2004 key achievements - cisionmb.cision.com/main/4659/9327184/60708.pdf · – north america 282...
TRANSCRIPT
1
2
2004 key achievements
Market share in Europe at target of ~80%, however, with lowermargins as a consequence
German deposit legislation finally concluded
Preparation for major RVM technology launches in 2005
Executed on the first two Recycling Technology acquisitions
Targeted 10% EBIT margin in California achieved
TRC pilot initiated in the UK, representing the single largestdevelopment project in TOMRA ever
Profit from Materials Handling improved
Sold ownership interest in Wise Metals Group for 8 MUSD
Operations in Brazil stabilized and profit improved
Organizational right-sizing to yield 40-50 MNOK in gross cost savingin 2005
3
Financials 2004
Revenues of 664 MNOK– Europe 236 MNOK– North America 282 MNOK– Non-Deposit Markets 146
MNOK
Operating profit 42 MNOK– includes 18 MNOK in
restructuring charges & EU case legal fees
Revenues of 2,512 MNOK– Europe 886 MNOK– North America 1,185 MNOK– Non-Deposit Markets 441 MNOK
Operating profit 173 MNOK – includes ~120 MNOK in non-
operational costs & business building initiatives
EPS 0.82 vs. 0.81 in 2003
Cash flow from operations 381 MNOK
Assets 3,261 MNOK– Cash balance 983 MNOK
Fourth Quarter FY 2004
4
Investments in major business building initiatives amounted to ~90 MNOK in 2004
0
50
100
150
200
250
300
EBIT '04
TRC costs
Bus. Dev.
Japan
Germany
Other
NO
K m
illio
ns
5
New segment reporting in TOMRA
TiTech
OrwakGroup
Recycling Technology
Sale/lease
Service
Admin. & promotion
RVM Technology
North America
Collection & Materials handling
Brazil
TRC project
Business development
Other non-deposit
activities
Deposit activities Non-deposit activities
HQ activities
Group functions
6
DEPOSIT ACTIVITIES
7
Segment: RVM Technology
8
RVM TechnologySegment financials based on NGAAP
349364- US East / Canada
149- Rest of Europe
431438- Central Europe & UK
465439- Nordic
266 (21%)192 (15%)Operating profit (in %)
693 (55%)631 (50%)Gross contribution (in %)
1,2591,250Revenue
20032004(In MNOK)
RVM Technology
9
Market share development in Europe 2004
70 %
80 %
90 %
100 %
Q104 Q204 Q304 Q404
RVM Technology
TOMRA ESTIMATES
10
RVM Technology – Europe
Revenue decrease of 3% to 886 MNOK in 2004
Strong finish to the year in Germany– 6% growth in revenue in 2004 to 253 MNOK
Second highest revenue ever in Sweden in 2004 due to replacement sales
Introduction of deposit in Estonia as of 1/1/2005– Orders anticipated by mid-2005
TOMRA has responded EU Commission’s Statement of Objections& contests allegations made by Commission
RVM Technology
11
RVM Technology – North America
Revenue increase of 5% to 364 MNOK, up 10% in USD
TOMRA maintained market share in US East at ~85% in 2004 despite significant price cuts from competitors
~20% of machines installed under 6.5 MUSD RVM contract in New York
Canada– Decline in revenue in Quebec due to harsh competitve environment in the
independent retail sector– Development activities in Ontario and Alberta are continued focus areas
for TOMRA and stakeholder discussions have progressed. Pilots expectedin 2005
Deposit introduced in Hawaii as of January 1, 2005– 66 machines delivered in fourth quarter 2004
RVM Technology
12
Legislative update – Germany
Amendment of German deposit law positively concluded in January 2005 with decision in Bundestag
Main highlights include:– Flat deposit of €0.25 per container of beer, carbonated soft
drinks and mineral water as of May 9, 2005Non-carbonated soft drinks to be included as of May 2006
– “Island Solutions” to be disbanded as of May 2006
German MoE maintains that new law is EU conform
RVM Technology
13
Deposit system preparations in Germany underway
DSD, P-System and Interseroh have announced plans to become full-service providers of clearing house and materials handling services to retailers
Potential clearing house providers have initiated screening processes regarding security marking of deposit containers
A decision on security marking is important prior to major RVM investments
TOMRA involved as discussion partner on several levels with potential clearing house providers
RVM Technology
14
New RVM innovations in 2005
T-820
New high-end, high volume machine
Improved recognition accuracy
Better user inter-face solutions
Lower service costs
RVM Technology
Uno
New low volume machine for small store segment
Innovative solutions for recognition & collection
Uno to open up segment of >100,000 stores for TOMRA
~NOK 30k per machine
15
New RVM innovations in 2005
New innovations will further strengthen TOMRA’s
competitive position
RVM Technology
16
TOMRA’s RVM portfolio 2005/06
RVM portfolio consolidated on common technology platforms, which will generate additional cost savings and
sourcing opportunities
RVM Technology
17
Segment: Collection & Materials Handling
Collection Materials Handling
Pick-up & transport Baling
Sorting
Collection & MH
18
Collection & Materials HandlingSegment financials based on NGAAP
295337- US West
535484- US East / Canada
34 (4%)48 (6%)Operating profit (in %)
160 (19%)184 (22%)Gross contribution (in %)
831821Revenue
20032004(In MNOK)
Collection & MH
19
Materials handling (US East/CAN) - Highlights
Improved profitability in 2004 due to cost savingprograms and outsourcing of processingoperations in Massachusetts
Focus areas in 2005– Additional consolidation/out-sourcing opportunities
