Q4 2024 Tomra Systems ASA Earnings Call
Sundar and I'm head of Investor Relations and today as always we have our CEO co founder some here to give you the highlights of the quarter and our CFO episodic more to dive deeper into the numbers at the end of the presentation, we will open up for Q&A.
Participants in the teams webinar.
Thanks to the webinar can be found in this morning's stock exchange release.
And without further Ado I give the word to talk.
Thank you Dawn and a warm welcome from me as well.
I'm very pleased to present, a record strong quarter, if we're talking about Q.
Q4, 'twenty 'twenty four we had record revenue and record EBITDA.
We did expect it to be a very strong quarter, but also we knew that it would not happen by itself.
And I'm really proud of the whole organization or the work and the effort that they put in to really make this result.
And it is nice to look back on 2024, where we have delivered on what they promise.
We have lifted the gross margins in collection to where it should be.
In recycling, we have delivered a top and bottom line in line with the record year Twin says 23, despite a softer market sentiment.
I mean, you haven't delivered on the cost saving and restructuring program in food.
With the cost saving of 30 million euros, and we entered the year with a run rate all of that 10% to 11% EBITA.
In addition, the focus we've had on working capital doing to in theater before has really paid off resulting in a very strong cash flow.
So we are very pleased with 20% before but we are even more excited about the future.
The greatest news in the quarter or over the last month or so.
Really been the historical progress made my policy makers on the circular agenda.
They called me, yes, it looks very encouraging for increase circularity.
<unk> told them at all and are well positioned to capture these opportunities.
I'll come back to this later in my presentation, but first let's look at the highlights for the quarter.
The revenue in the quarter and of that 398 million euros, that's is that 12% up compared to the same quarter last year.
Collection of my 2% up but we have to remember Q4 'twenty to 'twenty three it was also very strong quarter for collection.
And then recycling and 37% up into the 13%.
Very strong gross margin in the quarter or 46% compared to that in a 44% same quarter last year. The main contributors are that we are now seeing the results of the restructuring program in tooth and also that we had very high volumes in recycling.
Operating expenses in the quarter were in line with same quarter last year, which then resulted in a 46% increase over our EBITDA to 78 million euros.
We had some one off costs in the quarter of 3 million you're wrestling through a few of the restructuring program, which is now finalized we don't expect any costs related to that this year.
As I mentioned very strong cash flow, but also this quarter of 83 million, which then resulted in a total cash flow from operations of 235 million euros in 20th plentiful.
Going then to order intake and backlog that we had strong and good order intake both for our recycling and food in the quarter recycling order intake was the 10 billion are up versus the same quarter last year and then at 76, a millennial Rossa and Gayle Wilson and the order backlog all the hundred and seven.
Two the order intake was solid compared to the same quarter previous year, which was a very strong quarter, but still a very good order intake of 85 million euros.
And if you look then at the combined or the backlog go food and recycling. We are entering this year with an increase of 14 million euros compared to entering 'twenty 'twenty four.
The board all bathroom morale is proposing a dividend of two point 15 per share that's a 10% increase compared to previous year and this is in line with our dividend policy to pay out 40% to 60% of EPS, representing a 58% payout ratio.
And then last but not least the highlight in the quarter was really the acquisition all of us see trace which they said leading digital waste management company and we are very happy that they have now become a part of the tumor it off Tumblr.
I will then go into the different the business updates starting with collection.
I actually had a very strong quarter Q4, 'twenty couldn't before record revenues driven by the strong sales both in existing and new markets.
New markets. It was really the high preparation for all of US just go live we source of course I've done the red this year, but.
But it also means so good and continued activity level in remain now and we are seeing now increased activities in Poland.
In the existing markets. It was both the Americas, and Oh, Australia, contributing a well in the quarter.
In Australia is due to the expansion in New South Wales and also then Victoria. We spent their lives lost there where do we sit through post market and we all see in increasing revenues from Victoria.
