Good morning from Asker, ladies and gentlemen, and welcome to TOMRA's second quarter results presentation for 2026. My name is Daniel Sundahl, and I am Head of Investor Relations.

As always, CEO Tove Andersen will start today's presentation by giving you the highlights of the quarter, and afterwards, CFO Eva Sagemo will dive deeper into the numbers and present our updated outlook. At the end of the presentation, we will open up for Q&A for participants in the Teams webinar.

A link to the Teams webinar can be found in this morning's stock exchange release. Without further ado, I give the word to CEO Tove Andersen.

Thank you, Daniel, and good morning and warm welcome from me as well to our Q2 2026 presentation. This quarter, record installations of RVMs in Poland contributed to all-time high revenues for TOMRA Group.

Poland is now our second-largest deposit market in Europe, and our leading position provides a solid foundation to continue to grow from over the next years, in line with our ambition for all new deposit markets to come. Collection revenues grew 45%, mainly due to Poland, but also Portugal, Singapore, and Romania contributed.

We had good growth in existing markets. The high number of RVM sales as a share of total revenues in the quarter translates into a decline in collections gross margin, while the division's EBITDA increased with 58%.

Recycling revenues were down 11% following the decline in orders over the past year. The gross margin improved due to product mix, and for the first time in over a year, the division saw growth in the order intake.

Food delivered 5% growth, but lower gross margin due to that we still delivered a large share of third-party peripheral equipment. The market sentiment is positive, but we currently see a lower pipeline conversion of large projects, resulting in a decline in the order intake.

Let's dive into the divisional updates. Looking closer at the quarter in collection, revenues ended at EUR 246 million, up 45% year-over-year.

We had high activity level and contribution from our existing markets. We saw growth in throughput volumes in Australia, where we have invested in improved collection infrastructure.

In addition, higher commodity prices contributed to increased revenue both in the U.S. and Australia.

Clynk, which we acquired last year, also contributed to the growth in existing markets and is developing in line with our business case, both on top line and on the synergy realization. In Australia, our contract as network operator in New South Wales expires July next year, and the New South Wales Government is currently running a tender process.

Two weeks ago, together with our JV partner, Cleanaway, we submitted our new offer, and we expect the outcome of the tender process during the second half of this year. Over to the new deposit markets.

Bottom right on the slide, you see, as in every quarter, a list of upcoming deposit markets. EU legislation deems that all EU countries need to collect 90% of beverage containers, both PET bottles and cans, by 2029.

Experience shows that they will not be able to do that without introducing a deposit scheme. What has happened in these markets since our last quarterly presentation?

In Spain, we are waiting for the approval of a system operator. The process is progressing and has now moved to federal level.

The approval can be in place before the end of this year, and after a system operator is appointed, it will take at least one to two years before the deposit system will go live. France has initiated a consultation process on DRS, and Italy has launched a parliamentary process for a national deposit return scheme.

It's still early in the process for these countries, but the steps that are being taken support our review that is not a question about if these countries will implement DRS, but about how and when. Let's move back to the current new markets.

U.K. is set to go live October 2027.

There is significant commercial activity with many ongoing tender processes. We expect the majority of these to be concluded this year.

We are well-positioned for the U.K. market.

We have the clear ambition to become the market leader. The overall market size of U.K.

will depend on the type of machine selected and the penetration within the smaller store segment. Our current estimate is that the initial rollout, what we typically call phase I, represents a market potential of around 25,000 RVMs.

2027 will be the peak installation year, with some smaller volumes late this year and with a part of the installation spilling over into 2028. In the quarter, we signed our first major customer agreement in the U.K.

for around 2,700 machines. Yesterday, we announced that we have been appointed majority provider to another leading retail chain for around 1,200 RVMs.

A total of around 3,900 so far. Deliveries are expected to start in Q4 this year, but the majority will take place in 2027.

