Q1 2025 Tomra Systems ASA Earnings Call
Okay.
Operator: Good morning from ASKER, ladies and gentlemen, and welcome to Tomra's first quarter result presentation of 2025.
Daniel Symbol: Good morning from Oscar Ladies and gentlemen, and welcome to <unk> first quarter results presentation of 2025, My name is Daniel symbol and I'm head of Investor Relations.
Daniel Sundahl: My name is Daniel Sundahl, and I'm head of investor relations.
Daniel Sundahl: As always, CEO Tove Andersen will start by giving you the highlights of the quarter and afterwards, CFO Eva Sagemo will dive deeper into the numbers and present the updated outlook. At the end of the presentation, we will open up for Q&A for participants in the Teams webinar and the link to the webinar can be found in today's stock exchange release.
Speaker Change: As always feel to understand will start by giving you the highlights of the quarter and afterwards, CFO Isogamy will dive deeper into the numbers and present the updated outlook at the end of the presentation. We will open up for Q&A for participants in the teams webinar in the linked to the webinar can be found in todays stock exchange.
Daniel Symbol: At least.
Operator: We aim to conclude the presentation around 8pm.
Daniel Symbol: We aim to conclude the presentation around 840.
Tove Andersen: But without further ado, I give the word to Tove Andersen. Thank you, Daniel, and welcome from me as well to our first quarterly result in 2025. We report today a good first quarter in line with our expectations, both on top and bottom line. I'm especially proud of Food in a Quarter where we continue to see the benefits of the turnaround and they report record strong first quarter EBITDA and double digit growth in both revenues and new orders.
Daniel Symbol: But without further Ado I give the word to avert ambition.
Thank you Don and welcome from me as well to our first quarterly result in 2025.
Daniel Symbol: We report today, a good first quarter in line with our expectations, both on top and bottom line.
I'm, especially proud of food in a quarter, where we continue to see the benefits of the turnaround and they report record strong first quarter, EBITA and double digit growth in both revenues and new orders.
Tove Andersen: Let me then take you through the financial highlights. So we delivered a revenue of 306 million euros in the quarter, which is up 5% versus the same quarter last year. Collection was slightly down compared to a very strong quarter Q1 last year. Recycling in line with last year and then food 16% up. It's very nice to see the continued improvement in gross margin, which landed them at 43%, three percentage points up versus same quarter last year. We see improved margins in collection and also the high volumes and cost savings in food is improving the gross margins there.
Daniel Symbol: Let me then take you through the financial highlights.
So we delivered a revenue all of that 306 million euros in the quarter, which is up 5% versus the same quarter last year.
Daniel Symbol: Collections were slightly down compared to a very strong quarter at Q1 last year recycling in line with last year, and then food 16% up.
Daniel Symbol: It's very nice to see the continued improvement in the gross margin, which landed them at the 43% three percentage points up versus same quarter last year, we see improved margins in collection and also the high volumes and cost savings in food is improving the gross margins there.
Tove Andersen: Our operating expenses is 3% up in the quarter at 104 million euros. We continue to have good cost control while we are investing in future opportunities. This thing gave us an EBITDA of 26 million euros. There were no special items in the quarter and we have delivered a strong cash flow from operations of 65 million euros. Going then to order intake, the recycling order intake was soft in the quarter at 61 million euros, but we'll end the quarter with a solid order backlog of 122 million. Q2 had a strong order intake in the quarter of 87 million euro and also there we enter Q2 with a strong order backlog of 125 million euro.
Daniel Symbol: Our operating expenses that is the 3% up in the quarter are at 104 million euros. We continued to have good cost control, while we are investing in future opportunities.
This gave us an EBITDA of 26 million euros.
There were no special items in the quarter and we have delivered a strong cash flow from operations of 65 million euros.
Daniel Symbol: Going then to order intake at the recycling order intake was soft in the quarter at 61 million Euro, but we ended the quarter with a solid order backlog of 122 million.
<unk> had a strong order intake in the quarter Oasis 7 million Euro and also their Wii and their Q2 with a strong order backlog of 135 million euros.
Tove Andersen: Let me then dive into the different divisions. This collection delivered another good quarter with stable revenues compared to a strong Q1 last year. You have to keep in mind that last year we had the rollouts in Romania, Hungary and Ireland contributing to Q1. This quarter we had strong revenue growth in all regions except continental Europe due to this brief pause in new markets. In the new markets, we see a slowdown in Austria after their launch January 1st this year, but Romania actually continued to be strong despite going live more than a year ago. We actually had our highest quarterly revenue in Romania this quarter.
Let me dive into the different divisions.
Collection delivered another good quarter with stable revenues compared to a strong Q M. Q1 last year you have to keep in mind that last year, we had the rollouts in Romania, Hungary, Ireland contributing to Q1.
Daniel Symbol: This quarter, we had strong revenue growth in all regions, except continental Europe due to this brief pause in new markets.
Daniel Symbol: In the new markets, we see a slowdown in Austria after their launch it January one this year, while Romania actually continued to be strong despite going live more than a year ago.
Daniel Symbol: I actually had our highest quarterly revenue in Romania this quarter.
Tove Andersen: It's really great to see how the deposit market is developing in Romania and the high collection rates that they are achieving. Year-to-date, the collection rate for all beverage containers included in the scheme was above 87%. So this high collection rate drives the need for more collection infrastructure with our existing customers, but also we see that smaller independent stores are now investing into RVM. In existing markets, we continue to see good growth in the quarter and we are trending well to achieve our target of 5% growth in existing markets. And also very nice to see that the profitability continues to increase gradually, where we then landed in collection with a gross margin of 41%.
Daniel Symbol: And it's really great to see how the deposit market is developing in Romania, and the high collection rates that they are achieving so yet to date the collection rate for all beverage containers included in the scheme was above 80, 787%.
So this high collection rate drives the need for more collection infrastructure with our existing customers, but also we see that smaller independent stores are now investing into rvs.
Daniel Symbol: In existing markets, we continued to see good growth in the quarter and we are trending well to achieve our target of 5% growth in existing markets.
Daniel Symbol: And also very nice to see that the profitability continues to increase gradually where we then landed in collection rate the gross margin of 41%.
Tove Andersen: Also, I want to highlight Tasmania, even though that didn't happen in Q1, it happened last week, 1st of May, where we then went live with a deposit scheme in Tasmania. Tasmania is of course a fairly small market with 50 collection points featuring a bit more than 100 RVMs, and it is a throughput market. But it is an important and final step to make then Australia the first continent which is covered by the deposit return system. And we are very proud to have been selected together with our partner CleanAway to be the sole provider to Tasmania's deposit return.
Also I want to highlight just may not even though that didn't happen in Q1. It happened last week, a first of May where we then went live with a deposit scheme interest may now.
Daniel Symbol: It does mean that is of course, a fairly small market with 50 collection points, featuring a bit more than hundred rvs and it is a throughput market, but is there some important and final step to make that in Australia. The first continental which is fully covered by deposit return system and we are very proud to have been selected.
