started the commissioning Last month in June, we produced or we had processed 1,880 tonne in the facility and the commissioning is going very well. last month in june we produced or we had processed 1,880 tonne in the facility and the commissioning is going very well We see very good yields and we also see very good high priorities. we see very good yields and we also see very good high priorities Commissioning will continue during the autumn and we will take over the plant during the second half of this year. commissioning will continue during the autumn and we will take over the plant during the second half of this year On TOMRA Reuse, TOMRA Reuse is where we are focusing on solving the issues linked to takeaway packaging, both littering and CO2 emissions by introducing reuse options. An exciting development in the quarter is the preparations for Lisbon, where we are planning to install 17 return points across the downtown area by October. You will see on this picture that we had the first two reuse installations in Lisbon happening now in June. Also, what we have done in the quarter in reuse is that we have launched or shown our new collection point because our objective in reuse is not to only have solutions for beverage cups, reuse cups, but also for other types of food packaging. You can see bottom right here, this is our new reuse collection point where you can also use it for boxes, bowls, trays, and so forth. On TOMRA Reuse, TOMRA Reuse is where we are focusing on solving the issues linked to takeaway packaging, both littering and CO2 emissions by introducing reuse options. on tomra reuse tomra reuse is where we are focusing on solving the issues linked to takeaway packaging both littering and co2 emissions by introducing reuse options An exciting development in the quarter is the preparations for Lisbon, where we are planning to install 17 return points across the downtown area by October. an exciting development in the quarter is the preparations for lisbon where we are planning to install 17 return points across the downtown area by october You will see on this picture that we had the first two reuse installations in Lisbon happening now in June. you will see on this picture that we had the first two reuse installations in lisbon happening now in june Also, what we have done in the quarter in reuse is that we have launched or shown our new collection point because our objective in reuse is not to only have solutions for beverage cups, reuse cups, but also for other types of food packaging. also what we have done in the quarter in reuse is that we have launched or shown our new collection point because our objective in reuse is not to only have solutions for beverage cups reuse cups but also for other types of food packaging You can see bottom right here, this is our new reuse collection point where you can also use it for boxes, bowls, trays, and so forth. you can see bottom right here this is our new reuse collection point where you can also use it for boxes bowls trays and so forth This is now piloting, and we have live testing on it ongoing in Europe. Overall, the different ventures in our Horizon portfolio are progressing in line with plans and expectations. With that, I will hand over to our CFO Eva Sagemo. This is now piloting, and we have live testing on it ongoing in Europe. this is now piloting and we have live testing on it ongoing in europe Overall, the different ventures in our Horizon portfolio are progressing in line with plans and expectations. overall the different ventures in our horizon portfolio are progressing in line with plans and expectations With that, I will hand over to our CFO Eva Sagemo. with that i will hand over to our cfo eva sagemo

