Tomra Systems Stock

Good morning from Asker, ladies and gentlemen. Welcome to TOMRA's Second Quarter Results Presentation for 2026. My name is Daniel Sundahl, and I'm Head of Investor Relations. As always, CEO, Tove Andersen, will start today's presentation by giving you the highlights of the quarter. And afterwards, CFO, Eva Sagemo, will dive deeper into the numbers and present our updated outlook.

At the end of the presentation, we will open up for Q&A for participants in the Teams webinar. A link to the Teams webinar can be found in this morning's stock exchange release. So without further ado, I give the word to CEO, Tove Andersen.

Thank you, Daniel, and good morning and warm welcome from me as well to our Q2 2026 presentation. This quarter, record installations of RVMs in Poland contributed to all-time high revenues for TOMRA Group. Poland is now our second largest deposit market in Europe, and our leading position provides a solid foundation to continue to grow from over the next years, in line with our ambition for all new deposit markets to come.

Collection revenues grew 45%, mainly due to Poland, but also Portugal, Singapore and Romania contributed. We had good growth in existing markets. The high number of RVM sales as a share of total revenues in the quarter translates into a decline in Collection's gross margin, while the division's EBITDA increased with 58%. Recycling revenues were down 11% following the decline in orders over the past year. The gross margin improved due to product mix. For the first time in over a year, the division saw growth in the order intake.

Food delivered 5% growth, but lower gross margin due to that we still delivered a large share of third-party peripheral equipment. The market sentiment is positive, but we currently see a lower pipeline conversion of large projects, resulting in a decline in the order intake.

Let's then dive into the divisional updates. Looking closer at the quarter in Collection, revenues ended at EUR 246 million, up 45% year-over-year. We had high activity level and contribution from our existing markets. We saw growth in throughput volumes in Australia, where we have invested in improved collection infrastructure. In addition, higher commodity prices contributed to increased revenue, both in U.S. and Australia.

Clynk, which we acquired last year, also contributed to the growth in existing markets and is developing in line with our business case, both on top line and on the synergy realization. In Australia, our contract as network operator in New South Wales expires July next year. The New South Wales government is currently running a tender process.

Two weeks ago, together with our JV partner, Cleanaway, we submitted our new offer, and we expect the outcome of the tender process during the second half of this year.

Then over to the new deposit markets. Bottom right on the slide, you see as in every quarter, the list of upcoming deposit markets. EU legislation deems that all EU countries need to collect 90% of beverage containers, both PET bottles and cans by 2029. Experience shows that they will not be able to do that without introducing a deposit scheme. What has happened in this market since our last quarterly presentation.

In Spain, we are waiting for the approval of a system operator. The process is progressing and has now moved to federal level. The approval can be in place before the end of this year. After a system operator is appointed, it will take at least 1 to 2 years before the deposit system will go live. France has initiated a consultation process on DRS and Italy has launched a parliamentary process for a national deposit return scheme.

It's still early in the process for these countries, but the steps that are being taken support our view that it's not a question about if these countries will implement DRS, but about how and when.

Let's then move back to the current new markets. U.K. is set to go live October 2027, and there is significant commercial activity with many ongoing tender processes. We expect the majority of these to be concluded this year. We are well positioned for the U.K. market, and we have the clear ambition to become the market leader.

The overall market size of U.K. will depend on the type of machines selected and the penetration within the smaller store segment. Our current estimate is that the initial rollout, what we typically call Phase 1 represents a market potential of around 25,000 RVMs. 2027 will be the peak installation year with some smaller volumes late this year and with a part of the installation spilling over into 2028.

In the quarter, we signed our first major customer agreement in the U.K. for around 2,700 machines. Yesterday, we announced that we have been appointed majority provider to another leading retail chain for around 1,200 RVMs to a total of around 3,900 so far. Deliveries are expected to start in Q4 this year, but the majority will take place in 2027.

In Portugal, which went live with DRS in April, the first phase of the rollout is largely saturated, and we have secured a good position with an installed base of 1,600 RVMs. Total market is indicated to be 2,500 RVMs, but with the potential to grow over time.

Singapore DRS also went live in April and is progressing well after the launch. It's nice to see that we, in the quarter, have received additional orders. Our installed base is now 400 machines, and we expect some more installations during second half of this year.

However, in the quarter, Poland is the highlight. We have sold and installed more RVMs than we had expected this quarter. It is the result of great operational performance by our team in Poland. I'm really proud of what they have achieved. They were able to catch up the delayed installations in Q1 and front-loaded installations in preparations for the summer months where high container return volumes are expected.

It's now 9 months since the launch of DRS in Poland. With the first phase of installations behind us, I wanted to use this opportunity to give some more insight into the status of the Polish DRS market. Poland went live with their deposit return October last year. Bottom right, we have included an illustration of the deployment in Poland. As you will see, we had some early installations in '24 and '25, but the main deployment is taking place this year.

The first phase mainly represent installations with the large retailers. There are roughly 13,000 RVMs in Poland now, of which over 7,000 are TOMRA RVMs. We believe the total market might grow to around 15,000 to 17,000 RVMs over the next 1 to 2 years and potentially reach around 20,000 RVMs by 2030. The driver behind this growth is expansion with the large retailers as collection rates increases and penetration of RVMs with the smaller stores. This is what we call Phase 2.

We are slowly seeing interest picking up among small retailers, but even more so, we are receiving additional orders from existing retail chain customers. In addition, service revenue will kick in 1 to 2 years after the installation. All TOMRA RVMs will be serviced by us and 95% of our RVMs are sold with service contracts, underscoring the value of the large installed base we are building.

When we talk about the size of a new market as Poland, it's important to keep in mind that there is a broad range of RVMs being offered into the market, ranging from very small stand-alone machines to large, flexible high-volume systems as illustrated bottom left on the slide. Medium stand-alone RVMs has been the dominant model in this first phase in Poland, representing approximately 80% of our sales.

The S2, which we developed specifically to meet the customer requirements in this market, is probably the most common RVM in Poland as of today and one of the reasons for why we have been successful in this market. Other key differentiators are our digital solutions, our service network, reliability and competence.

The stand-alone RVMs have a lower price point than the typical large high-volume systems with front and backroom units, but they are good entry point solution for retailers as they gain experience with DRS. We do expect that over time, the market will shift towards more high-volume systems as the retailers gain experience with the deposit system and understand the value such solutions bring.

Each deposit market is unique. What has been special about Poland is a concentrated retail market dominated by discount chains with limited experience with deposit markets. As a result, the Polish market has been very competitive. Securing a good market position from the start has been important for us as it will drive value in the next sales phase and through after market economics.

An important metric we follow in all deposit markets is the number of beverage containers collected in total and through our RVMs. This is a good representation of our position in the markets. Top right on the slide, you can see that until end of May, around 1.6 billion beverage containers have been collected in total. 85% of those collected containers are returned through reverse vending machines. The remaining 15% is collected manually. The share 15% highlights the tail of opportunities that I talked about to sell RVMs to retailers who have started collection manually.

In the same period, our RVMs have collected around 800 million containers, representing 58% of the volume collected by RVMs in Poland.

To summarize, the first phase of installation in Poland has been completed, but there are still significant opportunities ahead and our leading position provides a solid foundation to capture additional sales and service revenues.

Turning to Recycling. Revenues were down this quarter following the decline in orders over the past year due to the subdued market sentiment we have experienced. However, for the first time in over a year, the division saw growth in the order intake, which was up 40%. We see good momentum in metals recycling. We experienced particularly strong orders of our AUTOSORT PULSE for aluminum alloy sorting, which we have talked a lot about since it was launched 1.5 years ago.

High metal prices and an increased focus on supply security drives investments into the segment. Demand remains stable within our largest segments, waste recovery and plastics recycling, even though we see small indications of improved investment sentiment within waste in Europe. As mentioned last quarter, higher virgin plastic prices are improving the relative competitiveness of recycling, but customers need to see those prices as sustainable before they translate into investment decisions and the market is not there yet.

However, we are confident that the market will recover due to the underlying drivers of legislation, supply security and decarbonization. 12th of August, the PPWR will come into force, which contains circularity targets, which will mean a requirement to at least double the capacity in Europe. However, as timing of recovery is uncertain, we have taken action to rightsize our cost base and the cost reduction program is progressing according to plan.

We are confident that we will reach a target of EUR 16 million gross savings. The workforce reduction program has been concluded in line with our targets and people will leave during the year with the majority done by end of this month. An important milestone of our restructuring was reached in the quarter as we have consolidated production and central warehousing to our main site in Slovakia.

As part of the restructuring program, we have evaluated different strategic options for our mining business. A strategic player in the mining industry might see more value in this business as it can provide a different scale than us. We have, therefore, initiated a process to explore the option of divesting our mining subdivision. Potential divestment will also create increased focus in our Recycling division on our core segments.

Then to Food. Being the global leader in food sorting and grading, our Food division delivered 5% revenue growth in this quarter, following strong orders over the past year. As in Q1, we had a large share of third-party peripheral equipment to large packhouses in our deliveries, impacting our gross margin in the quarter. The order intake in the quarter was down 22% against a strong comparison quarter, including significant contributions of large orders.

We experienced that the positive sentiment in small projects continues. While we see a solid pipeline of large potential projects to come, we do, however, see lower pipeline conversion of these currently. We just carried out a market survey with 120 of our customers in the Americas to understand better the recent slowdown. More than 2/3 of the customers surveyed, plan to invest over the next 6 to 12 months, and they cite different reasons holding them back currently.

Financing cost was a common reason given. LatAm customers also mentioned access to capital as a challenge, while North American customers highlighted market uncertainty holding them back in making the final investment decision. In addition to gaining insight directly from customers, we monitor plantings as new or increased plantings drives the requirement for additional sorting and grading capacity.

Currently, we see significant new plantings in all regions and in many of our core categories. This gives us confidence in our growth ambition for our Food division.

Moving to Horizon. Within our portfolio of business building initiatives, our current focus is to realize the value of the existing portfolio. It's great to see that revenues are starting to build after a period of investments. C-trace, our smart waste management business continues to deliver in line with our expectations. The revenues are up 26% so far this year with an EBITDA margin above 20%.

In feedstock, the focus is on the ramp-up of our Omra plant, which is progressing as planned. Well, actually, we are a bit ahead of plan. We had the target for the plant to be EBITDA positive by end of the year, but it's great to see that Omra already this quarter generated positive EBITDA contribution.

Reuse is the least mature unit in our Horizon portfolio with limited revenue generation currently. We have our city pilot in Oeiras and are currently rolling out the city solution in Lisbon. We have also run several successful pilots for our event solution and a key milestone in the quarter was that we have installed our first full-fledged permanent event solution at the Intility Arena in Oslo. This will be an important reference as the focus going forward is to commercially scale the event solution.

With that, I will hand over to Eva, who will go through the financials and outlook.

Thank you, Tove, and let's start with Collection. Revenues came in at EUR 246 million in the quarter, up 45% compared to Q2 last year. Growth was driven by strong execution in both new and existing markets. New markets contributed with EUR 69 million, led by Poland, Portugal, Singapore and Romania. Existing markets delivered 15% growth or 10%, excluding the contribution from Clynk with EUR 7 million.

The growth reflects a combination of a relative soft comparison second quarter last year for our existing sales and service market, together with higher volumes and favorable commodity prices in throughput markets such as U.S. and Australia. Gross margin ended at 38.6%. As expected, margins were impacted by business mix and strong deliveries into Poland, which represented then the largest contribution from new markets this quarter.

The margin came in somewhat below our expectations as Poland revenues were higher than anticipated, increasing the effect from new market mix. The 3.2 percentage point decline in gross margin compared to Q2 last year was mainly driven by product and business mix, reflecting a higher proportion of RVM equipment sales in the quarter, while higher-margin service and throughput revenues accounted for a relatively smaller share of the business mix.

Of the gross margin decline, approximately 2 percentage points was related to mix effect and around 1 percentage point to lower product margins in Poland, broadly then in line with what we had in Q1. OpEx of EUR 51 million in the quarter, up compared to EUR 43 million in Q2 last year. The increase is explained by activity levels in new markets such as Poland and U.K. with EUR 4 million, the addition of Clynk with EUR 1.5 million as well as inflation and FX effect accounting for around EUR 2.5 million.

This results in an EBITDA of EUR 44 million in the quarter for Collection, up from EUR 27 million compared to Q2 last year.

Looking at the short-term 2026 outlook, and we normally do not guide on new market revenues at the start of the year due to limited visibility. With 6 months behind us, we now have sufficient visibility to provide an expected range for the second half of this year. Revenues in the second half is expected with a range of EUR 400 million to EUR 440 million, with more tilted towards Q4, driven by the growth in existing markets in line with our mid-single-digit annual growth ambition.

We have the addition of Clynk, and we expect a slowdown in new markets compared to first half with Poland, Portugal and Singapore being down and Romania continuing steady. Deliveries to U.K. are expected to start in Q4 this year, but the majority will take place in 2027. Then we will have some installations continuing into 2028. Gross margin is expected to increase to above 40% in the second half of the year with a gross margin of around 40% for the full year.

The slightly lower 2026 gross margin guidance is due to a higher share of RVM sales and sales into Poland than previously anticipated. Quarterly OpEx expected at around EUR 52 million in second half of the year as OpEx base remains stable through 2026.

Then moving over to Recycling. Revenues came in at EUR 51 million in the quarter, slightly ahead of the indicated conversion ratio, but down 11% compared to Q2 last year, following a decline in orders in 2025. The combination of a favorable product mix with higher share of waste recovery projects improved the gross margin 2.5 percentage points in the quarter compared to Q2 last year, ending then at 48.9%.

OpEx of EUR 20 million in the quarter, marginally down compared to previous quarter and Q2 last year. Saving initiatives are progressing as planned, although partly offset by quarterly activity variations and inflation. As a result, EBITDA was EUR 5 million in the quarter for Recycling, down from EUR 6 million in Q2 last year. We had an order intake of EUR 58 million in the quarter, up 40% compared to Q2 last year, and that has been driven by mainly mining and metal projects.

