tomra capital markets day presentation - cision
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At TOMRA we have always thought this way. From inventing the world’s first reverse vending machine in 1972 to providing the most innovative sensor-based sorting systems today.
8
Our sorters can increase recovery of valuable minerals by up to 25%
Our sorters can reduce water consumption with 3-4 cubic meters per ton ore
Our sorters can reduce energy consumption in mining by 15%
10
More than 30 per cent of fruits and vegetables grown for North American consumers are discarded before they reach grocery store shelves because of cosmetic imperfections*
One of our optical sorters can individually analyze millions of potatoes, tomatoes etc. per day and quality sort each and every one to maximize efficient use of the produce
Our steam peelers increase the yield of a potato with up to 20% compared to mechanical peeling
12
30 billion used beverage containers are every year captured by our reverse vending machines
Our optical waste sorter can analyze and sort a football stadium covered with waste in less than 15 minutes
450 000 tons of metal is recovered every year by our metal recycling machines
Our vertical balers enable daily savings of 45,000 transport movements, 700,000 liters of fuel and up to 50% of customers’ waste handling costs
14* According to MAF Roda
24
1
2823
9
76 2
30
29
22
14
0 0 0 0
The global beverage market
Global soft-drink & beer consumption*100% = ~800 billion units
North America
Asia/Pacific
Europe
South America
Global soft-drink & beer packaging mix100% = ~800 billion units
Refillable glass
Non-refillable PET
Refillable PET
Cans
Non-refillable glass
Pouch/tub/ drum
Cartons
Other plastics
* Industrialized countries only
Source: Canadean; TOMRA analysis26
RVM TECHNOLOGY
SERVICE/SUPPORT
DATA ADMIN/CLEARING
MATERIALPICK-UP
MATERIALBROKERAGE
MATERIALPROCESSING
MATERIALRECYCLING
The used beverage container recycling value chain
Generic used beverage container (UBC) recycling value chain
RVM-based UBC recycling value chain
27
Value proposition
• RVMs reduce need for manual labor and will typically have a payback period of 12-18 months for medium sized stores
• Improved logistics and handling
• RVMs keep track of all deposit transactions – in Germany alone the total transaction volume has an annual value in excess of ~4 bn EUR
• RVMs have several fraud detection features to prevent paying out deposit on non-eligible containers
• RVMs make it convenient and easy for consumers to return their empty containers
• RVMs are clean and efficient and ensure correct redemption of containers
Reduced costs
Clearing of deposits
High convenience
28
• Non-refillables account for 75% of all containers sold and are popular due to simplified distribution/manufacturing and consumer marketing aspects
• Some markets have MANDATORY deposit systems to ensure proper collection of containers
• RVMs are used to make these systems more effective and efficient
• In markets without deposit there might still be a need to organize collection of empty containers, either to support overall recycling targets/ambitions or to demonstrate corporate social responsibility
• Although the rationale for using RVMs varies from market to market, RVMs can in general be used to facilitate the collection process
Other incentive-based markets(non-deposit)
Mandatory (non-refillable)deposit markets
• Refillable containers account for ~25% of all containers sold and have traditionally been used by local and regional breweries outside NA
• Refillable containers are typically part of a VOLUNTARY deposit system to incentivize consumers to return containers for reuse
• RVMs are used to make this system more effective and efficient
Voluntary (refillable) deposit markets
Market segments and business models
1
2
3
29
New markets
Mandatory deposit on all containers in refillable markets
Total theoretical market
100% = ~750,000 RVMs
Others
Envipco
TOMRA
WN
Developed market
100% = ~100,000 RVMs
Potential available market
100% = ~500,000 RVMs
Developing markets
Industrialized markets
Existing deposit markets
INDICATIVE
Market size and potential
Source: TOMRA analysis
67
33
0 0
655
20
10
30
20
30
50
* Trautwein has ~20,000 small RVMs installed in corporate cantinas, factories etc.