In North America are the main contributors were linked to the modernization of the deposit scheme in Connecticut, where that increase in deposit values. So that contributed but also good sales into Michigan.
If you look at 2024, 80% of our revenue came from existing markets intended before from existing markets. We delivered a 5% the revenue growth in the year, which is in line with our strategic ambitions for existing markets.
So this gave them that for collection and not on their record quarter, but also a record year with all time highest will be of revenues and EBITDA.
On the right hand side here, we have the list of the yeah countryside that have them are approved and in place at the pulse at Lloyds.
Really good pipeline now of different countries that are planning to go live with deposit schemes and I'll go briefly through them.
First one is Poland, which is the first one the what we call the big five to come in now Europe and.
Poland is planning to go live on first so October and there is significant activity has now happened in Poland and we expect that there will be a transition period from first of October until the end of the year or so now given the activity. We see we expect Poland real love to go over roughly a two year period.
It doesn't mean that it's going to go live there just announced that they now may 1st It was announced this week, where we are the sole provider of the AR solutions and you. This is a trip with markets. So you will see the sales and then increasing gradually.
Well so they can use from Greece. This week. They have now had this a secondary legislation signed by law, They're announced startup date is a first of December this year.
Portugal.
Also are done planning startup at the ring in 10 states and to fix the final date is not really Seth.
But the system outbreak there has been a sign and theres still lots of activities happening there and we expect that the former lives days will come soon.
So far is planning to go live April 10 states with the Big scheme of bracing placed tender processes are Romney.
It or what was supposed to go live are inconsistent before.
We are now estimating 2026, but there is no unused firm dates that being announced yet.
Some span the second all of the Big five are on this.
This miss him as I assume most of you know they announce their collection rates in late last year three gearing them at the Pos it's not because they're not meeting the targets set in the single use plastic directive and in the packaging and packaging waste regulation.
And that should then three year implementation of the posted within two years.
And then it was very exciting to see U. K are then policy that the prostate the law for England, and Ireland and Northern Ireland earlier. This year. The planned commencement that is first of October and they seem to be keeping firms. So that states in Scotland is now in the Pearl system, and then their existing deposits no to them.
So much in northern Ireland, and U K, so good unhealthy pipeline, which will create significant opportunities for us over the coming years.
Then through recycling.
Recycling had a very strong quarter record revenues and EBITA.
In line with Ah They estimate the conversion ratio be communicated at last quarter and as I said initially I'm really impressed by the organization on how them on that should deliver on this because there's been a lot of machines that needed to be delivered and installed.
Also it was good to see in the quarter with a strong order intake also illustrated here at 76 million euros. This means that we start the year with an 8 million euro higher backlog for recycling than we've had in the beginning authentic thought before.
Talking now about the market sentiment.
I would say, it's more or less the same as we've had the last couple of quarter. The market sentiment in plastics recycling is still soft and we are not currently expecting a recovery of that this year.
In waste so things stayed black tea with the link to automation and so forth and we do see a good then increase activity in the aluminum also then linked to the launch of our pulse machine lost here.
Also what I said in my introduction, so record quarter, but also then for the full year.
So recycling has done that delivered in line with went it went to three which was a record year for recycling. We wish I think it's a great performance given that current market sentiment.
And then a highlight has been the agitation of the packaging and packaging waste regulation, which happened earlier this year.
I think men Theyre aware of the positive parts of the packaging and packaging waste a regulation, but there is really you know the recycled content and the recycling rates that they're going to be significant drivers for our recycling business over the next years.
Just to give you a few examples of what is part of this regulation.
Did they in Europe by roughly.
Or less than 10% of the content and plastic packaging comes from post consumer recycled plastics.
In the packaging and packaging waste regulation, there are clear targets on recycled content for different types of all plastic packaging and typically the targets are all 30 or 35% incentive Thursday, so were talking three times the current recycling content.
Another requirement in the packaging and packaging and waste regulation is that 55% of all plastic packaging needs to be collected and process for recycling.