The trailing 12-month order intake is down 16%, but trending positive compared to the last 3 quarters. We end the quarter with an order backlog of EUR 105 million. Also here, looking at the short-term 2026 outlook, full year revenues is expected in the range of EUR 200 million to EUR 215 million. A 50% conversion ratio of Q2 backlog is estimated at revenues in Q3 and gross margins is expected at around 45% to 50% in Q3.

OpEx will gradually come down quarter-by-quarter as the cost reduction measures are at approximately EUR 16 million gross and gradually being implemented with full effect from 2027, whereas 2/3 of the gross savings are related to OpEx.

Then moving over to Food. Revenues came in at EUR 99 million in the quarter, slightly ahead of the indicated conversion ratio and up 5% compared to Q2 last year, following deliveries of large orders from 2025. Gross margin was 43.1% in the quarter, down 3.3 percentage points compared to Q2 last year. The decline is reflecting the lower margin profile communicated in Q1, driven by the continued impact of project mix, including a high share of third-party equipment with lower gross margins.

OpEx of EUR 28 million in the quarter, in line with last quarter and up from EUR 27 million in Q2 last year, reflecting then our continued focus on cost efficiency and operational improvements. As a result, EBITDA for Food was EUR 15 million in the quarter, down from EUR 17 million in Q2 last year. Order intake of EUR 83 million in the quarter, down 22% on strong comparison with Q2 last year, which included then EUR 25 million of large orders. As a result, trailing 12 months order intake is down 7%. We end the quarter with an order backlog of EUR 121 million.

Looking at the short-term 2026 outlook for Food, we expect full year revenues in the range of EUR 340 million to EUR 360 million, a 65% conversion ratio of Q2 backlog is estimated as revenue in Q3 and gross margin is expected in the range of 43% to 47% for the second half of the year. We will continue to deliver third-party equipment in the coming quarter, but less than in Q4. Quarterly OpEx is expected to remain at current levels.

Then looking at Horizon, revenues came in at EUR 10 million, more than doubling from Q2 last year, with strong momentum in c-trace delivering double-digit growth as well as the positive contribution from our feedstock plant, Omra. Gross margins was 49.2% in the quarter, while down from 65.2% compared to last year due to depreciation of the Omra asset, the gross margins improved from 48.4% last quarter as the portfolio continues to scale.

OpEx of EUR 6 million in the quarter, flat compared to last quarter and up from EUR 5 million in Q2 last year on higher activity levels. As a result, EBITDA was negative with EUR 1 million in the quarter, however, improved from negative EUR 2 million last quarter and last year. As the Horizon matures, our focus is on revenue growth, earnings progression and also capital efficiency. The short-term outlook for 2026 reflects this.

Full year revenue is expected in the range of EUR 45 million to EUR 50 million, with second half being seasonally stronger due to contract structure in c-trace. Full year OpEx is expected at around EUR 30 million with increase in the second half linked to operational growth in c-trace and feedstock and scaling of Reuse. Full year CapEx is expected at around EUR 10 million to support growth in c-trace ramp-up in feedstock and the scaling of Reuse.

Then looking at the group, combining the results from all divisions, the group achieved total revenues of EUR 405 million in the quarter, a 25% increase compared to Q2 last year. The gross margin was 41.3% in the quarter, down from 44.3% compared to Q2 last year, explained then by product and business mix effects in Collection and product mix effects in Food.

We had an OpEx of EUR 110 million in the quarter, up from EUR 100 million compared to Q2 last year, explained by ramp-up in the U.K. and Poland. In addition, we had Clynk and then also FX and inflation. This results in an EBITDA of EUR 57 million in the quarter, up 30% compared to same period last year.

This quarter, we have included an FX bridge to illustrate the impact of currency movements on the reported results. As you can see from the slide, FX was largely neutral in the quarter and did not have a material impact on our reported performance.

Moving over to cash flow and capital. Cash flow from operations was EUR 38 million in the quarter compared to EUR 17 million last year on improved profitability and more positive working capital development than last year. Working capital was 19% of revenue in the quarter, up compared to 16% in the same quarter last year, mainly driven by strong activity levels in new DRS markets.

During the quarter, we saw a shift from inventory into receivables as installations and deliveries progress, which we then expect to support cash flow in the coming quarters. Cash flow from investments was EUR 28 million in the quarter, down from EUR 34 million last year on lower investments in Horizon.

With investment activity being front-loaded in the first half, we expect a lower investment level in the second half, while remaining on track for full year investment at approximately EUR 90 million to EUR 100 million, mainly then within our core divisions.

ROCE ended at 15% in the quarter, down from 19% compared to same quarter last year, reflecting then inorganic investments, strategic business building and lower profitability in recycling. Looking ahead, we expect improvements on higher EBITDA, lower working capital, but also lower CapEx.

Then over to our financing slide. Our average debt maturity at the end of the quarter was 3.7 years with a liquidity buffer of EUR 112 million in undrawn facilities. Our equity ratio at the end of the quarter was 34%. We have good headroom being covenant intact with improvement expected in the following quarters.

Our gearing at the end of the quarter was 2.46x, up from same quarter last year, which reflects then recent debt-finance acquisitions. Gearing is expected to be gradually reduced with earnings and cash flow contributions over the following quarters.

Then over to the outlook. This slide brings the outlook together, both then short-term outlook and our long-term drivers. I will not revisit the outlook since we just covered that on the divisional slides, I want to emphasize the long-term fundamentals supporting then TOMRA's business.

Across all divisions, we continue to see strong structural tailwinds from regulation, decarbonization, resource scarcity, automation and demographic developments. While these drivers are different across Collection, Recycling and Food, they all point in the same direction, increasing demand for technologies that improve resource productivity and support the transition into a more circular economy. These trends remain unchanged and continue to provide a strong foundation for TOMRA's long-term growth.

With our strong market position, proven technology and track record of execution, TOMRA is well positioned to benefit from these trends and deliver sustainable, profitable growth over time.

Finally, we invite you to save the date for our Capital Markets Update on 25th of November 2026, so this year, here in Asker, at the head office. This will be an opportunity where we will share more details on our strategy execution, growth opportunities and value creation agenda.

With that, I hand it back to you, Daniel.

Thank you, Eva, and thank you, Tove. We will now move over to Q&A. [Operator Instructions] The first one coming in from Barclays from Morayo Adesina.

The first one, just on Poland, I understand, as you said, that we are only in Phase 1 so far. And so we could see more higher volume RVMs coming through later on. Does that then mean that we could see this negative product mix impact on margins in Poland for some time until those service revenues kick in, in 1 to 2 years? I just want to try and understand how that mechanism will work going forward.

Then is there anything you can share so far on the rollout into the U.K.? Are you seeing more stand-alone RVMs as you're seeing right now in Poland? Or is it more of a mix of RVMs with the backroom solutions?

Yes, I can start and then Eva can comment a bit on the impact on margins going forward from continued sales in Poland. If we then start with the U.K., as I said, there is a lot of discussions and tender processes ongoing. Currently, the retailers in the U.K. is asking for offers for all types of RVMs from small stand-alones to really flexible high-end volume solutions.

Where they will land exactly is still a bit too early to say as they are still kind of developing what kind of infrastructure they want. We still expect a significant portion of the medium stand-alone solutions, but not as high as we have seen in Poland. That is our current expectations. But we will know more during the second half of this year, and we'll come back to it then.

Then on Poland, as I explained, we have now finished this really peak deployment. You will not see the same impact as you've seen in this quarter going forward because it will be spread more out. Also, as we have said that going forward, we believe over time, there will be a conversion then into also larger systems there.

You want to add something, Eva, then on the margin impact?

Yes. Maybe we can just emphasize the market -- the margin impact that we have had in the quarter and in the first half with Poland. We have had quite a high share of the new market sales coming from Poland. Of course, we have the market or the product mix coming from the new market sales. Also the pricing levels has also impacted the margins overall for TOMRA Collection.

Going forward, we estimate -- since this was the peak, we estimate that the revenues coming from Poland will go down in the coming quarters and then be more normalized into the tail. We don't expect to have these large negative impacts on the product mix as we have had now in the first half, if you just look at the Poland revenue. Of course, going into a more normalized steady state with recurring revenues on service and also higher volume machines, the margin should be lifted.

The next question is coming from Pareto. Please go ahead, Fabian Jorgensen.

Also, I just want to highlight the new guidance and the outlook here is very helpful. Thank you for that. On pricing and competition and so on, you mentioned that it is a consolidated market in Poland, a few tenders giving a lot of competition. It's very different in the U.K. when we look at the retailer structure there.

Can you say anything about how the tenders are going in and if there is similar type of pricing pressure there or if the focus from the retailers there are different?

Yes. As you also point out, every deposit market is different and unique. What we have seen in Poland is that you have this with 2 large discount retailers really dominating the market. Also, what you have seen in Poland are these -- the large retailers don't have really experience with deposit systems from other markets before.

U.K. is different. Many more retailers, many of those have experience from deposit markets from other European markets. That's why it's a different dynamic there. Still, it's a competitive market. All of us want to get a significant share of these new markets. We feel that we are well positioned, and we have the clear ambition that we want to be also the leading player in the U.K.

Yes. And maybe can I add some thing to that, Tove. I think it's also important that what we have seen now in the first half on the margin is also coming from the product mix, right? When you have really large volumes coming into new markets and equipment sales accounts for a relatively higher share of the total revenue, you would also have a negative impact on the margin overall in Collection, which, of course, will turn positive when you go into a more steady state.

That could also be the situation in U.K. if you deliver high volumes into specific quarters, for example, thinking a bit into 2027.

Great. Then just finally for me here. Can you give some color on the size of the mining subdivision now?

Yes. On mining, mining is approximately 2% of the total TOMRA and then 10% of Recycling with revenues of around EUR 30 million last year.

Thank you, Fabian. The next question is coming from ABG. Please go ahead, Daniel Vardal Haugland.

Yes. Congrats on a decent quarter. I have 2 questions. The first is on Spain. When I'm comparing kind of your commentary on Spain in the slides versus what you said in Q1, it seems to me that Spain is actually maybe moving a little bit forward. Could you just comment on -- have you kind of changed your view on whether that scheme will be delayed or whether they are now actually taking action and going ahead?

Then my second question is on the gross margin. This is for Eva. You just mentioned that when you have a lot of RVM deliveries, gross margins are coming down, and you also see that in the history. That's not very shocking. But at the same time, you normally don't have kind of a big increase in your OpEx. Even though the kind of -- there's a negative margin impact on the gross margin, it will be positive anyhow on the EBITDA margin. Do you agree with that? That's my 2 questions.

Yes, I'll start with Spain. Spain is already delayed because they were supposed to go live end of this year. They're currently now running this process to get the system operator in place. It's a bit of a complicated political process in Spain, where first it needs to be approved by Madrid and then it's going to be approved by the federal. That is currently ongoing.

What's good to see is that it's now moved from Madrid to the federal. The question now is when will the system operator be appointed. As I said, it could be appointed this year, then it should take -- or then it will at least take 1 to 2 years. If you say end of '26, it's appointed, 2 years from that, it's end of '28, which still will be kind of our most likely timing for the Spanish market.

Yes. Then on your question related to the margin, of course, we will have increases in OpEx when we are setting up new markets, and that's also what you see in the quarterly results that we have increased the OpEx into new markets, Poland and U.K. compared to what we had before, so Q2 last year.

Also, we have had costs into Clynk, which is then -- I would say, synergy case, which should contribute positive to the EBITDA going forward, so into '27 and then onwards. That has, of course, a negative impact on the EBITDA as such. It depends on what you compare to going back in time. If you think about the large volume of new market revenues that we have had in the quarter, that has a larger impact on the gross margin that we have seen in the past and also that we have then the negative impact coming from the pricing levels in Poland.

It's difficult to compare this quarter with the past, what we have seen when we have rolled out new markets. Also when you think about replacement cycles that -- that is in a market that is already having an organization in place, so you can compare that as well. It's a bit difficult to compare, but I understand your point of view.

Okay. Maybe a follow-up on the last one there. To put it a little bit differently, when the OpEx is increasing as you, let's say, go into next year and U.K. is rolling out, I guess it will kind of happen gradually and not kind of just in a single quarter when you start rolling out.

Yes. Of course, investment into new markets happens gradually. But what we see now is that with the organization that we have in place in the U.K., we don't expect the OpEx to increase going forward. That's also why we say that the OpEx for the second half will be more stable. But of course, if we get a really high share in U.K., we might need to increase the OpEx in '27, but that's not necessarily what we see now. We have a good organization in place already.

Thank you, Daniel. We have another question coming in from Jefferies. Please go ahead, Adela Dashian.

I have a question on the recycling order intake. Sorry if this has already been answered, I joined a bit late. Can you talk about the quality of order intake and maybe also like the duration of these projects and how quickly beyond just the conversion rate that you provided for Q3, these orders can be turned into revenue?

Yes. I can start and then Eva can talk about the actual order backlog that we have. We had a good increase in order intake in Recycling in the quarter, mainly driven then by metal and mining. We see especially very good traction within aluminum and for our AUTOSORT PULSE. We still see that there is a stable market sentiment within waste and plastics. We don't really see a recovery there yet.

However, we see some small indications, for example, in waste in Europe. It's also nice to see now that the order intake is the first time that we are then changing now the trajectory. Overall, we will say good traction in metal, but stable in the rest. So not a recovery yet, but some positive signs.

Yes. Then on the conversion rate or when the orders kicked in and when it's going to be delivered, we don't see a change in the orders that we have in the backlog. The lead time is the same as before between -- yes, it depends on what kind of orders you would have in, of course, if it's plastic and waste, it will be around 5 to 6 months on average, and mining and metals orders a bit higher, especially for the mining orders as before.

Okay. Then maybe if I can just follow up also still on recycling. Would you say that this is the result of any deliberate actions that you have taken? Or are you actually starting to see somewhat of the light at the end of the tunnel for Recycling in terms of the end market?

Yes. I think, first of all, I think part of what we're seeing now is due to the innovation agenda of TOMRA. We launched this AUTOSORT PULSE for aluminum alloy sorting 1.5 years ago. That is really the key driver behind what we're now currently seeing in metal recycling. It shows really how we can drive then growth in challenging markets through innovation.

We say that the plastic and waste market is stable. That's currently what we are seeing. However, as I said, in Europe, we see some positive signs within waste, but it's still early days. I think the key thing is that we now see some positive momentum.