With our partner clean away to be the sole provider to test Manus depository third system.
Tove Andersen: As always, we have included here on the bottom right side the list of countries that have announced deposit return schemes with a firm gold live date as well. And as you can see, this is a strong pipeline. Of course, most exciting this year, it is Poland and Portugal. If you look at the potential for these two countries combined, the market potential, it is similar to the potential of the markets that went live between 2023 to 2024. So Poland and Portugal is similar to Romania, Victoria, Hungary, Ireland and Austria combined. And both of these markets are progressing in line with expectations and there are high commercial activities ongoing.
As always we have included this here on the bottom right side. The list of countries that have announced deposits return schemes with a firm go live date as well and as you can see this is a strong pipeline.
Daniel Symbol: Of course, most exciting this year it is Poland and Portugal.
Daniel Symbol: If you look at the potential for these two countries combined the market potential. It is similar to the bull attention of the markets that went live between 2023 eight attempted that before so Poland and Portugal is similar to romaine that Victoria Hungry, Ireland and Austria combined.
And both of these markets are progressing in line with expectations and there are high commercial activities.
Daniel Symbol: On the Gobi.
Tove Andersen: Also we got some big news regarding UK yesterday, so UK Deposit Management Organization has been confirmed as the system operator of their upcoming DRS. This is an organization representing both producers and retailers across England, Northern Ireland and Scotland, which also we will say is best practice. And this is an important step in the process to then be ready for a go live late 2027.
Well somebody got so my Big news regarding U K yesterday, so UK the posted Malnourishment organization has been confirmed as the system operator of their upcoming Drs.
Daniel Symbol: This is an organization, representing both producers and retailers across England, Northern Ireland, and Scotland, which also we will say is best practice and this is an important step in the process to them be read there Fred go live late 'twenty 'twenty seven.
Tove Andersen: Then over to Recycling. Recycling division delivered revenues in line with our expectations, marginally below the estimated conversion rate show, but it is in line with the revenue levels that we had same quarter last year. The disappointment in the quarter is the recycling order intake, which is down 16%. However, quarterly variations is normal and we had a strong order intake in Q4. And we always recommend to look at trailing 12 months when you look at order intake. And if you look at trailing 12 months, our order intake is down 3%. The lower order intake in the quarter is within waste management, mainly then in the U.S.
Then over to recycling.
Daniel Symbol: Recycling division delivered revenues in line with our expectations marginally below the estimate the conversion ratio, but it is in line with the revenue levels that we had the same quarter last year.
Daniel Symbol: The disappointment in the quarter is the recycling order intake, which is down 16%.
However, quarterly variations is normal and we had a strong order intake in Q4.
Daniel Symbol: Have you always recommend to look at trailing 12 months. When you look at the order intake and if you'll look at trailing 12 months, our order intake is down 3%.
Daniel Symbol: The lower order intake in the quarter, if everything waste management, mainly then in the U S. What we are currently seeing in the U S is football month of investment decisions and the lays all waste management projects due to macroeconomic uncertainty has been amplified by the trade War.
Tove Andersen: What we are currently seeing in the U.S. is postponement of investment decisions and delays of waste management projects due to macroeconomic uncertainty, which has been amplified by the trade war. We have had very good sales into the U.S. waste management industry the last couple of years. And this has really been driven by modernization of the infrastructure. and these type of projects can typically be somewhat pushed out in time without having a significant short-term consequences of the operations and that's what we are seeing. If you look at the metal segment or the intake in the quarter, it is in line with the same quarter last year, also then the same for ore sorting and plastic recycling.
Daniel Symbol: We have had very good sales into the U S waste management industry. The last couple of years and this has really been driven by modernization of the infrastructure and these type of projects can typically be somewhat pushed out in time without having a significant short term consequences of the operations and that's what we are seeing.
Daniel Symbol: If you look at the metal segment already in taking the quarter. It is in line with the same quarter last year also them the same for ore sorting and plastic recycling.
Tove Andersen: We have previously talked about the softness in the European plastic recycling market. And despite an increase in the ARPET prices, as shown on the graph here, we don't see signs of recovery yet, but the market has stabilized. Service revenue is important for us in the recycling division, and it represented 21% of the revenue last year. And we do see continued good development, both because we have increased the install base of 30% between 2021 and 2023. And as part of our strategy, we have increased focus on new service solutions to increase the sales of service. Services provides us with a secure recurring revenue and we expect services in recycling to grow double digit this year.
Daniel Symbol: We have previously talked about the softness in the European plastic recycling market.
Daniel Symbol: And despite an increase in the Rps prices as shown on the graph here, we don't see signs of recovery, yet, but the market has stabilized.
Daniel Symbol: Service revenue is important for us are in the recycling division and it represented 21% of the revenue lost here.
Daniel Symbol: And we do see continued good development, both because we have increased the installed base over 30% between 'twenty, one and 'twenty three.
Daniel Symbol: As part of our strategy, we have increased focus and new service solutions to increase the sales of services services provides us with a secure recurring revenue and we expect services in recycling to grow double digits. This year.
Tove Andersen: The underlying drivers for the recycling business is strong. So what we are currently seeing is not a change of the fundamentals. but rather a timing issue. where needed modernization is somewhat delayed and the race to increase the needed additional capacity to meet the legislative requirements in, for example, PPWR, has not started yet.
Daniel Symbol: The underlying drivers for the recycling business is strong so what we're currently seeing is not the change of the fundamentals.
But rather a timing issue.
Daniel Symbol: Neither modernization is somewhat delayed and the race to increase and needed additional capacity to meet their legacy their requirements. In for example, P. P. W. R has not started yet.
Tove Andersen: However, and we continue to position ourselves for the future, and I'm very proud to see that one of our renovations, the AI-based GainNext technology, has been named the Recycling Machine Renovation of the Year at the Plastic Recycling Awards in Europe. Gainnex is based upon deep learning technology and it complements our AutoSort to improve recovery and purity level. Currently we have sold 128 units of Gainnex.
Daniel Symbol: However, and we continue to position ourselves for the future and I'm very proud to say that one of our innovations. The AI based gain next technology has been named the recycling machinery innovation of the year at the plastic recycling and worse in Europe gain.
Daniel Symbol: <unk> is based upon deep learning technology, and it complements our out of sorts to improve recovery impurity level. Currently we have sold 128 units or gain next.
Tove Andersen: Thank you. As I said in my opening, I'm especially pleased with the performance of our Food Division Discord. They deliver strong revenue and order intake growth, and the profitability is improving, according to Platt. Europe and South America were the key contributors to the revenue increase. South America was particularly strong with deliveries into blueberries, cherries, and potatoes.
Daniel Symbol: And the food.
Daniel Symbol: As I said in my opening I'm, especially pleased with the performance of our food Division this quarter they.
They deliver strong revenue and order intake growth and the profitability is improving according to plan.
