Good morning, welcome to our second quarter results presentation. My name is Georgiana Radulescu. I am responsible for investor relations in Tomra. With me today I have Stefan Ranstrand, CEO, and Espen Gundersen, CFO. Thank you for joining us today. You can ask us questions via the Q&A link on the webpage. We will answer them towards the end of the presentation. There is a small time lag to the webstream. We encourage you to ask the questions as we go along or as soon as possible at the end of the presentation, just to make sure we get everything in time. Those being said, I wish you welcome. I will pass on the word to Stefan.
Dear all, thank you for dialing in. What a quarter we had. I would label it a challenging crisis, and in many ways, a totally new situation. In Tomra, we have some 4,500 employees. At the peak, 2,800 of them were working from their home offices. We have had, due to the pandemic, total 15 people infected, 11 are recovered, four are still active, but no severe conditions. I have seen highest dedication and commitment from our people, more than could have been expected. We have extreme cases where people have chosen to go and live at the customer site in order to serve the customer, because it was not possible for them to travel between their home and the customer on a daily basis. They have stayed there for months.
I dare to say our culture and our people is a differentiator, making Tomra more resilient and strong, and for me, definitely a reason to be proud of. We have also seen an extraordinary customer loyalty. The customers have understood that it's been difficult to operate, and they have worked with us here on that. We have not been able, with our salespeople, in some instances, to meet the customers, and we have therefore turned over to remote communication, like telephone or video, and that has worked well. We have even had customers who we have never met before who have bought equipment from us. We have even installed remotely equipment together with customers. These are extraordinary conditions, but they have been mastered very well.
We have advanced now from a period with very many new dimensions, and I would say a big uncertainty, to a situation where I feel that we are now having good control and much more certainty. In the second quarter, here in particular in April and May, we saw the most challenging period. Already in June, and in most parts of our business, we see stabilization, and I dare to say, in some cases, even return to normal. We are now having a staged return of our employees to offices. Our operations and supply chain is fully up to speed. This partly also thanks to our footprint that we are in different parts of the world, both from a production point of view and also service point of view. We don't need to ship people across countries. We have them locally so that we can operate.
We have, for instance, been able to capitalize on our manufacturing capabilities in China whilst we had lockdowns in New Zealand. Actually, we have under all times been able to deliver on all our commitments, and today we are fully normal again. We still have some service challenges, and that relates to some regional restrictions when it comes to travel, or in some cases, even our customers, especially in the food sector, saying they don't accept any visitors due to hygiene conditions. We respect that, of course, but apart from that, we are operating also with the service as normal. I also dare to say if there will be further pandemic waves, we are well prepared. When we entered this crisis, everything was new to us. We put up a crisis team and worked through a lot of different methods and ways to handle the situation.
We have learned a lot, so we will be better prepared if there will be a second wave. What we can control, we feel that we will be able to handle well, but certainly the uncertainty around the market conditions as a result of any new potential countermeasures will remain. With that, I choose to turn page and go into the result numbers. We saw a decline in revenues of 11%. The currency played a strong game here in the quarter, so if you were to ignore the currency effects, you would actually have the same top-line result as last year. In reality, the revenues were down 11%. The biggest reduction came from Collection Solutions, and that is very much thanks to our throughput lease or volume-related models. I will talk more about that.
That was, for us, unavoidable, clearly result of governmental or local regulators' restrictions put in place. Sorting Solutions showed strong resilience, and you will see that when we look at the totality of the figures. Also them, they were down 8% in revenues. The gross margin was reduced from 44.9% to 42.9%, and that was all related to the lower volumes in Collection Solutions. Here, Sorting Solutions showed strong resilience. We have acted, and I dare to say with speed, to address cost situation and to make sure Tomra as a company remains strong in this period. All unnecessary costs have been avoided or cut, and we have been able to reduce our operating expenses on a quarter-over-quarter basis compared with Q2 last year, by 8%. We have, however, not altered our strategic direction.
We have continued to invest in that we think is important for our future, and that, as example, is circular economy, but also on product and technology development. We will show you some exciting new technologies today, in fact. We see that our strategic direction remains intact. We believe in it, we are committed to it, and we are convinced about that the world will move in the way we are heading in circular economy and food. Therefore, we continue to invest, but we have been active in reducing all these costs we could to safeguard the maximum result in the quarter. However, also important is we are having made this in a way that we are ready to ramp up if the market conditions improve, and we are ready then to capitalize on the opportunities. This has been the balance for us.