Thank you, Adela. We have another question coming in from Fabian Jorgensen at Pareto.

Just a follow-up on the recycling or mining -- potential mining divestment. What would you earmark the proceeds to?

You can talk a bit on our capital allocation priorities, Eva?

Yes. The capital allocation priorities is following the dividend policy that we have as a foundation, and then we are allocating capital into the core business. Most of the capital allocation is for Collection, where they also -- so in addition to maintenance on the portfolio that we have, we also have R&D and then we have throughput opportunities that we happily take on.

For Recycling and Food, it's more into R&D, and we have hold back a bit on Food, as you know, in the past, given the restructuring that we did, but now we are loosening up again in Food as they are being more profitable and having results on the turnaround. Currently, we are holding back a bit on Recycling. We want to see that we are delivering on the turnaround that they are then turning their profitability upwards again.

Then we have the Horizon portfolio. Now the focus is to get the most value out of the ventures that we have. We have now the Omra plant that is progressing very well. We see positive EBITDA in the quarter, which is really nice to see. Also c-trace is also growing in line with our expectations, higher on the profitability and on the growth on the top line, but also very nice on the profitability.

Then on the Reuse venture that we have, that is more where we allocate capital into being able to run pilots for the event solutions, which looks very, very nice. And then -- so it's really to set the Reuse up for scaling opportunities in the future. That's our capital allocation that we are thinking about.

And short-term, of course, our priority is to pay down debt as well.

There are currently no further questions. We'll give it a few seconds to see if there's any final questions coming in. If there's no further questions, we have reached the conclusion of this presentation. The next set of quarterly results are due on the 23rd of October. Until then, have a pleasant summer and a nice day. Goodbye.

Good morning, ladies and gentlemen, and welcome to TOMRA's First Quarter Results Presentation for 2026. My name is Daniel Sundahl. I'm Head of Investor Relations in TOMRA. We will, as usual, start today's presentation with CEO, Tove Andersen, giving you the highlights of the quarter, followed by a deep dive into the numbers from the CFO, Eva Sagemo. At the end of the presentation, we will take questions from participants in the Teams webinar. A link to the webinar can be found in this morning's stock exchange release. But without further ado, I give the word to Tove Andersen.

Good morning, and welcome from me as well to our Q1 presentation 2026. We present today a quarter characterized by strong growth in Food and Collection, but with profitability impacted by short-term product mix effects in all segments and lower volumes in Recycling. However, the underlying developments in the quarter in all segments gives us confidence going forward that we are on the right track.

Collection delivered record revenues due to deliveries in Poland and Portugal and growth in existing markets, however, with lower margins due to the higher share of RVM sales and the product margins in Poland. In Recycling, we continue to see low commercial activity, but progressing according to plan on the cost reduction program. In Food, the high commercial activity is continuing, however, with short-term lower margins due to a larger-than-normal share of third-party peripheral equipment delivered.

Let me then take you through the business updates for the divisions and horizon. Collection had record quarterly revenues of EUR 208 million, up 15% currency adjusted. Revenue in existing markets was EUR 159 million in the quarter, which represents 5% growth, in line with our ambition. However, when comparing the revenue from existing markets in Q4 last year, it's important to remember the seasonal variations in our throughput volumes. New markets contributed with EUR 49 million of revenues in the quarter. In Poland, which was the biggest contributor, installation speed has picked up and deliveries will continue in Q2. By end of Q1, we had more than 4,000 machines installed.

As communicated earlier, the initial market in Poland is estimated to be 10,000 to 12,000 machines with a tail, which is difficult to estimate, but can be 5,000 machines or more coming over the next years as collection rate increases.

Portugal launched its deposit system on April 10. It is always exciting when a new country goes live. The initial market is estimated to be 2,500 machines, and we estimate that 2/3 of that market is done. By end of Q1, we had more than 1,000 machines installed in Portugal. We also had Singapore going live in April, April 1, where we have been awarded 1 of the 3 zones, representing roughly 350 RVMs. It is a small market, but an important reference for rest of Asia, and we are committed to make it a success. We have a great team in Singapore, and you can see some of them in the picture below together with the Senior Minister of State from the Ministry of Sustainability & Environment and the Ministry of Education.

When talking about new DRS markets, let's look at the pipeline, which we have listed on the bottom right. I will only comment on U.K., which is the next big market to go live. The process towards the launch in October next year is progressing as planned. We estimate initial rollout to be 25,000 locations. Also in U.K., there might be a tail of sales in the smaller independent stores, but difficult to estimate how large that market will be as they don't have an obligation to take back beverage containers. There is significant commercial activity ongoing in the U.K. All of the large retailers are running or are about to run procurement processes for RVMs. And we expect most contracts to be signed this year, while the rollout will mainly take place as of next year. Based upon the experience from the last DRS rollouts, where we have achieved a share of the market in line with our ambitions, we feel we are well positioned to win our share of the U.K. market.

Then to the last bullet on the slide, innovation. Innovation is key for us to ensure growth and to maintain our margins. In the quarter, we launched T100, the new version of our flagship model T9. T9 is by far our most sold machine, it's actually the world's most common RVM. So this is a big milestone. I'm confident that the T100 will be as successful in the future as the T9 has been for us in the past.

Then over to Recycling. In Recycling, we had a significant drop in revenues in the quarter due to the weak market sentiment, which caused a decline in orders last year, and due to the lead times, this impacts the revenues in this quarter. As you will see from the bottom left graph, the order intake is also down compared to Q1 2025, but in line with second and third quarter last year. The market sentiment is stable, and it is as we have described in the previous quarters. We have a weak market in North America waste recovery and within plastic recycling due to tariffs, low plastic prices and general macroeconomic uncertainty.

The metal market has remained stable. As you will see from the PET graph below, the PET prices had a sharp increase in the last weeks due to the increased oil prices and blockage of Hormuz. The increase in virgin PET prices has also lifted the prices of recycled PET, but not to the same extent. This is positive for our customers, but the impact on investment sentiment will depend on whether higher prices are perceived as sustainable. They need predictability of higher prices over time before the investment sentiment will improve. Key for us, given the challenging market, is to take action on the things we can control. The EUR 16 million cost reduction program is progressing according to plan, and there will be a gradual effect on our costs during this year and the full year effect will come next year.

In Food, we had revenue growth in all main markets, resulting in a revenue of EUR 79 million, up 17% currency adjusted. We saw some decline in revenue from the potato segment, which has been our largest category. This was expected, and we have talked about this in previous quarters as well, as we are coming out of a strong investment cycle on potatoes. What is nice to see is that we are able to compensate this decline with growth in other segments, in other categories. Citrus has been particularly strong in the quarter and is now competing with potatoes of being our largest category. This confirms the robustness in our business model and the value of having a diversified portfolio in Food. Order intake in the quarter was down on a strong comparison last year. There will always be quarterly variations in order intake. And if you look at the trailing 12 months, the order intake is up 7%. The market sentiment overall is good and the underlying activity is strong.

Innovation is also key in Food. And it's nice to see the 4C, which we launched some months back, has been well received in the market for nuts. This was 1 of the key segments that 4C was developed for. The positive response has confirmed our position as a challenger, well equipped to increase our share of that segment. This is part of our strategy in Food, to outgrow the market by gaining share in selected segments.

Then to Horizon. Our portfolio of new businesses consisting today of c-trace, reuse and feedstock. After a period of investing into this portfolio, it's nice to see that the revenues are starting to build up. The Horizon portfolio delivered revenues of EUR 10 million in the quarter. And looking at the graph, the decline from Q4 is due to the seasonality in c-trace, which typically has a significant portion of the revenue in the last quarter in the year. The business momentum in the market c-trace operates in, that is the Smart Waste Management segment is strong, and we expect the company to continue their profitable growth journey this year.

Reuse. It is the least mature in our portfolio. For the City Solution, the rollout in Lisbon is continuing, while the event solution is still in piloting phase, but with a good pipeline of opportunities. In feedstock, the focus is to ramp up the volumes at our Områ plant. We increased 2 shifts earlier this year and target to be at 2/3 capacity utilization by the end of the year. So overall, continued good progress in all 3 businesses.

That concludes the business update, and I will hand over to our CFO, Eva Sagemo.

Thank you for that, Tove. And let's dig into the figures, starting with Collection. Revenues came in at EUR 208 million, up 12% compared to Q1 last year and up 15% currency adjusted. The performance has been strong in the new markets with revenues of EUR 49 million, with strong contribution from Poland and Portugal. Our existing markets continue with solid performance with underlying growth of 5%, 2% up, currency adjusted. And looking at the overview per region, North America is seasonally lower in the first quarter on the throughput sales. But also in the quarter, we have added in Clynk compared to Q1 last year.

Our gross margins in Collection ended at 39.5%. It's lower than our ambition of being more than 40%. However, explained by the business mix with higher share of RVM sales of the total sales and then as well as the lower product margin in Poland also impacting the gross margin for Collection. OpEx ended up compared to Q1 last year, now at EUR 50 million in the quarter, explained by the high activity, especially in Poland, but also ramping up in U.K. We have added in Clynk, and then we have also inflation in the period. This results then in an EBITA in Collection of EUR 33 million, and it's up from EUR 30 million compared to the same period last year.

And then looking into the short-term outlook in 2026 and starting then with the revenues. And for existing markets, we expect mid-single-digit growth here in line with our ambition for the existing markets. For new markets, the momentum in Poland continues to be strong in next quarter, but the pace in Portugal and Romania is then expected to slow down, but continue to contribute throughout the year. And for U.K., there is currently high commercial activity, as Tove mentioned, and the deliveries to the U.K. retailers will start then in 2027. And for our profitability, our target is still to deliver a gross margin above 40% for the full year in 2026.

Over to Recycling. Recycling came in at EUR 37 million, a decline of 19% compared to Q1 last year, following then a decline in orders in 2025. The combination of low revenue volumes, metal projects and also our fixed cost base results then in a weak gross margin of 40.5% in the quarter. OpEx ended down compared to Q1 last year, now at EUR 20 million. And we have also added in restructuring costs of EUR 13 million as a special item in the quarter. This results then in a negative EBITA in the Recycling of EUR 5 million, then excluding those special items. And looking at the order intake in the quarter, it ended at EUR 41 million, low, impacted then by the challenging market sentiment. The level is, however, in line with what we had in 2025, especially for Q2 and also Q3, but down compared to a strong Q1 last year. Order backlog ended at EUR 98 million.

And then also here, looking into 2026, the short-term outlook, we estimate a 50% conversion ratio of the Q1 order backlog as revenue in Q2. And based on the current market sentiment, we do not expect the revenue growth this year. The majority of the order backlog that we have currently is estimated to be delivered in 2026. And also, given the current average lead time we have in production, we expect improved revenue visibility when we end Q2.

And then gross margins will continue to be impacted by the low volumes, but we expect, already in Q2, a more favorable product mix in Recycling. And as Tove mentioned, the restructuring program is progressing according to plan, where we expect the EUR 16 million gross savings to materialize gradually throughout the following quarters and then with full effect in 2027.

Then moving over to Food. Food revenues came in at EUR 79 million, which is up 13% compared to Q1 last year and up 17% currency adjusted. Performance was up in all main markets and also EUR 4 million better than estimated conversion ratio, mainly due to timing of deliveries. Gross margins for the quarter came in at 40.8%, which is then below last year's strong performance. And this temporary decrease was mainly due to the product mix with a higher proportion of third-party equipment sales linked to then large pack house projects that we had coming in as orders last year. OpEx ended up compared to Q1 last year, so slightly up, ending now at EUR 28 million, and that is mainly due to inflation.

And this results then in an EBITA of EUR 4 million, up from EUR 3 million in the same quarter last year. And also here, looking at the order intake in the quarter, it ended at EUR 80 million, a decrease from same period last year, however, then on strong comparables. The underlying market activity is strong and the trailing 12-month order intake is up 7%. And the order backlog ended strong at EUR 137 million. And then looking into 2026 outlook, we estimate a 70% conversion ratio of the Q1 order backlog as revenues in Q2. And for the full year, revenues is estimated to grow mid- to high single digit. And as we have seen in Q1, the product mix effect is expected to continue also in Q2, but then to return to mid-40s in the second half of the year.

And then we have a look at Horizon. Revenues came in at EUR 10 million, more than doubling from Q1 last year. We have a strong momentum in c-trace, but also here, we see now the positive contribution from Områ being now in production. Gross margins in the quarter of 48.4%, it's lower compared to Q1 last year, explained then by depreciations of our Områ assets. OpEx flat compared to Q1 last year of EUR 6 million. And that results in a negative EBITA of EUR 2 million, however, then with a positive EBITA for Områ.

And then looking into the short-term outlook also for Horizon. C-trace is expected to deliver double-digit revenue growth this year with an EBITA of more than 20%. And for feedstock, as Områ is scaling up its production, which is then estimated to reach 2/3 of its full capacity this year, we expect a positive EBITA contribution from the plant this year and then going into 2027 with a positive EBITA. And then if you look at the whole Horizon activities, OpEx is expected to be around EUR 30 million to EUR 35 million for the full year and then CapEx of around EUR 10 million for the full year.

And then combining the results from all of our divisions, the group achieved total revenues of EUR 334 million in the quarter. It's a 9% increase compared to Q1 last year and 12% increase if you adjust for currency. The gross margin was 40.2% in the quarter. It's down compared to the same quarter last year, explained then by product project and business mix, where some of those are short term in nature. OpEx ending at EUR 108 million in the quarter. It's up compared to same period last year, but that is mainly explained by then higher activity levels in new markets, we have added in Clynk, but also had inflation in the period. And this results then in EBITA of EUR 26 million for the group, in line with what we had in Q1 last year, adjusting then for those special one-offs.

Cash flow and capital. Cash flow from operations of EUR 60 million in the quarter. It's down from EUR 65 million in the same quarter last year on the lower results and a higher working capital. Looking at cash flow from investments in the quarter, it's EUR 25 million, trending in line with the estimated run rate for the full year, which we have communicated to be around EUR 100 million, where most of those investments will be then into our core business divisions.