In Portugal, which went live with DRS in April, the first phase of the rollout is largely saturated, and we have secured a good position with an install base of 1,600 RVMs. Total market is indicated to be 2,500 RVMs, but with the potential to grow over time.

Singapore's DRS also went live in April and is progressing well after the launch. It's nice to see that we, in the quarter, have received additional orders.

Our installed base is now 400 machines, and we expect some more installations during second half of this year. However, in the quarter, Poland is the highlight.

We have sold and installed more RVMs than we had expected this quarter. It is the result of great operation performance by our team in Poland.

I'm really proud of what they have achieved. They were able to catch up the delayed installations in Q1 and front-loaded installations in preparations for the summer months, where high container return volumes are expected.

It's now nine months since the launch of DRS in Poland. With the first phase of installations behind us, I wanted to use this opportunity to give some more insight into the status of the Polish DRS market.

Poland went live with their deposit return October last year. Bottom right, we have included an illustration of the deployment in Poland.

As you will see, we had some early installations in 2024 and 2025, while the main deployment is taking place this year. The first phase mainly represents installations with the large retailers.

There are roughly 13,000 RVMs in Poland now, of which over 7,000 are TOMRA RVMs. We believe the total market might grow to around 15,000 to 17,000 RVMs over the next one to two years, and potentially reach around 20,000 RVMs by 2030.

The driver behind this growth is expansion with the large retailers as collection rates increases and penetration of RVMs with the smaller stores. This is what we call phase II.

We are slowly seeing interest picking up among small retailers, but even more so, we are receiving additional orders from existing retail chain customers. In addition, service revenue will kick in one to two years after the installation.

All TOMRA RVMs will be serviced by us, and 95% of our RVMs are sold with service contracts, underscoring the value of the large install base we are building. When we talk about the size of a new market as Poland, it's important to keep in mind that there is a broad range of RVMs being offered into the market.

Ranging from very small standalone machines to large, flexible, high-volume systems, as illustrated bottom left on the slide. Medium standalone RVMs has been the dominant model in this first phase in Poland, representing approximately 80% of our sales.

The S2, which we developed specifically to meet the customer requirements in this market, is probably the most common RVM in Poland as of today, and one of the reasons for why we have been successful in this market. Other key differentiators are our digital solutions, our service network, reliability, and competence.

The standalone RVMs have a lower price point than the typical large, high-volume systems with front and backroom units. They are a good entry point solution for retailers as they gain experience with DRS.

We do expect that over time, the market will shift towards more high-volume systems as the retailers gain experience with the deposit system and understand the value such solutions bring. Each deposit market is unique, and what has been special about Poland is the concentrated retail market dominated by discount chains with limited experience with deposit markets.

As a result, the Polish market has been very competitive. Securing a good market position from the start has been important for us as it will drive value in the next sales phase and through after-market economics.

An important metric we follow in all deposit markets is the number of beverage containers collected in total and through our RVMs. This is a good representation of our position in the markets.

Top right on the slide, you can see that until end of May, around 1.6 billion beverage containers have been collected in total. 85% of those collected containers are returned through reverse vending machines.

The remaining 15% is collected manually. The share 15% highlights the tail opportunities that I talked about, to sell RVMs to retailers who have started collection manually.

In the same period, our RVMs have collected around 800 million containers, representing 58% of the volume collected by our RVMs in Poland. To summarize, the first phase of installation in Poland has been completed, but there are still significant opportunities ahead, and our leading position provides a solid foundation to capture additional sales and service revenues.

Turning to TOMRA Recycling. Revenues were down this quarter following the decline in orders over the past year due to the subdued market sentiment we have experienced.

However, for the first time in over a year, the division saw growth in the order intake, which was up 40%. We see good momentum in metals recycling.

We experienced particularly strong orders of our AUTOSORT PULSE for aluminum alloy sorting, which we have talked a lot about since it was launched a year and a half ago. High metal prices and an increased focus on supply security drives investments into the segment.

Demand remains stable within our largest segments, waste recovery and plastics recycling. Even though we see small indications of improved investment sentiment within waste in Europe.