Source: TOMRA analysis
Current global installed base of RVMs in deposit markets
South America: ~1,000
Nordic: ~20,000
Germany: ~30,000 / 45,000*
North America: ~19,000
Other Europe: ~20,000
Japan: ~500
All deposit (7)
Non-refillable
Refillable
ESTIMATES
31
Annual revenue from RVM
INDICATIVE
Competitive landscape
Source: TOMRA analysis
1-5 11-20
Nu
mb
ero
fin
stal
led
RV
Ms
Number of RVM markets
<2,500
6-10
2,500-5,000
10,000-20,000
>65,000
>3021-30
…
32
Protect and defendexisting business
Spur growth in existing markets
Succeed in new markets
• Cost leadership
• Increased differentiation
• Accelerated machine replacement
• Incremental revenue streams on installed base
• New segments/channels
• New deposit markets
• Viable non-deposit business models
Our strategy
33
Cost leadership
Overall ambition to reduce COGS on new RVMs by 40% from 2010 to 2015
• 20% by aggressive sourcing and production strategy
• 15% by technology and design for low cost manufacturing
• 5% by other means (volume increase, automation, quality)
Further standardization of modules and machines
Improve design and allow late customization
Increase use of tooling –plastics, sheet metal, covers
Redesign parts/modules that are non-TOMRA spec
Reduce number of parts
PHASE 1• Establish a local sourcing network
• Source components in China (cables, electronics, motors, cabinets) for deliveries to assembly plants
• Build up know-how and staff
PHASE 2• Start sub-assembly / module
production for deliveries to plants
PHASE 3• Production of high volume modules
and products
Economies of scale
Avoid reduced flexibility
More effective production
Better sourcing
Reduced complexity
Design for low cost manufacturing Low cost sourcing/production in China
34
International sourcing and production platform
TOMRA Production AS
Parts Modules
Partnertech ABWest Baltic AB
TOMRA Xiamen Ltd
NO, SE, LT
PL, CZ,
CN, Asia
CN, US, JP, EU, NO
CN, US, JP, EU
CN, Asia
35
CBSI OregonPT Atlanta
Increase differentiation by fulfilling stakeholder needs
“Appealing”Quick & convenient
RewardingI contribute
“In charge” Intuitive
Easy and CleanI contribute
“Compliant”Useful tool
Easily integrated
“In control”Predictable
Marketing channelEfficient
RETAIL CHAIN MGMT
IT MGMT
STAFF/PERSONNEL
USER/CONSUMER
“Unattractive”Annoying
FilthySlow
“Hassle”Unpredictable
Dirty
“Awkward”Proprietary Protective
“Complicated”Unpredictable
Expensive
Past Future
36
Innovation leadership – 2011 launches
MultiPac T-820 Touch TOMRAPlus UNO Promo
Taking uptime to new levels
• Redundancy to secure maximum uptime
• Intuitive and easy to operate and to clean
• Space efficient multi machine installations
Setting new standards in usability for owner, user and operator
• Intuitive and fast to use
• Multiple languages
• Run promotion in screen; chain/store can customize and also sell the space (video/audio/picture)
• Multiple donation receivers; split sum possibility
Turning the RVM into a promotional vehicle
• A tool for building new revenue streams
• Ideal for building CSR image and new marketing alliances
• Cross brand couponing and advertising in screen
• Personalized loyalty building activities via card reader
A new management tool for proactive maintenance and administration of your reverse vending system
• A direct link to all reverse vending installations for store owners and chains
• Get a running overview and possibility for management of entire fleet of installations
• Utilize the reverse vending system as a marketing tool by uploading campaigns
Flake
Boosting operational uptime and logistical efficiency
• More capacity, greater cost savings, and better for the environment!