Speaker 6: Thank you Tove and we start with the group P&L, for the second quarter, the top line came in at EUR 325 million, down 2% compared to a strong Q2 last year. As we expected, the revenues in Collection were down 12% due to the timing of new markets. Recycling down 1% due to tariffs and macroeconomic uncertainty, and Food up 15% delivering on the estimated conversion ratio from a strong order backlog in the first quarter. Gross margins were in line with Q2 last year, ending at 44%. We maintain strong and good cost control across our divisions with OpEx of EUR 100 million in the quarter, slightly down compared to Q2 last year. That results in an improved profitability, up 2 percentage points, giving an EBITDA of 15% including special items. Looking at Collection, revenues came in at EUR 169 million, down 12% compared to a strong second quarter last year. Thank you Tove and we start with the group P&L, f or the second quarter, the top line came in at EUR 325 million, down 2% compared to a strong Q2 last year. thank you tove and we start with the group p&l, f or the second quarter the top line came in at eur 325 million down 2% compared to a strong q2 last year As we expected, the revenues in Collection were down 12% due to the timing of new markets. as we expected the revenues in collection were down 12% due to the timing of new markets Recycling down 1% due to tariffs and macroeconomic uncertainty, and Food up 15% delivering on the estimated conversion ratio from a strong order backlog in the first quarter. recycling down 1% due to tariffs and macroeconomic uncertainty and food up 15% delivering on the estimated conversion ratio from a strong order backlog in the first quarter Gross margins were in line with Q2 last year, ending at 44%. gross margins were in line with q2 last year ending at 44% We maintain strong and good cost control across our divisions with OpEx of EUR 100 million in the quarter, slightly down compared to Q2 last year. we maintain strong and good cost control across our divisions with opex of eur 100 million in the quarter slightly down compared to q2 last year That results in an improved profitability, up 2 percentage points, giving an EBITDA of 15% including special items. that results in an improved profitability up 2 percentage points giving an ebitda of 15% including special items Looking at Collection, revenues came in at EUR 169 million, down 12% compared to a strong second quarter last year. looking at collection revenues came in at eur 169 million down 12% compared to a strong second quarter last year Sales were up in all regions except for Europe, mainly explained by the lower new market activity in this region. In Q2 last year, we had strong sales from both Austria and Romania, but as expected these are down with Austria going live first of January this year and Romania, as indicated before, continues to roll out reverse vending machines in the market but at a lower pace. Currently, we continue to see an improvement in our gross margin, ending at 42% in the quarter compared to 40% last, and that is explained by the business mix in this quarter. Good cost control in connection with OpEx, down compared to last year, ending at EUR 43 million, resulting in an EBITDA of 16%, same as last year. Sales were up in all regions except for Europe, mainly explained by the lower new market activity in this region. sales were up in all regions except for europe mainly explained by the lower new market activity in this region In Q2 last year, we had strong sales from both Austria and Romania, but as expected these are down with Austria going live first of January this year and Romania, as indicated before, continues to roll out reverse vending machines in the market but at a lower pace. in q2 last year we had strong sales from both austria and romania but as expected these are down with austria going live first of january this year and romania as indicated before continues to roll out reverse vending machines in the market but at a lower pace Currently, we continue to see an improvement in our gross margin, ending at 42% in the quarter compared to 40% last, and that is explained by the business mix in this quarter. currently we continue to see an improvement in our gross margin ending at 42% in the quarter compared to 40% last and that is explained by the business mix in this quarter Good cost control in connection with OpEx, down compared to last year, ending at EUR 43 million, resulting in an EBITDA of 16%, same as last year. good cost control in connection with opex down compared to last year ending at eur 43 million resulting in an ebitda of 16% same as last year On lower top line, Recycling came in at EUR 57 million, stable compared to Q2 last year, and as we said in Q1, we estimated a conversion ratio of around 50%, however with a downside risk due to the uncertainty linked to macroeconomic and tariffs. As you can see from the overview, we were down in our main market Europe and also down year-to-date. In North America, gross margins ending at 46%, a weak margin compared to a strong Q2 last year where we had a favorable product and business mix. This quarter, the gross margin is weak due to the product mix being more flakes and metal projects in the P&L. Important to note is that the underlying product margin in Recycling are intact. We have good cost control in Recycling as well. On lower top line, Recycling came in at EUR 57 million, stable compared to Q2 last year, and as we said in Q1, we estimated a conversion ratio of around 50%, however with a downside risk due to the uncertainty linked to macroeconomic and tariffs. on lower top line recycling came in at eur 57 million stable compared to q2 last year and as we said in q1 we estimated a conversion ratio of around 50% however with a downside risk due to the uncertainty linked to macroeconomic and tariffs As you can see from the overview, we were down in our main market Europe and also down year- to- date. as you can see from the overview we were down in our main market europe and also down year- to- date In North America, gross margins ending at 46%, a weak margin compared to a strong Q2 last year where we had a favorable product and business mix. in north america gross margins ending at 46% a weak margin compared to a strong q2 last year where we had a favorable product and business mix This quarter, the gross margin is weak due to the product mix being more flakes and metal projects in the P&L. this quarter the gross margin is weak due to the product mix being more flakes and metal projects in the p&l Important to note is that the underlying product margin in Recycling are intact. important to note is that the underlying product margin in recycling are intact We have good cost control in Recycling as well. we have good cost control in recycling as well OpEx of EUR 20 million in line with Q2 last year, which resulting then in an EBITDA margin of 11% in Q2. Looking at the order intake, as Tove said, we had a weak order intake in the quarter due to the continued challenging market in Europe, and in the U.S. the order intake was down 37% compared to Q2 last year, ending then at EUR 41 million. That results in a decline in the order backlog of 20%, ending then at EUR 107 million. Looking at the trailing 12 months for order intake in Recycling, we are down 9%. Food came in strong on top line, delivering EUR 94 million of revenue, up 15% compared to Q2 last year. In the quarter, sales were up in all main regions except for the rest of the world. OpEx of EUR 20 million in line with Q2 last year, which resulting then in an EBITDA margin of 11% in Q2. opex of eur 20 million in line with q2 last year which resulting then in an ebitda margin of 11% in q2 Looking at the order intake, as Tove said, we had a weak order intake in the quarter due to the continued challenging market in Europe, and in the U.S. the order intake was down 37% compared to Q2 last year, ending then at EUR 41 million. looking at the order intake as tove said we had a weak order intake in the quarter due to the continued challenging market in europe and in the u.s the order intake was down 37% compared to q2 last year ending then at eur 41 million That results in a decline in the order backlog of 20%, ending then at EUR 107 million. that results in a decline in the order backlog of 20% ending then at eur 107 million Looking at the trailing 12 months for order intake in Recycling, we are down 9%. looking at the trailing 12 months for order intake in recycling we are down 9% Food came in strong on top line, delivering EUR 94 million of revenue, up 15% compared to Q2 last year. food came in strong on top line delivering eur 94 million of revenue up 15% compared to q2 last year In the quarter, sales were up in all main regions except for the rest of the world. in the quarter sales were up in all main regions except for the rest of the world Gross margin ending at 46%, up compared to Q2 last year, explained by high volumes, higher installation revenues, and cost savings realized in the quarter. We had tariff impact in the quarter, as we talked about in Q1, that we expected a bit more than EUR 4 million of tariff impact in the margin. In Q2, we landed at EUR 1.2 million in the quarter, and that is explained by the intermediate tariff reduction between China and the U.S. OpEx in the quarter ended at EUR 27 million, down from Q2 last year, driven mainly by cost savings, resulting in a record EBITDA margin of 18%. We also had a special item this quarter for Food. It was a positive item of EUR 3.7 million related to the restructuring costs. Gross margin ending at 46%, up compared to Q2 last year, explained by high volumes, higher installation revenues, and cost savings realized in the quarter. gross margin ending at 46% up compared to q2 last year explained by high volumes higher installation revenues and cost savings realized in the quarter We had tariff impact in the quarter, as we talked about in Q1, that we expected a bit more than EUR 4 million of tariff impact in the margin. we had tariff impact in the quarter as we talked about in q1 that we expected a bit more than eur 4 million of tariff impact in the margin In Q2, we landed at EUR 1.2 million in the quarter, and that is explained by the intermediate tariff reduction between China and the U.S. in q2 we landed at eur 1.2 million in the quarter and that is explained by the intermediate tariff reduction between china and the u.s OpEx in the quarter ended at EUR 27 million, down from Q2 last year, driven mainly by cost savings, resulting in a record EBITDA margin of 18%. opex in the quarter ended at eur 27 million down from q2 last year driven mainly by cost savings resulting in a record ebitda margin of 18% We also had a special item this quarter for Food. we also had a special item this quarter for food It was a positive item of EUR 3.7 million related to the restructuring costs. it was a positive item of eur 3.7 million related to the restructuring costs They're coming from lease agreements in New Zealand and now being leases that have been subleased or either terminated, and including the special items, the EBITDA margin ended at 22% in the quarter. As Tove said, we have had the strongest order intake record Food of EUR 106 million in the quarter, up 28% compared to Q2 last year. It has been strong in all regions and includes large orders mentioned, being potatoes, citrus, and avocados, accounting for more than EUR 25 million together. The strong order intake results in also the strongest order backlog recorded, ending at EUR 137 million, up 15% compared to Q2 last year. Looking at the trailing 12 months for order intake in Food, we are up 11%. Cash flow from operations ended at EUR 17 million for the quarter, down from EUR 34 million in the second quarter last year. They're coming from lease agreements in New Zealand and now being leases that have been subleased or either terminated, and including the special items, the EBITDA margin ended at 22% in the quarter. they're coming from lease agreements in new zealand and now being leases that have been subleased or either terminated and including the special items the ebitda margin ended at 22% in the quarter As Tove said, we have had the strongest order intake record Food of EUR 106 million in the quarter, up 28% compared to Q2 last year. as tove said we have had the strongest order intake record food of eur 106 million in the quarter up 28% compared to q2 last year It has been strong in all regions and includes large orders mentioned, being potatoes, citrus, and avocados, accounting for more than EUR 25 million together. it has been strong in all regions and includes large orders mentioned being potatoes citrus and avocados accounting for more than eur 25 million together The strong order intake results in also the strongest order backlog recorded, ending at EUR 137 million, up 15% compared to Q2 last year. the strong order intake results in also the strongest order backlog recorded ending at eur 137 million up 15% compared to q2 last year Looking at the trailing 12 months for order intake in Food, we are up 11%. looking at the trailing 12 months for order intake in food we are up 11% Cash flow from operations ended at EUR 17 million for the quarter, down from EUR 34 million in the second quarter last year. cash flow from operations ended at eur 17 million for the quarter down from eur 34 million in the second quarter last year Year-to-date, we have EUR 83 million compared to EUR 54 million last year year-to-date, and this is really related to timing of inflows. 