As mentioned last quarter, higher virgin plastic prices are improving the relative competitiveness of recycling. The customers need to see those prices as sustainable before they translate into investment decisions, and the market is not there yet.

We are confident that the market will recover due to the underlying drivers of legislation, supply security, and decarbonization. 12th of August, the PPWR will come into force, which contains circularity targets, which will mean a requirement to at least double the capacity in Europe.

As timing of recovery is uncertain, we have taken action to rightsize our cost base, and the cost reduction program is progressing according to plan. We are confident that we will reach a target of EUR 16 million gross savings.

The workforce reduction program has been concluded in line with our targets, and people will leave during the year, with the majority done by end of this month. An important milestone of our restructuring was reached in the quarter, as we have consolidated production and central warehousing to our main site in Slovakia.

As part of the restructuring program, we have evaluated different strategic options for our mining business. A strategic player in the mining industry might see more value in this business, as it can provide a different scale than us.

We have therefore initiated a process to explore the option of divesting our mining subdivision. Potential divestment will also create increased focus in our recycling division on our core segments.

Then to food. Being the global leader in food sorting and grading, our food division delivered 5% revenue growth in this quarter, following strong orders over the past year.

As in Q1, we had a large share of third-party peripheral equipment to large pack houses in our deliveries, impacting our gross margin in the quarter. The order intake in the quarter was down 22% against a strong comparison quarter, including significant contributions of large orders.

We experienced that the positive sentiment in small projects continues, and while we see a solid pipeline of large potential projects to come, we do, however, see lower pipeline conversion of these currently. We just carried out a market survey with 120 of our customers in the Americas to understand better the recent slowdown.

More than two-third of the customers surveyed plan to invest over the next 6-12 months, and they cite different reasons holding them back currently. Financing cost was a common reason given.

LATAM customers also mentioned access to capital as a challenge, while North American customers highlighted market uncertainty holding them back in making the final investment decision. In addition to gaining insights directly from customer, we monitor plantings, as new or increased plantings drives the requirement for additional sorting and grading capacity.

Currently, we see significant new plantings in all regions and in many of our core categories. This gives us confidence in our growth ambition for our TOMRA Food division.

Moving to TOMRA Horizon. Within our portfolio of business-building initiatives, our current focus is to realize the value of the existing portfolio, and it's great to see that revenues are starting to build after a period of investments.

c-trace, our smart waste management business, continues to deliver in line with our expectations. The revenues are up 26% so far this year with an EBITDA margin above 20%.

In TOMRA Feedstock, the focus is on the ramp-up of our Områ plant, which is progressing as planned. Well, actually, we are a bit ahead of plan.

We had the target for the plant to be EBITDA positive by end of the year, but it's great to see that Områ already this quarter generated positive EBITDA contribution. TOMRA Reuse is the least mature unit in our TOMRA Horizon portfolio, with limited revenue generation currently.

We have our city pilot in Aarhus and are currently rolling out the city solution in Lisbon. We have also run several successful pilots for our event solution.

A key milestone in the quarter was that we have installed our first full-fledged permanent event solution at the Intility Arena in Oslo. This will be an important reference as the focus going forward is to commercially scale the event solution.

With that, I will hand over to Eva, who will go through the financials and outlook.

Thank you, Tove, let's start with the TOMRA Collection. Revenues came in at EUR 246 million in the quarter, up 45% compared to Q2 last year.

Growth was driven by a strong execution in both new and existing markets. New markets contributed with EUR 69 million, led by Poland, Portugal, Singapore, and Romania.

Existing markets delivered 15% growth or 10%, excluding the contribution from Clynk, with EUR 7 million. The growth reflects a combination of a relative soft comparison second quarter last year for our existing sales and service market, together with higher volumes and favorable commodity prices in throughput markets such as U.S.

and Australia. Gross margins ended at 38.6%.