This is a 46% increase versus the current figure wishes to 38% converting that the palms is roughly 3 million tons just to give an idea. If you then compare it with for example over feed so plants here in the Ole Red means that you will need it so until those kind of plants to meet that additional required.
So this is a very important that legislation or for circularity and the ear.
Great. Thank significant business opportunity this for over a recycling business going forward.
Then over to food also a good quarter with revenue growth over 13% are also very good to see now that we have the possibility of recovery that you will see on the graph here, giving them an EBITA with 13% in the quarter.
Very pleased that we have delivered on our cost saving programs, we have reduced our the stuffing with 20% to 311 employees and that's a reduction be.
<unk> restructured our production footprint to include anything close saying both Mrs and.
Auckland production side.
We have delivered a 30 million run rate savings.
Talking about the market sentiment there in the food area. The main weakness has really been in fresh food and what we're seeing there has been fewer large orders that those have been delayed and postponed.
This we have seen very clearly in the APAC and Asia Pacific, but also in Europe, but in Europe, we have seen very good growth over off the market compensate thing for some of the losses.
In the Americas, the momentum has picked up so much and also there we have had very good after market sales. So there are signs of improved market sentiment.
Looking at category with potatoes is continuing to be strong at coke potatoes. He is a very important category for us and also the good thing to see now is that the indications we have for the coming years. They thought this category will continue growing.
Also see threats, we see increased activity level. There has been a period with very low in the smiths into citrus processing I mean, you see now that they're speaking up both in the Americas and in that park.
Then last I'm going to talk a give a short update on our horizon portfolio. This is where we are developing business opportunities adjacent to core to create additional growth for tomorrow.
First no matter, if he'd stuck where we are solving the challenges of a plastics that are today landfilled or it's in the races. I remember, we have announced investments into two sorting plants. The beautiful picture on the bottom right here is our innovation plot, that's how it looks now.
<unk> is nearing completion on budget and on time, we will start commissioning in Q2 and this will then be ramping up our starting up doing awesome second half of this year.
The brownfield path, we expect to start up in 'twenty 'twenty six.
So whenever we yes. This is where we are solving their challenges or single use takeaway packaging. We are now celebrating one their pilot in orders are and demons felt this there have run a survey to see the satisfaction with the system may include some of the findings here. It highlights that people are annoyed by a takeaway.
Packaging industry.
That's 88% of their population are familiar with the system that we launched there and even more important all those that have used the system, 84% are satisfied or very satisfied.
750000, they reusable Cups Huston returned with a return rates of eight 7%. There's a good signals that this is a nice convenient system that people like.
Also we just announced or in there. This year that we have signed an agreement with the lease book. This is for the really B C health fatality area already spoke to where they have had this significantly through issue. They have therefore decided to ban plastic cups and the intention is that we will establish a seamless system there as we have in orders.
So I'm gonna take cells in a what's a part of our horizon portfolio.
When we establish the horizon and we have very clear or we do have very clear criteria for what should be part of this portfolio. It should be of course, something that is supporting our ambition. If there should be a business opportunity that can be substantial and become a new leg to mirror it needs to meet our profitability requirements. We have set but it also should be run.
For scaling its not an R&D activities should be business building.
Two years into textiles to be realized that this market is not mature enough to really have commercial opportunities and that's why I told them that they saw there's not any more part of the horizon portfolio, but turn into and the R&D and technology development in recycling still believing textile is going to be a significant market for us longer term.
And we are positioning us for that but currently they are not really significant commercial opportunities.
But they'll have the in addition to the portfolio, which is C. Trey said this is the acquisition we announced the Ah in October. This is said then leading German digital waste management company.
And the reason why we like see threats that you said is a good strategic and cultural fit with US. It is financially attractive and there is significant potential for synergies to develop that business forward focus now is on the on boarding and wishes are cording and progressing according to plan.
And to support seat trade on their growth journey, and they had a strong fourth quarter in line with our expectations.
With that I am my upset and I'll hand over to have all sarcoma.
Speaker Change: Thank you for that saw that and good morning from me as well. So as you have heard we have delivered.