35% equity ratio, gearing of 1.8 times, and a return on capital employed, trailing now above our long term target of 18%. Happy to announce that Scope Ratings affirmed our ratings for Tomra in June at a stable, being business risk profile of triple B plus and a financial risk profile at a. Our weighted average debt maturity is now at 4.2 years and we end the quarter with a EUR 92 million undrawn liquidity buffer for Tomra. Then over to the outlook. There is a high, and we start with Collection as normal. There is a high activity related to deposit return systems in new markets and growth in existing markets. Year- to- date, we have EUR 83 million compared to EUR 54 million last year year- to- date, and this is really related to timing of inflows. 35% equity ratio, gearing of 1.8 times, and a return on capital employed, trailing now above our long term target of 18%. year- to- date we have eur 83 million compared to eur 54 million last year year- to- date and this is really related to timing of inflows 35% equity ratio gearing of 1.8 times and a return on capital employed trailing now above our long term target of 18% Happy to announce that Scope Ratings affirmed our ratings for Tomra in June at a stable, being business risk profile of triple B plus and a financial risk profile at a. happy to announce that scope ratings affirmed our ratings for tomra in june at a stable being business risk profile of triple b plus and a financial risk profile at a Our weighted average debt maturity is now at 4.2 years and we end the quarter with a EUR 92 million undrawn liquidity buffer for Tomra. our weighted average debt maturity is now at 4.2 years and we end the quarter with a eur 92 million undrawn liquidity buffer for tomra Then over to the outlook. then over to the outlook There is a high, and we start with Collection as normal. there is a high and we start with collection as normal There is a high activity related to deposit return systems in new markets and growth in existing markets. there is a high activity related to deposit return systems in new markets and growth in existing markets Short and mid term performance will depend upon the timing of new markets in addition to replacement sales, introduction of new innovation, and variations in product and business mix. The growth prospects in 2025 are dependent on developments in upcoming deposit markets such as Poland and Portugal. However, we estimate the existing markets to grow approximately 5% year over year. Gross margins should continue to stay above 40% and we also expect good cost control to continue in recycling, I mean in Collection. However, with quarterly OpEx variations dependent on investments into new markets where we have an annual ramp up OpEx run rate of approximately EUR 20 million. Outlook for Recycling, the regulation and demand for recycled materials is expected to create growth opportunities. Short and mid term performance will largely depend upon installation volumes and variations in product and business mix. Short and mid term performance will depend upon the timing of new markets in addition to replacement sales, introduction of new innovation, and variations in product and business mix. short and mid term performance will depend upon the timing of new markets in addition to replacement sales introduction of new innovation and variations in product and business mix The growth prospects in 2025 are dependent on developments in upcoming deposit markets such as Poland and Portugal. the growth prospects in 2025 are dependent on developments in upcoming deposit markets such as poland and portugal However, we estimate the existing markets to grow approximately 5% year over year. however we estimate the existing markets to grow approximately 5% year over year Gross margins should continue to stay above 40% and we also expect good cost control to continue in recycling, I mean in Collection. gross margins should continue to stay above 40% and we also expect good cost control to continue in recycling i mean in collection However, with quarterly OpEx variations dependent on investments into new markets where we have an annual ramp up OpEx run rate of approximately EUR 20 million. however with quarterly opex variations dependent on investments into new markets where we have an annual ramp up opex run rate of approximately eur 20 million Outlook for Recycling, the regulation and demand for recycled materials is expected to create growth opportunities. outlook for recycling the regulation and demand for recycled materials is expected to create growth opportunities Short and mid term performance will largely depend upon installation volumes and variations in product and business mix. short and mid term performance will largely depend upon installation volumes and variations in product and business mix The market sentiment is currently affected by a soft European plastic recycling market, trade tensions, and a high degree of macroeconomic uncertainty. This leads to increased uncertainty in the timing of orders. Revenues in 2025 are dependent on developments in this market environment and how customers will react to these challenges. Based on the order backlog at the end of the second quarter, a 40% conversion ratio is estimated to be recognized as revenue in the coming quarter. However, given the market uncertainty, orders may be postponed over quarters and for gross margins. Volumes and product mix have an impact which can also be seen historically. There is a currently higher share of metal recycling installations in our backlog which generally then have lower gross margins than other product segments. The market sentiment is currently affected by a soft European plastic recycling market, trade tensions, and a high degree of macroeconomic uncertainty. the market sentiment is currently affected by a soft european plastic recycling market trade tensions and a high degree of macroeconomic uncertainty This leads to increased uncertainty in the timing of orders. this leads to increased uncertainty in the timing of orders Revenues in 2025 are dependent on developments in this market environment and how customers will react to these challenges. revenues in 2025 are dependent on developments in this market environment and how customers will react to these challenges Based on the order backlog at the end of the second quarter, a 40% conversion ratio is estimated to be recognized as revenue in the coming quarter. based on the order backlog at the end of the second quarter a 40% conversion ratio is estimated to be recognized as revenue in the coming quarter However, given the market uncertainty, orders may be postponed over quarters and for gross margins. however given the market uncertainty orders may be postponed over quarters and for gross margins Volumes and product mix have an impact which can also be seen historically. volumes and product mix have an impact which can also be seen historically There is a currently higher share of metal recycling installations in our backlog which generally then have lower gross margins than other product segments. there is a currently higher share of metal recycling installations in our backlog which generally then have lower gross margins than other product segments Gross margins may also be negatively impacted by tariffs, all dependent on sales into the U.S., and we expect the business division to maintain good cost control also going forward. Outlook for Food, the need for optimization and increased quality and safety requirements create opportunities and we are experiencing an improved market sentiment. However, the current macroeconomic uncertainty may impact customers' investment willingness. Also here, revenue growth in 2025 has potential to reach mid single digit levels and based on the order backlog at the end of the second quarter, a 55% conversion ratio is estimated to be recognized as revenue in the third quarter. However, also here, given the market uncertainty, orders may be postponed or over quarters. The cost reduction program has improved our gross margins in Food. However, we will continue to see quarterly variations in the gross margin depending on volume and product mix. Gross margins may also be negatively impacted by tariffs, all dependent on sales into the U.S., and we expect the business division to maintain good cost control also going forward. gross margins may also be negatively impacted by tariffs all dependent on sales into the u.s and we expect the business division to maintain good cost control also going forward Outlook for Food, the need for optimization and increased quality and safety requirements create opportunities and we are experiencing an improved market sentiment. outlook for food the need for optimization and increased quality and safety requirements create opportunities and we are experiencing an improved market sentiment However, the current macroeconomic uncertainty may impact customers' investment willingness. however the current macroeconomic uncertainty may impact customers' investment willingness Also here, revenue growth in 2025 has potential to reach mid single digit levels and based on the order backlog at the end of the second quarter, a 55% conversion ratio is estimated to be recognized as revenue in the third quarter. also here revenue growth in 2025 has potential to reach mid single digit levels and based on the order backlog at the end of the second quarter a 55% conversion ratio is estimated to be recognized as revenue in the third quarter However, also here, given the market uncertainty, orders may be postponed or over quarters. however also here given the market uncertainty orders may be postponed or over quarters The cost reduction program has improved our gross margins in Food. the cost reduction program has improved our gross margins in food However, we will continue to see quarterly variations in the gross margin depending on volume and product mix. however we will continue to see quarterly variations in the gross margin depending on volume and product mix As we said, tariffs have impacted the margins in Q2 and it may continue to impact gross margins also going forward. Following last year's cost reduction program, the target is to achieve an EBITDA margin of 10% to 11% in 2025. The outlook for Horizon consists of our venture activities in feedstock and reuse, in addition to the newly acquired smart waste company C-Trace. While the underlying operating expenses for feedstock and reuse are expected to remain in line with 2024 levels, there will be an increase in costs related to the feedstock plant in Norway, which goes into operations end of this year. The total OpEx run rate for feedstock and reuse is estimated south of EUR 20 million for full year 2025. When we talk about the investments or the CapEx of Horizon, it's approximately EUR 40 million for this year, so EUR 40 million for 2025. As we said, tariffs have impacted the margins in Q2 and it may continue to impact gross margins also going forward. as we said tariffs have impacted the margins in q2 and it may continue to impact gross margins also going forward Following last year's cost reduction program, the target is to achieve an EBITDA margin of 10% to 11% in 2025. following last year's cost reduction program the target is to achieve an ebitda margin of 10% to 11% in 2025 The outlook for Horizon consists of our venture activities in feedstock and reuse, in addition to the newly acquired smart waste company C-Trace. the outlook for horizon consists of our venture activities in feedstock and reuse in addition to the newly acquired smart waste company c-trace While the underlying operating expenses for feedstock and reuse are expected to remain in line with 2024 levels, there will be an increase in costs related to the feedstock plant in Norway, which goes into operations end of this year. while the underlying operating expenses for feedstock and reuse are expected to remain in line with 2024 levels there will be an increase in costs related to the feedstock plant in norway which goes into operations end of this year The total OpEx run rate for feedstock and reuse is estimated south of EUR 20 million for full year 2025. the total opex run rate for feedstock and reuse is estimated south of eur 20 million for full year 2025 When we talk about the investments or the CapEx of Horizon, it's approximately EUR 40 million for this year, so EUR 40 million for 2025. when we talk about the investments or the capex of horizon it's approximately eur 40 million for this year so eur 40 million for 2025 That is mainly related to our two feedstock plants where we have currently spent around EUR 10 million. I think I end here, Daniel, and hand it over to you. That is mainly related to our two feedstock plants where we have currently spent around EUR 10 million. that is mainly related to our two feedstock plants where we have currently spent around eur 10 million I think I end here, Daniel, and hand it over to you. i think i end here daniel and hand it over to you