We could have done more, but we have done it this way in order to be able to ring-fence the strategic initiatives and to be able to come back quickly if the market calls for that. Our earnings, EBITDA, are down, ending at NOK 288 from NOK 352. Cash flow from operations ended at NOK 123, up from NOK 45 million of last year. We had a reduced order intake in TOMRA Sorting Solutions, slightly down by 5%, and order backlog is down 2%. From a business point of view, the biggest impact we had on the results, as a result of COVID, was on the North America impact on TOMRA Collection and the order intake, which was down 5% in TOMRA Sorting Solutions. With that, I ask to turn to the next page. This page illustrates some of the highlights of the TOMRA Collection business. I start on the left hand here.
Here you see a graph. You see a dark blue line, you hopefully see a pink line and a light blue line. What is unique in our Collection Solutions business is that not only are we a global leader, we have also by now connected most of the machines to our center. They are connected on the web, and we have direct access to the machines, seeing what's happening. That means we will instantly see how many bottles are going through every machine placed out there. In a time of a crisis like this, it's an extreme advantage, because if there would be any changes, we would be able to respond much quicker. If you look at the graph here again, I will use this to illustrate, that represents the status of volumes going through the RVMs out in the different regions.
We can see from the dark blue line, which represents Europe, that we have seen no disturbance, no ups and downs. It's been a very stable operation. Europe RVM operations have shown very strong resilience during this period. If you look at the pink line, that illustrates the situation in Australia. Here we are talking about the installations we have in New South Wales and in Queensland. Here we could see that in early April and May, we had a volume dip. You can see that recovered fairly quickly, and it was all due to the lockdowns by the regulators, and we are back to normal in Australia. In fact, it's a little bit higher than last year because we have continued to expand, and we see that these two markets, Queensland and New South Wales, still are growth markets.
We expect that market to continue to grow slightly going forward. The light blue line then indicates North America, and here is where we saw the biggest effect with volume decrease in the magnitude of 50% for also a more extended period of time. Gradually, starting end of May and into June, we saw recovery of the operations, and we are now back to normal. We can say Collection Solutions, as we operate now in all three main regions, are back to normal. You can also see on this light blue line that we have a certain recovery. People have probably stored a lot of beverages during this period in their garages or in their cellars, and once the locations open up, they have utilized the opportunity to return more than normal. We don't expect this to continue.
It will be flattened out, but again, we consider the collection business more or less back to normal. If we look at the market, we see that, I don't have global evidence, but I can talk for Norway figures right now. We see that people actually are consuming more than before, and the latest figures indicate that people buy 20% more bottles than before. If that is the remaining effect, we will certainly also see more volumes going through our machines going forward. Again, these are early indicators. The positive is that they are not showing a decline in consumption. They are showing an increase in consumption, positive for our operations here, but we will have to observe how that goes forward and how it looks on a grander scale than Norway.
If I then go to the right page here, one question we have asked ourselves, would this COVID situation now lead to delays in legislative processes around deposits? I'm pleased to tell you we have not seen that effect. Western Australia have now announced the commencement date, and that is October 2020. In fact, that is ahead of the original plan. They were struggling a little bit in determining the date due to the situation, and they were playing around with either November or June next year. They now decided they will go live October. We see that as positive. This is not a big market for us. We will have about five locations, or precisely five locations with some 10 RVMs. There will be more high-volume locations than we see in many stores in Europe.
It's more mirroring what we see in Queensland. We're excited to go live there. We are prepared in all ways to do that, both from a technical and an operations point of view. We look forward to the start in Western Australia in October this year. Netherlands have, for quite some time, been debating whether to extend the DRS system or not. They have now, on April 24, decided to extend their DRS system. They already had a system, but the new system will also include small bottles and more types. They have set the deposit value for the small bottles to EUR 0.15 and for larger bottles to EUR 0.25. They target a return rate of 90% as of January 2022. We have had no new information since April. This is the latest what we've got from the authorities.
Finally, Scotland, also here, moving ahead. On May 13, the Scottish Parliament approved The Deposit and Return Scheme for Scotland Regulations 2020. They are committed to start the system 1st of July 2022. That has been passed into law. On the question whether legislation has altered their view on deposit as a result of the corona, we dare to say they have been staying put. They have continued with their strategic approach. That's good news for a cleaner world. With that, I will turn to the next page and talk about the food business. In essence, food is not eaten less during these times. What happens is that people have less opportunity to eat at restaurants.
Since there are less people working, the whole catering sector is also reduced, less conferences, less office supplies of food, and of course, a lot of hotels have been shut down. This whole HoReCa, hotel, restaurant, and catering sector, is quite significant, especially for the processed food sector. We rely on numbers, official numbers here, telling that in U.S., about 50% of the food value generation is coming from the HoReCa sector, and in Europe, about 40%. These sectors are down now, and they are significantly affecting the processed food suppliers. They now live under big uncertainty.