Our working capital of 18% end of the quarter, it's up compared to same quarter last year, reflecting then the high activities in new DRS markets, but it's down compared to end of 2025, and we also expect that to come further down as orders are being delivered and payments being collected and especially in Collection. Our ROCE ended at 15% end of the quarter. It's down compared to same quarter last year. Then reflecting inorganic investments, but also the strategic business building that we are doing and also the lower profitability in Recycling. And also here, looking ahead, we anticipate an improvement in returns as we then get the positive impact from the investments that we have done, and we are also able to lift the profitability in Recycling.

Financing. Our average debt maturity end of the quarter is 4.2 years with a liquidity buffer of around EUR 100 million in undrawn facilities. And our equity ratio at the end of the quarter was 35%. It's down compared to same quarter last year, but stable from end of 2025. And we still have a good headroom in the equity. Our gearing at the end of the quarter was 2.37x, up from same quarter last year and also up from end of 2025, which then reflects recent debt finance acquisitions.

And then looking ahead, equity ratio is expected to be impacted by the dividend payments, which is now planned for Q2 in May. However, we will still be covenant intact and then also expect improvement in the following quarters of 2026. And then for the gearing, it's expected to be gradually reduced with the earnings and cash flow from contributions also here in the following quarters.

And then this slide brings the outlook together, both on the short-term outlook, but also on TOMRA's long-term drivers. And I will not go through this since I just covered it on the previous slides, but just want to emphasize the strong long-term drivers for TOMRA being then decarbonization, regulation, modernization and optimization, but also demographics and resource scarcity.

And with that, I will hand it back to you, Daniel.

Thank you, Eva, and thank you, Tove. We will now move over to the Q&A in Teams. And I see we have a few questions coming in already, and we will start with Morayo Adesina at Barclays.

Just a couple from me. So I just wanted to understand a bit more about the lower product margins in Poland. Just wondering why the margins are lower in this market? Is it something specific to Poland? Yes, just wondering what the moving parts are behind that. And then just continuing on this product mix subject. So obviously, you've mentioned for Recycling expecting it to be a bit better in Q2 and continuing for Food. So just wondering what the outlook is for Collection, if you're expecting those product mix effects to continue?

And then just a clarification question. So the machine estimates that you mentioned for some of the markets, are those for the total market or just for TOMRA's share? So that's just on Collection. And then on Recycling, I'm just wondering what underpins the confidence for the 50% conversion ratio in Q2, given that the near-term challenges have still continued. Would that be seasonal effects or something else?

Yes, I can start. So if we start on the margins in Poland, to approach this question is that it's important to remember that all the different markets that we operate in, in Collection is different. In Poland, we have talked about that we have had quite some price pressure, but nevertheless, given that situation, we are confident that we are going to deliver more than 40% gross margins in Collection for the full year. And then if you think about Q2 and the Poland impact, we are also going to deliver quite some machines into Poland in Q2. So this will also impact the margins in Q2 for Collection.

You had the question on the margins also in Recycling and in Food. And of course, in Recycling, when you operate with lower volumes, you will have an impact on the margins, and the product mix has also an impact on that. So with the visibility that we have in the order backlog, for example, we are going to deliver more waste orders into Q2, that would have a positive impact on the gross margins in Recycling. And of course, with the market sentiment and the lower intake and the lower volumes that we have been trending on, this impacts the gross margin. But as we go along and we take out the savings and go into 2027, we will see positive effects also here because part of the savings is impacting the gross margin.

And then if I just take the visibility on the conversion ratio for Recycling of 50% into Q2, that is based on the orders that we have in the order backlog that we are working on delivering to our customers. So we have quite some visibility into that. But as we always say, some variations can happen. And we have seen that, for example, as a positive thing now in Food in the quarter where we have delivered a bit higher than the conversion ratio. And that is really about the timing of the deliveries and nothing else than that.

For Food on the product margins, we see a decline now in Q1. Q1 is always a bit lower because of seasonality and what kind of orders you are delivering into the market. But we see a negative impact this quarter because of the third-party equipment. And for those following TOMRA, they would remember that last year, we had quite some larger orders coming in early in the year, which were to those large pack houses that we have talked about. And there also, we are taking on the third-party equipment into our P&L, and that has an impact of the margin. Nevertheless, we're not going to say no to those orders because it's so important to deliver that to the customer according to what they need. And I think that was covering my part, right?

Yes. And you had a question on market estimates linked to then the indications that we were giving on Poland and Portugal. So we estimate the initial phase in Poland for the total market, not TOMRA share, to be 10,000 to 12,000 machines. This is then typically the larger retail chains that will be early investing. Then after that, there are tens of thousands of smaller stores in Poland. How many of those that they will decide to have RVMs is very difficult to estimate, but that part could represent a market opportunity of at least 5,000 machines.

Then also what we expect is and what we have seen in many markets is that also the larger retailers will potentially underestimate the capacity that they need for collecting beverage containers. So also you will expect to see continued sales into those. So as we have communicated for Poland for quite some time is that we expect our rollout here lasting at least 2 to 3 years. But the initial phase that is really happening now is then representing a total market of approximately 10,000 to 12,000 machines.

And then for Portugal, the indication is that now in the initial phase is 2,500 installations. This is even publicly communicated in Portugal. And then we'll see over time if that again is an underestimation of the market. So there is also an opportunity for an additional sales there. And of course, this is always the initial phase and getting a large share in that initial phase is so important, because then you will get the opportunities of replacements. Some of these retailers are growing. They are changing stores all the time. That will create opportunities for sales and you are getting the service revenue that comes after.

And the next question is coming from Elliott Jones at Danske Bank.

Just on Collection first, I'm just kind of trying to get an understanding of the -- I know we talked about it a bit, but the margins and the selling prices. So just kind of given the developments, is it fair to assume that whenever we have Poland as the majority contributor in a quarter, will we likely have gross margins under 40%? Or was there a more special mix within Poland this quarter that's kind of abnormal?

Yes. Thank you for that question, Elliott. So when we have deliveries to Poland, we will have an impact on the margin around 1 percentage points, what we have seen now in Q1. But of course, the business mix in Collection also plays a role here. So when we are now seeing volumes on the throughput coming in later in the year, that will have a positive impact. But this is then specifically, when we talk about the product margin, specifically related to Poland.

Got it. And so just on that, like just linked to kind of selling prices in general, I mean, given this, is it fair to assume that your selling prices have dropped across the board? I mean, just frankly, I think that's what the market could assume? Or is that potentially not the case? I know you mentioned that you hope to have gross margins for the full year above 40%. So I just want some clarity on that, that would be helpful.

Yes. Our target is that we should have a gross margin in Collection above 40%. And of course, as Eva said, there is quite some variations within our portfolio. We knew that there would be tough competition in the new markets. We knew that there would be price pressure. It is important for us to get a large share initially at the same time as we want to maintain our margins. So this is a balance that we are playing when we are then deciding our commercial tactics in the different markets. This doesn't mean that the overall price level is going down. This doesn't mean that we expect the gross margins overall to go down over time. But we will see quarterly variations. Also typically, we have lower margins on RVM sales versus service. So when you also have higher shares of sales of equipment versus service, you will see lower margins in that quarter.

Really helpful. And then just last quarter, you highlighted an order book of EUR 100 million in collections of February. Can you provide any highlights as to how this has developed since then?

So when we talked about that EUR 100 million, that was firm orders that we were going to deliver into the year. And out of that, we have delivered -- we will deliver more of what we have delivered in Q1 now going into Q2. So I think that's answering your question, Elliott. And then, of course, we expect also orders to come in throughout the year, but not necessarily linked to that EUR 100 million that we talked about in Q1.

Got it. And then sorry, 2 more questions. Just down the P&L for Collection, I know we talked about gross margins, but could you provide any kind of color in terms of OpEx development just so we can get a link to EBITA margins versus Q1, for example?

Yes. So for Q1, we have seen -- so first of all, we have added in Clynk, that has an impact on the cost side. We have had inflation in the period, but also that we are now -- we have had quite some high activity in Poland that also drives cost, and we are ramping up in U.K. with all the activities that are ongoing there. We had EUR 50 million OpEx in the quarter, and this is what we would assume would be the OpEx in Collection more or less in the following quarters as well for 2026.

Really helpful. And last question, just in Food. You mentioned the potato segment. Can you provide any kind of color as to how much the potato segment has been in terms of last 12 months order intake for TOMRA? Has it been a meaningful portion? Or is it more diversified now?

It has definitely been a meaningful position, but also what we have worked on is really diversifying our portfolio so that we are not so dependent on some few categories. And as I said now, citrus is more or less at the same level as the potato segment was in the past. And we have worked very systematically now on really mapping the different categories that we are focusing on, mapping their investment cycles, so that also we can plan how do we allocate our resources into the different cycles, also then linked with our innovation pipeline.

Thank you, Elliott. And the next question is coming from Daniel Vårdal Haugland at ABG.

I have a couple of questions. So just firstly, on Q1 in Collection. So if we kind of think about it in terms of ramping production in Collection, I'm just observing that the Q1 revenues was basically flattish versus Q4. So can you comment a bit more on this? Because I think many had the impression that there would be a step-up given the Poland rollout. So is there something that has happened here? Or is this just more machines in Poland going to be rolled out in Q2? That's the first question.

Yes. So when we had the Q4 announcement, we talked about the weather situation in Poland. Quite some snow in the first month of the year and made it difficult to go in and do the installation and also for our customers to prepare the sites. So we have the backlog for Poland. We are delivering according to what we are able to deliver. So we're progressing very well, and we will have a strong Q2 on the Poland deliveries as well. So I would say it's according to what we would expect given the challenges that we had on the weather situation in Poland in the first month of 2026.

And when you compare the revenue in Q4 versus...

Basically, it seems like it's more...

Just to say one thing in a way, when you compare revenue in Q4 with revenue in Q1, you have to remember the seasonality in our throughput volume, if you're sort of...

Yes. Okay. And then on U.K., is there anything you can kind of tell on when you expect any kind of conclusions on tenders? We've already seen one of your competitors announce a couple of orders. So yes, on that. And also, can you maybe confirm whether you will announce orders in U.K. when you get them? Or is there kind of any dynamics with frame agreements, et cetera, that will make you not announce orders even though you're getting them?

Yes. It's very exciting in the U.K. currently, a lot of commercial activities, a lot of tenders, tender processes are ongoing. We expect most of those to be concluded this year and to be signed this year, while most of the deliveries will happen next year. And then Eva can say a bit about our policy on announcing.

Yes. So when it comes to announcing on the contracts, what we have done in the past and also we continue to do going forward, it's all about what is significant for TOMRA. And we have had kind of like that threshold of 1,500 machines more or less. But of course, we are evaluating this case by case if it's of importance for the market to know about contracts being signed. So that's also the way we will handle this also going forward for the U.K. market assessment case by case. But think about the threshold in combination with importance for the market.

And on the kind of -- can you confirm or disconfirm that you kind of have any big type of frame agreements that will be likely be drawn on versus kind of other markets, et cetera?

No, we have -- of course, we have frame agreements with different large retailers in Europe. And in addition to that, typically, we will set up kind of sub agreements for the specific country.

And would you then kind of -- if there is a big draw on our frame agreement, would that kind of go in under the policy of 1,500 machines?

Yes, typically, yes.

Okay. Okay. And then my last question is on Recycling. So I see the orders down again quite in Q1 versus -- you had a boost in Q4. So can you give a little bit more flavor on this? Because is it such that the customers have been more kind of on the fence given the macro situation with the war, et cetera, towards the end of the quarter? Or is there kind of anything else in that number?

Yes, I can say a bit general and then you can add if there are some more details. When you look at the order intake, there will be quarterly variations. We believe underlying, because we also look at the whole pipeline. So we have a visibility of all projects being discussed, evaluated to be invested on. And based on our total kind of pipeline, so not only the orders that have gone into the order backlog, we will say that the market sentiment is stable. So that decline that you see doesn't really represent the underlying market sentiment. And then you can have quarterly variations because you could have, I don't know, a EUR 3 million, EUR 4 million order or 2 of those coming in one quarter versus the other, which will create some of those jumps.

Yes. Nothing to add. It's more about the timing.

Thank you, Daniel. And the next question will come from Markus Heiberg at SEB.

So I might have missed the first one, but how much of the backlog in Collection have you delivered in Q1 out of the EUR 100 million? And how much have you added to that backlog intake in Q1? That's the first one. And the second one is, how do you assess your market share in Q1 compared with sort of your installations versus the market? Those are the 2 first questions, at least.

Yes. So I can do the orders, and then you can talk about market share, Tove. So we communicated the EUR 100 million in Q4 going into 2026. And as you see from the presentation, we have had revenues of EUR 49 million in new markets. So we have delivered from that EUR 100 million into the Q1, but we will deliver more of that EUR 100 million into Q2. So that's the status of the EUR 100 million. And then we're probably not going in and communicate on what kind of will be added to that EUR 100 million. I think we will stop that here now and more communicate on the progress in the market as the quarters develop. But we will deliver more into Q2 from that EUR 100 million.

And then on market share, as I said, we estimate this initial rollout to represent 10,000 to 12,000 machines. We have 4,000 machines installed by end of Q1, and the momentum in Poland will continue in Q2, in line with what we have done in Q1.

And to follow up on that, do you expect still the first rollout to be done by Q2? Or will it go into Q3, Q4?

It is sliding a bit. As Eva talked about the snow and that continued also into a bit early this year. And that also, as Eva said, out of the 100, we have delivered less than half of that in the quarter. So we see now things are pushing a bit out in time, but the majority will still be first half and then we'll go into additional orders coming in, as I talked about, as collection rates are ramping up, because when you launch a deposit, initially, there will be very few containers coming back to the retailers. As that volume is ramping up, the retailers will assess the capacity they have, they will come new orders and so forth. But this initial phase will mainly be done by end of Q2.

And the final one for me is on other markets. So the backlog that you communicated last quarter was related to 3 specific markets, but then you also mentioned that the other markets will sort of step down. So that suggests to me at least that there are some revenues here from markets that was not in the backlog in the EUR 49 million in new market. So how much of the EUR 49 million was related to the backlog and how much was related to the other markets?

Yes. I think giving specifics on that, it's very sensitive for the different markets that we operate in. But we have delivered less than half of that EUR 100 million into Q1 and then we'll deliver more in Q2.

