How Does Tomra Systems Company Work?

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How does Tomra Systems work?

Tomra Systems ASA, a global leader in sensor-based solutions, reported a strong Q1 2025 with revenues up 5% to EUR 306 million. This growth highlights their role in the circular economy, with around 113,700 installations worldwide and EUR 1,348 million in 2024 revenue.

Tomra develops and sells advanced collection and sorting systems crucial for recycling, mining, and food processing. Their innovations directly support sustainability and resource efficiency, making their operations key to understanding their market impact.

Tomra's core business revolves around sensor-based sorting technology. This technology allows for the precise identification and separation of materials based on their unique properties. For instance, their reverse vending machines collect used beverage containers, sorting them by material type and color, which is a fundamental step in enabling effective recycling. This process is vital for achieving higher recycling rates and recovering valuable resources, contributing significantly to a more sustainable future.

Tomra Systems creates and delivers value through its sophisticated sensor-based sorting and collection technologies, primarily serving the recycling, food, and mining industries. The company's core products include reverse vending machines (RVMs) for beverage container collection and optical sorting systems for waste and metal recycling.

Core Operations: Recycling and Collection Technologies

Tomra's operations are centered around advanced sensor-based sorting and collection technologies. Their reverse vending machines (RVMs) are a key component, with approximately 87,000 RVMs deployed across more than 60 markets. These machines facilitate the collection of over 40 billion empty cans and bottles annually, giving Tomra a global market share exceeding 50% in reverse vending.

Value Proposition: Resource Recovery and Efficiency

The company's value proposition lies in optimizing resource recovery and enhancing efficiency for its customers. By integrating technologies like AI and deep learning, Tomra achieves high purity levels in sorting without sacrificing throughput speed.

Serving Diverse Industries

Beyond recycling, Tomra Systems also provides advanced processing and sorting technology for the food industry, focusing on both fresh and processed food applications. This broad application of their technology highlights their commitment to sustainability across multiple sectors.

Operational Excellence and Global Reach

Operational processes include extensive research and development, precision manufacturing, and a robust global logistics and service network. This infrastructure supports their installations in over 100 markets worldwide.

Tomra's Technological Edge and Circular Economy Contribution

Tomra's unique approach integrates advanced technology, including AI and deep learning, into its sensor-based sorting systems. This allows for high purity sorting while maintaining efficient throughput speeds, a critical factor in waste management and resource recovery.

• Tomra's RVMs collect over 40 billion containers annually.
• The company holds a global market share exceeding 50% in reverse vending.
• Tomra's technology supports a circular economy by maximizing material recovery.
• Their solutions are deployed in over 100 markets globally.
• The company's commitment to innovation is evident in its continuous R&D efforts.

Understanding Tomra's reverse vending machine process reveals a sophisticated system designed for efficient beverage container collection. The company's extensive reach and technological advancements are key to its success in promoting recycling and resource management. For a deeper dive into the company's journey, explore the Brief History of Tomra Systems.

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Tomra Systems generates its income primarily from selling and servicing its advanced collection and sorting systems across its key divisions: Collection, Recycling, and Food. The company achieved a record revenue of EUR 1,348 million in 2024, reflecting a 4.6% increase.

Collection Division Performance

In Q1 2025, the Collection segment brought in EUR 185 million, a slight 2% decrease from the previous year. This segment, which remains the primary revenue contributor, operates on sale and service models, accounting for 65% of its revenue, and a throughput model representing 20%.

Recycling Segment Revenue

The Recycling division generated EUR 46 million in Q1 2025, a 1% dip compared to Q1 2024. While order intake decreased by 16% to EUR 61 million, the backlog remained robust at EUR 122 million.

Food Division Growth

The Food division demonstrated strong growth, with revenues reaching EUR 70 million in Q1 2025, a significant 16% increase from Q1 2024. This division also saw its highest first-quarter order intake in three years, up 13% to EUR 87 million.

Q2 2025 Financials

For the second quarter of 2025, overall revenue was EUR 325 million, a 2% decrease year-over-year. Collection revenue declined by 12%, while Food revenue grew by 15% to EUR 94 million, with Recycling revenues remaining stable.

Recurring Service Revenue

A key aspect of Tomra's monetization strategy involves recurring service revenues derived from its extensive installed base of equipment. This provides a stable foundation for the company's earnings.

Future Revenue Diversification

The company is actively exploring new business avenues through its 'Horizon' platform. Initiatives like TOMRA Feedstock, TOMRA Reuse, and c-trace are strategically positioned to contribute to future revenue diversification and expansion.

Tomra Systems' business model is built on providing advanced sorting technology and comprehensive solutions that cater to various industries, including waste management and food processing. Understanding the Growth Strategy of Tomra Systems reveals how the company leverages innovation and market expansion to drive its financial performance and contribute to a circular economy.

Monetization Strategies in Action

Tomra Systems employs a multi-faceted approach to revenue generation, combining upfront sales with ongoing service agreements and usage-based models. This strategy ensures consistent income streams and fosters long-term customer relationships.

