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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