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TOMRA: Business update and revised dividend proposal

01 April 2020

The Board of Directors and management of TOMRA Systems ASA are taking measures to respond to the uncertain situation created by the ongoing COVID-19 pandemic and will revise its proposed dividend for 2019 of NOK 2.75 per share.

It is instead proposed that the general meeting grants the Board an authorization to resolve dividends, up to NOK 2.75 per share, at a later stage, in light of the then prevailing market situation. The authorization will cover the period until the annual general meeting in 2021.

The Board of Directors has approved the annual accounts for 2019. Apart from the change in proposed dividend, there are no changes versus the preliminary annual accounts published on 20 February 2020. The call for the general meeting with the revised proposal on dividend will be distributed 7 April 2020, together with the 2019 Annual report.

TOMRA has a sound financial position with ample excess liquidity. The ongoing turmoil is expected to have marginal impact on order intake and the reported revenues and EBITA for 1Q20. The material weakening of the NOK against all major currencies during March 2020 will have a positive effect on EBITA line, but a negative effect on the finance line (fx-contracts on future cashflow valued at 31 March closing rate) for the 1Q20 results.

The long-term demand for better resource productivity is a result of megatrends such as population increase, a growing middle-class consumer base, the emergence of e-commerce and greater urbanization. TOMRA, as a leader in sensor-based solutions, is favourably positioned to capitalize on these trends.

TOMRA’s main activities in the food and waste sector are considered critical for society, and our operations will often be exempt from restrictions applicable to other industries. Overall, the company has a strong and diverse customer base and significant recurring revenues. The local sales and service organizations are endeavouring to maintain a close dialogue with our customers to ensure uninterrupted service and to anticipate and prepare for future needs. Tomra should consequently be in a good position to get through the current period of unrest.

However, the visibility has decreased and the volatility in the markets is currently increasing, as countries and states are initiating measures to fight the outbreak of the COVID-19 pandemic. TOMRA is delivering capital goods that requires on-site installation, meaning demand for our solutions will likely be temporarily affected by the downturn in the global economy, health and safety concerns and disruptions in logistics.

Like several other listed companies, the Board has consequently decided as a precautionary measure to resolve dividends for 2019 at a later stage. The decision does not entail any changes to the company’s dividend policy, which is to pay out an annual dividend of between 40-60 per cent of earnings.

“Given this extraordinary and uncharted situation, The Board of Directors considers it to be in the best interest of TOMRA and its shareholders to await further market developments before deciding on a potential dividend, taking into account the company’s necessary financial flexibility to provide for sustainable growth,” says Board Chair Jan Svensson.   

 “At TOMRA, the health and safety of our colleagues and their families, our customers, partners and the communities we are part of is always our primary concern. TOMRA has swiftly formed response teams on all levels to protect our people and safeguard our assets. The present business environment is however volatile, and we are continuously assessing our production, delivery and service capabilities.

We are committed to leading the resource revolution and we see that the drivers for resource efficiency and waste reduction remain strong. In this challenging time, our goal is to maintain our financial robustness, and we are prepared to implement the necessary measures to adapt to changing market conditions, creating a basis for long-term sustainable development of TOMRA”, says President and CEO Stefan Ranstrand.

Management will provide updated information during the 1Q20 presentation on 5 May 2020.

 

Asker, 1 April 2020

TOMRA Systems ASA

For questions, please contact:

Espen Gundersen, Deputy CEO/CFO: +47 66 79 92 42 / +47 97 68 73 01

Bing Zhao, Director Investor Relations & Strategy: +47 40 21 08 19