If we want to make it even more complex, we also have to remember that there is a trade war going on between China and the U.S. We have reported before that affected U.S. exports from round numbers of $20 billion of food was exported to China two, three years back. In last year, that was down to estimated $11 billion, so a $9 billion reduction in a rather short period of time. We have no evidence for that. That has been resolved, so that still remains as an uncertainty over this sector. For the U.S. food processing industry, you have two really big effects affecting them here in a short period of time. You have the China-U.S. trade war, and you have the big reduction in volumes in the HoReCa.
That sector in U.S. and the HoReCa impact in Europe, has made this sector of processed food really pressed. We are still not seeing evidence for recovery here, we actually remain cautious also going forward about the processed food sector. It makes in our food business about 60%, where 40% is the fresh sector, it is not insignificant. We just want to be prudent and say here we still see an uncertainty. On the fresh side, however, we have seen very good momentum. Most of the food is sold over retail. There has been an uptake here. We have seen good activity levels in many new capacities being installed in both the berries and the fruit sector, and we have seen strong orders growth in that sector. To date, good momentum in fresh, low momentum in processed food.
Going forward, certain uncertainty around the food sector, given the big impacts of the pandemic. I hope that is clear, the way I communicate it here. I'm pleased that we in Tomra have now, due to our strategic development, established ourselves in both sectors, both in processed and fresh, making us more resilient to such swings. This is the first time we really experienced this, and I'm pleased to see. That makes our food organization much robuster. I'm also very impressed with how the team has been working here, really very active with the customer contacts. We have made more than 1,000 interviews in last month alone in the processed food sector. We really stay close to the customers and try to serve them, so that we are at least there to support them, and that they feel that Tomra is a good partner when times returns.
That I can assure you, this is a temporary situation. It will return. It will recover. Food is such an essential service of society, a recovery is guaranteed. It's only a matter of how long this challenge will remain for the industry. We have also good evidence that we have maintained our market shares, we see rather delays in investments. Here, one delay of a couple of months can actually lead to a delay in a year because of the seasonality effect in food. I hope this is enough to explain it. I do not want to send too strong negative messages, I also want to be prudent and say we are a bit cautious about the outlook here. Looking at the right side, here you have some numbers really supporting what I said. Look at the fresh potato sales over the retail channel.
We have strong underlying drivers. We have continued waste services need to be performed. We have waste volume increases. We don't generate less waste because we eat at home or consume at home. Probably on the contrary. At least for us, that has shown to be good momentum in these two markets. In the general waste management, household waste management facilities, and the sector of plastic upgrading, which is really mostly in the rPET sector, where we are turning old bottles into new bottles, very much also connected to our collection business, just downstream of that path. People today actually are paying significant premium prices, rPET over virgin. That again shows their commitment to using sustainable packaging material, and that is continuing to be strong.
Here, Tomra definitely has a leading position, and it also supports our business during these times. We have seen less good momentum in the metals side. Metal recycling, where you have metal scrapyards, which are very much competing with virgin metals, for instance, production of cars or construction, where we see a strong decline in automobile production leading to much less demand for the material, and it’s got integrated deep learning technologies. It’s got extended resolution for fine sorting. If you think of that, this is precisely the technology we now need for making circular economy a reality. When you do circular economy, you really need to close the loop, meaning that you can take recycled content into building new products. For doing that, you need high precision in the material so that you can meet very stringent specifications.
This technology is very critical for meeting exactly that evolution of the technology and economy. On top of that, we have the AUTOSORT SPEEDAIR. You can ask, what is that? Well, actually, what we're doing is that we are, with this SPEEDAIR, in combination on the AUTOSORT, we are pressing air on the belt so that light materials, if you think of films, like for food packaging films, when the belt moves too quickly, the air will make them start lifting and being unstable on the belt, reducing our ability to increase the speed of the belt. By pressing air on top, we are basically, with a fan, pressing these objects to the belt, enabling us to increase the speed significantly, and by that, the capacity.
The capacity of a sorter is depending on the width of the belt, the speed of the belt, and the density you can have on the objects of the belt. The speed of the belt here can be increased with help of this SPEEDAIR module. That's really a revolution for the industry, and again, a step towards higher productivity of our installations. Really a very exciting innovation by our team here. We have the CYBOT. This is, you can really call it a robot. It will be used to pick objects at the end of the sorting line. It's the final quality control. It's robot, not in a normal sense, because this is a robot with advanced multi-sensor system. Also here using artificial intelligence and sensors, we are able to do things we could not do before.