As expected, margins were impacted by business mix and strong deliveries into Poland, which represented then the largest contribution from new markets this quarter. The margin came in somewhat below our expectations as Poland revenues were higher than anticipated, increasing the effect from new market mix.

The 3.2 percentage point decline in gross margin compared to Q2 last year was mainly driven by product and business mix, reflecting a higher proportion of RVM equipment sales in the quarter. While higher margin service and throughput revenues accounted for a relatively smaller share of the business mix.

Of the gross margin decline, approximately two percentage points was related to mix effect and around one percentage point to lower product margins in Poland, broadly then in line with what we had in Q1. OPEX of EUR 51 million in the quarter, up compared to EUR 43 million in Q2 last year.

An increase is explained by activity levels in new markets such as Poland and U.K. with EUR 4 million, the addition of Clynk with EUR 1.5 million, as well as inflation and FX effect accounting for around EUR 2.5 million.

This results in an EBITDA of EUR 44 million in the quarter for Collection, up from EUR 27 million compared to Q2 last year. Looking at the short-term 2026 outlook, we normally do not guide on new market revenues at the start of the year due to limited visibility.

With six months behind us, we now have sufficient visibility to provide an expected range for the second half of this year. Revenues in the second half is expected with a range of EUR 400 million-EUR 440 million, with more tilted towards Q4, driven by growth in existing markets in line with our mid-single-digit annual growth ambition.

We have the addition of Clynk, we expect a slowdown in new markets compared to first half, with Poland, Portugal, and Singapore being down and Romania continuing steady. Deliveries to U.K.

are expected to start in Q4 this year, but the majority will take place in 2027. We will have some installations continuing into 2028.

Gross margin is expected to increase to above 40% in the second half of the year, with a gross margin of around 40% for the full year. The slightly lower 2026 gross margin guidance is due to a higher share of RVM sales and sales into Poland than previously anticipated.

Quarterly OPEX, expected at around EUR 52 million in second half of the year, as OPEX base remains stable through 2026. Moving over to Recycling, revenues came in at EUR 51 million in the quarter, slightly ahead of the indicated conversion ratio, but down 11% compared to Q2 last year, following a decline in orders in 2025.

The combination of a favorable product mix with higher share of waste recovery projects improved the gross margin two and a half percentage points in the quarter compared to Q2 last year, ending at 48.9%. OPEX of EUR 20 million in the quarter, marginally down compared to previous quarter and Q2 last year.

Saving initiatives are progressing as planned, although partly offset by quarterly activity variations and inflation. As a result, EBITDA was EUR 5 million in the quarter for Recycling, down from EUR 6 million in Q2 last year.

We had an order intake of EUR 58 million in the quarter, up 40% compared to Q2 last year. That has been driven by mainly mining and metal projects.

The trailing 12 months order intake is down 16%, but trending positive compared to the last three quarters. We end the quarter with an order backlog of EUR 105 million.

Also here, looking at the short-term 2026 outlook, full-year revenues is expected in the range of EUR 200 million-EUR 215 million. A 50% conversion ratio of Q2 backlog is estimated at revenues in Q3, and gross margins is expected at around 45%-50% in Q3.

OPEX will gradually come down quarter by quarter as the cost reduction measures are at approximately EUR 16 million gross are gradually being implemented with full effect from 2027, whereas two-thirds of the gross savings are related to OPEX. Moving over to Food.

Revenues came in at EUR 99 million in the quarter, slightly ahead of the indicated conversion ratio and up 5% compared to Q2 last year, following deliveries of large orders from 2025. Gross margins was 43.1% in the quarter, down 3.3 percentage points compared to Q2 last year.

The decline is reflecting the lower margin profile communicated in Q1, driven by the continued impact of project mix, including a high share of third-party equipment with lower gross margins. OPEX of EUR 28 million in the quarter, in line with last quarter and up from EUR 27 million in Q2 last year, reflecting our continued focus on cost efficiency and operational improvements.