Daniel Symbol: Europe and South America were the key contributors to the revenue increase South America was particularly strong with deliveries into blueberries cherries and potatoes.
Tove Andersen: Due to seasonality in food, with winter in the Northern Hemisphere, the first quarter is usually the quarter with lowest activity. But for the first time, we had a positive first quarter EBITDA contribution from food. We are really seeing the effect of the Improvement Program in the future. In addition, the market sentiment has improved.
Due to seasonality and food with winter in the northern Hemisphere. The first quarter is usually the quarter with lowest active activity.
Daniel Symbol: But for the first time, we had the positive first quarter EBITDA contribution from food.
You really see the effect of the improvement program in the figures.
In addition, the market sentiment has improved.
Tove Andersen: Providing us with a strong quarterly order intake in both vegetables and potatoes and with further potential in for example Of course, there is a risk that trade tensions lead to postponement of investment decisions in food as well. However, for several segments, we see a need for investments into food sorting technology as new plantations are ready to bear fruit.
Providing us with a strong quarterly order intake in both vegetables and potatoes.
Daniel Symbol: With further potential in for example, citrus.
Daniel Symbol: Of course, there is a risk that trade tensions lead the postponement of investment decisions in food as well however for several segments, we see a need for investments into food sorting technology technology as new plantations are ready to bear fruit.
Tove Andersen: Then to Horizon, our portfolio of adjacent business building activities.
Daniel Symbol: Them to horizon, our portfolio of adjacent the business building activities.
Tove Andersen: Tomra Feedstock is entering an exciting period now. Tomra Feedstock is a venture where we focus on solving circularity of plastic. And what you see on the bottom right here is a picture from our Novation plant, advanced sorting plant, which is now entering the commissioning phase. Actually, we had the first bale going through the plant last week, and everything is progressing as planned, and the official opening is planned later this year.
Speaker Change: So I'm gonna feed suk is that entering an exciting period now tell them on a fee. So I guess I wasn't sure where we focus on solving circularity of plastics.
What do you see on the books to my right here is a picture from our innovation and plant advanced sorting plant, which is now entering the commissioning phase I study, we had the first bail going through the plant last week and everything is progressing as planned and the official opening Ah is planned later this year.
Tove Andersen: In Tomra Ureuse, where we want to solve the challenges linked to takeaway packaging, the focus is continued piloting both our city solution and our event solution. The Aarhus pilot is continuing while we are preparing for the pilot in Seatrace, the company, a smart waste management company that meet all the Bratislava to bring next level digitalization to the city's waste collection.
Speaker Change: In pulmonary reuse, where we want to solve the challenges linked to takeaway packaging. The focus is continued piloting both artistic dissolution and a rabbit solution. The orders pilot is continuing while we are preparing for the pilot in the spot.
Speaker Change: C trace at the company is smart waste management company that we thought about this love it the ring next level digitalization to this at this waste collection.
Speaker Change: Yeah.
Tove Andersen: Then, before ending my update, I want to summarize how we see the current trade war and terror situation impacting us. If we look at our total revenues, approximately 25% of our revenue is from the U.S. However, only 60% of that is based on imports from outside the U.S. and therefore our exposure tariff. As you will see from the bar in the middle, less than 5% is imported from China, while more than 95% comes from the EU. Also, what you see is that Hood is a division with the highest revenue exposure, representing approximately 60%.
Before ending my updates I want to summarize how we see the current trade war and tariff situation impacting us.
Speaker Change: If you look at our total revenues approximately 25% of our revenue is from the U S.
However, almost 60% of that is based on imports from outside the U S and therefore are exposed to tariffs.
Speaker Change: As you will see from the bar in the middle less than 5% is imported from China, while more than 95% comes from the year.
Speaker Change: Also what you see is that food is a division or with the highest revenue exposure representing approximately 60%.
Tove Andersen: And we have looked at the effects, both as first-order effects and second-order effects. So if you first look at the first-order effects, that is really the direct tariff effect on our COX, we estimate it to be maximum one percentage point on our gross margin. And this estimate is based on a scenario where the EU tariffs will go up to 20% and the China tariffs stay as is today at 145. So the impact in recycling and collection is estimated to be marginal, but we will get a Q2 impact in food on the import from China.
And we haven't looked at the FX bolt, that's first order effects and second order effects. So if you first look at the first order effects that is really the direct tariff effects are on a rig cooks, we estimate it to be maximum maximum one percentage point on our gross margin.
Speaker Change: And this estimate and then based on this scenario, where the EU tariffs will go up to 70% in the China terrorists stay as is today at 145.
Speaker Change: So the impact in recycling and collection is estimated to be marginal, but you'll get the Q2 inviting food on the import from China.
Tove Andersen: Going forward, different mitigating actions will limit the impact. Second order effects are, of course, harder to estimate as the situation is constantly evolving, but we see both challenges and opportunities arising from the situation. Tariff uncertainty and lowered GDP growth may delay recycling and food customers' investments. However, our global customer base and diversified segment exposure balances the region. The collection division is deemed to be largely unaffected.
Going forward different mitigating actions will limit the impact.
Speaker Change: Second order effects are of course harder to estimate at the situation is constantly evolving, but we see both challenges and opportunities arising from the situation.
Speaker Change: Tariff uncertainty and lower GDP growth may delay, a delay recycling of food customers investments.
Wherever our global customer base and diversified segment to explore her balance is at risk.
The collection division is deemed to be largely unaffected.
Tove Andersen: On foreign exchange, our main exposure is towards Europe. The strengthening or weakening of Euro toward other currencies of 10% will normally decrease or increase, respectively, EBITDA with 5%. And if we focus on the US dollar and euro exposure, if the US dollar weakens in line with forecasted FX curves, that is 10% weakening towards the euro up until the end of the year and with everything else equal, this may impact our EBITDA percentage negatively with 1% decline. Wherever we do have a currency hedging strategy is in place for future predicted cash flows to mitigate.
Speaker Change: On foreign exchange I remain as bullish or east to West Euro.
Speaker Change: A strengthening or weakening of euro toward other currencies of 10% will normally decrease or increase respectively, EBITA with 5%.
And if you focus in on the U S dollar and euro exposure if the U S. Dollar weakens in line with forecasted the ethics curse that there's a 10% weakening Dorothy you yeah. The euro up until the end of the year and with everything else equal This may impact our EBITDA percentage negatively with one person at this point.
Speaker Change: Wherever we do have a currency hedging strategy is in place for future predicted cash flows to mitigate the effects.
Tove Andersen: But we also see opportunities arising from the situation. Increased focus on supply security and reduced global trade will increase the need for more recycled materials and circular systems. And for food, changes to trade laws can create new export markets and thereby increase the need for investment into food grading and sorting equipment. In Tomra, we are well positioned to handle both the first order and the second order effects linked to the trade. We are diversified, operating in many segments and all regions of the world. And we do have an agile can-do culture, which means that we're able to just.