Yes. And we had contributions, for example, from Romania in the quarter, that is part of the EUR 49 million, which is continuing delivering quite some time after their launch date.

Thank you, Markus. Do we have another question from -- we have one coming in from Adela Dashian at Jefferies.

Just 2 questions from me. First, on tariffs. There was a change to Section 232 earlier in April. Do you see this impacting your effective blended tariff rate at all?

Yes. So we don't necessarily see that, that will impact significantly on how we operate, Adela. And then, of course, we are trying as much as possible to push the potential impact to our customers on the additional cost. But we will, of course, come back with details if it turns out to be significant for TOMRA.

Yes. We don't have a significant tariff cost in our P&L, but of course, it's still impacting the investment sentiment. Yes.

Okay. I see. Do you know what your effective tariff rate was prior to this change? Because if I'm remembering correctly, 50% tariff on just the metals content and then there was an additional tariff on the remaining value. So I would assume that your blended rate would have been lower than 50%.

Yes. That's correct. And I'm happy to come back to you with further details on that after the call, Adela.

Great. And then also, did you specify what percentage of your revenues in Collection came from existing versus new markets in the quarter?

Yes, we did. So out of the EUR 208 million that we had in Collection, EUR 49 million came from the new markets and the rest from existing.

I think that was -- do we have another question from you, Morayo Adesina? I see your hand is raised. So please go ahead and ask it.

Sorry. Just 2 follow-ups. Just on the Middle East conflict, I know obviously, you mentioned the impact it's been having on plastic prices. I'm just wondering if there are any other impacts that you're seeing in terms of your business or if it's not really relevant. And then secondly, have you disclosed whether or not Poland is largely a throughput market versus sales and service in terms of the business model that's there?

Yes. So Poland is mainly a sales and service market. On the Middle East situation, of course, this is impacting all businesses. We have done an assessment of both the direct impact and potentially indirect impact, which will be caused by higher inflation, energy prices increases, et cetera, and put in place mitigating actions to ensure that we are covering that risk. But of course, the main impact for us is linked to the investment sentiment and what will this do to the underlying GDP growth throughout the different countries. And the general investment sentiment is both in Food and in Recycling, a large portion of our sales is into CapEx projects. So currently, we don't see any kind of large short-term impacts. But of course, depending on how this develops, there is significant risk now, and it definitely is not helping to boost the recovery within Recycling.

And with that, I believe we have reached the end of today's presentation. Thank you, everyone, for tuning in. The next time we will be here is on the 17th of July with our Q2 results. Thank you very much, and have a nice day. Goodbye.

Good morning from Asker, ladies and gentlemen, and welcome to TOMRA's Fourth Quarter Results Presentation for 2025. My name is Daniel Sundahl, and I'm Head of Investor Relations. As is usual, Tove Andersen, our CEO, will start today's presentation by giving you the highlights. And afterwards, CFO, Eva Sagemo, will dive deeper into the numbers and give you the updated outlook. And after the presentation, we will open up for Q&A for participants in the team's webinar. [Operator Instructions] We aim to conclude the presentation around 8:40 today.

But without further ado, I give the word to Tove Andersen.

Thank you, Daniel, and also welcome from me to our quarter Q4 2025 presentation. And we present today a strong final quarter in a year that has been characterized by volatility and market uncertainties. In Collection, we report a record quarter, record revenue and record EBITDA, and we have seen that the rollout in Poland and Portugal is stepping up. Recycling, we are presenting a good quarter in a year that has been a weak year due to the challenging market sentiment. And in Food, we are seeing the results of the improvement initiatives and an improving market sentiment, and we delivered a strong quarter, which also then makes 2025 a record year regarding profitability in the Food segment.

Let me then give you an update on the different divisions and our Horizon portfolio. I'll start with Collection. In Collection, we have had very good sales in existing markets in the quarter. As many of you know, we have a strategic ambition that we should grow our existing markets with 5% annually. And in 2025, existing market represented 87% of our sales. In this quarter, we saw particularly good growth in Continental Europe, partly then driven by our new innovations. And one of those are our multi-feed machines, the ones where you don't need to put one and one bottle into the RVMs, but you can just drop a whole bag of bottles into the machines. And we did increase our installations of multi-feed machines with 50% in 2025, and we have roughly now 1,100 multi-feed machines installed.

Also in the quarter, we saw then installations in Poland and Portugal slowly picking up. We delivered 1,000 or installed 1,000 reverse vending machines in Poland in Q4. And if you look at the picture top right here, that is a picture from Poland. This is our S2 machine that we developed then specifically for Poland. It's an outdoor machine. And as you can see from the picture, it can endure cold weather, snow, rain and also warm weather. And a significant portion of what we are installing in Poland is this machine. But also as this picture illustrates, it's been quite a challenging period to install outdoor machines in Poland, and I'm very impressed by our service technicians and installation people that they have been able to install so many machines despite snowstorm and really bad weather.

End of last year, we had roughly 2,600 machines then installed in Poland, and we are currently installing 100 machines per week. So we have roughly now 3,000 reverse vending machines in Poland. Also in Portugal, we are then stepping up installation. We installed around 300 machines in Q4, making the end of the year an installation base of 500 machines in Portugal. And today, we have roughly 700 machines in Portugal. But there is still much left to install. In Poland, as we communicated before, the first phase with the large retailers represent 10,000 to 12,000 reverse vending machines, and then we expect a significant tail, which could be 5,000 machines or even more. So we do expect that we will see a similar tail as we have seen in, for example, Romania, where we have been continuing installing machines still now so late after they go live.

So actually, our installed base in Romania in last year grew with 20%. Also, we have seen similar things in Hungary where our installed base in Hungary last year, 2025, increased with 30%. Another highlight is that we have been appointed as a return point network operator in Singapore as 103 with a minimum installation of 350 RVMs. And we are very excited and looking forward to work with BCRS, which is the system operator there to make this successful launch of the first deposit system in Asia. And then, of course, this year, an exciting thing is U.K. U.K. will go live with a deposit scheme in November next year, November 2027. And we are seeing significant commercial activities there. We believe -- so many of the large retailers have already published an RFP, and we expect others to do it shortly. So we believe a lot of the contracts will be signed this year, but we expect most of the installations then to happen in 2027.

Also in the U.K., there has been questions about if it's the whole U.K. that will go live next year or if Wales will not be part of it, and there were some positive news that came out yesterday. So it was a press release that the deposit return scheme for drinks containers in Wales, the regulation had been laid to the parliament. And it was then stating that they have now an agreement with U.K. where the debate has been around glass and that they now are planning to go live also then on 1st of October. Still need Senate approval, but it looks like everything is set up now for that the whole of U.K. will go live late next year.

In addition to that, as always, we have included on the slide here the different countries. I'll give a short update on the ones that I haven't commented upon. Greece was supposed to go live late last year. It has been delayed, and there is not communicated yet a new start date. Moldova has announced that they are going ahead with the deposit scheme with the latest start-up in January 2027. And in Spain, we are waiting for the scheme operator to be appointed. There was an expectation that, that will happen late last year. It hasn't happened. And we are now seeing when it's going to happen. If it doesn't happen before May this year, there might be 1 year further delay. And you can expect that after a scheme operator is appointed, it takes 1 to 2 years before the scheme goes live.

But overall, no question about if it's really about when. And of course, the underlying picture here is the targets that are part of the single-use plastic directive and the packaging waste regulation that all EU countries needs to meet the collection targets in 2029, which means that they will need to implement a deposit system.

Then over to recycling. I want to start with that we really believe in the long -- mid- to long-term picture within recycling. The way that we are utilizing our resources today is not sustainable. If you look at all resources we use annually, less than 8% is circular. So this needs to change. And most waste streams comes as a mixed waste stream, which means that you need to have automated sorting to enable this at scale. However, currently, we do see a weak market sentiment, especially within plastics and waste in Europe, but also in the Americas. This is driven by low plastic prices. It's driven by that the new targets are not really kicking in before 2030 because in Europe, we have the packaging and the packaging waste regulation with the targets for 2030, which then to be met, you need to at least double the infrastructure in Europe.

And it's also in Europe, the reason for weak market sentiment is import -- cheap import from Asia. And it's positive to see that the EU recognize the challenges that the plastic recycling industry in Europe has and are facing. And last week, they passed what they call a winter package, a circularity winter package, which is about how to implement the single-use plastic directive, especially then how to calculate for the recycled content saying that if you are going to include recycled material to meet the recycled content targets until late next year, November next year, it needs to be sourced from the EU. And after that, there needs to be a mirror process, which means that the imported material needs to meet the same strict regulations on environmental health and waste management as in the EU.

So it's good to see that there are some movements there to secure that recycling industry in Europe. However, we don't expect then a short-term recovery. We don't expect a recovery in this market this year, and we'll see then what will happen next year. So that's why we had to take measures to ensure that we are regaining our profitability at the levels we wanted to be. Our revenue for 2025 is 18% down versus the year before, and we really need now to adjust and rightsize our organization to meet the current market sentiment. So that's why on Wednesday, we informed our employees in recycling about the cost reduction initiative. The objective of that initiative is to take us back to an EBITA percentage above 20% as soon as possible. We will take out EUR 16 million of cost. This will then have a full effect from next year 2027, and it represents approximately 175 positions. And also, we will work on optimizing our global footprint and the supply chain. And the objective there is really to use this opportunity also to look at our organizational setup so that we have a more scalable global operations going forward.

Then to Food, very good year for Food last year. We really now see the impact and the effects of the improvement programs that we have put in place to cut costs but also to drive customer-facing commercial activities. At the same time, we see now a positive market sentiment in many categories. But we're also now much more well positioned to take a significant part of that improved market sentiment. So we are then also ending last year with a very strong order backlog with large orders to be delivered this year. Also good to see how the profitability has improved significantly. And as I said in my introduction, we have the highest profitability, both in absolute and percentage terms ever in our Food segment. But also as part of our improvement initiative in Food, we have worked a lot on our innovation agenda and our innovation road map, and we believe that it is crucial to maintain our good margins and to gain market share in the core categories that we are focusing on.

So we have a pipeline of initiatives where we will then gradually launch new products. And last week, we launched our new Blueberry machine. So this is 5S Spectrim with LUCAi, which means it has built in our deep learning AI algorithms. Blueberries is a very important segment for us. It's a segment that is growing because of increased consumption. So it's increased planting areas coming. And when you have that, you also need the infrastructure to pack and sort those blueberries. And this machine, which I think looks amazing, and it's a very cool machine and is very well received in the market. It's about really increasing the throughput. Speed is always important. It's making sure that we spread the blueberries well, that we have less material staying in what we sorted out and the opposite. And actually, this machine per second, you can take 385 blueberries through it. So it's -- speed is very important. Very well received in the market, and we have already received orders for it, but it's a good illustration on also how we are constantly working now to keep our technology leadership to generate value going forward.

Then to Horizon. Horizon is then our portfolio of business building ventures as we call them, where we are leveraging our competence and technology to build new businesses to create value going forward. c-trace is the company that we acquired a bit more than a year ago, which is then within smart waste management. Very happy with the performance of c-trace last year. They delivered according to our expectations with double-digit growth and an EBITA above 20%. Reuse is our venture for solving the problems with takeaway packaging and single-use packaging at events and festivals. Last quarter, we had the 2 pilots of our event solution, both the one in Oslo at the Intility Arena and then at the Fairground Festival in Hannover.

And you see the picture bottom left here from Hannover, very cool solution where we are providing a technology solution where you have a barplate. So when you buy the beer in a reusable cup, it's automatically match with your payment method. After the drinking, you just throw it through a hole. You can even take all your friends' cups together with it and throw all of them, and they will automatically be identified with your payment cards, so you get the money back for the deposit. Very good feedback on this solution, and we are working now really hard on then a scaling plan for that.

Feedstock is the venture where we are focusing on solving how to divert plastic from ending in landfill or incineration. We have invested in one plant in Norway there, Omra, and we had a very good start of operations in last quarter, and we ended then 2025 with a positive EBITDA run rate. Ramping up now to 2 shifts. We also have had a German plant in construction, and we have decided that we are putting the remaining investments of the German plant on hold due to the current market situation. And we rather want to utilize the flexibility we have to find an optimal setup of our assets in order to deliver the value in our offtake agreements, which has previously been announced. For feedstock, we are planning to have a positive EBITDA contribution in 2027.

So that concludes my update. And as I said in the beginning, we end the year with a strong quarter, showing that even in a year marked by volatility and market uncertainty, TOMRA's strategic foundations are strong, and we are exceptionally well positioned for the growth cycles ahead.

With that, I hand over to Eva.

Thank you, Tove. And let's start with the group P&L for the fourth quarter. The fourth quarter ended at EUR 382 million, down 4% compared to a very strong Q4 last year. Collection ended up 2% compared to then a strong Q4 last year. Recycling down 27%, but in line with the conversion ratio that we estimated for the quarter and Food down 3%, however, strong, delivering above the estimated conversion ratio.

If we look at the full year revenues, the revenues came in, in line with last year adjusted for currency effects. Gross margins ended at 46% in the quarter, in line with Q4 last year. Looking at the OpEx, we have a strong cost control across our divisions in the quarter with OpEx of EUR 105 million. That is slightly up compared to Q4 last year, where most of the increase is explained by high activity, adding in CLYNK and also inflation in the year. When we look at the EBITA, that results in an EBITA adjusted of EUR 71 million and an adjusted EBITA margin of 19%.

And then looking into Collection. Revenues came in at EUR 207 million. That is 2% up compared to a very strong Q4 last year. In Q4 last year, we had strong sales from Austria preparing for its DRS, while this quarter, sales has come in from new markets such as Poland and Portugal. In 2025, existing markets have delivered well in line with our target of 5% annual growth, resulting of then 87% of total revenues. This year is stemming then from our existing markets. And when we look at the contribution from new market, that includes Poland, Portugal, Romania and Austria.

And for gross margins in Collection, they have delivered a strong gross margin of 42% in the quarter, but also in the year compared to last year 41%. And the gross margin in the quarter has been positively impacted by business mix, but also release of warranty accruals. As I said, good cost control in our divisions also for collection with OpEx of EUR 47 million in the quarter, down compared to Q4 last year. That gives us an EBITA in the quarter of EUR 39 million and an EBITA percent of 19%. And for -- we talk always about the ramp-up cost in Collection for the year. And then for full year 2025, the ramp-up cost has been north of EUR 20 million in Collection.