Speaker Change: Strong Q4 in 2024, we have had a record top line in the quarter ending revenues of 398 million euros, so up 12%.
Speaker Change: Compared to the same quarter last year.
Speaker Change: We have deliver gross contribution of 181 million euros, which gives us a very strong gross margin of 46.
Speaker Change: The person that is.
Speaker Change: Mainly due to volumes, but also due to cost savings in food.
Speaker Change: Good cost control operating expenses of 103 million euros in the quarter. It gives us an EBITA adjusted of 78 million euros and as Tobi mentioned, we have had some.
Tobi: Restructuring costs are related to food in the quarter of around 3 million euros. So we're looking at the full year, we have delivered a growth of 5% on the top line at 1.348 billion euros, we have delivered increase in our gross margins in the year.
Oh, the 0.8 percentage points compared to 'twenty to 'twenty three we have managed to have good cost control on the operating expenses. It also with the food restructuring.
Tobi: We delivered an EBITA adjusted of 181 million euros, which is also an improvement compared to last year 0.9 percentage points up compared to 2023, which ends the year at 13 points for our EBITDA margin.
Tobi: Then looking into the divisions and starting with collection, we have had a rutgard topline in collection this quarter ending our revenues of 203 million euros, which is up 2% compared to same quarter last year and as we all remember Q4 last year.
Tobi: A very strong quarter.
Tobi: We have a in the quarter, we ended the actually higher than what we expected coming into the quarter, our monitoring of topline yeah around 20 million euro higher than what we expected and that is all related to the higher activity in Austria.
Tobi: In the quarter and in the year as such we have had good growth in both existing markets and also with the new Mark get are coming along and as Tobi mentioned, 80% of our revenue and collection is related to <unk>.
Tobi: Existing markets both in the quarter, but also for full year.
Tobi: When we talk about the existing Mark Yes, that's Talbot mentioned earlier, we have had good growth in Americas and also in Australia.
Tobi: Australia with adding onto Victoria as a state for deposits.
Tobi: We talk about youth market activities in the quarter, but also for full year the markets activities in new markets has mainly come from them, Austria, Romania, and Poland and Hungary in the start of the year when it comes to the hungry.
Tobi: Yes.
Tobi: So that gives us an grocer in the cluster we had a gross margin of 82 million euros, which gives us a stable and solid gross margin of 41%.
Tobi: Operating expenses in the quarter for collection is slightly up compared to Q3, a 48 million euros.
Tobi: And more or less related to U market activity that gives us an EBITDA of 34 million euros in the quarter.
Tobi: So looking at the full year, we are very satisfied with the collection and the year of 11%.
Tobi: Compared to 'twenty spent this week, we have managed to deliver solid margin above 40% and good profitability.
Yeah.
Tobi: Looking at the recycling in the quarter here, we have delivered a record revenue of 103 million euros in the quarter, so up 37% compared to same quarter last year and this was all expected as you know based on our estimated backlog conversion that we gave back in Q3.
Tobi: And as you can see on the AR on the slide we have had the good growth in Europe and in America, which has mainly been prozac deliveries into the waste management industry.
Tobi: But we have also had good growth in the quarter. It but also in the year as such into our service revenue, which is also a strategic focus for recycling going forward.
Tobi: If you look at the gross contribution under the 58 million euros, So which gives us a very strong gross margin of 56%, which is all related to the volumes in the quarter.
Tobi: Good cost control in recycling trailing a bit down compared to Q3, and it gets 18 million euros, which gives us an EBITDA of 40 million and the profitability of 39% overall for the year. Good performance are delivering a more or less along with a very strong trends.
Tobi: Three in the soft market for plastic and maintaining a solid and strong gross margins and profitability.
When we look at the order intake for the quarter that has been strong AR on the 76 million euros.
Tobi: And then when we look at the order book, we see that we have especially in a an increase in the metal business related to our pulse machine.
Tobi: So it's up 15% compared to same quarter last year.