Speaker Change: But you also see opportunities arising from the situation.
Speaker Change: Increased focus on supply security and reduced global trade will increase the need for more recycled material and circular solutions.
Speaker Change: And for food change just a trace loss can create new export markets and thereby increase the need for investment into food grading and sorting equipment.
Speaker Change: Since we are well positioned to handle both the first order and the second order effects linked to the trade War.
Speaker Change: We are diversified operating in many segments and all regions of the world.
Speaker Change: And we do have an agile can do culture, which means that we're able to address quickly.
Tove Andersen: So we are monitoring the situation closely to adapt, as and when we see fit, to mitigate the impact and to explore the opportunity.
Speaker Change: So we are monitoring the situation closely to adapt as and when we see fit to mitigate the impact and to explore new opportunities.
Eva Sagemo: With that, I will hand over to Eva. Thank you for that, Tove, and good morning from me as well. Starting with the Group P&L, we ended the revenues at 306 million euros, which is then 5% up compared to Q1 last year. The quarter on top line has been according to our expectations, and we have had a good quarter in March. We are very pleased to see the improvement of the gross margin ending at 43%, up 3 percentage points compared to same quarter last year. As said, we have a strong cost control in the group, OPEX, ending at 104 million euros in the That gives us an EBITDA of €26 million and an improvement in profitability with 3 percentage points ending at 8% in the quarter.
Emma: With that I will hand over to Emma.
Emma: Thank you for that for that and good morning from me as well starting with the group the P and L. A we under the revenues at 306 million euros, which is down 5% up compared to Q1 last year.
Speaker Change: Walter on topline has been according to our expectations are.
Speaker Change: And we have had a good quarter and somewhere.
Speaker Change: We are very pleased to see the improvement of the gross margin on that and the at 43% a three percentage points compared to same quarter last year.
Speaker Change: So do we have a strong cost control in the group Oh FX ending at 104 million euros in the quarter that gives us an EBITDA of 26 million euros and an improvement in profitability with three percentage points ending at 8% in the cluster.
Eva Sagemo: Then moving over to collection. Top line ended at 185 million euros, slightly down 2% compared to a very strong Q1 last year where we had high activities from new markets. This quarter, the strong performance, we have had strong performance in existing markets with the contribution from both innovation, but also good throughput volume. In new markets, we have had a decline compared to the high activity in Q1 last year. But that is as expected due to the timing of the rollout in new markets.
Speaker Change: Then moving over to collection topline ended at a 185 million euros.
Speaker Change: Slightly down two for SUNS compare from compared to a very strong Q1 last year, where we had high activities from EU markets.
Speaker Change: This quarter are the strong performance are the we have had strong performance in existing markets with the contribution from both innovation, but also good Jess Ruth the volume's in Nu Mark Yes, we have had a decline compare to that and high activity in Q1 last year.
Speaker Change: But that is as expected due to the timing of the rollout in new markets.
Eva Sagemo: This quarter, new markets represent approximately 15% of the revenue, and we classify or categorize Romania, Poland and Portugal, but also Austria as new market in the quarter. There's mainly revenue coming in from Romania and Austria in the quarter related to new markets.
Speaker Change: This culture, new markets represents approximately 15% of the revenue.
Speaker Change: And a week justify or cast with grass, Romania, Poland, and Portugal, but also Austria as new market in the in the quarter, there's mainly revenue coming in from Romania, and Austria in the quarter related to new markets.
Eva Sagemo: Good to see improvements in gross margins in collection. We are now trailing at 41% in the quarter, up 1% percentage point compared to same quarter last year. Good cost control in the collection, ending the OPEX at 46 million euros, which gives us an EBITDA of 30 million euros.
Speaker Change: Good to see improvements in the gross margins in collection, we are in a trailing at 41% in the quarter up 1% a percentage point compared to same quarter last year.
Good cost control in the collection and the affects that 46 million euros, which gives us an EBITDA of 30 million euros.
Eva Sagemo: Moving over to recycling. And in recycling, the revenues came in at 46 million euros, according to our expectations, slightly lower than the ratio that we indicated back in Q4. We have had lower revenues in America, that is due to timing of orders. And as you probably remember, we had very strong revenues in from that market in Q4. In the quarter, we have had strong performance in aftermarket sales and in service. The gross margin ended at 45%, a softer margin compared to the same quarter last year on the same volumes, but that is due to the product mix in the Good cost control in recycling, ending the OPEX at 21 million euros in line with the same quarter loss.
Speaker Change: Moving over to recycling and recycling the revenues came in at 46 million euros. According to our expectations slightly lower than the ratio that we indicated back in Q4.
Speaker Change: We have had lower revenues in Americas and that is due to timing of orders and as you probably remember we had very strong revenues in from that market in Q4.
Speaker Change: In the culture, we have had a strong performance in after market sales and in service sales.
The gross margin ended at 45% a softer margin compare to the same quarter last year on the same volumes, but that is due to the product mix in the quarter.
Speaker Change: Good cost control in our recycling ending the Opex of 21 million euros in line with the same quarter last year that gives us a EBITA of minus one percentage point.
Eva Sagemo: That gives us an EBITDA of minus one percent. Oh, one percent. Sorry.
Oh, 1% sorry, Luke.
Eva Sagemo: Looking at the order intake that has been soft in the quarter, as we have seen over quite some time, we have had a softer market sentiment in Europe for plastics, but also now in the quarter, we see postponements in the US within the waste management segment. We are down 16% compared to same quarter last year, ending at 61 million euros. However, as Tove said, it's important to look at the trailing 12 months, and we are down then 3% on the trailing 12 months.
Speaker Change: Looking at the order intake that has been soft in the quarter I'm actually I've seen over quite some time, we have had a a softer market sentiment in the Europe for plastics, but also now in the quarter, we see postponements in the U S within the waste management a segue.
Speaker Change: <unk>.
Speaker Change: We are down 16% compared to same quarter last year on the 61 million euros.
Speaker Change: However, as sort of a sad it's important to look at the trailing 12 months and we are down and then 3% on the trailing 12 months order backlog and so that's 122 million euros in the quarter.
Eva Sagemo: Order backlog and set €122 million in debt.
Eva Sagemo: Over to food. Food has had a strong performance on top line ending revenues at 17 million euros in line with the conversion ratio that we indicated back in Q4. We have had especially strong performance in our main markets, which is Europe and in America. It's also very good to see the improvement in the gross margins ending at 44%. Quite a good improvement compared to Q1 last year. And it's related to the cost saving program, but also on the volume side. Good cost control, coming from of course the cost savings program, but also that we have continued strong focus on cost in the business division.
Speaker Change: Or what's your food our food has had a strong performance on top line ending M revenues at 17 million euros in line with the conversion ratio that we indicated back in Q4.
Speaker Change: Oh, we have had especially strong performance in our main markets, which is Europe and in Americas is also very good to see the improvement in the gross margins ending at 44%.