• Sale and Service Model: The primary revenue driver, particularly in the Collection division, where customers purchase equipment and opt for maintenance and support services.
• Throughput Model: A revenue share based on the volume of materials processed, aligning Tomra's success with its customers' operational output.
• Recurring Service Revenues: Generated from the extensive installed base of machines, providing predictable income and enhancing customer loyalty.
• New Business Areas: Development and commercialization of innovative solutions under the 'Horizon' platform, such as TOMRA Feedstock and TOMRA Reuse, aim to capture new market opportunities and diversify revenue streams.
• Data Analytics and Digital Solutions: Enhancing the value proposition through data-driven insights that improve operational efficiency and recycling outcomes for clients.

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Tomra Systems has demonstrated significant growth and strategic evolution, marked by record financial performance and innovative product launches. The company's commitment to sustainability and circular economy principles underpins its operational successes and market positioning.

Key Financial Milestones

In 2024, Tomra Systems achieved record revenues of EUR 1,348 million and record EBITA of EUR 176 million. This performance was driven by strong revenue growth in existing markets and the successful launch of deposit systems in new territories.

Technological Advancements and New Launches

The company introduced several new technologies in 2024, including the TOMRA R2 multi-feed machine and the TOMRA RollPac backroom solution. These innovations enhance efficiency and user experience within its recycling solutions.

Strategic Restructuring and Reuse Initiatives

A significant strategic move in 2024 involved restructuring the Food segment, resulting in EUR 30 million in cost savings and improved profitability, as evidenced by strong Q1 2025 performance. The company also expanded its reuse initiatives, such as the Aarhus reusable cup pilot and the unveiling of a new Reuse Collection Point for food packaging in May 2025.

Strengthening AI and Market Position

Tomra bolstered its artificial intelligence capabilities by acquiring a 25% stake in waste analysis start-up PolyPerception in 2024. This move underscores the company's commitment to leveraging advanced technologies for waste management.

Competitive Edge and Market Leadership

Tomra Systems maintains a strong competitive advantage through its technological leadership in sensor-based sorting and reverse vending machines, holding over 50% market share in RVMs. Its extensive global presence, with 113,700 installations in over 100 markets, and comprehensive service infrastructure provide a distinct edge.

• Technological leadership in sensor-based sorting and reverse vending machines.
• Global reach with over 113,700 installations across more than 100 markets.
• Comprehensive service infrastructure supporting its installed base.
• Benefit from supportive legislative trends promoting circularity and sustainability.
• Over 50 years of operational excellence and continuous R&D innovation.

Understanding Tomra's reverse vending machine process is key to appreciating its contribution to recycling. The company's approach to food waste reduction is also a significant aspect of its operations, aligning with broader sustainability goals. Tomra Systems explained through its consistent innovation and strategic market penetration demonstrates how Tomra works to achieve its business model objectives.

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Tomra Systems holds a commanding global presence, particularly in the collection and recycling sectors. It is the undisputed world leader in reverse vending machines (RVMs), with over 50% of the market and approximately 87,000 RVMs installed across more than 60 countries. The company also leads in sensor-based sorting equipment for recycling, capturing 55%-60% of the market, and maintains strong positions in global food sorting.

Industry Position

Tomra Systems is the global market leader in reverse vending machines, with an estimated 50% market share and 87,000 RVMs in over 60 markets. It also leads in sensor-based sorting for recycling, holding a 55%-60% market share.

Key Risks and Headwinds

Macroeconomic uncertainty, trade tensions, and a weaker European plastic recycling market can impact order intake. Delays in implementing new deposit return systems (DRS) also present a risk.

Future Outlook and Growth Strategy

The company anticipates high activity in 2025, supported by a strong order backlog and growing market activity. New DRS markets are set to launch, including Poland and Greece in 2025, and Portugal, Spain, and the UK in subsequent years.

Financial Targets and Investments

Tomra aims to accelerate annual revenue growth to 15% by 2030, increase its EBITA margin to 18%, and achieve a return on capital employed above 18%. Investments in new ventures through its Horizon platform are also planned.

Tomra Systems' commitment to innovation and expansion is evident in its strategic roadmap. The company is actively pursuing growth in new deposit return systems (DRS) markets, with significant launches anticipated in Poland (approximately 10,000 machines) and Greece (approximately 1,000 machines) in 2025. Further expansion is planned for Portugal (around 1,000 machines) and Spain (approximately 12,000 machines) in 2026, followed by the UK (approximately 17,000 machines) in 2027. Uruguay and Singapore are also scheduled to implement deposit systems in 2026. These initiatives are designed to support Tomra's ambitious financial targets, which include accelerating annual revenue growth to 15% by 2030, increasing its EBITA margin to 18%, and delivering a return on capital employed above 18% within the same timeframe. The company's financial stability is underscored by an A- credit rating affirmed by Scope Ratings in June 2024, enabling continued investment in its strategic growth plans and new business ventures via its Horizon platform, such as TOMRA Feedstock and TOMRA Reuse, with an estimated capital expenditure of EUR 40 million for Horizon in 2025. Understanding the competitive landscape is crucial when evaluating Tomra's position; a look at the Competitors Landscape of Tomra Systems provides valuable context.

Tomra's Contribution to a Circular Economy

Tomra Systems plays a pivotal role in advancing the circular economy through its innovative recycling and collection solutions. Its technology facilitates efficient material recovery and promotes higher recycling rates.

• Tomra's reverse vending machines increase container collection rates.
• Sensor-based sorting technology enhances the quality of recycled materials.
• The company's solutions reduce waste and conserve natural resources.
• Tomra's efforts support a more sustainable approach to resource management.

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