Tobi: That gives us a strong order backlog of 107 million euros and of the air So trailing up compared to same quarter last year on a strong start for 2025.
Tobi: Then looking into huge yeah sort of has a solid quarter in Q4 are delivering in line with the expectations on the revenues at 91 million euros, so up 13% compared to the same quarter last year unless you can see we have had good growth in our main mark.
Tobi: Yes, Europe and America.
Tobi: So here, we have had good growth in AR.
Tobi: Sales of services and after Mark yet, there's just all sorts of cheesecake.
Tobi: Focus point for food and we see that for the year, we have managed to to trail upwards on the ratio of service compared to the the total revenue in in this business.
Tobi: Three and a half percentage point compared to 2023.
Tobi: Of course, the contribution in the quarter and up to 41 million euros, which gives us a strong.
Tobi: Gross margin at 45% and here you really see the effects of the cost savings the program, where we have.
Tobi: <unk> taken out a bit more than 21 million euros are in real life savings in the year. So we talk about the run rate of 30, but in the year. We have had around 21 million euros and you can see the positive effects in the gross margin.
Tobi: Operating expenses of.
Tobi: 29 million euros in the quarter. It gives us an EBITA of 12 million rose in the quarter on a 13% EBITA margin mm for food.
Tobi: Also here are very good to see that we are just trailing a bit softer than planned to 23, but we have managed to live or on the cost savings, giving us solid margins for 2024.
Tobi: Looking at the order intake in food as Tony mentioned, we are down compared to the same quarter last year.
Tobi: But it's important to mention that the we have some timing effects in the order intake and if you remember back to Q4 of last year, we had some bigger potato projects into the order intake in that quarter.
Tobi: That gives us with the 85 million is your order intake in the quarter. We ended the year at 108 million Euro order backlog, which is also a strong start the fourth Wednesday Wednesday five.
Tobi: Then over to the balance sheet and.
Tobi: We ended the year and strong on our Kpis are.
Tobi: We have a solid balance sheet the equity ratio of 38% we have a gearing at 1.6.
Tobi: The real key is trailing at 18% and we have that's working capital around 11%.
Tobi: We haven't delivered a very strong cash flow for the full year 235 million euros compared to the 137 million euros last year and in Q4, we ended our cash flow from operations of 83 million euros.
Tobi: Looking at the financial position, we have also had some activities in the quarter related to the final thing. So we have updated the renewed the civil war.
Tobi: Our credit facility at the same level at the same and also with the same maturity three plus one plus one.
Tobi: We have also included now the Green bond that we did.
Tobi: We are going in October and also we have.
Tobi: We have.
Speaker Change: Yeah, and we all we have the Undrawn credit facility with just on the 109 million.
Speaker Change: Your end of the year. So all in all in a very good position here on financing.
Speaker Change: And then over to the outlook and starting with collection.
Speaker Change: As you have heard earlier today, there are several new deposit initiatives in the pipeline and we expect higher activity related to preparation for these markets now in 2025.
Speaker Change: In addition, our existing markets and collection continues to be important for our growth and we expect these markets to continue to grow 5% in tons day 25.
Speaker Change: When we talk about new market activity to be expected in 2025.
Speaker Change: We have Australia in Romania, where we anticipate the roll out to continue throughout the year, but at a slowing pace compared to 2024.
Speaker Change: We also have Portugal on the list where saves can potentially start in the second half of the year.
Speaker Change: And then we have tough mania wishes of truth with market, where revenue will come over time and they go live now in May this year.
Speaker Change: And then we need to talk about Poland, Poland is a significant mark yet, but it's around 36 million inhabitants. So the market potential can be around 10000 machines using done.
Speaker Change: Sector off three to 4000 machines the inhabitants per machine.
Speaker Change: The go live date is now to October 1st which seems to be a very firm date, but what we can expect is that there.
Speaker Change: There will be a three month month grace period in the market.
Speaker Change: So in Q3, we said that we believe that this rollout in Poland would take around two to three years.