• Less time spent on bin emptying means more time for core business
• Less bin changes -greater machine uptime
• More space with reduced volume
37
New markets
39
North America Europe/Other
UK: 20,000-25,000 RVMs fully penetrated
Australia:
4,000-5,000 RVMsfully penetrated
Spain:
15,000-20,000 RVMsfully penetrated
Proposed expansion/amendments
Industry Funded Repeal Campaign
CDL campaign
INDICATIVE
Highlights – Collection Technology
• TOMRA is the number 1 player in the reverse vending machine (RVM) industry
• Installed base of more than 65,000 machines across more than 30 markets
• Annual revenue of ~2 bn NOK
• Current EBITA margin of 15-20% after R&D charges
• Opportunities for introduction of new (deposit) legislation and expansion of existing deposit systems
• Opportunities to leverage installed base– Accelerated replacement of old
machines in existing markets through increased innovation
– Incremental revenue streams on installed base (value added services etc.) such as PANTO
– New material streams handled by RVMs – odd shapes
– Penetration of new segments/channels
Business characteristics Investment opportunities
40
Cutting-edge technology for industries where automated sorting and processing are key for value creation
GLOBAL LEADER IN SENSOR BASED SORTING
42
• High-tech sensors are utilized
to identify objects on a
conveyor belt
• High speed processing of
information: material, shape,
size, color, defect, damage
and location of objects
• Precise sorting by air jets or
mechanical fingers
Our core technology: the eyes and brains of sorting and processing
43
Our common technology platform is used in a numberof applications across 3 industries
44
SENSOR BASED SORTING TECHNOLOGIES
FIELDS OF APPLICATION
RECYCLING
Waste and metal sorting
E-scrap
Wood
Paper
Packaging
Plastics
Metals
RDF monitoring
Organic
…
MINING
Mineral and ore sorting Food quality and safety
Coal de-stoning
Uranium
Base metals
Copper
Gold
Gems
Stainless steel
Diamonds
…
FOOD
Tomato
Citrus
Meat
Radish
Corn
Cheese
Onions
Potatoes
…
RECYCLING MINING FOOD
Sorting and inspection business streams
SEGMENT
SHARE OF
REVENUE
MATERIALS
CUSTOMERS
INDUSTRY
POSITION
1 1 Top 5 overall, number 1 in certain segments
~45%
Plastics, paper, metals etc.
Material recovery facilities, scrap dealers, metal shredder operators
~20%
Minerals, gems, coal, metal slag etc.
Mining companies
~35%
Potatoes, tomatoes, carrots etc.
Food growers, packers and processors
45
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
• Revenue growth, organic plus inorganic, of nearly 40% per year from 2004-10
• Technology base and segment/application knowledge expanded both through acquisitions and in-house ventures
• Growth driven by
− Favorable changes in regulatory framework (DSD, WEEE, ELV, etc)
− Price increases in food, commodities & landfill costs
− Strong sales and service network
− Technology leadership
− Higher quality and food safety demands
TITECH Visionsort AS established
CommoDas acquired
Ultrasort acquired
QVision AS established
>100
Strong revenue growth since inception in 1996
Revenue development and key milestones for TITECH GroupEUR million
Real Vision Systems acquired
TITECH acquired by TOMRA
14.5
0.5
Odenberg acquired
46
RECYCLING
Adoption of sensor-based sorting at different maturity levels
Maturity/ industry adoption
Time
* In certain mining sub-segments, such as industrial minerals and diamonds, sensor-based sorting is a more mature technology.
FOOD
MINING*
47
INDICATIVE
Revenue breakdown on business streams
Acquisition of Odenberg and strong organic growth in mining meanrevenues are now more diversified than before
Revenue per segment 2008Percent of total
Recycling
Mining
96
4
Revenue per segment E2011Percent of total
Food Recycling45
20
35
0
Mining
48
Countries where machines have been installed or sold
We have more than 5,000 units installed in over 40 countries
Europe
Germany
Iberia
UK
Italy
US / Canada
Other
Installed units
MARKET
TOTAL
RECYCLING
2575
1475
775
275
225
200
400
700
Europe
US / Canada
Australia
South Africa
Other
Installed units
MARKET
TOTAL
MINING
63
33
11
39
17
163
Sorting
Peeling
Chilling &
Freezing
Installed units
MARKET
TOTAL
2200
500
200
2900
FOOD
49
ESTIMATES
Revenue breakdown on geographies
Increasing share of revenues from emerging markets
Revenue per market 2008Percent of total
North America
Europe
33
61
4 2
Asia RoW
North America
Europe
32
48
8
12Asia
RoW
Revenue per market E2011Percent of total
50
Total annual market size for different sensor-based sorting segments