Speaker 1: Thank you, Tove, and thank you, Eva. Before moving over to the Q&A, I would like to mention that Områ, our Norwegian feedstock plant, will officially open on the 5th of November. We're happy to invite everyone who's interested to join this ceremonial event to contact Investor Relations. We're also, of course, happy to organize other investor site visits to view the plant in live operations. Stay tuned for that as well. With that, we will open up for Q&A. I see that we have a few questions coming in already. The first question is coming from Adela Dashian in Jefferies. Please go ahead. Adela, I think you are muted. There we go. Now we hear you. Thank you, Tove, and thank you, Eva. thank you tove and thank you eva Before moving over to the Q& A, I would like to mention that Områ, our Norwegian feedstock plant, will officially open on the 5th of November. before moving over to the q& a i would like to mention that områ our norwegian feedstock plant will officially open on the 5th of november We're happy to invite everyone who's interested to join this ceremonial event to contact Investor Relations. we're happy to invite everyone who's interested to join this ceremonial event to contact investor relations We're also, of course, happy to organize other investor site visits to view the plant in live operations. we're also of course happy to organize other investor site visits to view the plant in live operations Stay tuned for that as well. stay tuned for that as well With that, we will open up for Q& A . with that we will open up for q& a I see that we have a few questions coming in already. i see that we have a few questions coming in already The first question is coming from Adela Dashian in Jefferies . the first question is coming from adela dashian in jefferies Please go ahead. please go ahead Adela, I think you are muted. adela i think you are muted There we go. there we go Now we hear you. now we hear you