Now we are more confident that it will take around two years to roll off Poland.
Speaker Change: And currently what we see in the market, it's a very.
Speaker Change: Very high commercial activity and told them is absolutely a part of this but what we see as the next and interest for both the both sales and service in the market, but also the truth, but models that we offer.
Speaker Change: And that is yeah coming clear in the discussions with our customers in Poland.
Speaker Change: So the revenue levels for 2025 will highly depend on the state of smuggled that's art Houston by the customers in the Polish market. So if you would see a more saves and service model you would expect a spread of revenues over the next two years, but if it will be a more truth.
Speaker Change: That model you would see that the growth in revenue will come over time as the return rates increase.
Speaker Change: So what we believe in is that the market, but most probably be a mix of sales and service and throughput, but just kind of course change down the road when the contracts are being signed.
Speaker Change: Yeah.
Speaker Change: When we talk about the expectations for margins in collection in 2025, we believe that that should stay north of 40%. That's what we have delivered in 'twenty to 'twenty. Four we also expect opex levels to remain at the same.
Speaker Change: Same levels that we have seen in trying to send before when you think about opex over revenues and of course I would all dependent on the ramp up costs needed in 2025.
Speaker Change: So currently are we are indicating a ramp up cost level at around 20 million Euro.
Speaker Change: For the full year.
Speaker Change: Which is down in line with what we have had in 'twenty 'twenty four.
Speaker Change: And then over to recycling.
Speaker Change: And I just wanted to remind us that the important drivers continue to be a regulation the carbonization as well as the need to modernize and automate recycling sourcing process and we see that clearly with the commitment and ear with a proving done the plastic and plastic waste regulation.
Speaker Change: However, we have seen.
Speaker Change: Soft drink market sentiments in the plastic upgrading segment over the last year.
Speaker Change: And because of that we expect a slower short term growth that our strategic targets for recycling.
Speaker Change: So based on the backlog information in the pipeline information that we have today, we are confident to say that we can deliver a mid single digit growth in 'twenty to 'twenty five.
Speaker Change: And the important drivers for that will be stable activity in waste sourcing, which is that where are the largest segment in recycling.
Speaker Change: We will continue to see growth in service and after market sales as well as growth in metal and mining segments.
Speaker Change: And with this growth we have not assumed a recovery in the plastics segment, which means that that would represent the potential upsides in 2025.
Looking at the margins, we expect to deliver and to maintain strong margins in Santos 25, as we had incentive 24.
Speaker Change: The conversion ratio that'd be estimates for the coming quarter Q1, 'twenty to 'twenty five it's a 45% conversion ratio of the order backlog of 107 million euros.
Speaker Change: And then over to food we are proud to have her today to have delivered on our cost reduction program in 'twenty before with this 30 million Euro run rate in savings for the full year.
Speaker Change: And that has resulted in a delivery of a more than 10% EBITA in Q4.
Speaker Change: Profitability will remain a focus area also in 'twenty to 'twenty five in addition to them the continuation of the improvement program in food, ensuring the new organizational setup, but also the technology leadership for future.
Speaker Change: Important drivers for food, it's the demographics, the modernization and optimization for food sourcing processes.
Speaker Change: And over the last years, we have experienced a challenged market in food and even if we now see an experienced pockets of positive sentiment in the market yet we do not believe in a full recovery in 2025. So given these sectors are we indicated a low single digit growth in 2025 gross.
Speaker Change: Margins in the mid Forty's and profitability in line with the run rates coming out of 'twenty 'twenty four.
Speaker Change:
Speaker Change: And then of course further improvements on the profitability is expected when the top line growth materialize overtime for Q4, our estimate 65% of the commercial ratio of 108.
Speaker Change: Millions of Euro order backlog to be recognized as revenue in two coupons at 2025.
Speaker Change: And then over to our Horizon business. There is high activity in feedstock are with the new plant in Norway being going into operations in 2025, and then the German plants going and it's more expected into 'twenty 'twenty six.