Speaker Change: Quite a good improvement compared to Q1 last year and it's related to a cost saving program, but also on the volume side.
Speaker Change: Yep good cost control.
Speaker Change: Coming from of course, the cost savings program, but also that we have continued strong focus on cost in the business Division. So we under the Opex of 27 million euros in the quarter.
Eva Sagemo: So we ended the OPEX at 27 million euros in the quarter.
Eva Sagemo: and that gives us a positive EBITDA for the quarter first ever in the first quarter in food and we are very pleased with the results giving us a EBITDA of EBITDA margin of five percent. Looking at the order intake, we are up 13% in the quarter, ending at 87 million euros. And we have seen especially good intake in core categories being vegetables and... Looking at the trailing 12 months in food, we are up 3%. And we end the quarter with a very strong order backlog of 125 million euros.
Speaker Change: That gives us a positive EBIDTA mm for the quarter, a first ever in the first quarter in food and we are very pleased with the results, giving us a EBITA EBITA.
Speaker Change: EBITDA margin of 5%.
Speaker Change: Looking at the order intake are we are up 13% in the quarter ending at 827 million euros, and we are seeing especially good intake in our core categories being at vegetables and potatoes.
Speaker Change: At the trailing 12 months in food, we are up to 3%.
Speaker Change: In the quarter with a very strong order backlog of 125 million euros.
Eva Sagemo: In the quarter, or at the end of the quarter, we have a strong and healthy balance sheet. And as you can see from the KPIs on the slide, we have Strong cash flow from operations ending at 65 million euros compared to the 19 million euros in Q1 last year. And that is the result from higher profit in the quarter, but also that we operate with lower working capital now being at 10% end of year. We have an equity ratio of 38% and a gearing of 1.2%. Looking at the return on capital employed, we are trailing now at 19% above the strategic target that we have set for Tomra at 18%.
Speaker Change: In the quarter or at the end of the quarter. We are we have a strong and healthy balance sheet and as you can see it from the Kpis on this slide we have.
Speaker Change: Our strong cash flow from operations and the 65 million euros compared to the 19 million euros in Q1 last year and that is the result from higher profit in the quarter, but it also that'd be operate with lower working capital now being at 10%.
Speaker Change: End of Q1.
Speaker Change: We have an equity ratio of 38% and a gearing of 1.6.
Speaker Change: Looking at the return on capital employed we are trading now at 19% above the strategic target that we have set for Tumblr at 18%.
Speaker Change: Yeah.
Eva Sagemo: And then on the financial position, as you can see on the slide, we have a good spread of weighted average debt maturity, now being at 4.1 years. And looking at the undrawn facilities, we end the quarter at 143 million euros.
Speaker Change: And then on the financial position S. S. You can see on the.
Slide we have a good spread of weighted average debt maturity now being at 4.1 years I'm looking at the Undrawn AR facilities, we end the quarter at 143 million euros. So in a good financial position for future.
Eva Sagemo: So in a good financial position for finance.
Speaker Change: Yeah.
Eva Sagemo: And then over to the Outlook, and we start with collection. It's a high activity. High activity is expected in both existing and new markets in 2025. The activity and growth in existing markets this year is driven by replacement sales, introduction of new innovation, as well as volume growth in throughput markets. Looking at the new markets, the activity is expected from Romania. Even with that market going live back in 23, the rollout is expected to continue, but at a slowing pace throughout the year. As we have heard today, Q1 was the strongest quarter in Romania, where we have had sales to both existing customers, but also to smaller independent stores.
Speaker Change: And then over to the outlet S. A and we start with collection.
Speaker Change: It's a high activity high activity is expected in both existing and new markets in 25.
Speaker Change: The activity and growth in existing markets. This year is driven by replacement sales introduction offend you innovation as well as volume growth in truth it markets.
Speaker Change: Looking at the new Mark gets the activity is expected from Romania.
Speaker Change: Even with that the market going live back in 'twenty three the roll out is expected to continue but at a slowing pace throughout the year.
Speaker Change: Actually I've heard today Q1 was the strongest quarter in Romania, where we have had sales to both existing customers, but also just smaller independent stores and the sale is driven by consumer behavior and high deposits returns and we expect them says to continue due to the technology need to handle the higher deposit volumes in the car.
Eva Sagemo: And the sale is driven by consumer behavior and high deposit returns. And we expect sales to continue due to the technology need to handle the high deposit volumes in the country trailing now above 87% year-to-date. The next new market is Poland, and the market plans to go live in October this year, and we expect sales to materialize in the second half of the year. As mentioned earlier, commercial activity in the market is high, and we expect that retailers are beginning preparations for the go-live date. Back in Q4, we mentioned that we experienced an interest for both sales and service, but also throughput sales, which is also currently the case, and we believe that the market will be a mix of those, but we are leaning now more towards sales and service.
Speaker Change: Tree trailing now above 87% year to date.
Speaker Change: The next few Marquette is Poland and the market tends to go live in October this year, and we expect things to materialize in the second half of the year as mentioned earlier at commercial activity in the market is high and we expect that retailers are begin the preparations for the go live dates.
Speaker Change: Back in Q4, we mentioned that we experience in high or an interest for both sales and service, but also truth grew its sales.
Speaker Change: Which of those are currently the case and we believe that the market will be a mix of those but we are leaning now more tumor sales and service.
Eva Sagemo: And how much Poland will contribute to the collection growth in 2025 will depend on the sales set up and also contracts being signed in the year. And we expect the rollout to continue into 2026 and also in 2036. The next market is Portugal. High activity in Portugal as well, and the market plans to go live early 2026. We expect them sales towards the end of the year related to this market.
And how much phone and will contribute to the collection growth in 'twenty five will depend on the sales setup and off of contracts being signed in in the year and we expect the rollout to continue into 'twenty tend to fix and also in 'twenty seven.
The next market is first to go high activity are in Portugal, as well and the market tends to go live early 'twenty six we expect unsafe towards the end of the year are related to this market and then of course mentioning to me now that went live just last week.
Eva Sagemo: And then, of course, mentioning Tasmania that went live just last week. It's a small throughput market, but nevertheless, we will have revenue coming in from that market over time.
Speaker Change: Weak, it's a small throughput mark yet, but nevertheless, we will have revenue coming in from that market and over time.
Eva Sagemo: So all in all in connection, we expect a revenue growth in 25 of approximately 5% in existing markets, whilst growth in new markets will highly depend on the sales models in Poland. Gross margins should stay above, should stay north of 40%, and then on the OPEC's revenue levels for full year, then excluding the ramp-up variation, should stay in line with the 2024 run rate. And currently for ramp-up, we are trailing on a full year run rate at 20 million euros. Then over to recycling, the underlying drivers for recycling business is still strong, being regulation, decarbonization, as well as the need for modernize and ultimate recycling sorting process.
Speaker Change: So all in all in collection, and we expect our revenue growth and 25 of our approximately 5% in existing markets why is the growth in new markets will highly depend on the sales models in Poland.