Speaker 4: Perfect. Perfect. perfect A few questions for me. Firstly, if we start with Recycling, are you able to just clarify your expectations for revenues this year? I mean, given the decline in order backlog and also the indicated conversion ratio, it seems like you would have to take a pretty strong pickup in H2 to achieve full year growth. What's your visibility on that, what you currently have in the pipeline? What gives you confidence in a potential rebound already in the second half? A few questions for me. a few questions for me Firstly, if we start with Recycling, are you able to just clarify your expectations for revenues this year? firstly if we start with recycling are you able to just clarify your expectations for revenues this year I mean, given the decline in order backlog and also the indicated conversion ratio, it seems like you would have to take a pretty strong pickup in H2 to achieve full year growth. i mean given the decline in order backlog and also the indicated conversion ratio it seems like you would have to take a pretty strong pickup in h2 to achieve full year growth What's your visibility on that, what you currently have in the pipeline? what's your visibility on that what you currently have in the pipeline What gives you confidence in a potential rebound already in the second half? what gives you confidence in a potential rebound already in the second half

Speaker 6: Year-to-date, we have had revenues in Recycling of a bit. Year- to- date, we have had revenues in Recycling of a bit. year- to- date we have had revenues in recycling of a bit More than EUR 100 million. More than EUR 100 million. more than eur 100 million The data point that we have indicated for the coming quarter is 40% conversion ratio of the order backlog. That's the data point that we have given. We have also said it's an uncertainty in the market related to the macroeconomic situation. The tariffs and revenues for 2025 will depend on how customers will react to these challenges. The data point that we have indicated for the coming quarter is 40% conversion ratio of the order backlog. the data point that we have indicated for the coming quarter is 40% conversion ratio of the order backlog That's the data point that we have given. that's the data point that we have given We have also said it's an uncertainty in the market related to the macroeconomic situation. we have also said it's an uncertainty in the market related to the macroeconomic situation The tariffs and revenues for 2025 will depend on how customers will react to these challenges. the tariffs and revenues for 2025 will depend on how customers will react to these challenges

Speaker 4: Would it be fair to say that with that conversion ratio you're currently not expecting growth in 2025? Would it be fair to say that with that conversion ratio you're currently not expecting growth in 2025? would it be fair to say that with that conversion ratio you're currently not expecting growth in 2025

Speaker 6: I can just repeat myself, Adela, that it's a very uncertain market, and these are the data points that we can give at this point in time. I can just repeat myself, Adela , that it's a very uncertain market, and these are the data points that we can give at this point in time. i can just repeat myself adela that it's a very uncertain market and these are the data points that we can give at this point in time

Speaker 4: If we move to Food, very strong margin development here in Q2. Do you feel like the current full year target might be a bit too conservative? Because as it stands now, it looks like you're not expecting double digit margins in H2 despite the restructuring benefits and strong order momentum. What would then be driving a more cautious outlook? If we move to Food, very strong margin development here in Q2. if we move to food very strong margin development here in q2 Do you feel like the current full year target might be a bit too conservative? do you feel like the current full year target might be a bit too conservative Because as it stands now, it looks like you're not expecting double digit margins in H2 despite the restructuring benefits and strong order momentum. because as it stands now it looks like you're not expecting double digit margins in h2 despite the restructuring benefits and strong order momentum What would then be driving a more cautious outlook? what would then be driving a more cautious outlook

Speaker 6: Yeah, so the profitability in Food, it's very high, it's very strong and good. Now in Q2, it's a mix of many things. Of course, as I said, volume plays a part, the product mix plays a part, and the business mix plays a part. That's what, when we say, when we talk about gross margins, we indicate that it will be quarterly variations. Of course, with the cost reduction program that we had over the last year, we have seen improvements in the margins in Food. Yeah, so the profitability in Food, it's very high, it's very strong and good. yeah so the profitability in food it's very high it's very strong and good Now in Q2, it's a mix of many things. now in q2 it's a mix of many things Of course, as I said, volume plays a part, the product mix plays a part, and the business mix plays a part. of course as i said volume plays a part the product mix plays a part and the business mix plays a part That's what, when we say, when we talk about gross margins, we indicate that it will be quarterly variations. that's what when we say when we talk about gross margins we indicate that it will be quarterly variations Of course, with the cost reduction program that we had over the last year, we have seen improvements in the margins in Food. of course with the cost reduction program that we had over the last year we have seen improvements in the margins in food

Speaker 4: With the current order backlog, is there a mix variation, a more negative mix in H2 that makes you feel like you will not achieve double digit margins? With the current order backlog, is there a mix variation, a more negative mix in H2 that makes you feel like you will not achieve double digit margins? with the current order backlog is there a mix variation a more negative mix in h2 that makes you feel like you will not achieve double digit margins

Speaker 6: We don't necessarily go into the details of the order backlog, but what I can say is that we have the target still of reaching the EBITDA of 10 to 11% for the full year in Food. We don't necessarily go into the details of the order backlog, but what I can say is that we have the target still of reaching the EBITDA of 10 to 11% for the full year in Food. we don't necessarily go into the details of the order backlog but what i can say is that we have the target still of reaching the ebitda of 10 to 11% for the full year in food

Speaker 4: Okay. Lastly, on Collection, are you able to provide us with an update on how things are progressing in Poland? Maybe specifically what go to market model that's been adopted or is being planned to be adopted. Maybe also an update on how you would characterize your competitive positioning versus both local and regional players? Okay. okay Lastly, on Collection, are you able to provide us with an update on how things are progressing in Poland? lastly on collection are you able to provide us with an update on how things are progressing in poland Maybe specifically what go to market model that's been adopted or is being planned to be adopted. maybe specifically what go to market model that's been adopted or is being planned to be adopted Maybe also an update on how you would characterize your competitive positioning versus both local and regional players? maybe also an update on how you would characterize your competitive positioning versus both local and regional players

Speaker 6: Yeah, so it's a very exciting time now in Poland, a lot of activities going on. We have a good and strong team in place in Poland with more than 50 people already. We have signed some contracts, and we are in negotiations related to other contracts, and we have talked about in the past that we have had discussions both on throughput models in Poland and sales and service. What we are seeing currently is that it's tilting more towards sales and service. We think currently that the majority of the business models will be a traditional contract linked to then selling the equipment and doing the service afterwards. Yeah, so it's a very exciting time now in Poland, a lot of activities going on. yeah so it's a very exciting time now in poland a lot of activities going on We have a good and strong team in place in Poland with more than 50 people already. we have a good and strong team in place in poland with more than 50 people already We have signed some contracts, and we are in negotiations related to other contracts, and we have talked about in the past that we have had discussions both on throughput models in Poland and sales and service. we have signed some contracts and we are in negotiations related to other contracts and we have talked about in the past that we have had discussions both on throughput models in poland and sales and service What we are seeing currently is that it's tilting more towards sales and service. what we are seeing currently is that it's tilting more towards sales and service We think currently that the majority of the business models will be a traditional contract linked to then selling the equipment and doing the service afterwards. we think currently that the majority of the business models will be a traditional contract linked to then selling the equipment and doing the service afterwards

