The following is a summary of the Tomra Systems ASA (TMRAY) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Tomra reported Q2 2024 revenues of €333 million, flat compared to the same quarter last year, with gross margin increasing to 44% from 42% due to improved business mix.

• Operating expenses were €101 million, consistent with previous quarters, leading to an EBITA of €44 million, slightly down by €2 million year-over-year due to a one-off cost in the Food restructuring program.

• Strong cash flow from operations was reported at €34 million.

Business Progress:

• Collection division reported a 15% increase, driven by new market entries in Romania and Austria.

• Opened a new European Distribution Hub in Poland to optimize logistics and inventory levels, anticipating future growth and reducing CO2 emissions.

• Notable success with the innovative RollPac solution which won two design awards and has sold over 750 units, mainly in Austria.

• Recycling division's quarter aligned with expectations despite a lower backlog conversion, attributed to a higher share of large projects.

• Food division reported stable order intake and a significant increase in order backlog, up 23% from last year, focusing on profitability rather than growth.

Opportunities:

• Collection business expects growth from new deposit system markets like Romania and Austria, and potential in Poland with the upcoming DRS scheme.

• Continuous growth in Recycling expected with a strong order backlog providing clear visibility for upcoming quarters.

• Food division sees opportunity in optimizing profitability and maintaining service revenue, strengthening its market position despite a softened segment sentiment.

Risks:

• Uncertain recovery timeline for Recycling and Food divisions amidst softer market sentiments and highly competitive project environments.

• Collective profitability may be impacted by ongoing economic pressures affecting customer investments and order delays, particularly in the Food segment.

More details: TOMRA SYSTEMS ASA SPON ADR REP 1 NOK2 IR

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