Here is a very interesting company that came across my radar while researching Latour’s holdings. The current share price and valuation levels look historically cheap when looking at the expected results for 2027 (EV/EBIT 11 and P/E 14) and 2028. Historically, we have traded above EV/EBIT 25 and around P/E ~35. I would see that an acceptable valuation level in the longer term could be around the level of the Finnish company Kone (EV/EBIT 16-20 & P/E 20-25), because the business models of the companies—namely equipment sales and providing services for them—resemble each other very much, even though the markets are different. Tomra’s relatively stronger market position and the market’s higher (albeit somewhat regulatory-driven) growth could also offer the potential for even higher levels.
Tomra’s crown jewel is the Collection segment, whose installed base currently consists of approximately 92,000 RVM machines. Tomra is the undisputed market leader in RVM machines, and over the next 5 years, the RVM market is expected to grow significantly due to EU regulation. According to various estimates, this would mean as many as 200,000 new machines over the next 5 years, and if Tomra captures, for example, 30% of these, the installed base will grow by 60% in 5 years.
The Collection segment is the company’s crown jewel precisely because it combines several high-quality features:
• High profitability: Collection’s gross margin was 41.7% in 2025 and the group’s EBITA margin was 13.2%. The company’s long-term target is an EBITA margin of over 18%.
• High recurring revenue: In 2025, as much as 61% of Collection’s revenue came from services, maintenance, spare parts, and throughput models (equipment sales accounted for only 39%).
• Strong market position: Around 92,000 installed RVM machines and a clear market leadership. The machines collect over 53 billion beverage containers annually.
• Structural growth driver: New deposit systems (especially in Europe) create demand that is not as dependent on the industrial investment cycle as traditional engineering companies.
• Good return on capital: Historically, ROCE has been around the 15% level (2025: 15.4%).
These factors make Tomra clearly higher quality than the average engineering company. In addition, the company has food and material recycling sorting businesses that diversify the operations somewhat, even though their shares of operating profit are not very large compared to Collection’s 65% share (Food: 24% and Recycling 11%). The Food and Recycling businesses slightly lower the group’s overall quality metrics, but the whole is still good.
Have any of you invested in the company? I am seriously considering clearing a few lines from my portfolio to build an initial position.