As a result, EBITDA for TOMRA Food was EUR 15 million in the quarter, down from EUR 17 million in Q2 last year. Order intake of EUR 83 million in the quarter, down 22% on strong comparison with Q2 last year, which included EUR 25 million of large orders.

As a result, trailing 12 months order intake is down 7%. We end the quarter with an order backlog of EUR 121 million.

Looking at the short-term 2026 outlook for TOMRA Food, we expect full year revenues in the range of EUR 340 million-EUR 360 million. A 65% conversion ratio of Q2 backlog is estimated as revenue in Q3, and gross margin is expected in the range of 43%-47% for the second half of the year.

We will continue to deliver third-party equipment in the coming quarter, but less than in Q4. Quarterly OPEX is expected to remain at current levels.

Looking at the TOMRA Horizon, revenues came in at EUR 10 million, more than doubling from Q2 last year, with strong momentum in c-trace delivering double-digit growth, as well as a positive contribution from our TOMRA Feedstock plant, Områ. Gross margins was 49.2% in the quarter.

While down from 65.2% compared to last year due to the appreciation of the Områ asset, the gross margins improved from 48.4% last quarter as the portfolio continues to scale. OPEX of EUR 6 million in the quarter, flat compared to last quarter and up from EUR 5 million in Q2 last year on higher activity levels.

As a result, EBITDA was negative with EUR 1 million in the quarter, however, improved from negative EUR 2 million last quarter and last year. As the TOMRA Horizon matures, our focus is on revenue growth, earning progression, and also capital efficiency.

The short-term outlook for 2026 reflects this. Full year revenue is expected in the range of EUR 45 million-EUR 50 million, with second half being seasonally stronger due to contract structure in c-trace.

Full year OPEX is expected at around EUR 30 million, with increase in the second half linked to operational growth in c-trace and TOMRA Feedstock and scaling of TOMRA Reuse. Full year CapEx expected at around EUR 10 million to support growth in c-trace, ramp-up in TOMRA Feedstock, and the scaling of TOMRA Reuse.

Looking at the TOMRA Group, combining the results from all divisions, the TOMRA Group achieved total revenues of EUR 405 million in the quarter, a 25% increase compared to Q2 last year. The gross margin was 41.3% in the quarter, down from 44.3% compared to Q2 last year, explained by product and business mix effects in TOMRA Collection and product mix effects in TOMRA Food.

We had an OPEX of EUR 110 million in the quarter, up from EUR 100 million compared to Q2 last year, explained by ramp-up in U.K. and Poland.

In addition, we had Clynk, then also FX and inflation. This results in an EBITDA of EUR 57 million in the quarter, up 30% compared to same period last year.

This quarter, we have included an FX bridge to illustrate the impact of currency movements on the reported results. As you can see from the slide, FX was largely neutral in the quarter and did not have a material impact on our reported performance.

Moving over to cash flow and capital. Cash flow from operations was EUR 38 million in the quarter compared to EUR 17 million last year on improved profitability and more positive working capital development than last year.

Working capital was 19% of revenue in the quarter, up compared to 16% in the same quarter last year, mainly driven by strong activity levels in new DRS markets. During the quarter, we saw a shift from inventory into receivables as installations and deliveries progressed, which we then expect to support cash flow in the coming quarters.

Cash flow from investments was EUR 28 million in the quarter, down from EUR 34 million last year on lower investments in Horizon. With investment activity being front-loaded in the first half, we expect a lower investment level in the second half while remaining on track for full year investment at approximately EUR 90 million-EUR 100 million, mainly then within our core divisions.

ROCE ended at 15% in the quarter, down from 19% compared to same quarter last year, reflecting then inorganic investments, strategic business building, and lower profitability in recycling. Looking ahead, we expect improvements on higher EBITDA, lower working capital, but also lower CapEx.

Then over to our financing slide. Our average debt maturity at the end of the quarter was 3.7 years, with a liquidity buffer of EUR 112 million in undrawn facilities.

Our equity ratio at the end of the quarter was 34%. We have good headroom, being covenant intact, with improvement expected in the following quarters.