Speaker 4: How is competitiveness right now? Is it the same as you've already established in previous quarters, or are you seeing it intensifying more? How is competitiveness right now? how is competitiveness right now Is it the same as you've already established in previous quarters, or are you seeing it intensifying more? is it the same as you've already established in previous quarters or are you seeing it intensifying more

Speaker 6: I think it's always very competitive in these new markets that are being launched. I think when we looked at the competitive situation in Poland a year back, you had the mix, the more local players, new local players, and the more international ones. What we have seen now is that the small local players find it very difficult to compete in the market. The ones that we're seeing active now are the traditional competitors that we see in all markets. We are very confident in the service that we are offering to the customers. We have 50 years of history, we have the largest experience and background from different markets. We have the broadest portfolio, we have the best software solution, we have the most reliable products. I think it's always very competitive in these new markets that are being launched. i think it's always very competitive in these new markets that are being launched I think when we looked at the competitive situation in Poland a year back, you had the mix, the more local players, new local players, and the more international ones. i think when we looked at the competitive situation in poland a year back you had the mix the more local players new local players and the more international ones What we have seen now is that the small local players find it very difficult to compete in the market. what we have seen now is that the small local players find it very difficult to compete in the market The ones that we're seeing active now are the traditional competitors that we see in all markets. the ones that we're seeing active now are the traditional competitors that we see in all markets We are very confident in the service that we are offering to the customers. we are very confident in the service that we are offering to the customers We have 50 years of history, we have the largest experience and background from different markets. we have 50 years of history we have the largest experience and background from different markets We have the broadest portfolio, we have the best software solution, we have the most reliable products. we have the broadest portfolio we have the best software solution we have the most reliable products We have also developed some specific products for Poland because many stores in Poland will not be able to have the reverse vending machines inside, so they want to have them outside. We have launched a new product now specifically for Poland. We have also developed some specific products for Poland because many stores in Poland will not be able to have the reverse vending machines inside, so they want to have them outside. we have also developed some specific products for poland because many stores in poland will not be able to have the reverse vending machines inside so they want to have them outside We have launched a new product now specifically for Poland. we have launched a new product now specifically for poland So. So. so We believe that we are very well positioned to take a significant share of the Polish market. We believe that we are very well positioned to take a significant share of the Polish market. we believe that we are very well positioned to take a significant share of the polish market

Speaker 4: Great, thank you. I'll jump back in the queue. Great, thank you. great thank you I'll jump back in the queue. i'll jump back in the queue

Speaker 1: Thank you, Adela. Next question will come from Maria Dasina in Barclays. Please go ahead. Thank you, Adela. thank you adela Next question will come from Maria Dasina in Barclays . next question will come from maria dasina in barclays Please go ahead. please go ahead

Speaker 2: Hi. Hi. hi Morning. Here on behalf of Gaurav, Jane, just one question from me on Food. Obviously, last quarter you were expecting around $4 million tariff impacts. Is there any color you can give us here on what you're expecting for Q3? I don't know if there's any more color you can give us in terms of the improvement in Food. How much of that can be attributed to the restructuring program versus improved market sentiment? I don't know if there's anything you can share on that. Morning. morning Here on behalf of Gaurav, Jane, just one question from me on Food. here on behalf of gaurav jane just one question from me on food Obviously, last quarter you were expecting around $4 million tariff impacts. obviously last quarter you were expecting around $4 million tariff impacts Is there any color you can give us here on what you're expecting for Q3? is there any color you can give us here on what you're expecting for q3 I don't know if there's any more color you can give us in terms of the improvement in Food. i don't know if there's any more color you can give us in terms of the improvement in food How much of that can be attributed to the restructuring program versus improved market sentiment? how much of that can be attributed to the restructuring program versus improved market sentiment I don't know if there's anything you can share on that. i don't know if there's anything you can share on that

Speaker 6: Yeah. Yeah. yeah If we start with the restructuring program, we had a target to save EUR 30 million and what we said was that one third of that should go into the gross margins. As we have said today, we have quarterly variations in the gross margin depending on volume, product mix, and business mix. This quarter we had the tariffs in of EUR 1.2 million impacting the margin negatively with more than 1% going forward. Of course, that depends on, first of all, that the tariffs are being fully landed. You can have predictability into what that means for the shipments into the U.S., but also Incoterms plays a role in how you also negotiate with your customers. What I would like to say is that tariffs might impact the margins going forward, all dependent on what we have in the order backlog and what we would sign on orders in the U.S. If we start with the restructuring program, we had a target to save EUR 30 million and what we said was that one third of that should go into the gross margins. if we start with the restructuring program we had a target to save eur 30 million and what we said was that one third of that should go into the gross margins As we have said today, we have quarterly variations in the gross margin depending on volume, product mix, and business mix. as we have said today we have quarterly variations in the gross margin depending on volume product mix and business mix This quarter we had the tariffs in of EUR 1.2 million impacting the margin negatively with more than 1% going forward. this quarter we had the tariffs in of eur 1.2 million impacting the margin negatively with more than 1% going forward Of course, that depends on, first of all, that the tariffs are being fully landed. of course that depends on first of all that the tariffs are being fully landed You can have predictability into what that means for the shipments into the U.S., but also Incoterms plays a role in how you also negotiate with your customers. you can have predictability into what that means for the shipments into the u.s but also incoterms plays a role in how you also negotiate with your customers What I would like to say is that tariffs might impact the margins going forward, all dependent on what we have in the order backlog and what we would sign on orders in the U.S. what i would like to say is that tariffs might impact the margins going forward all dependent on what we have in the order backlog and what we would sign on orders in the u.s going forward at which term. It's a bit difficult to estimate precise what will be the tariff impact in Q3 and Q4. We just need to come back to that. going forward at which term. going forward at which term It's a bit difficult to estimate precise what will be the tariff impact in Q3 and Q4. it's a bit difficult to estimate precise what will be the tariff impact in q3 and q4 We just need to come back to that. we just need to come back to that