Speaker Change: Gross margins should stay above Ah I should say north of 40% and then on the Opex or revenue levels for full year and then excluding the ramp up a variation should stay in line with the trends of 24 run rate and are currently for ramp up but we are trailing on affiliate.
Speaker Change: Our run rate at the 20 million euros.
Then over to recycling.
Speaker Change: <unk>.
Speaker Change: Underlying drivers for our recycling business is still strong being regulation de carbonization as well as the need for modernize and automate recycling sorting processes.
Eva Sagemo: And even with important commitments in EU for packaging, we experience a softer market sentiment in, for example, plastic recycling. On top, the increased macroeconomic uncertainty and trade tension lead to slower short-term growth, especially down in the waste management segment in the U.S. We still expect growth in 2025 in recycling, but lower than the previous indicated mid-single-digit growth for the year. Where we will end the year will depend on the development of the macroeconomic situation. Looking into growth, important drivers continue to be growth in the service and aftermarket sales, as well as the growth in the metal segment.
Speaker Change: And even with importantly commitments in the EU for packaging, we experienced in the softer market sentiment in for example, plastic recycling on topped the increased macroeconomic uncertainty and trade tension lead just lower short term growth, especially down in the waste management segment in U S.
Speaker Change: We still expect growth in 'twenty 'twenty five in recycling, but lower than the previous indicated mid single digit growth for the year.
Where we will end the year will depend on the development of the macroeconomic situation.
Speaker Change: Looking at the gross important drivers are continued to be a growth in the service and after market sales as well as the growth in the metals segment.
Eva Sagemo: We expect strong cost control in this business division and to maintain healthy margins. However, product mix may reduce full year margin with approximately one percentage point.
Speaker Change: We expect strong cost control in this business division and to maintain healthy margins. However, our product mix and reduced full year margin may reduce film out year margin with approximately one percentage point and then we were talking about the EBITDA margin.
Eva Sagemo: And then we're talking about the EBITDA. We estimate a 50% conversion ratio of the order backlog to be recognized as revenue in Q2. However, given the market uncertainty, we may experience orders being postponed over the quarters, which could push the conversion ratio some percentage points down in Q2.
Speaker Change: We estimate a 50% conversion ratio off the order backlog to be recognized as revenue in Q2, however, given them a market uncertainty, we may experience orders being postponed over the quarters, which could push that conversion ratio some percentage points down in Q2.
Eva Sagemo: Over to food. The need for optimization and increased quality and safety requirements create opportunities mid and long term for our food business. We are currently seeing a positive shift in the market sentiment following two years of challenging conditions.
Over to food are the need for optimization and increased quality of quality and safety requirements create opportunities mid and long term for our food business. We have currently is seeing a positive shift in the market sentiment following two years of challenging conditions. However, it renewed.
Eva Sagemo: However, renewed macro uncertainty may impact customers' investment willingness. with a positive momentum in the order intake and that in several segments there is a need to invest in food sorting technology as new plantations begin producing fruit. And we are keeping then our full year outlook with an indication of low single-digit growth in 2025 for food. We expect gross margins in the mid-40s and profitability of 10-11% EBITDA. Further improvement of profitability is expected when the top line growth materializes.
Speaker Change: Macro uncertainty may impact customers invest since willingness.
Speaker Change: Where the positive momentum in the order intake and that in several segments and there is a need to invest in food sourcing technology.
Speaker Change: New plantation plantations being producing begin producing food fruit and we are keeping them, our full year outlook and an indication of low.
Speaker Change: Single digit growth in 'twenty 'twenty five for food.
Speaker Change: We expect the gross margins in the mid Forty's and profitability of 10% to 11% EBITA.
Speaker Change: And further improvement of profitability is expected when the top line growth materializes.
Eva Sagemo: Important to mention is that we expect extra COGS in Q2 of approximately 4 million euros created to tariffs in EU. And for the rest of the year, we plan with mitigating actions to limit the impact from trade. Based on the order backlog, end of Q1, we estimate a 75% conversion ratio of the order backlog to be recognized as revenue in Q2.
Speaker Change: Important to mention is that we expect extra cooks in Q2 of approximately 4 million euros created to tariffs in U S.
Speaker Change: And then for the rest of the year, we plan with mitigating actions to limit the impact from the trade War.
Speaker Change: Sure.
Speaker Change: And based on the order backlog end of Q1, we estimate a 75% commercial ratio.
Speaker Change: After the order backlog to be.
Speaker Change: I recognize this revenue in Q2.
Eva Sagemo: And then lastly, on Horizon, we have... High Activity in Feedstock, where the Norwegian plant Omra will start operations in 2025, whilst the German plant is expected done in 2026. Remaining cutbacks for these two plants is approximately 40 million euros for the year, where 10 million euros is remaining for Omra. Year-to-date we have spent around 6 million euros.
Speaker Change: And then lastly on horizon, we have.
Speaker Change: Hi activity in feedstock, whether new eats implant Omar will start operations in 25 waves. The German plant is expected then in 'twenty six remaining capex for these two plants is approximately $40 million, you're all set for the year, whereas 10, mainly euro is our remaining for Omar.
Speaker Change: Our year to date, we have spent around 6 million euros.
Eva Sagemo: As we prepare to begin operations in Norway, we anticipate a shift in the operating expenses for Horizon. The run rate for the year for Ryerson will be approximately at 2024 levels, but on top we will have an increase. So we will double the run rate and the increase will be entirely driven by the costs associated with the plant operations in Norway. Looking at the revenue profile, the plant in Norway is expected to be modest at launch but will grow in line with ramp up in capacity over time.
Speaker Change: As we prepare to begin operations in Norway, we anticipate the shift in the operating expenses for horizon.
Speaker Change: Hum we will.
Speaker Change: The run rate for the Euro for Rice, and there will be approximately at the times, it's 94 levels, but on top we will have an increase so we will double the run rate and the increase will be entirely driven by the costs associated with the plant operations in Norway.
Speaker Change: Looking at the revenue profile the the plant in Norway is expected to be modest at launch, but we'll grow in line with ramp up in capacity overtime.
Eva Sagemo: And that's that. We expect the plant to reach a positive EBTA run rate by the end of 2020.
Speaker Change: And that's that we expect the plan to reach a positive EBITDA run rate by the end of a 2025.
Operator: And with that, we end the Outlook session, Daniel, and move to Q&A. Thank you, Tove and thank you, Eva.
Speaker Change: And with that we on the succession, there Danielle and move to Q&A. Thank.
Speaker Change: Thank you till then thank you have a will move over to Q&A and we have for questions coming in.
Elliott Jones: We'll move over to Q&A and we have four questions coming in, starting with Elliott Jones at Danske Bank. Please go ahead. Morning guys, congrats on the results. Just in the collection section, we heard about tariffs.
Speaker Change: Starting with Elliot Jones.
Speaker Change: Goodbye.
Please go ahead.