Speaker Change: Remaining capex for these two plants are now approximately 40 million euros. So we have a timing between the 24 and 25 were then ton mainly joy is for the plastics facility in Norway.
Speaker Change: As we are planning to start operations in Norway in 'twenty to 'twenty five we will have a different the profile on the operating expenses in horizon.
Speaker Change:
Speaker Change: What are the underlying horizon operating expenses is expected to stay at the same level as we have delivered in 2020 for around eight to 9 million euros, we expect the run rate to double in 2025 with the additional cost of being fully linked to the plant operation.
Speaker Change: And I'm talking about the revenue profile for the new eastern plants, which goes into operations.
Speaker Change: Is that you should expect limited revenue in the start but then as the capacity increases the revenue will also increase.
Overtime.
Speaker Change: And having said that we expect the new eastern plants to deliver positive EBITDA as a run rate of 2025.
Speaker Change: And I think with that so we can on the Oh look I've done that and move over to Q&A. Thank you saw they never we will now open up for Q&A, we'll have 10 minutes before we plan to end at 845 today and we have a few questions coming in already.
Speaker Change: First one coming in from.
Speaker Change: At Jefferies. Please go ahead Hello.
Speaker Change: Thank you Danielle and I will keep it to just two questions then.
Speaker Change: First off you mentioned here, a little bit about Poland, and how activity levels are materializing.
Speaker Change: But maybe on the back of the delayed implementation here by a couple of months can you say anything about you know.
Speaker Change: You're too that delay how much where are you budgeting for the first half of the year end and are you really seeing a significant back end loaded year due to Poland tons now obviously as a result of that like how should we view that just in modeling purposes.
Speaker Change: So when we started the year, we have a thought about two to three years the implementation time in Poland.
Speaker Change: And then also with the firm date that that will probably change a bit and I think here. It's important to note what I said on the SaaS model that the revenue will depend on what will be a sign of it.
Speaker Change: H contract in Poland, but it's for sure a what we believe and it's a more backend loaded the Poland. The fact for collection in 2025.
Speaker Change: That makes sense and then can I just ask quickly about your expected market share in Poland.
Speaker Change: Got it for 50% in in newer markets is that what you are expecting for Poland too and then I will move on to one question of resection before I'll end.
Speaker Change: We don't give up market share for our country, but we always target to be the largest player significantly larger.
Speaker Change: Then there are there is that in at least above 50%.
Speaker Change: Can you say, if that's the case in Poland, not 50%, but if you are the largest country.
Speaker Change: So there is a lot of commercial activities that have to being as we stand here and so I'm not going to comment on that.
Speaker Change: Alright.
Speaker Change: Last name and recycling then the conversion ratio was I think pretty low and that's seasonal related to Q1 or is there anything else.
Speaker Change: No other commercial ratio that'd be indicated for Q1 is on the softer side then that's all related to timing of projects and the order backlog are what we are most probably you will see in 'twenty to 'twenty five is more like a backend loaded also year for for recycling.
Speaker Change: But still we will probably see an increase in revenues. If you look at the Q1 over Q1, 'twenty 'twenty four with us the backlog commercial.
Speaker Change: Okay I appreciate all the color. Thank you.
Speaker Change: Thank you.
Speaker Change: The next question is coming from Elliot Jones Deutsche Bank. Please go ahead.
Elliot Jones: Morning, guys. Congrats on the on the numbers this morning.
Elliot Jones: Just starting with a new market that we saw in 2024, so kind of like Oh sure.
Speaker Change: Yeah like hungry.
Speaker Change: Can you give us some color on in terms of like what percentage of that overall market is done or if we could maybe expect some teo contribution in 'twenty 'twenty five are from those from those market.
Speaker Change: Yeah. So for Austria, you would expect them the delivery to continue in 2025 mm mainly you know in Q1, that's normal after go live dates are and the start of the quarter.
Speaker Change: We also expect the continued rollout in Romania.