Speaker 5: If I can just add one comment. What we have done in Food, because in Food we have been exposed both to Chinese and European tariffs into the U.S. because we had some products also being produced in China during now Q3. We will also have that capability in Europe to produce what we are currently producing in China, so that we are able to flex between those two production locations based on the tariff situation. If I can just add one comment. if i can just add one comment What we have done in Food, because in Food we have been exposed both to Chinese and European tariffs into the U.S. because we had some products also being produced in China during now Q3. what we have done in food because in food we have been exposed both to chinese and european tariffs into the u.s because we had some products also being produced in china during now q3 We will also have that capability in Europe to produce what we are currently producing in China, so that we are able to flex between those two production locations based on the tariff situation. we will also have that capability in europe to produce what we are currently producing in china so that we are able to flex between those two production locations based on the tariff situation

Speaker 2: Great, thanks so much. Great, thanks so much. great thanks so much

Speaker 1: Thank you, Maria. Next question will come from Elliott Jones in Danske Bank. Please go ahead, Elliott. Thank you, Maria. thank you maria Next question will come from Elliott Jones in Danske Bank. next question will come from elliott jones in danske bank Please go ahead, Elliott. please go ahead elliott

Speaker 3: Hey, good morning guys. Thanks for taking my questions. Just starting on Collection, you noted I think gross margins at 42%, 2 percentage point increase year-on-year. Is there a reason to kind of think that these margin levels will be kind of lower from this level as we move through the year? I know you have the kind of baseline target of above 40%, but just trying to get a kind of idea of, I don't know, maybe the mix or how we can expect to see this gross margin develop through the year. Hey, good morning guys. hey good morning guys Thanks for taking my questions. thanks for taking my questions Just starting on Collection, you noted I think gross margins at 42%, 2 percentage point increase year- on- year. just starting on collection you noted i think gross margins at 42% 2 percentage point increase year- on- year Is there a reason to kind of think that these margin levels will be kind of lower from this level as we move through the year? is there a reason to kind of think that these margin levels will be kind of lower from this level as we move through the year I know you have the kind of baseline target of above 40%, but just trying to get a kind of idea of, I don't know, maybe the mix or how we can expect to see this gross margin develop through the year. i know you have the kind of baseline target of above 40% but just trying to get a kind of idea of i don't know maybe the mix or how we can expect to see this gross margin develop through the year

Speaker 6: Yeah. Yeah. yeah Gross margin should stay above 40%, and we will have quarterly variations depending on what we sell in the quarter. We had the positive business mix now in Q2 related to throughput volumes, less new sales of machines. Of course, that impacts the gross margins going into the second half. We expect the new markets to pick up with Poland and with Portugal. When you sell more machines into a quarter, that also impacts the gross margins in Collection. Think about the more than 40% gross margin for Collection for the full year. Gross margin should stay above 40%, and we will have quarterly variations depending on what we sell in the quarter. gross margin should stay above 40% and we will have quarterly variations depending on what we sell in the quarter We had the positive business mix now in Q2 related to throughput volumes, less new sales of machines. we had the positive business mix now in q2 related to throughput volumes less new sales of machines Of course, that impacts the gross margins going into the second half. of course that impacts the gross margins going into the second half We expect the new markets to pick up with Poland and with Portugal. we expect the new markets to pick up with poland and with portugal When you sell more machines into a quarter, that also impacts the gross margins in Collection. when you sell more machines into a quarter that also impacts the gross margins in collection Think about the more than 40% gross margin for Collection for the full year. think about the more than 40% gross margin for collection for the full year

Speaker 3: Got it. Just on Poland, good to hear that you guys are signing contracts and things are developing. I'm just digging a bit deeper there. Are you expecting kind of a meaningful set of installations in Q3 and Q4, or is this just based on the contracts you've seen and signed? Is this kind of a market whereby it's nothing in Q3 and a big rush in Q4, just to get a bit of color there. In Portugal, just quickly, how are things looking there with regards to a similar question, but how ready the market is prior to go live? Are you expecting decent installation rates before the go live date in Portugal, or is that one where it's going to be a big rush in Q1, for example, and then a longer tail? Got it. got it Just on Poland, good to hear that you guys are signing contracts and things are developing. just on poland good to hear that you guys are signing contracts and things are developing I'm just digging a bit deeper there. i'm just digging a bit deeper there Are you expecting kind of a meaningful set of installations in Q3 and Q4, or is this just based on the contracts you've seen and signed? are you expecting kind of a meaningful set of installations in q3 and q4 or is this just based on the contracts you've seen and signed Is this kind of a market whereby it's nothing in Q3 and a big rush in Q4, just to get a bit of color there. is this kind of a market whereby it's nothing in q3 and a big rush in q4 just to get a bit of color there In Portugal, just quickly, how are things looking there with regards to a similar question, but how ready the market is prior to go live? in portugal just quickly how are things looking there with regards to a similar question but how ready the market is prior to go live Are you expecting decent installation rates before the go live date in Portugal, or is that one where it's going to be a big rush in Q1, for example, and then a longer tail? are you expecting decent installation rates before the go live date in portugal or is that one where it's going to be a big rush in q1 for example and then a longer tail

Speaker 5: Yeah. If you start on with Poland, the official go live date is October 1st. We have always said that we think there will be a three month grace period, which means that this will go live first of January next year. Also, what we have said is that we believe that the rollout there will be more similar to Romania where you will have a longer rollout. However, at the same time, we do believe that installations will pick up significantly during second half. We have ramped up production to be ready to do that. As commercial negotiations are progressing, our expectations is that installations will pick up during second half in Portugal. You can say Portugal has a later go live date than Poland, but are a bit more advanced in the commercial discussions. Yeah. yeah If you start on with Poland, the official go live date is October 1st. if you start on with poland the official go live date is october 1st We have always said that we think there will be a three month grace period, which means that this will go live first of January next year. we have always said that we think there will be a three month grace period which means that this will go live first of january next year Also, what we have said is that we believe that the rollout there will be more similar to Romania where you will have a longer rollout. also what we have said is that we believe that the rollout there will be more similar to romania where you will have a longer rollout However, at the same time, we do believe that installations will pick up significantly during second half. however at the same time we do believe that installations will pick up significantly during second half We have ramped up production to be ready to do that. we have ramped up production to be ready to do that As commercial negotiations are progressing, our expectations is that installations will pick up during second half in Portugal. as commercial negotiations are progressing our expectations is that installations will pick up during second half in portugal You can say Portugal has a later go live date than Poland, but are a bit more advanced in the commercial discussions. you can say portugal has a later go live date than poland but are a bit more advanced in the commercial discussions It's also different than Poland because in Poland you have the additional complexity of many system operators. The system operator in Portugal has been known for quite some time, so there we see that it's more mature than Poland. We have signed contracts with three of the large players in Poland as the majority now in Portugal as the majority supplier. We would also then expect installations in Portugal to happen during second half year and then continuing next year as well. It's also different than Poland because in Poland you have the additional complexity of many system operators. it's also different than poland because in poland you have the additional complexity of many system operators The system operator in Portugal has been known for quite some time, so there we see that it's more mature than Poland. the system operator in portugal has been known for quite some time so there we see that it's more mature than poland We have signed contracts with three of the large players in Poland as the majority now in Portugal as the majority supplier. we have signed contracts with three of the large players in poland as the majority now in portugal as the majority supplier We would also then expect installations in Portugal to happen during second half year and then continuing next year as well. we would also then expect installations in portugal to happen during second half year and then continuing next year as well