Speaker Change: Good morning, guys. Congrats on the results Justice and the collection of Sag section, we just thought about tariffs.
Tove Andersen: How are your confidence levels, say in Poland now versus the Q4 stage with regards to Poland contribution later on in the year? With your conversations with the customers, has that changed? Have you heard them talking about tariffs over here in Europe a lot or in that segment, is it a much more kind of limited? Yeah, no, as I said, when I talked about tariffs in general, we think that the collection division is not really significantly or will not really be impacted by the tariffs, not on both direct and indirect effects. Poland is progressing according to plan, commercial discussions are progressing according to plan, the setup is also then progressing well, so we don't see any changes there.
Speaker Change: Your confidence levels say in Poland now versus the Q4 stage with regards to the pylon contribution electronic media is.
Speaker Change: When you are.
Speaker Change: Conversations with customers is that.
Speaker Change: Has that changed have you had them talking about Paris of air in Europe or in that segment is a much more kind of a limited.
Speaker Change: Yeah, no as I said, when I talked about tires and turn all of US think that the the collection division is not really significant they'll real not really be impacted by the tariffs north on both our direct and indirect that affects Poland is progressing according to plan and commercial.
Speaker Change: All discussions are progressing according to plan. They set the base also then progressing well. So we don't see any changes there you actually see I would say you know, it's a firmer now than that last quarter. Because we have seen that you know that things are progressing as expected.
Elliott Jones: We actually see, I would say, you know, it's firmer now than last quarter, because we have seen that, you know, the things are progressing as expected. Got it, thank you. Thank you, Elliott.
Speaker Change: Got it thank you.
Speaker Change: Yeah.
Speaker Change: Thank you Elliot and the next question is coming from Adela Duchemin.
Adela Dashian: And the next question is coming from Adela Dashian at Jefferies. Please go ahead, Adela. Thank you, Daniel. I'm going to continue on Poland, if that's OK. Could you maybe just help us understand? I mean, you are expecting revenues to ramp up now in H2, but the market is going live in October. And it seems like there is, at least not in this quarter, any revenue contributions from Poland. Have you have you sold a single machine to that market yet? And if the case is no, then is that because you're still in agreements about what type of or waiting to hear about what type of model that would go live, which is delaying the agreement processes?
Jefferies: Jefferies. Please go ahead that dealer.
Speaker Change: Thank you Danielle.
Speaker Change: I'm going to continue on the whole loan if that's okay.
Speaker Change: Could you maybe just help us understand I mean are.
You are expecting.
Speaker Change: Revenues to ramp up now in H, two but the market is going live in October and it seems like there is.
Speaker Change: At least not in this quarter and he brought in three new contribution from Poland.
Speaker Change: Have you have you sold a single machine to that market yet.
And and if the case is no then.
Speaker Change: Is that because you're still in in agreements about what type of or waiting to hear about what type of model that wouldn't go live which is delaying the agreement processes.
Tove Andersen: So we have signed contracts in Poland, we have installed more than 1,000 reverse running machines in Poland. The goal line is set to be October 1st, but also as we communicated before, we expect that it will be at least a three month grace period, so probably the firm goal line will be more end of the year. Got it. So so there has been a machine sold in H1 already to the Polish market. Okay. And last year and last year. So it's not significant in Q1, but we have then already now more than 1000 machines. But we expect in a way to be a busy period from now till the end of the year in Poland.
Speaker Change: And so we have signed contracts in Poland, we have installed more than palace in the reverse vending machines in Poland are they go live is set to be October 1st but also as we communicated before we expect that there will be at least a three month Grace period. So probably there for go live will be more at end of the year.
Speaker Change: Got it. So so there has been a machine sold are in each one of attitude to the Polish market and lost there and lost there. So there's nothing okay, great that in Q1, but we have than that already now more than thousand machines installed.
Speaker Change: That will be but we expect in the way that they are busy period [laughter] from now till the end of the year in Poland.
Adela Dashian: Okay, great. That's all for me. Thank you. Thank you, Adela.
Speaker Change: Okay, Great. That's all for me. Thank you.
Angela: Thank you Angela.
Victoria Adesina: And the next question is coming from Victoria Adesina at Barclays. Please go ahead, Victoria. Hi everyone, here on behalf of Goro Jane, just to see from me, so in recycling obviously we've seen order intake is slightly down, gross margin slightly down as well year on year, but then OPEC still remains, you know, at slightly elevated levels.
Speaker Change: And the next question is coming from Victoria.
Victoria: At Barclays. Please go ahead Victoria.
Victoria: Yep Hilton houses Gore Jane just a few from me. So it was slightly obviously be seen order intake. It's like down gross margins like you Don is arguing here, but then okay. Opex still remains you know.
Speaker Change: The elevated levels could it be the case that there needs to be some restructuring.
Tove Andersen: Could it be the case that there needs to be some restructuring here, or is there something that we're missing? So recycling, first of all, you know, recycling is a well-run, very profitable business for Tomra. We believe in the future prospects of growth. However, we are always looking at cost optimization and operational excellence. And I think recycling has always shown that they've had good cost control. So this is something that we work on as a continuous improvement agenda, but we don't see a need for a significant restructuring in the recycling division. We have consistently delivered EBITDA above 20% in that division.
Victoria: That's something that we're witnessing.
Victoria: As a recycling first of all you know in recycling is a well run very profitable business for them and I I, we believe in the future prospects of growth. However, we are always looking at cost of amortization and operational are excellent excellence and I think recycling has always shown that they have had the good costco.
Victoria: So this is something that we work on continuous improvement agenda, but we don't see a need for a significant restructuring in the recycling division, we have consistently delivered that and EBITDA above EBITDA EBITDA about 20% in that business.
Operator: Okay, I think we lost Victoria, but if she has a follow-up question, we'll...
Victoria: Okay, I think we lost the Victoria, but it's.
Just a follow up question will.
Operator: We'll bring her back later.
Victoria: We will bring her back later.
Victoria: The next.
Thomas Darling-Ness: The next question is coming from Thomas Darling-Ness at Sparbank1. Please go ahead, Thomas. They might have some technical... issues. There we go. Can you hear me now? Now we can hear you, Thomas. Okay, great. Great. Good morning, guys. You're saying that the tariffs may delay food and recycling orders.
Speaker Change: The next question is coming from Thomas Sterling This barbaric.
Please go ahead Thomas.
Speaker Change: Oh.
Speaker Change: We might have some technical.
Speaker Change: Issues.
Speaker Change: There we go China can you hear me now now we can hear you Tomas Okay, great great. Good morning, guys.
Speaker Change: You're saying that that the charges may delay food and recycling orders and I'm, saying that we are half way through the second quarter already could you give us some more color on the current impact you're seeing.