Again, this final product quality control is so critical for enabling of circular economies. You can say these new launches are very fit for our attempt to be leader in the circular economy area. I'm really excited about this. In addition, I tell you, we had 1,000 participants on this launch event, and the feedback was overwhelming. Before I talk more, let's turn page, look at the video, and I hope you will like it as much as I try to make you enthusiastic about here.
Welcome to this Tomra digital event. This event is a premiere to Tomra. It's the first digital product launch event that we do. Just another sign how the pandemic affects our lives and our businesses. The bright future we see ahead of us requires the cooperation and smooth interaction of the industry and all stakeholders along the value chain. We know very well that we are currently over-exploiting Mother Nature's resources. We will continue to develop the most advanced solutions that help to create circular value streams and bring harmony to industry, society, and nature. We develop instruments that can play different genres and sort materials of all sorts: plastic, metal, paper, and many more.
Our new AUTOSORT is indeed impressive. Due to our new generation FLYING BEAM technology, more materials can be detected and sorted. Ralph, take it away.
We are able to run and sort with much higher belt speed, and at the same time, we can use the artificial intelligence classification for a better material sort.
We are playing on a global scale, and our international team is really working to support you everywhere around the globe.
Just in time. With the laser technology, like for example, shape recognition, due to the fact that we can use the deep learning technology to do deep learning.
This composition makes our symphony unique, powerful, and stable. As you could see, this was aimed for customers, but it was a snapshot of the live streaming event. We just compressed it in short time. It's truly exciting, and I'm convinced that with these new launches and our strong team and our deep knowledge and our global presence, we will be able to continue to compete on the top ladder of the recycling industry. I would not be surprised if we can continue to gain market share in a market where we already have some 50%-60% market position. My last piece in my presentation is about the circular economy. As I said before, we are committed to this. I see Tomra as a obliged partner for the collaboration we are doing and for the evolution of the society from a linear to circular economy.
We are pristine positioned. We have leading position in collection and sorting, and they are essential technologies for making this happen. We have invested significantly in creating and positioning ourselves in this collaborative platforms. For instance, we are members of Alliance to End Plastic Waste. We are a strategic partner with the Ellen MacArthur Foundation, et cetera. We are working among many different dimensions on the technology side, but also in enabling this, because many big corporations, brand owners today, had committed to sustainable packaging and some very high ambitions, but they really need to know how to do it. Here, I think Tomra and our collaboration partners can play a vital role, and that's our ambition. With that, of course, we intend to create more demand for our collection and sorting technologies, as we want to process much more products in the future.
I will not go too deep into that. The legislation, again, and the authorities are staying put. They are focusing on this transition. We have the European Green Deal as a part for a resilient recovery after COVID-19, where Ursula von der Leyen really talked about scaling up investment in the fields of sustainable mobility and the circular economy. It's a commitment for European Union. We see the Green Deal as a green recovery. We are seeing short-term now the economic situation creating challenges for many of our customers, especially in the metals and general plastic waste, as I mentioned before. We see the brand commitments. We are in dialogue with many companies. I can assure you that many leading global brands, we are in close contact in cooperation with, and we see that they are not altering the agenda.
They are committed, and they know that they have to do this, and they know that the topic will not disappear because of the pandemic. It will be there, and they just really need to show and demonstrate how they become more sustainable in the way they package and promote their products. We see that the legislation continues to be a major driver for implementation of circular economy. This is one of the strategic highlights of Tomra, as you know from before, and we are totally committed to it. We are continuing to invest in the technology, in the collaboration, in test centers, and in different ways to make this happen. With that, I will actually stop here and pass over to Espen to present the numbers for you. Thank you for listening.
Thanks, Stefan. If we move to slide 10, as always, quick look at currencies. As you know, NOK depreciated significantly during first quarter this year and continue to be weak compared to all major currencies, and we are 16% down versus US dollars and almost 13.4% down versus EUR in the second quarter 2020 versus second quarter 2019, and this, of course, influence the figures as we will see. Moving to the next page, you see, as Stefan said, we are in nominal figures, flat versus last year, but it make more sense to look at the currency-adjusted figures on the right columns. Consequently, we are down 11% on the group, 13 down on TOMRA Collection, and eight on TOMRA Sorting Solutions. Gross margin is down two percentage points due to the lower margins in TOMRA Collection. Operating expenses is down 8% due to strong cost control in the quarter.
