Tomra Systems (TOM) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached €326 million, up 6% year-over-year, with strong growth in Collection (+14%) and Food (+12%), but an 18% decline in Recycling.

• Adjusted EBITA/EBITDA increased 15% to €44 million, with margin improving to 13% and cash flow from operations surging to €99 million.

• Gross margin remained stable at 43%, with improvements in Collection and Food, but lower in Recycling due to volume decline.

• Order backlogs reached record highs in both Recycling (€134 million) and Food (€114 million), supporting future demand.

• Science Based Targets initiative validated climate targets, reinforcing sustainability commitments.

Financial highlights

• Revenue: €326 million, up 6% year-over-year; Collection +14%, Food +12%, Recycling -18%.

• Gross margin: 43%, stable year-over-year.

• Adjusted EBITA/EBITDA: €44 million, up 15% year-over-year; margin 13%.

• Operating expenses: €97 million, lower or stable compared to previous quarters.

• Cash flow from operations: €99 million, a record high for the quarter.

Outlook and guidance

• Collection expected to end the year with mid-to-high single-digit growth, with Q4 softer due to tough comparables.

• Recycling full-year revenue expected to be flat, with a strong Q4 anticipated; growth expected in 2025.

• Food division focused on profitability, with no growth expected for the full year but positive momentum and margin improvements.

• Full €30 million cost reduction program savings expected by year-end.

• Horizon capital expenditures of ~€50 million expected in 2024, mainly for Feedstock sorting plants.