Tove Andersen: And seeing that we are halfway through the second quarter already, could you give us some more color on the current impact you are seeing on order intake? Yeah, so we don't necessarily give indications on the order intake in the quarter, unless given kind of like the outlook going forward. And what we say is that we expect a softer dynamics on the recycling side, but also that in food, that it might impact orders going forward when we talk about the uncertainty in the market related to macro. Remember that we have had a strong intake in food this quarter and a softer order intake in recycling.
Speaker Change: On order intake.
Speaker Change: Yeah. So we don't necessarily give indications on the order intake in the quarter, it unless giving kind of like the outlook going forward and what we say is that the we expect our a softer dynamics on the recycling side, but oh.
Speaker Change: That in food that it might impact the orders going forward when we talk about the uncertainty in the markets related to macro.
Speaker Change: And remember that we have had a strong intake in food are this quarter and a a softer order intake in recycling, but please look at the trailing 12 months I think that is the best indication and then we need to come back to the order intake in Q2 four for Q2 reporting.
Tove Andersen: But please look at the trailing 12 months. I think that is the best indication. And then we need to come back to the order intake in Q2 for Q2. Yeah, you know, obviously, I didn't want any concrete, concrete figures. It's more is it is it kind of a 5%, 10% impact? Or is it like, yeah, we got preliminary truck orders in April. Yesterday or Friday, it was down 50% year over year. So it was more in kind of the magnitude of impact. We have given them an updated guidance for the year, where we say that we expect to still have growth in the recycling division.
Speaker Change: Yes.
Speaker Change: Obviously I didn't want any concrete concrete figures as more is it is it kind of a 5% 10 presented in factories at site.
Speaker Change: Preliminary truck orders in April yesterday on Friday, It was down 50% year on year. It was more in kind of the magnitude of impact.
Speaker Change: You need to and we have given them an update to the guidance for the year, where we say that we expect you know to a steel how growth there in the recycling division. So I think that gives an indication of them based on what we see so yes, we do see some postpone them, but we are a very diversified business operating in the many different the same.
Tove Andersen: So I think that gives an indication based on what we see. So yes, we do see some postponement, but we are a very diversified business operating in many different segments and regions of the world. So yes, we see some impact, but still we believe that we'll be able to deliver growth in the recycling division.
Speaker Change: Men's in regions of the World. So, yes, we see some impact but that you know are still we believe that we will be able to deliver growth in recycling this year.
Operator: Okay, thank you. Absolutely.
Speaker Change: Okay. Thank you I think you had given the current market sentiment.
Tove Andersen: Could I also add just one quick question on the cost side? You're saying that you're able to... there will be some impact on COGS in... second quarter but then you will be able to impact the tariffs going forward. Is that the full effect or should we expect kind of a gradual implementation of those mitigating effects? Yeah, so we have, based on the order backlog and what we are going to deliver in, we know that we will have an impact of around $4 million for food. We have been working a lot over quite some time now, looking into mitigating actions.
Speaker Change: Absolutely.
Speaker Change: Can I also just one quick question on the cost side, you're saying that you're able to to two there will be some impact on Cogs and in <unk>.
Speaker Change: Second quarter, but then you will be able to impact the tariffs going forward is that the full effect or should we expect kind of a gradual implementation of those mitigating effect.
Speaker Change: Yeah. So we have based on the order backlog and what we are going to deliver in a we we we know that we will have an impact of around 4 million for food. In Q2 are we have been working a lot over quite some time now looking into mitigating actions are being of course of how we are pricing our products.
Thomas Darling-Ness: Being, of course, pricing our products, how we are looking at the terms and conditions in the contracts, and so on and so forth. So that's also why we believe, when we look into Q3 and Q4 and the rest of the year, that we will limit the impact, but we can't promise a zero impact. So we need to go back, come back to that. Thank you. Thank you so much. Thank you, Thomas.
Speaker Change: How we are how we are.
Speaker Change: Looking at the terms and conditions in the contracts and so on and so forth. So that's also why we believe our into when we look into Q3 and Q4 and the rest of the year that are we will.
Speaker Change: Limit the impact, but we can't promise of zero impact and so we need to go back come back to that later.
Speaker Change: Thank you. Thank you so much.
Thomas Sterling: Thank you Thomas and then I see Victoria is a buck in the neat thing Victoria. Please go ahead.
Victoria Adesina: And then I see Victoria is back in the meeting.
Victoria Adesina: Victoria, please go ahead and follow up your question. Yeah, I had some tech issues. Sorry about that. But I'll check the transcripts of the response on recycling. Just the other questions. So it was great to see the turnaround ensued.
Speaker Change:
Got it.
Speaker Change: Yeah, Hudson Turkish <unk>, sorry about that and then I'll I'll check the transcript. The response can be slight thing just the other question and obviously, it's great to see be the turnaround in seed is there anything you're able to share on how Q2 performance has been say fall in time. This is not continuing on that same strong trajectory and then lastly, just on FX is there anything notable to.
Tove Andersen: Is there anything you're able to share on how Q2 performance has been so far in terms of if that's continuing on that same strong trajectory?
Tove Andersen: And then lastly, just on FX, is there anything notable to note in terms of impact or anything else you can share on the currency hedging for the rest of the year?
Tonight in terms of impact to anything else you can share on the.
Speaker Change: Currency hedging for the rest of the year.
Tove Andersen: Yeah, first question on food. So with the outlook that we have given today, we stay firm on what we said in Q4 for the year. So I think that is kind of like the answer on that question. We can't go into more details on what we see in Q2 and moving forward. But we are confident on the outlook that we have given, of course, based on the situation that we see today. And then on FX, not significant impact on FX in the quarter. And we have not changed the hedging strategy in Tomra for currency. But this is something that, of course, we are using as a tool to mitigate any currency impacts for Tomra.
Speaker Change: Yeah first a question on the on food them. So our would be our outlook that we have given today, we stay firm on what you said in the in the in Q4 at four <unk> for the for the year. So I think that as I kind of like a the answer on that question I cant go into more detail on what we see in Q.
Speaker Change: Two and moving forward, but Oh, yeah, we are confident on the on the the athletes that we have given of course are based on the situation that we see today and then on the affects are not significant impact on FX in the quarter and we have not.
Speaker Change: James the Hudson our strategy in Soma for currency, but this is something that of course, we are using as a tool to mitigate that and the currency impacts are for tomo.
Operator: So monitoring that on a weekly basis or even daily basis, especially on the US dollar. Okay, great.
Speaker Change: Some monitoring that on a weekly basis or even daily basis are especially on the U S. Dollar.
Speaker Change: Okay great.
Speaker Change: Yeah.
Operator: Thank you, Victoria.
Speaker Change: Thank you Victoria and as there are no more questions. In line. Then we have reached the conclusion of today's presentation. Thank you very much for tuning in we will be back here with our next set of results on the 17th of July for the second quarter.
Operator: And as there are no more questions in line, then we have reached the conclusion of today's presentation. Thank you very much for tuning in.
Operator: We will be back here with our next set of results on the 17th of July for the second.
Operator: Have a nice day, good weather.
Speaker Change: Have a nice day goodbye.