Revenues in Germany during first quarter 2004 amounted to 56 MNOK, an increase of 107 percent relative to first quarter 2003. An increased number of installations for refillable containers is the main driver behind this growth. TOMRA expects continued strong demand for technology for refillable containers in Germany. Several legal and legislative processes related to the deposit system for non-refillable containers in Germany are still pending. These processes significantly reduce the probability of TOMRA receiving orderes for 2004 related to technology for non-refillable containers. TOMRA will continue its technology and market development activities in order to pursue future automation opportunities in Germany.
Sales in Sweden equaled 62 MNOK, an increase of 114 percent compared to first quarter 2003. Machine installations under the 100 MNOK contract with Coop Sweden were the main reasons for the higher revenue level. Installations under this contract were largely completed during first quarter 2004. The activity level in Sweden will therefore be lower in the second quarter 2004.
In the US East region, container volumes increased by an estimated six percent in the first quarter 2004 versus 2003. This positively impacted TOMRA`s material handling operations. Technology revenues in first quarter 2004 decreased by 15 percent versus the same period last year. The decline is largely driven by lower technology sales in Michigan where significant replacement of old machines was completed during 2003. TOMRA anticipates technology sales to demonstrate year-on-year growth in US East for the reminder of 2004.
Revenues in California equaled 79 MNOK in the first quarter 2004, which is an increase of 27 percent versus 2003. The union labor strike at certain retail chains in California ended in February 2003, and operating conditions at the affected 250 retail stores normalized in March. The revenue growth in the first quarter of 2004 is mainly driven by higher volume growth, as well as higher PET and aluminum prices. TOMRA anticipates the continuation of a high rate of growth in California in the remainder of 2004.
In Brazil, revenues were down by 11 percent to 86 MNOK during the first quarter 2004. Sales of aluminum cans continued to decline in the first quarter 2004 versus first quarter 2003. Consequently used beverage container collection also dropped. High incentives are still being paid to consumers to have them return their cans. For TOMRA, this has consequently resulted in very weak results in its collection business in Brazil. Because of continuing negative market trends, TOMRA has decided to discontinue most of its business development activities in Brazil, among other the potential establishment of automated collection solutions for PET containers.