EUR million
Market size and potential
ESTIMATES
Source: TOMRA analysis
~500-550
~850-900
50 90407020
60
400
650
2010 2015
Food
Mining
Metal
Waste
51
Maintain technology leadership position
Expand geographically
Use M&A to consolidate market and enter new business streams
• Continue to invest heavily in R&D
• Bring new and enabling technology to the market
• Further develop web of partners
• Aggressively target promising regions and markets
• Leverage market presence across entire portfolio
• New verticals/business streams in sensor-based sorting
• Increase footprint and scale through consolidation
Our strategy
52
Competitive advantages
Highly skilled workforce – strong organizationPeople
Broadest product portfolio and widest range of sensor technologiesTechnology
Sales & service
Production
Financing Very strong financial position
Sourcing and assembly in cost attractive regions
Global sales and service network – knowledge sharing across borders
53
• World leader in sensor-based sorting
• Focused on recycling, mining and food -number 1 in waste and mining and a key player in food
• Installed base of ~5,000 optical sorters and 500 peelers across 45 markets
• Total 2010 revenue of more than 100 MEUR
• Strong value propositions and attractive ROI for customers based on reduction of operational costs and/or increased quality/output of material stream
• Expansion into new segments (new verticals/industries) and new geographies
• Potential for increased scale benefits and rapid growth through industry consolidation
Business characteristics Investment opportunities
Highlights – Sensor Based Sorting
54
A wide range of high-tech sensors are utilised to identify material
on a conveyor belt and sort it out by air jets or mechanical fingers
Basic principle of sensor based sorting
56
Sensor/Technology
Material Property Segment
RM (Radiometric) Natural Gamma Radiation Mining
XRT (X-ray transmission) Atomic Density Recycling, Mining, Food
XRF X ray fluorescence (Elemental Spectroscopy)
Recycling, Mining
COLOR (CCD Color Camera) VIS (Visual Spectrometry)
Reflection, Absorption, Transmission
Recycling, Mining, Food
PM (Photometric) Monochromatic Reflection /Absorption of Laser Light
Mining
NIR / MIR (Near/MediumInfrared Spectrometry)
Reflection, Absorption (Molecular Spectroscopy)
Recycling, Mining, Food
LIBS Laser induced breakdown spectroscopy
Recycling, Mining
EM (Electro-Magnetic sensor)
Conductivity,permeability
Recycling, Mining, Food
10-12
10-11
10-10
10-9
10-8
10-7
10-6
10-5
10-4
10-3
10-2
10-1
101
102
103
104
Ultraviolett (UV)
Visible light (VIS)
Near Infrared (NIR)
Microwaves
X-ray
Gamma-radiation
Alternating current(AC)
Radio waves
[m]
Infrarot (IR)
Sensor based technology portfolio
57
• Multitude of applications with each individual product
• Application development mainly in software
• Sorting products based on common core sorting components
• Different mechanical and electrical design but common core components
• Sensors
• Electronics
• Software
• Ejection modules
Technology pyramid
58
Common sorting platfrom
59
Processing
Sensing
Ejection
• PC-based software architecture
• Customized hardware components
• Standardized interfaces
• Maximum performance, real time
• Flexibility
• Reusability
Truly modular system
Product families recycling
TITECH finderTITECH autosort
• Extremely flexible belt sorters
• +6..-300mm covered by three models
• Sensors NIR, VIS and EM
• Sophisticated belt sorters
• +8..-120mm covered by three models
• Sensors XRT, XRF and EM
TITECH x-tract
• Simple and robust belt sorters
• +8..-150mm covered by two models
• Sensors EM and NIR
• Sorting of small materials using NIR
• +2..-20mm covered
• Sensors NIR, VIS, RGB and EM
TITECH autosort flake TITECH combisense
• Sophisticated belts sorters
• +2..-120mm covered by two models
• Sensors RGB and EM
60
Industrial Processing (PRO) Series
Run of Mine(ROM) Series
• Extremely rugged belt sorters
• +6..-300mm covered by two models
• Sensors RM, PM, EM and XRT
• Sophisticated wet/dry sorters
• Precon, Recon and SPS systems
• Sensors XRF, XRT and COLOR
Gem Stone (GEM) Series
• Simple and efficient freefall sorters
• +3..-300mm covered by three models
• Sensors COLOR, XRT and NIR
• Special Purpose Belt Sorters
• +8..-80mm covered by two models
• Hi resolution EM sensor
Metal Slag Processing (SLAG) Series
Product families mining
61
Product families food
62
Sorting Solutions
Sentinel, NFM, Iris, Alpha
Sorting Solutions
Halo, Titan II, Iris II
• Premium Sorter range
• Enhanced accuracy
• Superior size, shape, aspect sort
