Overview of Tomra Systems' First Quarter#
Tomra Systems ASA recently released its first-quarter financial results, which fell short of expectations. The company's adjusted earnings before interest, taxes, and amortization (EBITA) was EUR 26 million, approximately 35% lower than forecasts.
Revenue Breakdown#
The group generated revenues of EUR 334 million, marking a 9% increase compared to the same period last year, but still about 2% below what analysts had predicted. The Collection division performed well, bringing in EUR 208 million, a 12% increase from the previous year. However, the Recycling division faced challenges, with revenues dropping 19% to EUR 37 million. The Food division also saw growth, with revenues rising 13% to EUR 79 million, and the Horizon division more than doubled its revenue to EUR 10 million.
Profit Margins and Challenges#
Despite the increase in revenue, adjusted EBITA remained unchanged year-over-year at EUR 26 million, resulting in an 8% profit margin. The Recycling division reported a loss of EUR 5 million, reflecting a negative margin of 14%, a stark contrast to the breakeven point achieved in the first quarter of 2025. Low installation volumes and an unfavorable mix of products continued to impact results, even as the company initiated cost-cutting measures. In contrast, the Collection division's EBITA rose by 10% to EUR 33 million with a 16% margin, and the Food division's EBITA grew by 33% to EUR 4 million with a 6% margin.
Future Outlook#
Tomra Systems noted a divergence in order trends across its divisions. The Recycling backlog decreased by 20% year-over-year, while the Food backlog increased by 10%, suggesting stronger demand in the Food segment. Looking ahead to the second quarter, the company anticipates a 50% conversion ratio in Recycling, expecting improvements in product mix. For the Food division, a 70% conversion ratio is expected, maintaining a similar level of lower-margin third-party equipment as in the first quarter.