Valuation of Tomra ASA

2010

In this thesis Tomra ASA is valued using discounted cash flow. A strategic analysis is first

carried out in order to reveal whether Tomra ASA should be expected to earn return on

invested capital in excess of its cost. Insight from the strategic analysis is then used to form a

base case scenario for future growth, profitability and reinvestment needs for each of the

business units in Tomra ASA.

In the strategic analysis it is concluded that in the company’s Industrial Processing

Technology business unit, there is reason to believe that its capability in innovating

electronic sensors can give a sustainable competitive advantage. For the Collection

Technology and Material Handling business units there was not found any basis for a

competitive advantage.

Based on the strategic analysis a base case scenario is formulated where Tomra ASA’s stock

is valued at 15,7 NOK per share as of 1st

of April 2010. This is 46% less than the closing

price on Oslo Stock Exchange this day.