Our gearing at the end of the quarter was 2.46 times, up from same quarter last year, which reflects then recent debt finance acquisitions. Gearing is expected to be gradually reduced with earnings and cash flow contributions over the following quarters.

Then over to the outlook. This slide brings the outlook together, both then the short-term outlook and our long-term drivers.

I will not revisit the outlook since we just covered that on the divisional slides. I want to emphasize the long-term fundamentals supporting then TOMRA's business.

Across all divisions, we continue to see strong structural tailwinds from regulation, decarbonization, resource scarcity, automation, and demographic developments. While these drivers are different across collection, recycling, and food, they all point in the same direction, increasing demand for technologies that improve resource productivity and support the transition into a more circular economy.

These trends remain unchanged and continue to provide a strong foundation for TOMRA's long-term growth. With our strong market position, proven technology, and track record of execution, TOMRA is well-positioned to benefit from these trends and deliver sustainable, profitable growth over time.

Finally, we invite you to save the date for our capital markets update on 25th of November 2026, so this year, here in Asker at the head office. This will be an opportunity where we will share more details on our strategy execution, growth opportunities, and value creation agenda.

With that, I hand it back to you, Daniel.

Thank you, Eva, and thank you, Tove. We will now move over to Q&A.

Please raise your hand in the team's webinar to ask a question. We have a few coming in already.

The first one coming in from Barclays, from Morayo Adesina. Please go ahead.

Hi, team. Morning.

Thank you for taking my question. The first one, just on Poland, I understand, as you said, that we are only in phase I so far, we could see more higher volume RVMs coming through later on.

Does that then mean that we could see this negative product mix impact on margins in Poland for some time until those service revenues kick in in one to two years? Just want to try and understand how that mechanism will work going forward.

Is anything you can share so far on the rollout into the U.K.? Are you seeing more standalone RVMs as you're seeing right now in Poland?

Or is it more of a mix of RVMs with the backroom solutions?

Yeah, I can start and then Eva can comment a bit on the impact on the margins going forward from continued sales in Poland. If you then start with the U.K., as I said, there is a lot of discussions and tender processes ongoing.

Currently, the retailers in the U.K. is asking for offers for all types of RVMs, from small standalones to really flexible high-end volume solutions.

Where they will land exactly is still a bit too early to say, as they are still kind of developing what kind of infrastructure they want. We still expect a significant portion of the medium standalone solutions, but not as high as we have seen in Poland.

That is our current expectations. We will know more during the second half of this year, and we'll come back to it then.

On Poland, as I explained, we have now finished this really peak deployment. You will not see the same impact as you've seen in this quarter going forward because it will be spread more out.

Also, as we have said that going forward, we believe over time there will be a conversion then into also larger systems there. You want to add something, Eva, then on the margin impact?

Maybe we can just emphasize the margin impact that we have had in the quarter and in the first half with Poland. We've had quite high share of the new market sales coming from Poland.

Of course, we have the market or the product mix coming from the new market sales. Also the pricing levels has also impacted the margins overall for TOMRA Collection.

Going forward, since this was the peak, we estimate that the revenues coming from Poland will go down in the coming quarters and then be more normalized into the tail. We don't expect to have these large negative impacts on the product mix as we have had now in the first half, if you just look at the Poland revenue.

Of course, going into a more normalized steady state with recurring revenues on service and also higher volume machines, the margin should be lifted.

Great. That's clear.

Thank you very much.

Thank you. The next question is coming from Pareto.

Please go ahead, Fabian Jørgensen.

Thank you. Also just want to highlight the new guidance and the outlook here is very helpful, thank you for that.

On pricing and competition and so on, you mentioned that it is a consolidated market in Poland, few tenders giving a lot of competition. It is very different in the U.K.

when we look at the retailer structure there. Can you say anything about how the tenders are going and if there is similar type of pricing pressure there, or if the focus from the retailers there are different?