And then looking at the recycling results. The top line came in at EUR 75 million. That is down compared to a very strong Q4 last year, but in line with the conversion ratio that we estimated for the quarter. And as you can see from the overview, the weak performance continues in our biggest markets being Europe and North America, explained by the challenging market sentiment, both in the Plastics segment in Europe, but also in the waste segment in the U.S. Gross margin ending at 52% in the quarter, that is reduced compared to Q4 last year, however, improved compared to previous quarters this year, explained by the product mix and the segment mix in the quarter being more waste orders and that we have sold AUTOSORT machines in the quarter. And we are taking measures on cost in recycling. And with that, we have had EUR 1.2 million as restructuring costs in the quarter.

If we look at the OpEx, it ended at EUR 19 million, which is slightly up compared to Q4 last year, but it's down compared to previous quarters this year. That results in an adjusted EBITA of EUR 21 million in the quarter for recycling and an EBITA margin of 27%. And as always, we look into the order intake, and that has continued weak also this quarter, explained by the market sentiment. And the order intake was down 20% compared to Q4 last year, resulting in an order intake of EUR 61 million. And that results in a declining order backlog, declining 12% compared to end of last year. And when we look at the trailing 12 months, recycling is down 25% on the order intake.

Moving over to Food. Food came in strong at EUR 88 million on top line. That is down compared to last year, 3%, but higher than what we estimated on the conversion ratio. We have seen especially a strong quarter in the Rest of the World and a decline in Americas. But if you look at the full year, all markets have delivered a solid performance in 2025. Gross margin ending strong at 52%. It's significantly up compared to Q4 last year and historically, the strongest that we have had in Food. And the strong margin is a result of a combination of the full year cost savings effect, but also positive product mix and release of warranties and tariff accruals.

If we look at the OpEx, it ended at EUR 29 million, which is then flat compared to Q4 last year. And as a result of the strong gross margin in the quarter, EBITA ended at 18% in Q4, resulting then in a record EBITA margin for the year of 13%, which is then an overachievement of our target of 10% to 11% EBITA for the year. And also here, looking into the order intake and for Food, we have seen a continued positive momentum in the order intake throughout the year. We are up 2% compared to Q4 last year, ending then at EUR 86 million. And as I said, all regions have delivered a solid performance, and we see especially an uptick in the citrus category this year. The order backlog was up then 26% compared to Q4 last year, ending then in a backlog of EUR 136 million. And also here, when we look at the trailing 12 months of order intake, it's up 12%.

Still a solid balance sheet for TOMRA end of the year. And if we look into the cash flow for the quarter, it ended at EUR 24 million. It's down compared to a very strong cash flow from operations in Q4 last year. And that is explained by timing effects of customer payments and release of contract liabilities. And that's also something that you can see in the cash conversion cycle for the year. Equity ended at 35% and the gearing at 2.3 and our ROCE ended at 15.2% ending 2025.

Looking at the financial position, it's a nice spread of our debt maturity ending the year at 4.2 years and in average. And then we had undrawn facilities of EUR 54 million ending 2025. And moving over to the outlook. And starting with Collection. As always, we mentioned that it's a high activity related to deposit return systems in new markets, but also growth in existing markets. And the short and midterm performance will, of course, depending on the timing in the new markets, but also the activities happening in the existing markets. And when we look at 2026, we need to separate the growth expectations into what is coming from existing markets and what is coming from new markets in Collection.

And starting with existing markets, we expect revenue growth at mid-single digit annually on average, which aligns with our strategic ambition for this division and also what we have delivered in 2025. And then for new markets, we expect Poland, Portugal and Singapore to contribute with approximately EUR 100 million from current orders. And on top, as Tove said, there is an attractive tail in Poland, similar to what we have experienced in Romania with independent stores, representing then a total market opportunity of approximately 5,000 machines or more where we already have a dozen preferred supplier agreements at hand. However, the timing of sales into this segment can follow a trend as what we have seen in Romania, meaning that they take -- that the revenue will come over a period of time after the market has gone live.

Another new market activity worth mentioning is the ramp-up of volume in Tasmania as well as continued contribution from Romania and Austria. And in addition, we will have the full year effect from CLYNK, the company that we acquired in September in 2025, expected to come in at around EUR 25 million in revenues for 2026. And then for gross margins in Collection, it should continue to stay above 40%, but the quarterly variations may occur depending on the sales mix between the quarters, meaning in quarters when we sell more equipment, the gross margin will be normally lower.

We expect a continued good cost control in Collection. However, we might have OpEx variations between the quarters depending on investments into new markets. And when it comes to investments into new markets, this is where the ramp-up for OpEx run rate comes in, and we estimate that to be at around EUR 20 million for the full year, so the same level as we have had in 2025.

And then over to the outlook for Recycling. And as Tove mentioned, despite the belief in the strong long-term drivers like regulation and the demand for recycled materials, the market is currently facing challenges. And as a result of that, timing of orders in recycling is uncertain. And this challenging environment is expected to continue throughout this year and then possibly into 2027. And we have taken measures to restore our profitability already announced this week, where the target is to come back to an EBITA margin above 20% as soon as possible. And with the cost savings program that we have announced, we target to save a gross EUR 16 million as an annual run rate, and that will have a full effect in 2027. And the cost of that will be approximately EUR 15 million.

And the cost saving will be approximately 1/3 in COGS and 2/3 in OpEx. And we expect the savings to be gradually implemented in the year, so more towards the end of 2026 as it takes 3 to 6 months to execute on the program. And that means that we will have approximately 50% of the savings as an effect in 2026. And then looking into the coming quarter, we estimate a conversion ratio of 40% of the backlog as revenue in Q1. And with the market uncertainty, it's important to mention that there is a risk that orders may be postponed over quarters for recycling. And as we know, volumes and product mix impact the gross margin in recycling. And in 2025, we have had lower volumes than previous years and in combination with a higher share of metal orders being delivered, these 2 factors impact the overall margin in 2025.

And then looking into Q1 and the conversion ratio that we now have indicated of 40%, the volumes are estimated to be on the lower end. And in the combination with product mix in the order backlog, this will have an impact on the margin for Recycling. And for Food, the outlook in Food, here, the drivers are the automation and higher standard for food quality and safety, and that creates new opportunities for our business division, Food. And although the market has now normalized, macroeconomic uncertainty may still influence customers' willingness to invest. Food growth -- revenue growth for 2026 is projected to reach mid- to high single digits. And looking into Q1, we estimate a conversion ratio of 55% based on the order backlog ending the year.

And then the restructuring and cost reduction program has improved the gross margins in Food. And in 2025, the product mix that we have sold less third-party equipment in addition to release of accruals have impacted the gross margin positively. And for 2026, we expect the gross margin to remain in the mid-40s based on project and product in the order backlog. However, we might see quarterly variations dependent then on volume, business and product mix. And we have delivered a robust EBITA margin of 13% in 2025, which is ahead of our ambition to reach a mid-teen target by 2030. And for 2026, we expect maintaining strong performance in Food with an EBITA margin of approximately 12%. And why 12%? The outlook builds on the positive momentum from 2025, but we anticipate changes in the product mix and an increase of third-party equipment sales, especially given the large orders that we are -- that we have in the order backlog that is going to be delivered into 2026.

And then over to Horizon and the outlook, that is where we have the venture activities, feedstock and reuse and also c-trace. And c-trace have delivered a strong year in 2025 with double-digit growth in EBITA above 20%, and which is then projected to continue into 2026. And for feedstock, it's all about ramping up the capacity at Omra, where we plan to increase it to now 2/3 of full capacity. And we expect a positive EBITDA contribution in 2026 from the Omra plant, given the successful capacity ramp-up and also current market prices. And then as Tove said, a positive EBITDA in 2027 already.

And then with the underlying OpEx for feedstock and reuse for business building, that is expected to remain in line with 2025 levels, but we will have an increase in costs related to Omra with ramping up Omra and also c-trace due to higher activity levels. So the OpEx run rate estimated for Horizon as a total is estimated to be around EUR 40 million for the full year 2026. And then lastly, on CapEx, the total CapEx for the year is estimated at approximately EUR 100 million, and that will be primarily directed towards our core divisions, meaning collection, food and recycling. And we do not expect large CapEx investments into Horizon, explained also by the remaining investments in the German plant, the feedstock plant is now put on hold.

So with that, I think we end on the financial side, Daniel, and can move into Q&A.

Thank you, Eva, and thank you, Tove. We will then take questions. [Operator Instructions] And I see that we have a few questions coming in. The first one coming in from Elliott Jones at Danske Bank.

Congrats on the results this morning. Just a couple of things for me. On Collection, yes, you mentioned this in the outlook that kind of orders equate to EUR 100 million in sales for 2026. And like you said, it's just current orders that you've received and maybe obviously more to come from Poland alone and the others. But can you just help us understand kind of in general, what the time lag is between you receiving orders and then being able to kind of deliver them just on a general basis?

Yes. On a general basis, it's -- I think it's -- I think we need to discuss more specific for Poland, right? Because as Tove said in her note on collection is that we have an installation plant for Poland with 100 machines per week, and that's kind of like the phase that we are now working according to. And as you know, we announced contracts during the fall, and that's what we are now delivering according to, and it's included in the EUR 100 million revenues on the current order base. So that includes Poland, Portugal and Singapore.

And if I can add to also what we said is that in Poland, we expect deliveries on the existing contracts first half of this year. And as Eva said, we have a dozen of frame agreements with the smaller retailers, which means that the frame agreement is there. So it's just a call off and that could be very quick. So a retailer can just order a machine and it could be delivered a few weeks later. So on those, we have a very quick turnaround.

Got it. And then also just a question on operational leverage in Collection. Yes, if you kind of look back all the way to kind of Germany, I know that TOMRA kind of had an OpEx base that was able to be stable as revenue started to take off. And obviously, you just made comments on ramp-up costs this year being north of EUR 20 million in 2025. You said EUR 20 million in 2026. So I just want to kind of kind of test like beyond 2026 when there's more new markets coming, how do you stand with regards to that, do you expect any kind of big jumps in OpEx? Or would you say that along the way, you have been investing in regions such as France and Italy and the like already?

Yes. So the way -- first of all, we're doing quite a bit now on structuring Europe in a good way. In collection, we just reorganized the whole region to make sure that we are really set up to run that efficiently as new markets are coming along. On the kind of backbone, the operational backbone, the supply chain, procurement, production, et cetera, is well set up to handle then the growth. But what you have to expect that each time a new market comes, we need salespeople on the ground, we need service people on the ground. So of course, there will be some OpEx coming in every market, while at the same time, we are working on ensuring that we have as much operating leverage as we can.

And the next question is coming from Adela Dashian at Jefferies.

Yes, if we first could start on Collection. I appreciate the guidance of EUR 100 million revenue contribution in 2026 from the newer markets. But when I plug that into my model, I still have a difficult time getting up to a double-digit growth rate for the full year for Collection, given that existing markets are growing by mid-single digits. So could you just explain if you -- and I guess also with U.K. now not coming live until late 2027, could you explain like what's the -- how you will achieve double-digit growth, which is what consensus is assuming right now?

So as Eva explained, so we are from the existing contracts. So in Poland, that is the large retailers with existing contracts, the contracts we have in Portugal and Singapore that represent EUR 100 million to be delivered and most of that in first half of this year. Where we land the year will then depend on additional sales into these markets and additional sales into Romania and Austria.

I see. Okay. So it's just based on those confirmed orders. Okay. Makes sense. On recycling, I'm assuming that there was no -- it was a quite nice beat versus expectations, but I'm assuming that the restructuring effects, I mean, it's very, very subdued. These were now so no effect of that in Q4. So could you explain, was it a sequential better mix as well that drove the results in the quarter? And also on the restructuring costs, what should the phasing be in the quarters?

Yes. I'm not sure if I got the first question, Adela, but I can answer the other one, and then maybe Tove can fill in if she got the first one. So on the restructuring cost, it will be -- it's estimated to come in, in Q2 and Q3 at large, of course, depending on how this restructuring program will go into effect in the year.

Yes. And we had EUR 1 million in restructuring costs in Q4. So that was the only effect in Q4 from the restructuring.

Sure. And maybe...

Yes, sorry, Adela. On recycling, the mix that we delivered was more normalized into waste. But however, the order backlog still has a higher share of metals in it to be delivered going forward.

Okay. I see.

Good. Thank you, Adela. The next question will come from Fabian J�rgensen at Pareto.

All right. If we talk Spain and U.K. phasing, Spain is obviously a bit more uncertain. We say that the RFPs for U.K. have already started. Spain is a much more consolidated market than, for example, Poland, Romania, where you have the long tail end. When do you expect the capacity to be all rolled out in the U.K.? Is this a play where you expect most to be in place by October, meaning that sales could start in late 2026? And how should we think about that?

So we expect that the U.K. start will be a hard launch. That's the current expectation. You know that in Poland, we had a soft launch. They had a 3-month grace period. We don't expect that to happen in the U.K. It can change, but at least that's what is communicated, which means that you should expect a significant portion of the installation to happen before the go-live date.

Exactly. Okay. And so I think one of the most important things to note in the report is the margins here. Food was obviously very great again, similarly to Q2. But also on Collection, you state that the added cost for 2026 is very limited. And if you look at consensus estimates now, what they basically assume for 2027 is that OpEx in Collection expand 30% to 40% relative to 2025. Is that way too high?

So on the OpEx for 2027, that's down the line, and we need to come back to that at a later point, Fabian. What we have said is...

Does it make sense that it's up 30%?

It depends on...

To your business model. Do you think so?

I think. Yes, I think the level of the OpEx depends on the activity in the markets, right? So what we are working according to is to have good cost control in Collection and across the divisions that we have. And then, of course, a large part of TOMRA Collection is related to existing markets. And then for new markets, we manage the activity going into new markets in a very prudent way. So cost will, of course, occur with going into new markets, but the levels we need to come back to.

And the next question is coming in from Morayo Adesina at Barclays.

Just one for me, just a follow-up on the product mix in recycling. So I know that there was some softness in the waste recovery segment of recycling in 2025. Are you now saying that we're seeing that coming back, especially in the U.S.? I know that there was some sort of effects from the geopolitical backdrop yes, just wondering where we're at on that.