Speaker Change: <unk>, which is very positive they went live in 'twenty to 'twenty three mm, but I'm not going to I can't give you details on how much is really pending on the penetration of the market that such but that's kind of like on the existing markets coming into 'twenty 25, then except for Poland, which we have talked about I'm hungry.
Speaker Change: Yeah, Yeah, I'm hungry, a spa and you should not expect you know large numbers coming in from Hungary mm in 'twenty to 'twenty five, but some are would probably be materialized, but not a significant the volume.
Speaker Change: Got it thank you and then.
Speaker Change: And yeah in terms of in terms of Poland. The Octavus thought they.
Speaker Change: How should we think about kind of.
Speaker Change: Meaningful sales contribution and for that reason like like I said, it's a two year rollout but.
Speaker Change: Are you expecting some proper contribution to come in in the quarter or two quarters before that or are you still thinking it's very kind of you.
Speaker Change: Backend loaded in terms of that market.
Speaker Change: I think Poland is a very exciting yeah, you know, it's a huge opportunity there for us I have I was talking about the total potential how the revenue profile will be it will depend really on the commercial models and we are in the middle of the negotiations on that if there will be mainly sales and service you'll see quite a lot of activity.
Speaker Change: This this year also before the first of October but those off there is going to be mainly throughput you know the wall nimble and the revenue will come out late this year and really that much more next year.
Speaker Change: Well you know, we don't know where we will land the commercial negotiations are happening regardless, it's a great commercial opportunity for us that we are really focused on capturing but exactly you know how much of a lousy isn't there five versus the fixed it's very difficult to say at this stage I will keep you update those as he says discussions.
Speaker Change: Negotiations are uncompleted.
Speaker Change: Got it thanks, and then just one more from me on recycling I think you mentioned a mid single digit growth ish on the topline and tons of margin levels. I know that segment is quite linked to two volumes. A question should that if all else equal if if if you're going to see mid single digit growth.
Speaker Change: Is it fair to assume on the margin side that you're expecting a small uplift as well or is that something that could happen.
Speaker Change: Yeah. So we expect to maintain margins in line with 1% before.
Speaker Change: Trans Atlantic five so even with that the growth. So we should not expect an uplift in the margin as such.
Speaker Change: Perfect. Thank you.
Elliot Jones: Thank you Elliot.
Speaker Change: Then we will take our last question from Victoria Odyssey of Barclays. Please go ahead Victoria.
Victoria Odyssey: Good morning, guys, yes, I'll be quick and so you just wouldn't tumor horizon with tumor textiles, and all of that being taken out can we expect that should be a new venture that would be just sticking to feedstock on reuse.
Speaker Change: Yeah. So currently requires happy with the portfolio via have that'd be have either then see price, which means that we have a three <unk> and interest there also with quite different the capex requirements protocols, you have theatres, where she is over or theyre running basis with a good positive cash flow that they can build from there.
Speaker Change: So which is more capital intensive we have the reuse vicious much less capital intensive. So we feel like we have a quite a good portfolio of their current Smith of course, we are constantly screening and evaluating additional opportunities, but we don't really have anything that we are expecting to be launching their short term.
Speaker Change: Okay.
Speaker Change: And then just want to make sure I have this right on the market sentiment, so essentially you're saying that you.
Speaker Change: You are not expecting a recovery necessarily in plastics recycling to ship seed it could potentially be the beginning of a recovery is about right or.
Speaker Change: Yes, what we see in food, we are seeing in our pulse that there are signs of a market recovery, especially than in some categories.
Speaker Change: Recycling, our assumption current place that'd be able to not see a recovery this year, but of course that represents the positive upside if it comes.
Speaker Change: Great Yeah, absolutely. Thank you so much.
Speaker Change: So wood, thank you Victoria and with that we have reached the conclusion of todays presentation. Thank you everyone for tuning in next time, we report our results will be on the seventh of May and that's our Q1 results the day after our AGM.
Oscar: But with that thank you from Oscar.
Speaker Change: A happy Valentine's day.
Oscar: Okay.