As you also point out, every deposit market is different and unique. What we have seen in Poland is that you have this with two large discount retailers really dominating the market.

What we have seen in Poland are the large retailers don't have really experience with deposit systems from other markets from before. U.K.

is different, many more retailers. Many of those have experience from deposit markets from other European markets.

That is why it is a different dynamic there. It is still a competitive market.

All of us want to get a significant share of these new markets. We feel that we are well-positioned, and we have the clear ambition that we want to be also the leading player in the U.K.

Maybe can I add something to that, Tove. I think it is also important, what we have seen now in the first half on the margin is also coming from the product mix.

When you have really large volumes coming into new markets and equipment sales accounts for a relatively higher share of the total revenue, you would also have a negative impact on the margin overall in collection, which of course will turn positive when you go into a more steady state. That could also be the situation in U.K.

if you deliver high volumes into specific quarters, for example, thinking a bit into 2027.

Great. Thank you.

Just finally from me here, can you give some color on the size of the mining subdivision now?

Yeah. On the mining is approximately 2% of the total TOMRA and then 10% of TOMRA Recycling with revenues of around EUR 30 million last year.

Cheers. Thank you.

Thank you, Fabian. The next question is coming from ABG.

Please go ahead, Daniel Vårdal Haugland.

Yes. Super.

Thank you for taking my question and congrats on this quarter. I have two questions.

The first is on Spain. When I'm comparing your commentary on Spain in the slides versus what you said in Q1, it seems to me that Spain is actually maybe moving a little bit forward.

Could you just comment on have you changed your view on whether that scheme will be delayed or whether they are now actually taking action and going ahead? My second question is on the gross margin.

This is for Eva. You just mentioned that when you have lot of RVM deliveries, gross margins are coming down, and you also see that in the history.

That's not very shocking. At the same time, you normally don't have a big increase in your OpEx.

Even though there's a negative margin impact on the gross margin, it will be positive anyhow on the EBITDA margin. Do you agree with that?

That's my two questions. Thank you.

I'll start with Spain. Spain is already delayed because they were supposed to go live end of this year.

They're currently now running this process to get the system operator in place. It's a bit of a complicated political process in Spain where first it needs to be approved by Madrid, and then it's going to be approved by the federal.

That is currently ongoing. What's good to see is that it's now moved from Madrid to the federal.

The question now is when will the system operator be appointed? As I said, it could be appointed this year, then it will at least take one to two years.

If you say end of 2026 it's appointed, two years from that is end of 2028, which still will be our most likely timing for the Spanish market.

On your question related to the margin, of course, we will have increases in OpEx when we are setting up new markets, and that's also what you see in the quarterly results that we have increased the OpEx into new markets, Poland and U.K., compared to what we had before, so Q2 last year. Also we have had costs into Clynk, which is then, I would say a synergy case, which should contribute positive to the EBITDA going forward, so into 2027 and then onwards.

That has, of course, a negative impact on the EBITDA as such. It depends on what you compare to going back in time.

If you think about the large volume of new market revenues that we have had in the quarter, that has a larger impact on the gross margin that we have seen in the past, and also that we had then the negative impact coming from the pricing levels in Poland. It's difficult to compare this quarter with in the past what we have seen when we have rolled out newer markets.

Also when you think about replacement cycles, that is in a market that is already having an organization in place, so you can't compare that as well. It's a bit difficult to compare, but I understand your point of view.

Okay, thank you. Maybe a follow-up on the last one there.

To put it a little bit differently, when the OpEx is increasing as you, let's say, go into next year and U.K. is rolling out, I guess it will happen gradually and not just happen in a single quarter when you start rolling out.

Is that right?

Yeah. Of course, investment into new markets happens gradually.

What we see now is that with the organization that we have in place in the U.K., we don't expect the OpEx to increase going forward. That's also why we say that the OpEx for the second half will be more stable.

Of course, if we get a really high share in U.K., we might need to increase the OpEx in 2027, but that's not necessarily what we see now. We have a good organization in place already.