• Sensors NIR, VIS
• Least cost formulation
• Yield process control
• Eliminate “out of spec” claims
• Transflection
Process Analytics
Q-Vision, Peel Scanner2
• Simple and robust sorters
• Low maintenance
• Easy to use
• High Efficiency
• Sensors NIR, VIS
• Assured Product Quality
• Energy Efficiency
• Productions Advantages
• VRT
Chilling & Freezing
Pallet-link, RT Systems
Peeling Solutions
Peelers, Deskinners, Washers, lines
• Most advanced Steam peeler in the market
• Increased Yield
• Increased Efficiency
• Energy Savings
Our common technology platform is used in a numberof applications across 3 industries
63
SENSOR BASED SORTING TECHNOLOGIES
FIELDS OF APPLICATION
RECYCLING
Waste and metal sorting
E-scrap
Wood
Paper
Packaging
Plastics
Metals
RDF monitoring
Organic
MINING
Mineral and ore sorting Food quality and safety
Coal de-stoning
Uranium
Base metals
Copper
Gold
Gems
Stainless steel
Diamonds
FOOD
Tomato
Citrus
Meat
Radish
Corn
Cheese
Onions
Potatoes
Significant efforts in R&D
• In-house R&D department withmore than 70 people
• 8 % of revenueinvested in R&D annually
• 9 test centersworldwide (seemap)
64
Worldwide test center locations
2011 2012 2013
Horizon 1Short term projects“Extend and defend our core business”
2014
Horizon 3Long term projects“Develop breakthrough applications”
Horizon 2Medium term projects“Develop our current technology and sorting capabilities”
• Higher resolution/more wavelengths
• XRF
• NIR for food
• Cost savings
• ME-XRT
• MIR
• Thermal Imaging
• LIBS
• Terahertz Spectroscopy
• Long-term segments
Substantial R&D efforts to sustain the competitive edge
65
Core competence in-house, extensive cooperation with world-class R&D institutions
66
R&D/Technology
Cost leadership
• Production facility in Slovakia
• Network of competent suppliers
• ISO – certified
• Local expert team for production support
• Sourcing through subsidiaries in US, Europe, Australia and China (TOMRA)
• Proprietary design of expensive components (sensors)
• Platform principle
High focus on cost efficient design
Global Sourcing network
Production
67
Competitive landscape
68
INDICATIVE
Neutral
Low High
Co
st a
dva
nta
ge
Technology advantage
Low
Neutral
High
Input stream
News print
Pre-sorting
Screen
Mixed paper
Ballistic
Containers
Container sorting(manual or optical)
PE Colored
PE natural
Tin
PET
Alu
Baler
The concept of a Material Recovery Facility (MRF)
70
Automated with TITECH units
PET
PE Natural
PE Coloured
PP
ONP DoubleDeck Screen
Input
Manual sorting for oversize materials
ONP Cleaning
Mixed Paper cleaning
Ballistics(removing films)
Packaging
NIR for packaging waste
Baler
Focus on the PET stream,
72
• Bottle to bottle principle (highest quality level)Re-granulate for beverage bottle production
• Packaging film (highest quality level) Single layer film, suitable for use in food
• Packaging film (lower quality)3 layer film, middle layer is made from recycling PET, outside layer from virgin material, film is suitable for use in food
• Fiber industry (lower quality)PET flakes for fiber production, used for textile, filter, carpets, etc.
• Other use (lowest quality)Flake for fiber production, used for straps, etc.
74
Aim is to produce various grades of PET flakes
Value proposition for PET sorting
Reducescosts
Increasesrevenues
Ensures consistent,
stable and fast operations
• Reduces person-hours by up to 75 %
• Low operating and maintenance costs and reduced space requirements
• Avoids high turnover of personnel
• High precision (over 99% purity –ready for BtB processes)
• Easy to adapt to changing needs and sorting tasks
• Sorting of up to 10 tons per hour
• MTBF >7,000 hours, i.e., two years of two-shift operations
• Reduced accidents and less strain on staff
• Constant quality and performance
• Some sorting tasks impossible/difficult for manual sorters
76
Market segments in recycling
Waste recycling Metal recycling
PackagingSorting
Commercial & Industrial Wate Sorting
Construction & demolition WasteSorting
Single Stream Recycling
Paper Sorting
Mixed MunicipalSolid WasteSorting
RefuseDerived Fuel
Pre-sortedMaterial Sorting
End of Life VehiclesScrap Sorting
Electronic Scrap Sorting
Non-FerrousMetals Sorting
Ash Sorting
WireRecovery
77
Total annual market size
EUR million
Growth potential
• Market expected to grow at an annual rate of 10-15% overall
• TITECH expects to maintain its overall market share
Drivers
• Increased demand for raw material
• Higher labor costs
• Higher commodity prices
• Legislation (landfills, ELV, WEEE etc.)