to be evaluated– Apply best practice from Michigan to rest US of
transportation operations– Introduce new glass enhancing technology– Develop new market, Maine, together with partners
Collection & MH
20
Significant improvement in CA collection operations in 2004
Year-over-year collection volume growth rate in CA (comparable sites only)
0 %
10 %
20 %
30 %
40 %
Jan
Feb
Mar Apr
May Ju
n Jul
AugSep
tOctNov Dec
Record year in California completed with 14% growth to 337 MNOKTargeted 10% operating margin achieved in 2004 through continuous cost focus, improved material prices & increased volumes
Collection & MH
Continued positive momentum expected in CA in 2005
21
NON-DEPOSIT ACTIVITIES
22
Non-deposit85%
Deposit15%
TOMRA ~35% global market share of UBC handling
TOMRA ~0% global market share of UBC handling
World UBC legislation, % containers*
Tomra currently handles <5% of the world’s beveragecontainers (and other used packaging/materials)
* UBC = Used Beverage Containers
23
Two groups of non-deposit activities are under development
Aim
Apply technology to existing collection and recycling processes in order to gain marginal efficiencies
1. Evolutionary path
2. Revolutionary path
Trigger a shift in collection and recycling system infrastructure by creating a revolutionary new collection technology
How?
By acquiring technology providers
By developing the TRC and related collection solutions
24
Segment: Recycling Technology
TiTech sorting unit
Presona baler
Orwak compactor Morinders compactor
Orwak Group
25
Automated sorting and processing solutions reduce costs and maximize material value
Current collection of used material…
…leads to……which leads to need for …
…manual sorting or…
…pure material for recycling…
…co-mingled material…
…which generate……which leads to…
Recycled materials!…..and compaction
…automated sorting solutions…
Recycling Technology
26
Recycling TechnologySegment financials based on NGAAP
-2- Rest of World
-7- US East
-18- Rest of Europe
-41- Central Europe & UK
-14 (21%)Operating profit (in %)
-46 (68%)Gross contribution (in %)
-68Revenue
20032004(In MNOK)
Recycling Technology
27
TOMRA to acquire Orwak Group
Orwak Group is the market leader within compaction and baling technology
Brands include Orwak, Presona & Morinders, which service the retail sector, waste management industry and other industries
Turnover in 2004 equaled ~265 MNOK in ~40 markets
Closing of acquisition expected in February– Acquisition price based on EV
of 175 MSEK + up to 20 MSEK related to 2005/06 performance
Recycling Technology
28
Volume reduction & material sorting are key components in any effective recycling system
Recognition
Volume reduction
Front-end Back-end
• Titech• TOMRA
• TOMRA
Needed for maximizing material value
Needed for minimizing costs
Recognition and volume reduction needed either in back-end or front-end
• Orwak Group
Tomra presence
• Orwak Group
Recycling Technology
29
Recycling plants
Supermarkets, industries, transfer stations
Small shops, fast food, hotels
Food service, shops, garages
Retailers, industry
End user
The total baler market is significant and provides the Orwak Group with room for growth
* Based on markets where Orwak is present, e.g., Europe, Russia, Japan and to some extent the USSource: Orwak Group & Tomra analysis
Annual sales*
Total
~400
~300
~550
~250
~0
~1,500
NOK millions ROUGH ESTIMATESExpected ann. growth rate
~5-10%
~5-10%
~5-10%
Significant
Orwak Group market share
is ~20%*
Recycling Technology
30
TiTech developing in line with expectations
NOK 114 MNOK in revenues, up 30% vs. FY 2003– TOMRA’s 2004 share 68 MNOK
Trends in 2004:– Strong development in traditional
markets such as Germany & other central European countries
– Increased number of installations in new markets such as UK and US
Focus in 2005: – Continued growth in core markets
– Developments of new regions such as Asia
Recycling Technology
31
Considerable growth opportunity for TiTech
210
5
230
60
180
60
0
~750
~250
~1000
25
230
5
11030
40
n/a
0
~400
~150
~550
10
Number of large MRF’s* in different countriesLevel of automation
Packaging Paper
High
Very low
Moderate
Low
Moderate
Low
Very low
Moderate
Very low
US ~500
Germany
Poland
France
UK
Italy
Spain
Hungary
Total selected EU
Additional EU
Total EU-25
Portugal
*Material Recovery Facilities
ROUGH ESTIMATES
Source: Tomra analysis
Only ~300 out of
~2,000 MRF’s have
installed optical sorting
equipment
Recycling Technology
32
TOMRA’s ambition in non-deposit markets…
…is to become a leading supplier of recycling technology equipment and solutions
Recycling Technology
33
Segment: Other non-deposit activities
TOMRA Warehouse
Collection
TOMRA Recycling Plant -
Pindamonhangaba
ALCANRexam Can Factory
Brazilian operations
TRC project
Business development
34
Other non-deposit market activitiesSegment financials based on NGAAP
(42)(66)Operating loss
55 (15%)49 (13%)Gross contribution (in %)
374373Revenue
20032004(In MNOK)
Other non-deposit activities
35
Going from manual to automated “front-end” collection solutions is more efficient…
Current collection of used material…
…leads to……which leads to need for …
…manual or automated sorting or…
…pure material for recycling…
…co-mingled material…
…which generate……which leads to…
Recycled materials!…..and compaction
Material recognition &compaction
Pure material ready for recycling
Recycled packaging!!!