Okay, super. Thank you.

Thank you, Daniel. We have another question coming in from Jefferies.

Please go ahead, Adela Dashian.

Thank you so much, good morning. I have a question on the recycling order intake, and sorry if this has already been answered, I joined a bit late.

Can you talk about the quality of the order intake and maybe also the duration of these projects and how quickly beyond just the conversion rate that you provided for Q3 these orders can be turned into revenue?

Yeah. I can start, then Eva can talk about the actual order backlog that we have.

We had a good increase in order intake in recycling in the quarter, mainly driven then by metal and mining. We see especially very good traction within aluminum and for our AUTOSORT PULSE.

We still see that there is a stable market sentiment within waste and plastic, we don't really see a recovery there yet. However, we see some small indications, for example, in waste in Europe, it's also nice to see now that the order intake is the first time that we are then changing now the trajectory.

Overall, we'll say good traction in metal, but stable in the rest, not the recovery yet, but some positive signs.

Yeah. Then on the conversion rate or when the order is taken in and when it's going to be delivered, we don't see a change in the orders that we have in the backlog.

The lead time is the same as before. It depends on what kind of orders you would have in, of course.

If it's plastic and waste, it will be around five to six months on average. Mining and metals orders a bit higher, especially for the mining orders.

That's as before.

Okay, thank you. Maybe if I can just follow up also, still on recycling.

Would you say that this is the result of any deliberate actions that you have taken, or are you actually starting to see somewhat of a light at the end of the tunnel for recycling in terms of the end market?

Yeah. I think, first of all, I think part of what we're seeing now is due to the innovation agenda of TOMRA.

We launched this AUTOSORT PULSE for aluminum alloy sorting one and a half year ago. That is really the key driver behind what we're now currently seeing in metal recycling.

It shows really how we can drive then growth in challenging markets through innovation. We say that the plastic and waste market is stable.

That's currently what we are seeing. However, as I said, in Europe, we see some positive signs within waste, but it's still early days.

I think the key thing is that we now see some positive momentum.

Great. Thank you.

Thank you, Adela. We have another question coming in from Fabian Jørgensen at Pareto.

Please go ahead.

Just to follow up on the TOMRA Recycling or potential TOMRA Mining divestment. What would you earmark the proceeds to?

You can talk a bit on our capital allocation priorities, Eva.

The capital allocation priorities is following the dividend policy that we have as a foundation, we are allocating capital into the core business. Most of the capital allocation is for TOMRA Collection, where they also, in addition to maintenance on the portfolio that we have, we also have R&D, we have retrofit opportunities that we happily take on.

For TOMRA Recycling and TOMRA Food, it's more into R&D, we have held back a bit on TOMRA Food, as you know, in the past, given the restructuring that we did. Now we are loosening up again in TOMRA Food as they are being more profitable and having results on the turnaround.

Currently, we are holding back a bit on TOMRA Recycling. We want to see that we are delivering on the turnaround, that they are done turning their profitability upwards again.

We have the TOMRA Horizon portfolio. Now the focus is to get the most value out of the ventures that we have.

We have now the Områ plant that is progressing very well. We see a positive EBITDA in the quarter, which is really nice to see.

c-trace is also growing in line with our expectations, higher on the profitability and on the growth on the top line, also very nice on the profitability. On the TOMRA Reuse venture that we have, that is more where we allocate capital into being able to run pilots for the event solutions, which looks very nice.

It's really to set the TOMRA Reuse up for scaling opportunities in the future. That's our capital allocations that we are thinking about.

Great. Thank you.

Short term, of course, our priority is to pay down debt as well.

Yeah.

Great. Thanks.

Thank you, Fabian. There are currently no further questions.

We will give it a few seconds, see if there is any final questions coming in. If there is no further question, we have reached the conclusion of this presentation.

The next set of quarterly results are due on the 23rd of October. Until then, have a pleasant summer and a nice day.

Goodbye.