• Adoption of technology in new markets (Asia, Latin America, Eastern Europe)
• New applications such as flake sorting
Market size and potential
90
160
Source: TOMRA analysis
50
90
40
70
2010 2015
Waste Metal
78
ESTIMATES
• TITECH pioneered optical sorting of waste and is the number 1 player in this industry
• Serves all key market segments such as recycling of plastics, paper, metals etc.
• Installed base of more than 2,500 units
• Strong sales and service network
• Unrivalled technology platform
• Growing business, historically the annual growth rate has been in excess of 20%
• Favorable macro drivers– Increasing waste volumes– More ambitious recycling targets and
programs– Labor costs continue to increase– Attractive commodity prices
• Continued strong organic growth driven by geographical expansion and new sorting applications– Asia, Middle East and South America
are growing markets– Demand for more advanced sorting
solutions as markets become more sophisticated and experienced with sensor based sorting
Highlights - TITECH
Business characteristics Investment opportunities
79
Traditional mining and beneficiation process
Tailings (fines)
Product
Primary Crushing
Run of Mine
Beneficiation Plant
Milling
Screening
DMS
Flotation
Facts (estimated)
• 2-3% of the world energy consumption used for crushing, screening and milling in the mining industry
• Water consumption of 3-4 m3 per ton ore
Example Copper Ore
• Average head grade is 1,5%
• Capacity of large mines is 10.000 tph
• Copper output of 150 tph
81
The concept of sensor-based sorting in mining
Tailings (fines)
Product
Primary Crushing
Run of Mine
Sensor Based Sorting
Beneficiation Plant
Milling
Screening
DMS
Flotation
Facts (estimated)
• 15% to 50% of the ROM can be rejected in an early stage of the process (application dependent)
• These low grade waste rocks don’t need to be crushed, grinded and further treated
Case Study Nickel Ore
• Average head grade is 1,5%
• Nickel Grade after sorting is 2,72%
• Floatation Recovery increased by 20%82
Value proposition
Increased access to resources
Cost savings
Environ-mental
benefits
• Lower head grade can be processed
• Better utilization of existing deposits
• Old dumps turn into resources
• Significant capacity increase of the traditional beneficiation plant
• Energy costs savings
• Less wear and tear and chemicals costs
• Better carbon footprint
• Reduction of acid mine drainage
• Less pollution
83
PreciousMetals
IndustrialMinerals
Calcite
Feldspar
Dolomite
Talc
Quartz
Magnesite
Salt
Diamonds
Tanzanite
Emeralds
Diamonds& Gems
Gold
Platinum
BaseMetals
Iron
Manganese
Chromite
FerrousMetals
Copper
Zinc
Nickel
Tungsten
Lead
Fuel
Coal
Uranium
StainlessSteel
Copper
Chromite
Slag
Bold = High Volume Mining
Market segments
84
Market size and potential
Total annual market size
EUR million Growth Potential• Market expected to grow at an
annual rate of around 20-30% overall
• Commodas Ultrasort expects to maintain its overall market share
Drivers• Increasing demand for
commodities from emerging markets
• Increased pressure on costs but high/increasing energy and water costs
Source: TOMRA analysis
20
60
2010 2015
85
ESTIMATES
• CommoDas UltraSort is the number 1 player in sensor-based sorting of mining materials
• Covers all key industry segments such as minerals, metals, gemstones etc.
