Tomra Systems (TOM) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue rose 12% year-over-year to EUR 398 million, with strong growth in Recycling (+37%) and Food (+13%), and full-year revenue up 5% to EUR 1,348 million.

• Adjusted EBITDA/EBITA for Q4 was EUR 78 million, up 46% year-over-year, with gross margin improving to 46% and EBITA margin at 20%.

• Board proposes a dividend of NOK 2.15 per share, a 10% increase, representing a 58% payout ratio.

• Acquisition of c-trace, a leading digital waste management company, completed and integration progressing.

• Delivered on cost-saving and restructuring programs in Food, including site closures and 20% staff reduction, resulting in EUR 30 million annual savings.

Financial highlights

• Q4 gross margin improved to 46% from 44% in Q4 2023; full-year gross margin at 43%.

• Adjusted EBITDA/EBITA for Q4 was EUR 78 million, up from EUR 53 million in Q4 2023.

• Cash flow from operations was EUR 83 million in Q4 and EUR 235 million for the year.

• Return on capital employed improved to 23% year-over-year.

• Equity ratio at 38%; net interest-bearing debt/EBITDA at 1.6x.

Outlook and guidance

• High activity expected in Collection, with performance tied to timing of new market launches and 5% growth in existing markets for 2025.

• Recycling segment guided for mid-single-digit growth in 2025, with stable margins; 45% of backlog expected to convert to Q1 2025 revenue.

• Food segment expects low single-digit growth in 2025, with gross margins in the mid-40s and profitability in line with 2024 run rate; 65% of backlog expected to convert in Q1 2025.

• Horizon business to see increased activity, with Norwegian feedstock plant starting operations in 2025 and EUR 40 million CapEx planned.

• New market rollouts in Austria, Romania, Portugal, Tasmania, and Poland to drive activity; Poland rollout expected over two years.