Yes. Not necessarily. So what we see in the quarter is a result of what we had in the order backlog for the year. And in Q4, we had more waste projects into the -- to be delivered to the P&L. So that's the reason we don't necessarily see a recovery in the waste segment because of that.

And we will take 2 final questions, one from Markus Heiberg at SEB.

So a 2-parted question on the competitive position in recycling. So the first one is how do you see the competition there now as the market is softer in plastics, are you seeing higher competition? And also maybe in metals, are you seeing any changes there? And the second part of that question is now as you are downscaling your cost base, are you seeing that impacting your own product road maps? And I imagine there are some opportunities there in AI and what's happening there. So some discussions on that will be interesting.

Yes. So first of all, it's clear that our competitors are experiencing exactly the same as us. So we are not losing market share. It is the market that is down. But that also means, of course, it becomes very competitive on the orders that are out there. So in a situation like this, yes, there are pressure on margins, but we are still, I feel in a very good competitive situation versus the others. When we are -- what we are doing is rightsizing the organization. We have reduced turnover with 18%. We are not 100% sure when it will come back. It will come back, but when it will come back. So we need to take down our organization to meet the current market sentiment, which means that we are reducing all over in recycling, including that we are reducing on some of our innovation activities because also we see that the market will not be there to take those innovations and we can get real value of it short term.

At the same time, we have been very focused on making sure that we don't take out things that will make us less competitive when the market comes back. So this is, of course, a balance. So we believe that we have the balance right, which means that we are still investing into our innovation portfolio, including AI with the new organization or the new manning that we will have then as of -- yes, mid this year.

Thank you, Markus. We have one last, but no longer in the queue. So I think with that, we have reached the end of today's presentation. Thank you very much for tuning in. The next time we will be here is on the 24th of April for our Q1 results the day after AGM. Looking forward to seeing you then. Until then, have a nice day, and goodbye.

Good morning from us, dear ladies and gentlemen, and welcome to TOMRA's Third Quarter Results Presentation for 2025. My name is Daniel Sundahl, and I'm Head of Investor Relations.

As always, CEO, Tove Andersen, will start today's presentation by giving you the main highlights of the quarter. And afterwards, CFO, Eva Sagemo, will dive deeper into the numbers and present our updated outlook. At the end of the presentation, we will open up for Q&A for participants in the Teams webinar. A link to the Teams webinar can be found in this morning's stock exchange release. We look to conclude this presentation at around a quarter to 9 today. And without further ado, I give the word to CEO, Tove Andersen.

Thank you, Daniel, and welcome from me as well to our Q3 presentation. The results in this quarter has been muted due to phasing of new deposit markets in collection and a continued weak market in recycling. Food, however, is continuing to perform in line with our expectations on both top line and bottom line.

And in addition, we see a strong momentum in orders in Food, which is positioning this division well for future growth. And despite the overall financial results being muted in the quarter, the activity level has been anything but that. And we are very excited about the prospects going forward. So let me run through an update on our 3 divisions and Horizon.

As always, I start with Collection. In Collection in the quarter, we saw solid growth of 6% in our existing markets. So we are on track on delivering on our strategic ambition, which is to have 5% annual growth in existing markets. And in the quarter, 90% of the revenue stems from these markets, which really provides a strong and stable foundation for our Collection business.

We did have a decline in contribution from new markets in the quarter. As last year, Q3, we had good contributions from Austria, which went live with the deposit scheme early this year. Well, this quarter, we see that the main rollout in new markets like Poland and Portugal is yet to come.

So what is in the status in these 2 markets? First of all, Poland reached a significant milestone on October 1. The deposit scheme went live. This was, of course, expected, but it's always nice to see that this happened without any additional delays. As we have communicated before, the launch in Poland is what we call a soft launch with a 3-month grace period. That means that currently, there are very few beverage bottles and cans in the market sold with the deposit label and a deposit value. And this also means that during Q4, there will be very few bottles and containers returned to the retailer. And this is why many of the retailers have not seen an urgency in investing in infrastructure, reverse vending machines yet. But this will change now.

As of 1st of January, all containers put on the market needs to have a deposit value. So the number of bottles and cans that will be returned to the retail shops will then gradually increase during 2026, and thereby also the demand for automating this collection through reverse vending machines. But there are always some customers who want to be early, and we have already more than 1,600 TOMRA RVMs in Poland.

When we estimate the market potential in Poland, we believe that the initial rollout will be with the large retail chains. And that will take place from now till then mid-next year. And we expect that market potential to be roughly 10,000 to 12,000 RVMs.

In addition to these large retail chains, you have tens of thousands of small retailers in an independent stores in Poland. And it's very difficult to estimate how many of these will buy an RVM, but they can represent the potential of 5,000 machines or more. So we believe what you will see in Poland is a fairly long tail of sales, similar to what we have seen in Romania.

We have so far been delivering then to 3 leading retail chains in Poland. And as you probably have picked up in the stock release sent out yesterday, we have now also signed with Dino. Very pleased that they have selected us as their provider.

In addition to that, we have preferred supplier agreements with a dozen of franchise groups of independent retailers. And how that works is that these franchise groups will then sign a frame agreement, but then the decision will be up to the independent retailer if they will buy an RVM and from whom they will purchase from.

We are very pleased with the position we have achieved so far in Poland. This position provides a strong foundation going forward. And we are really excited to take part in making this a successful deposit return scheme for our customers for Poland and for the environment.

Then over to Portugal. There is still no firm go-live date communicated in Portugal, but the expectations is that the deposit scheme will go live late Q1 or early Q2 next year. Compared to Poland, the market is showing more normal market dynamics and the majority of the market is already signed. We are working with 5 leading retailers in Portugal and the rollout is expected to then step up now in Q4 and continue first half of next year.

As always, we show on this slide the list of upcoming markets. I will not comment on all of them, but both U.K. and Spain is, of course, of particular importance due to their size.

In the U.K., we already see significant activity by the retailers to prepare themselves for the upcoming deposit scheme. So that's good to see. Also, it's good to see the positive development in the activity in Wales, which now has drafted their legislation. You might remember that the current planned deposit scheme is covering England, Scotland and Northern Ireland, not Wales. It's early days, but of course, still uncertain, but Wales could then potentially join the rest of the U.K. where this will go live late 2027.

In Spain, they are running the process to appoint the scheme operator, which is expected to be in place by mid-2026. Also nice to see in Spain that there is some activity on the ground. We participated in a small pilot in Sangüesa, where there has been collected 150,000 bottles during 3 months in this summer. And these bottles is important to -- or these bottles are important to engage community and local authorities to then both get the buy-in but also preparing them for the upcoming deposit return scheme.

I will end my update on Collection with the exciting news about our acquisition of CLYNK in the U.S. CLYNK provides bag drop collection solutions. This means that instead of them depositing one beverage container, you put it in a bag, you deposit the whole bag, and then you will get the deposit back a few days later. And this can be an attractive collection method in certain markets, complementing then reverse vending machine and replacing depots and redemption centers.

This acquisition will in itself generate significant value as we have large synergies between their operation and our material recovery business in the U.S. And we have indicated that the price that we have paid will then be equal to a 2027 EV/EBITA multiple below 10. In addition to be a profitable acquisition in itself, the CLYNK solution will be a great addition to our portfolio, especially in the U.S. market, where we do see strong growth potential for this type of bag drop solutions.

Then to Recycling. Recycling delivered a weak Q3 both on the P&L and on order intake. We see that the depressed market sentiment continues in Europe and the U.S., both within the plastic and the waste segment. This is driven by lack of profitability of plastics recycling and geopolitical uncertainty. However, there are still regions and segments performing better. We still see good activity in Middle East, Asia and Eastern Europe and in certain segments like the metal segment.

However, based on what we see currently, we believe that the weak market sentiment will continue next year and potentially also the following year. Therefore, we are taking measures to address the current market situation in order to improve the profitability of the division. Our ambition is to get the profitability level in Recycling above 20% EBITA as fast as possible.

I want to stress that we are still confident about the positive outlook medium to long term for this division as legislations as the packaging and packaging waste regulation and customer commitments to CO2 reduction will drive demand for recycled content. If you only look at Europe, the requirements in the packaging and packaging waste regulation for 2030 means that at least you need to double, potentially triple the infrastructure in Europe. So the market will come back. We will revert with more details on the planned actions to restore profitability in our Q4 results presentation.

Then to Food. Food is again a highlight in the quarter as they continue to deliver in line with our top line expectations and profitability ambition. I said it before, but I want to stress it again, that I'm very proud of the whole food organization on how they have turned this business around. And now we see the market and orders are picking up as well.

Q3 is typically the quarter with the lowest order intake, but it was up 6% on the same quarter last year. And it leaves us to end the quarter with a record high order backlog of EUR 138 million. Our plan for this year has really been about focusing on profitability at the same time as we position us for growth in 2026, and we are definitely on track for that.

And then part of them positioning us for future growth has been to upgrade and work on upgrading our product portfolio in selected categories. We need to have the best solutions in the categories we focus on in order to continue profitable growth. So in addition to then do the cost reductions, do the turnaround, we have had and invested in focused R&D in parallel, and I'm very excited about the launch of our new 4C for nuts and frozen vegetables.

Our goal for this solution is that our customers will save time. They will reduce operational cost, and it will really raise the bar for the quality in nuts and frozen vegetable sorting. Our AI solution, LUCA is integrated into the 4C. So this brings then deep learning to the nut industry. And here, we are building on the successful LUCA applications we already have launched for apples, blueberries, cherries and citrus. This is then the first bulk sorter to run the entire spectrum of artificial intelligence in tandem, allowing then the customers to have power to instantly adapt to changing conditions.

And what really set this product apart is the ability it has to achieve a false reject rate of less than 1%. What does that mean is that we have a very low volume of good quality produce that are being rejected. So this ensures that the processors can maintain a really high product quality without sacrificing yield, which equals profit. It's a bit very interesting to follow now the development of sales of this product.

Then let me conclude my part with providing an update on Horizon, our portfolio of adjacent business building activities which today consists of our 2 organic ventures, TOMRA Feedstock and TOMRA Reuse and our acquisition last year, c-trace.

The whole portfolio is progressing very well and delivering on their plans. In c-trace, we see strong momentum, and they are delivering both top line and profitability in line with our expectations when we did the acquisition.

In Reuse, there is lots of exciting developments. If you remember, here, we are focusing both on a city solution and an event solution for then takeaway packaging to replace single-use packaging with reusable ones.

For the event solution, we had a successful pilot at the music festival Øya in Norway this summer and more pilots will be around doing this autumn. And in the city solution, we have, of course, the Aarhus pilot up and running and are now commencing installations in Lisbon in Portugal.

Then over to TOMRA Feedstock, which is in a very exciting period as the Områ plant is now up and running. This is a Feedstock sorting plant in Norway, which is designed to take all plastic packaging waste in Norway and turn it into valuable raw materials. The plant is a joint venture between us and the producer organization Plastretur.

The construction project has been on time and on budget. And in addition, the quality of the output has also been in line or even a bit better than our expectation. So there's been a fantastic job by both the Plastretur team and our TOMRA Recycling team to achieve this and also our external partners, including then Sutco, which has been the plant builder. And we are currently now producing 10 high-quality output fractions from mixed plastic waste.

On capacity, we will now in the beginning, have a utilization rate of 1/3 of the capacity with a plan to increase it to 2/3 during next year.

And as previously communicated, we are expecting a positive EBITDA, just to make sure we have the D in there, run rate end of this year, and the neutral and positive EBITA contribution in 2026, given successful capacity ramp-up and current market prices.

With that, I end my update and will hand over to Eva on the financials and outlook.

Thank you, Tove. Let's start with the group P&L in the quarter. The third quarter came in at EUR 306 million, down 6% compared to Q3 last year. As timing of revenues from new markets have been uncertain, Collection ended 5% down compared to Q3 last year.

Recycling was down 32% due to the weak market sentiment, and Food down 2%, however, strong delivering on the estimated conversion ratio. Gross margins in the quarter ended at 44%, up from Q3 last year, which were at 43%.

Strong cost control across divisions with OpEx of EUR 104 million in the quarter, up compared to Q3 last year, where most of the increase is explained by c-trace, feedstock activity and acquisition costs from CLYNK as well as inflation. This results in an EBITA of EUR 30 million in the quarter and an EBITA margin of 10%.

Looking into Collection. Revenues came in at EUR 179 million, down 5% compared to a strong third quarter last year. Last year, we had strong sales in Europe with Austria preparing for their DRS launch, while this quarter sales are yet to pick up from the new markets than being Poland and Portugal this year.

Existing markets are trailing well in line with our expectations of 5% growth year-over-year, currently 6% in the quarter and 6% also year-to-date.

We continue to see strong gross margins in Collection, ending the quarter at 42% compared to then 41% last year. And gross margin in the quarter is positively impacted by the business mix.

We have a good cost control in Collection with OpEx of EUR 47 million, up compared to last year but flat adjusting for the acquisition cost of CLYNK. EBITA ended at EUR 29 million, resulting in an EBITA margin of 16%.

Looking into Recycling. Recycling came in weak in the quarter at EUR 40 million, down compared to Q3 last year and EUR 3 million lower than the estimated conversion ratio that we gave back in Q2.

As you can see from the overview, the weak performance is in our biggest markets, Europe and North America, and that is explained by the weaker market sentiment, especially in the European Plastic Recycling Segment But also in the waste sorting segment in North America.

Gross margins ending at 44%, weak compared to Q3 last year, where we had higher volumes as well as favorable product and business mix. And as we have seen this year, also relevant for this quarter, we have a higher share of metal projects recognized in the P&L, which then impacts the margin negatively. The underlying product margins are still intact for Recycling.

We have a good cost control in Recycling, OpEx now of EUR 21 million, slightly up from Q3 last year, mainly explained by inflation, and that results in a negative EBITA in the quarter of EUR 3 million.

Looking at P&L, that also came in weak in the quarter due to the challenging market situation. Order intake was then down 30% compared to Q3 last year, ending at EUR 42 million. That also results in a declining order backlog in the quarter of 19%, ending then at EUR 109 million. When we look at the trailing 12 months for order intake, we are down 17%.