• ~160 units installed worldwide
• Rapidly growing business
• Increasing demand for commodities from emerging markets
• Increased pressure on costs but high/increasing energy and water costs
• Tougher environmental regulations
• Lower head grade
Business characteristics Investment opportunities
Highlights - Commodas Ultrasort
86
CONSUMER88
SEED GROWER
WARE GROWER
Potato Processing
Fresh Potato Packer
PreparedFoods
FrenchFry
Dehydrated Potatoes
RETAILER
Case Study : Potato Supply Chain – Top 5 Crop
ChipSnacks
Food Service
Dry SolidsMonitoring
Wash
Dry Blanch Sort/Inspect Hydro Cut
Fry Freeze
Q
Pre Grade Steam PeelPeel
Separation
Optimise Peeling Process
Quality, Yield &Safety Sort
OptimisingDrying Process
OptimisingFrying Process
- Removes Defects - Achieve Lowest Peel Waste
- Automate Peeler Control
- Mitigate Risk, Reduce Labour- Optimise Dryer to Moisture Levels
- Optimise Fryer for the Perfect fry - Less Waste, Less Energy, Consistent Quality
Productivity to French Fry Lines
Value proposition
90
Operational Efficiency
Reduces Costs
Assured Consumer
Food Quality & Safety
Increases Revenue
• Up to 100% reduction on manual labor alternative
• Productivity Increases -~ 20%
• In many cases sorting cannot be completed manually due to product size or defect types
• Yield improvement > 1.5%
• Protects customers reputations. Automated control helps protect against ‘undesirables’ or ‘harmful’ items entering the food chain. Mitigates against the ‘cost’ and damage of failure, recalls, etc
• Legislation for food quality becoming more and more demanding with full traceability
• High precision and multiple sort grades (by size & quality) maximizes raw product utilization and product sales value
• Easy to achieve customer requirements regardless of incoming product quality.
• Analyses the crop quality, size and line efficiency as it sorts. Provides real time data to customers to become more productive [effective real time control], maximizing yield and select/monitor suppliers.
Market segments and technologies for food sorting
Source: TOMRA analysis 91
SK
Seeds &
Kernels
PFV
Processed
Fruits &
Veg incl
Frozen /
diced..
FF
Fresh Fruits
FV
Fresh Vegetables
NDF
Nuts &
Dried Fruit
Circa 45% of global production (volume)
Circa 40% of global production (volume)
Market segments
VEGETABLES
FRUIT MEAT DAIRY
92
• Productivity, Consumer Quality & Safety
– Sort & Grade of fruits and vegetables sorted by shape, color, defect, blemish, damage, size & removal of foreign objects
– Peel / Skin removal on Potatoes, Carrots, Beets, Peppers
– Freezing & Chilling Systems to reliably & safely freeze meats, soups & sauces
– Process Analytics to measure meat and potato constituents (fat, water, sugar, etc)
• Key segments include:
– Potatoes (From field to store, fresh & processed, whole, peeled & cut)
– Tomatoes (In Field and Processing Plants whole, peeled & cut/diced)
– Whole vegetables and fruits– Cut and diced fruits and vegetables– Dried fruits – Ground Meat
•Active in five continents and 30 markets
•Odenberg provides sorting solutions for
–Growers – harvester mounted tomato and potato sorters
– Packers – sorting of many different types of fruit and vegetables by color, size, shape, defect, blemish, damage or foreign objects
– Processors – sorting of processed potatoes (french fries, chips), fruits and vegetables
•6 of the 10 largest, global food companies are Odenberg customers.
•30% of workforce dedicated to sales and support (~50 employees)
Customer base
93
Market size and potential
Total annual market size
EUR million
400
650
2010 2015
Growth potential
• Market expected to grow at an annual rate of >10% overall
• Odenberg expects to increase its overall market share
Drivers
• More sophisticated and demanding consumers with more disposable income and changing eating habits
• Consolidation in the retail and processing sectors
− Improving yield and quality
− Reducing labor costs
• Globalization & increasing export
− Verifiable quality & safety processes
− Traceability Requirements
Source: TOMRA analysis 94
ESTIMATES
New product innovations increase Odenberg’s addressable market
95
NFM Color SorterField Sorter
Alpha Color & Defect
Process Spec
SentinelGross Sort – Major
Color, Defect & Safety
New HaloHigh Resolution Sort For whole fruits and vegetables –Color,
Defect, Size, Shape & Safety
New Titan IIHigh Capacity Quality Sort - Color,
Defect & Safety.
Price & Functionality
New Iris IIHigh Resolution Sort
Small Produce Color,
Defect, Size, Shape & Safety
2011 Releases
12% of world population covered
Market presence today
96
Subsidiary, Sales &
Service
Satellite sales Office
INDICATIVE
35% of world population covered
Market presence 2012
97
Subsidiary, Sales &
Service
Satellite sales Office
Reach expanding in conjunction with new product releases
INDICATIVE
56% of world population covered
Market presence 2013
98
Subsidiary, Sales &
Service
Satellite sales Office
Reach expanding in conjunction with new product releases
INDICATIVE
• Top 5 player in optical sorting and processing solutions for food.