Other non-deposit activities
36
TRC pilot installation in UK in place
First TRC installed together with TESCO outside Southampton
Additional 5 centers to be installed in first half of 2005
Test center working according to expectations
Concept and technology well received in the UK
TRC potential in the UK tied to retail store base of ~2-3,000 sites
Other non-deposit activities
37
Test installations in Tokyo area continue
Eight RVM-based collection centers installed in Tokyo region together with Sumitomo Corp.
Test centers well received by stakeholders
Public acceptance rate high– National TV coverage achieved
Discussions with Sumitomo regarding partnership model expected to be initiated during 1Q05– New Cooperation agreement signed
Other non-deposit activities
38
Together, TOMRA, Titech and Orwak Group will be able to provide a broad range of solutions
Back-end material handling systems
Front-end systems
Transportation Sorting and processing RecyclingCollection
Other non-deposit activities
39
TOMRA’s focus in 2005
Further strengthen TOMRA’s position within core segments through product innovation and cost optimization
Execute on German opportunity
Achieve successful completion of front-end collection center pilots in the UK and Japan
Integration of TiTech and Orwak Group into TOMRA
Explore further opportunities within recycling technology industry
40
41
Addendum slides
42
2004 segment financials based on NGAAP
173
(7%)
(16)(66)14
(21%)
48
(6%)
192
(15%)
Operating profit (in %)
910
(36%)
49
(13%)
46
(68%)
184
(22%)
631
(50%)
Gross contribution (in %)
2,512373688211,250Revenues
TOTALGroup functions
Other non-
deposit activities
Recycling Tech
Collection &
Materials handling
RVM Tech(in MNOK)
43
2003 segment financials based on NGAAP
242
(10%)
(16)(42)-34
(4%)
266
(21%)
Operating profit (in %)
908
(37%)
55
(15%)
-160
(19%)
693
(55%)
Gross contribution (in %)
2,463374-8311,259Revenues
TOTALGroup functions
Other non-
deposit activities
Recycling Tech
Collection &
Materials handling
RVM Tech(in MNOK)
44
Major shareholders*
33,2%59 231 030Total foreign ownership
100.0%178,486,559TOTAL (17,611 shareholders)
70,8%126 287 319Other shareholders
29,2%52 199 240SUB-TOTAL
1,2%2 054 051Nordea Bank Sweden A C1710.
1,2%2 057 927Verdipapirfondet AVA c/o Avanse Forvaltning9.
1,2%2 155 470State Street Bank & Client Omnibus D8.
1,3%2 328 460DnB NOR ASA Finansregnskap7.
1,8%3 132 486Clearstream Banking CID Dept, Frankfurt6.
1,9%3 385 173Nordea Bank Denmark S/A Nordea (DK) CCA5.
2,0%3 566 689Vital Forsikring ASA DnB NOR Kapitalforvaltning4.
2,1%3 706 048Mellon Bank AS Agent Mellon Bank NA A/C NOM3.
6,1%10 889 836JP Morgan Chase Bank Clients Treaty Account2.
10,6%18 923 100Folketrygdfondet1.
OwnershipShares
*Registered 31 December 2004
45
Shares & shareholders*
17 43397.8%TOTAL
630.6%1 071 983The Netherlands10.
131.1%1 910 993Belgium9.
1001.1%1 951 586Germany8.
271.8%3 265 145Switzerland7.
1302.6%4 562 059Sweden6.
703.0%5 315 628Denmark5.
413.2%5 727 986Luxembourg4.
1697.3%13 100 847USA3.
6610.3%18 452 613Great Britain2.
16 75466.8%119 255 529Norway1.
Number ofshareholders
OwnershipSharesCountry
*Registered 31 December 2004