Tomra Systems (TOM) Q1 2025 earnings summary

Executive summary

• Revenue increased 5% year-over-year to EUR 306 million in Q1 2025, with strong growth in the Food division and improved gross margin to 43%.

• EBITA rose to EUR 26 million, up 69% from the prior year (adjusted), with no special items this quarter.

• Cash flow from operations surged to EUR 65 million from EUR 19 million, driven by higher earnings and lower working capital.

• Food division achieved record Q1 EBITDA and double-digit growth in both revenue and new orders, reflecting the success of its turnaround program.

• Collection maintained stable revenues despite a slowdown in new markets, with Romania showing exceptional collection rates and ongoing infrastructure investments.

Financial highlights

• Group revenue: EUR 306 million (up 5% year-over-year); gross margin: 43% (up from 40%).

• EBITA: EUR 26 million (up from EUR 15 million adjusted); operating expenses: EUR 104 million.

• EBITA margin improved to 8% from 5% year-over-year (adjusted).

• EPS reached EUR 0.03, up from EUR 0.01 (adjusted for special items).

• Cash flow from operations was EUR 65 million, up from EUR 19 million year-over-year.

Outlook and guidance

• Collection expects 5% revenue growth in existing markets for 2025, with new market growth dependent on Poland's sales model.

• Recycling is expected to grow in 2025, but at a lower rate than previously indicated, due to macroeconomic headwinds and softness in plastics.

• Food division maintains a low single-digit growth outlook for 2025, with gross margins in the mid-40% and EBITDA profitability of 10-11%.

• Horizon segment anticipates increased operating expenses as the Norwegian plant ramps up, with positive EBITDA run rate expected by year-end and capital expenditures of EUR 40 million in 2025.

• Estimated 50% of Recycling and 75% of Food order backlog to convert to revenue in Q2 2025.