• #1 in sorting of potatoes, tomatoes & peaches and # 1 in steam peeling of potatoes
• Diversified both geographically and by customer type
• Proven & loyal partner to some of worlds top food companies
• Installed base of ~2,200 optical sorters and ~500 steam peelers
• Rapidly growing business, revenue doubled from 2005 to 2010
Business characteristics Investment opportunities
Highlights - Odenberg
• Increasing global consumption of food
• Growing middle class population (70 million per year) with increasing demands for food quality, in particular from BRIC countries
• Relentless industry focus on reducing costs through automation and improved quality control
• Stricter rules and regulations regarding food safety [farm to fork]
• Huge liability issues for food manufacturers if products are defect or contaminated
99
Collection Technology - Segment financials
101
Gross and EBITA margin developmentPercent
Revenue developmentNOK million
0
500
1000
1500
2000
2500
2007 2008 2009 2010
Q1 Q2 Q3 Q4 Full year
4345 46
48
16 16
2119
0
5
10
15
20
25
30
35
40
45
50
2007 2008 2009 2010
GM EBITA
Collection Technology - Financial Dashboard
102
~75%
~35%
Industry growth
Profitability (ROCE)
Recurringrevenue
Dashboard
20-30 markets
~65%
Low
Market share
Geographicaldiversity
Cyclicality
0-5%
TARGETS 2010 -2015
• Yearly growth 5 – 10%
• 40% reduced COGS on machines from 2010 to 2015
• EBITA-margin 20-25%
Industrial Processing Technology - Segment financials
103
Gross and EBITA margin developmentPercent
Revenue developmentNOK million
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010
Q1 Q2 Q3 Q4 Full year
51 52 52 53
1719
5
18
0
10
20
30
40
50
60
2007 2008 2009 2010
GM EBITA
Financial Dashboard - Industrial Processing Technology
104
10-15%
’15-40%
Industry growth
Profitability (ROCE)
Recurringrevenue
Dashboard
40-50 markets
10-60%
Medium to high
Market share
Geographicaldiversity
10-15%
TARGETS 2010 -2015
• Yearly organic growth 15%
• Acquisitions on top
• EBITA-margin 20-25%
Cyclicality
Material Handling - Segment financials
105
Gross and EBITA margin developmentPercent
Revenue developmentNOK million
0
200
400
600
800
1000
1200
2007 2008 2009 2010
Q1 Q2 Q3 Q4 Full year
21
17
10
22
10
7
-8
9
-10
-5
0
5
10
15
20
25
2007 2008 2009 2010
GM EBITA
Financial Dashboard - Material Handling
106
90-100%
~14%
Industry growth
Profitability (ROCE)
Recurringrevenue
Dashboard
10 markets
30-80%
Market share
Geographicaldiversity
0-3%
TARGETS 2010 -2015
• Yearly organic growth 0-3%
• EBITA-margin >10%
Low
Cyclicality
• Cash flow from operations
• 40 MNOK in 1Q 2011 versus 109 MNOK in 1Q 2010, which was positively influenced by prepayments
• Cash flow from investments
• Investment of 55 MEUR in Odenberg in 1Q 2011
• Other investments of 48 MNOK 1Q 2011
• Interest bearing debt
• Increased by 422 MNOK during 1st quarter due to the Odenberg acquisition
• 500 MNOK 5 year revolving debt facility, established in January 2011, replacing previous 250 MNOK facility due to expire in October 2011
• Additional 500 MNOK to be refinanced during 2Q 2011
• Solid financial position
• 48% equity
• NIBD/EBITDA* =1.2
Amounts in NOK million
31 Mar 2011
31 Mar 2010
ASSETS 3831 3123
• Intangible assets 1394 904
• Leasing equipment 158 124
• Other fixed assets 615 606
• Inventory 614 568
• Short-term receivables 941 891
• Cash and cash equivalents 109 30
LIABILITIES AND EQUITY 3831 3123
• Equity 1833 1919
• Interest bearing liabilities 957 269
• Non-interest bearing liabilities
1041 935
* Rolling 12 months based upon EBITDA before other items
Financial highlights – balance sheet, cash flow and capital structure
107
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