Speaker 3: Great. Sorry, two further questions on Spain. I think there's been some kind of progress there and you mentioned that as well. Is it, I think the consensus is that Spain is, was definitely going to be delayed quite significantly. Would you agree with that or are you seeing progress there that actually makes you think that there could be, you know, we could be hitting the ground on time in Spain and things are actually looking good for kind of a Q4 launch there? The final question is on food. Again, just in terms of orders, you spoke out a more positive environment. Is there any reason to suggest this is a massive one off or if things don't change, could you expect similar order intake levels in Q3 and Q4? Great. great Sorry, two further questions on Spain. sorry two further questions on spain I think there's been some kind of progress there and you mentioned that as well. i think there's been some kind of progress there and you mentioned that as well Is it, I think the consensus is that Spain is, was definitely going to be delayed quite significantly. is it i think the consensus is that spain is was definitely going to be delayed quite significantly Would you agree with that or are you seeing progress there that actually makes you think that there could be, you know, we could be hitting the ground on time in Spain and things are actually looking good for kind of a Q4 launch there? would you agree with that or are you seeing progress there that actually makes you think that there could be you know we could be hitting the ground on time in spain and things are actually looking good for kind of a q4 launch there The final question is on food. the final question is on food Again, just in terms of orders, you spoke out a more positive environment. again just in terms of orders you spoke out a more positive environment Is there any reason to suggest this is a massive one off or if things don't change, could you expect similar order intake levels in Q3 and Q4? is there any reason to suggest this is a massive one off or if things don't change could you expect similar order intake levels in q3 and q4

Speaker 5: Yeah. In Spain, I guess also our expectations were that when this kicked in and they were going to go live within two years, there would be some delays because we often see that in markets. However, when you see how Spain is progressing now, there is no reason why they shouldn't be able to go live as planned in Q4 2026. This we just need to monitor. I think the key thing now is that we see that they are taking the steps that you need to take to get ready for the launch of a deposit return system. They now have had this tender out for then applying to be a system operator. They will evaluate that. I think we'll learn more as we go. The positive thing is that we see that they are progressing. Yeah. yeah In Spain, I guess also our expectations were that when this kicked in and they were going to go live within two years, there would be some delays because we often see that in markets. in spain i guess also our expectations were that when this kicked in and they were going to go live within two years there would be some delays because we often see that in markets However, when you see how Spain is progressing now, there is no reason why they shouldn't be able to go live as planned in Q4 2026. however when you see how spain is progressing now there is no reason why they shouldn't be able to go live as planned in q4 2026 This we just need to monitor. this we just need to monitor I think the key thing now is that we see that they are taking the steps that you need to take to get ready for the launch of a deposit return system. i think the key thing now is that we see that they are taking the steps that you need to take to get ready for the launch of a deposit return system They now have had this tender out for then applying to be a system operator. they now have had this tender out for then applying to be a system operator They will evaluate that. they will evaluate that I think we'll learn more as we go. i think we'll learn more as we go The positive thing is that we see that they are progressing. the positive thing is that we see that they are progressing

Speaker 6: On the order intake question for Food, we had very strong order intake now in Q2, and it is important to mention that we had large orders into that order intake of more than EUR 25 million. That's important to note when you model going forward. What we have said is that we see an improvement in the market. We see orders coming in in the regions in the different categories, but it is also still a risk within the Food market because we have also seen postponement there on the investment willingness due to the uncertainty generally in the world. On the order intake question for Food, we had very strong order intake now in Q2, and it is important to mention that we had large orders into that order intake of more than EUR 25 million. on the order intake question for food we had very strong order intake now in q2, and it is important to mention that we had large orders into that order intake of more than eur 25 million That's important to note when you model going forward. that's important to note when you model going forward What we have said is that we see an improvement in the market. what we have said is that we see an improvement in the market We see orders coming in in the regions in the different categories, but it is also still a risk within the Food market because we have also seen postponement there on the investment willingness due to the uncertainty generally in the world. we see orders coming in in the regions in the different categories but it is also still a risk within the food market because we have also seen postponement there on the investment willingness due to the uncertainty generally in the world

Speaker 5: We always say, you know, there will be quarterly variations. We always recommend you to look at the trailing 12 months. We also say that when the order intake has been good. If you look at that trailing 12 months for food, I think it's up 11%. We always say, you know, there will be quarterly variations. we always say you know there will be quarterly variations We always recommend you to look at the trailing 12 months. we always recommend you to look at the trailing 12 months We also say that when the order intake has been good. we also say that when the order intake has been good If you look at that trailing 12 months for food, I think it's up 11%. if you look at that trailing 12 months for food i think it's up 11%

Speaker 6: 11%, yeah. 11%, yeah. 11% yeah

Speaker 3: That's great. Thank you very much, guys. That's great. that's great Thank you very much, guys. thank you very much guys

Speaker 1: Thank you, Elliott. As there are no further questions in line, we have reached the end of this presentation. The next time we will be here is in exactly three months on 17th October. In the meantime, we wish you a wonderful summer. Have a nice day. Goodbye. Thank you, Elliott. thank you elliott As there are no further questions in line, we have reached the end of this presentation. as there are no further questions in line we have reached the end of this presentation The next time we will be here is in exactly three months on 17th October. the next time we will be here is in exactly three months on 17th october In the meantime, we wish you a wonderful summer. in the meantime we wish you a wonderful summer Have a nice day. have a nice day Goodbye. goodbye