And then for Food. Food came in strong at EUR 76 million in the quarter, down 2% compared to Q3 last year but higher than the estimated conversion ratio for the quarter. Revenues were relatively stable in the different regions, as you can see from the overview.

Gross margins ending at 45%, up compared to Q3 last year, explained mainly by positive product mix and cost savings that has been realized. Tariff cost has been EUR 1 million in the quarter, but that has been fully mitigated.

When we look at OpEx in Food, we ended at EUR 26 million, down from Q3 last year then driven mainly by the cost savings, resulting in EBITA margin of 10%, in line with the overall target for the year.

Looking at order intake in Food. We had a strong order intake of EUR 77 million, up 6% compared to Q3 last year. And all regions are performing well, with strong sales in citrus and also continued solid performance in potatoes, those being the 2 largest categories in Food currently. The strong order intake results also in the strongest order backlog recorded, ending at EUR 138 million, then up 21% compared to Q3 last year. And also here, looking at the trailing 12 months for order intake, we are up 8%.

Yes. We are still in a healthy position looking at the balance sheet, and cash flow from operations came in at EUR 64 million in the quarter compared to EUR 99 million in Q3 last year. When we look at cash flow from operations year-to-date, we are more or less in line with last year, ending at EUR 147 million than year-to-date this year.

Equity ratio of 33% in the quarter and a gearing of 2.2x. The gearing is up in the quarter mainly related to the acquisition of CLYNK. And that also goes into the explanation of the ROCE trailing a bit down compared to Q2. That's based on lower profitability but also the higher goodwill that we have in our balance sheet.

Looking at the financial position ending Q3. We had a EUR 40 million bridge loan to fund the acquisition of CLYNK now in Q3, and our current weighted average debt maturity is at 3.7 years. And important to mention is that all of our bonds are green, and we also just recently launched our new green financing framework, replacing our Green Bond framework that was launched in 2022.

And then over to the outlook, and we start with Collection. There is a high activity related to the positive return systems in new markets as well as growth in existing markets. And short- to mid-term performance will depend on the timing of new markets but also replacement sales, introduction of new innovation and variation of product and business mix.

The revenue growth in existing markets for 2025 is estimated at approximately 5%, and we are trailing well on that one currently. The overall revenue growth for Collection in 2025 is dependent on the rollout in new markets, being Poland and Portugal this year.

Having already secured contracts in both countries in combination with Poland being live since 1st of October this year, we expect rollout activity to ramp up now in Q4. And for the contracts signed in Poland, the rollout is expected until the first half 2026. But it is challenging to estimate how much it will be -- how much of that will be recognized as revenue in Q4 because this depends on whether the customers are ready as they are responsible for preparing installation sites. But on our hand, we are fully prepared and ready to start.

Gross margins should continue to stay above 40%, and we also expect good cost control to continue. However, we might experience quarterly variations in the OpEx depending then on investments into new markets. And related to that, we have a ramp-up OpEx run rate for new markets, which has an estimated level of EUR 20 million for the full year.

And then looking at the Recycling. As Tove said, while long-term drivers such as regulation and the demand for recycled materials remains solid and are expected to create growth opportunities, the market is currently facing significant challenges. Ongoing trade tensions and subdued European plastic recycling market, in addition to considerable macroeconomic uncertainty, have impacted the market sentiment negatively. And that makes the timing of orders less predictable for us. This market environment is expected to continue throughout 2026 and potentially then into 2027.

More short term. Based on the order backlog at the end of this quarter, a 70% conversion ratio is estimated to be recognized as revenues in the fourth quarter. With this conversion rate, the revenues for 2025 are estimated to decline approximately 15% to 20% for Recycling. And important to note, with the market uncertainty, there is a risk that orders may be postponed over quarters.

And as you know, volumes and product mix impact the gross margin in Recycling. And this year, we have had a higher share of metal orders being delivered impacting the overall margin negatively.

And looking at Q4, we have a more balanced mix of waste and metal orders being delivered, meaning we estimate some improvements in the gross margin for Q4. And also, Tove touched upon that, that measures to restore our profitability have started in Recycling. And we are going to give further updates then in Q4. Our objective is to come back to an EBITA margin above 20% as soon as possible.

And then the outlook for Food, the need for optimization, along with the increased quality and safety requirements for food production continues to serve as drivers for growth and opportunities in food. While the market now is normalizing, ongoing macroeconomic uncertainty may still influence customers' willingness to invest.

And based on the order backlog, ending the third quarter, a 60% conversion ratio is estimated to be recognized as revenue in Q4. And with this conversion rate, the revenue growth for 2025 is estimated at mid-single digits. However, also here, given the market uncertainty, orders may be postponed over quarters. And the cost reduction program has improved our gross margins in Food. However, we will continue to see quarterly variations in the gross margins, dependent then on volume and product mix.

And we have talked about tariffs impacting margins negatively in TOMRA and especially for the Food division. However, due to mitigating actions, we do not estimate material negative impact in the gross margins for Food in Q4. And then following last year's cost reduction program, the target is to achieve an EBITA margin of 10% to 11% in 2025.

And then lastly, the outlook for Horizon, which then consists of Feedstock and Reuse and c-trace. While the underlying OpEx or Feedstock and Reuse are expected to remain in line with the 2024 levels around EUR 8 million, there will be an increase in costs related to the Områ plant now being in production. And that gives us a total OpEx run rate for Feedstock, and Reuse estimated south of EUR 20 million for full year 2025.

And then CapEx related to Horizon is estimated currently at EUR 30 million for 2025, which is then primarily related to our Feedstock plans, where we currently have spent EUR 20 million. And that's Daniel and my presentation.

Thank you, Eva, and thank you, Tove. We will now then move over to the Q&A. [Operator Instructions] And I see that we have a few questions coming in already. The first one is coming from Elliott Jones at Danske Bank. Please go ahead, Elliott.

Just on the Collection side, obviously, there's been a lot of recent news with orders being announced for you guys and some of your competitors as well. I just wanted to get your take on the developments in the space here and what could come with the increased competition. With this competition, are you starting to see increased pressure for potentially lowering prices, for example? Or I mean you've always been quite confident that you can keep gross margins at assessment level in Collection. But I'm just wondering if you're seeing perhaps a shift in customer behavior to kind of just go cheaper and tick a box, which could percolate down into other markets? Or are you just not seeing that?

Yes, the situation in Poland, we have always expected now in this new market that it will be very competitive because, as you know, when the new market is launching, more or less the whole market is up for grab and then everybody wants to take their share. And it is important to get a significant share from day 1 because that will give you scale advantages, advantages on efficiency, and it gives you a good position then to harvest for the coming years.

The way we work in TOMRA then to make sure that we win a significant part of the market, we work then on really making sure we have a good product portfolio that fits the customer needs. So why do customers choose us? It is because we have a portfolio that fits their needs that we have -- we provide reliability and uptime but also a great service network.

So I talked a bit about the development so far. And as I said, you know that we are satisfied with the position that we have gotten so far, but it's definitely very competitive. Our gross margin target in Collection is not changed. Our gross margin target is that we should be above 40% as an average. And then there will always be certain markets, certain products that will be above and some that are below.

Got it. And then one more. You mentioned the service side of things there. And also, I'm just thinking that the production capacity side of things. Can you provide some insight into the production capacity you have of RVMs each year? Or even kind of just like qualitatively, if you think that is something that you have by far the highest of amongst your competitors? Or are you seeing others kind of catching up?

That's also what we have seen as one of our competitive advantages in Poland that we have been ready to deliver early and guarantee certain volumes in a short-time period. We have quite a flexible production setup. We have some in-house production and main production is outsourced. As Eva commented in her outlook going forward, we are now ready to start really delivering on the orders that we have in Poland. So it will not be our production capacity that will be the limiting factor.

But many of the Polish retailers will not have the RVMs inside their store. They will put it outside. And this means that also the retailers need to prepare the site where the machine is going to be installed. So our uncertainty on timing on deliveries for Q4 and first half of next year is really linked to that, not our ability to produce and install.

Thank you, Elliott. And the next question is coming from Fabian Jørgensen at Pareto.

I'll start off three quick ones, but sorry, following up on Alex's question there. So if we say a market of 20,000 machines in Poland, roughly 50% of the market has already been handed out now. We assume that you take the Germans and you had 3,000 yesterday, you're at roughly 22% market share.

And now you go into more of a, let's say, the long tail where there's preferred supplier agreement but every retailer will decide themselves. You have a 50% market share target. Do you see any risk to that in Poland? And if you also state that it's important to get a big footprint in the start to get scale on service and everything, will you prioritize scale over price to get to 50%? What's more important, margins or market share?

Yes, it's a good question. And of course, it's difficult to answer yes or no because it is a balance here. It's important, as I said, to get a large enough position in the market, but also, we are very committed to the profitability targets that we have set for collection on 40% gross margin and an EBITA of high double teens. So it's really about a balance.

But as I said, we have a portfolio. We have, for example, developed the S2 which we communicated is what Dino has ordered. The S2 has been designed for the Polish market. It is a stand-alone outside machine with galvanized steel. So it can really take both the heat and the cold and the rain and everything and snow in Poland. So by having them also a unique product, it's, of course, easier to maintain margin versus if you're competing head-to-head.

And the feedback that we have gotten from the Polish customers, which typically have been now testing many of the suppliers for the last couple of years, is that they really appreciate our solutions. And that's also one of the reason why we are so firm still that on average, we will meet our targets and profitability in Collection.

Okay. And then following up on perhaps something a bit more positive. Your Food margins are very strong. Year-to-date, your 13%. You set your target still to 10%, 11%. Growth is coming back margin scales with volumes. Why don't you raise that target?

Ye. So the target is 10% to 11%. And as you pointed out, we are year-to-date at 13%. So we are trailing in a good position to reach the target, Fabian.

Okay. And finally, on the Recycling, you say that you expect a weaker market in '26 and perhaps also in '27. Of course, going into 2025, you had quite a strong backlog. So are we speaking in terms of orders? Are you speaking in terms of P&L, meaning that I mean, if orders stay muted, that would imply a negative growth in 2026 not stable and continued muted markets if you understand my question?

Yes. No, I understand your question. And it's the current sentiment is challenging, right? And we see that for 2025, and we expect that challenging market situation to continue into 2026, as we said, and potentially into 2027.

Of course, everything is dependent on the order intake, right? And we will need to come back to that on how that will trail in the coming quarters. But that's a -- yes, we can't say more than that. It's still -- we need to look into the coming quarters to see how 2026 will develop. But it's -- yes.

Thank you, Fabian. And the next question is going to come from Adela Dashian at Jefferies.

Two questions from me. First of all, on the OpEx space, I'm assuming that you definitely do have an ambition to double the number of RVMs from current levels in just the Polish market, and I appreciate the commentary around what you expect the ramp-up costs to be for this year. But how should the phasing look like going into 2026? It's a bit too early, I guess, but should we expect a similar type of pace or with what you have already expanded into that market? Do you feel like it's enough in preparation phase?

Yes. As I said on the outlook, we would -- we might have variations in the OpEx in Collection based on investments into new markets, then, of course, now being Poland and Portugal and then the markets to come in 2026 and beyond.

We have already a good organization on the ground in Poland, where, of course, some more fine-tuning of that will be needed going forward in order to be delivering on what we should in relation to the contracts. But more precise than that, we can't be.

Okay. And then on Recycling, I mean, how confident are you in your ability to at this point, reach a level of a 70% conversion ratio given that the current market sentiment continues to be weak. I mean is this really realistic? Or do you have any concrete examples of why you have this confidence?

Yes. So what we do normally in the quarter is to give that conversion ratio, which is an estimate based on the order backlog that we have at the current point in time on the expectations to be delivered into Q4. So that's the best data point that we have. And then also we have this disclaimer on that orders can be postponed over quarters, which we have also seen in the recent quarters for Recycling. So 70% is the best data point that we can give at the current point in time, Adela.

But do you base this on historical performance? Or is it like actual conversations with customers and planned deliveries?

Yes. So this is based on both on the order backlog information and when the orders are going to be shipped and delivered based on customers -- yes, based on customer dialogue that we have. So it's based on data points in combination with when you sign the order, when you have the discussions with the customer throughout the period on to delivery. So it's a data point that we have currently today based on customer information.

Thank you, Adela. And the next question will come from Daniel Haugland at ABG.

Yes, so I have two questions. The first one is, I think on the previous quarter, you said you've installed around 1,000 RVMs in Poland. Is it possible to give an update on how much we've installed up until now as of Q3?

And then my second question is that now that we've seen the 2 large retailers place big orders in the last week, do you expect the remaining large ones? So I think there's at least one more to place orders in the coming months. And do you have kind of a threshold for contract announcements like yesterday? Does it need to be, let's say, over 2,000 machines for you to announce it? So that's my two questions.

Yes, Eva can answer the last question and then I can start with the first one. So we have currently 1,000 -- or more than 1,600 RVMs installed in Poland. That is what we have done so far.

And on the commercial side, as I said, there will be an initial rollout phase, which is really then linked to the leading and the international retailers where you have seen them quite some announcement the last days that they are now firming up on the contracts and the orders, and we expect that to be kind of closed in not too long time for the leading retailers. And then you have the whole chain of independent stores where there will be more frame agreements.

And then you can say a bit about it -- and also, what I said is that we than have -- Dino that was announced yesterday and 3 other retail these leading retailers signed up with us. And then you can say a bit on how we think about announcing contracts externally.

Yes. So when it comes to the size of contracts, it needs to be significant for TOMRA. And then we are talking more than 1,500 machines, yes, up to 2,000 before that kicks in on an announcement for us. So it needs to be significant for us in order to announce. And that's also what you have seen in line with, yes, previous announcement coming from TOMRA.

Thank you, Daniel. And we have one last question coming in from Pallav Mittal at Barclays. So we don't hear you, Pallav. I think you might be on -- you might be muted. At least, we can't hear you. So if we don't get the sound to work, please feel free to come back to us with your question. We'll be happy to answer it after the presentation.

So with that, I think we will just conclude the presentation. Thank you, everyone, for tuning in today. The next time we will be standing here is on the 13th of February next year for our fourth quarter results. Thank you very much. Have a nice day. Goodbye.