Travel cost is down for obvious reasons. Salaries is down due to furlough, the German Kurzarbeit, some government grants, and very limited use of consultants. Marketing is cut and so on. At the same time, as Stefan said, we have increased cost on group functions related to the circular economy this year, in particular, and the gross savings are consequently more than 10%. Since the margin is down, the EBITDA is also down to NOK 288 compared to NOK 352 last year. Moving to TOMRA Collection on page 12. There are significant difference performance between the regions. Europe is not impacted, really. Retail is open, and people can return. We have service techs living close to the machines, so we usually get access to the machines. In total, Europe is actually up 5% currency adjusted. It's really no material impact in that region.
North America, as we touched upon, down 38%. The lockdown, particularly in New York, but also in the other states like Michigan and the New England region has been hitting us significantly as in North America, we also have manual machines on throughput leases and the redemption centers. Our revenue is a direct consequence of the volumes hitting our infrastructures and also the material recovery part of our business, where we take responsibility of the bottles and cans after they go through the machines. This is also their activities linked to the return rates. We have been down and that's the main reason why we see a lower revenue in total for the quarter. The rest of the world is mainly Australia, and as Stefan said, we had a small dip in April, but already going into May, we were back at the normal levels in Australia.
With lower volumes, the gross margin is also going down. Even though we haven't had significant layoffs for a period in North America, we also have fixed costs and other costs due to rent, lease, depreciations, and so on. That's the reason why margins temporarily has gone down in Collection in this quarter. OpEx is down 9%, EBITDA, NOK 118 million. Moving to Sorting Solutions at page 13. Revenues are down 8% currency adjusted. Food was similar, just slightly down on top lines, but Recycling has had a stronger decline. This is partly because of high comps figures in the Recycling business stream. In total, this is marginally above the 60%-65% backlog conversion ratio we indicated at the end of first quarter. Overall, we have managed to keep activity up, but it's still hard to get machines out, parts, and people across borders.
Some of our customers do experience challenges, therefore installations has been postponed and some service has not been executed according to original schedule. We are happy to see gross margin maintained at 46% unchanged despite the more challenging environment when it comes to transportation. That's an increased cost for us and there are some obstacles in that respect, but we have managed to compensate and still report 46% on the margin side. OpEx is almost down 10%, so it's on bottom line. We are actually nominal figured up compared to 2019, but slightly below the currency adjusted figures and we get NOK 206 million. Moving to the order situation on page 14. As we said under the first quarter presentation, we assume that the second quarter order intake will go down, and it is with 5%.
The pandemic has made it more challenging to meet customers, in particular new customers, as travel is restricted and fairs are closed. The intake would have been higher if it wasn't for the COVID situation. As results are down, we only reduce the backlog with two. As the revenue results are down with 8%, the backlog is only down with two percentage points from the end of first quarter. Therefore, going into third quarter, we have a higher backlog or a rather high backlog and with an estimated conversion ratio of 70%, we see a rather decent quarter coming up. As we also said, this estimated backlog conversion ratio is not a guiding, this is just an indication for those of you that want to model us on a quarterly basis. Moving to page 15, balance sheets. There is, of course, always currencies in here.
Regardless whether you look 6 or 12 months back, we maybe had a higher balance sheet because of the depreciation of the Norwegian krone. Due to seasonality, it usually makes more sense to go 12 months back. If you do, the balance sheet has currency adjusted increase with 1%. Most line items are rather similar when you look against what you had 12 months ago. Working capital is slightly down compared to 12 months ago, despite the inventory, which has increased also currency adjusted. The inventory increase is because of the currency disruptions. We are more cautious. We are building some buffers, and it's not strictly just in time ship line anymore because of the uncertainties. One comment on intangibles also in turbulent times, you have an obligation to revisit your impairment every quarter.
We have done, and it just confirmed what we know from before also, that there's significant headroom when it comes to impairment testing on our intangible. Meaning the assumed net present value of the cash flow generating from those investments is more than sufficient to cover the book value of these assets. It's good to know. Page 16. Solid financial position. Maybe slightly short debt maturity on two years on average. We consequently work on what we start after summer to refinance some of the short-term debt. We have learned that access to financing is easy. We are very privileged in that respect. We see that it will be easy to get sufficient funding at very attractive rates. We are confident that that will not be a problem at all.
We also feel comfortable with unused committed credit lines of NOK 850 million that we currently have available. Moving to page 17. Now it is about looking forward. In Collection, after a setback in second quarter, Collection is now in many ways business as usual. RVMs are operational. We get access to machines. Volumes of redeemed containers going to our infrastructures is stable. Only exception worth mentioning is, of course, new lockdowns, new outbreaks of COVID, which is beyond our control. This could have negative impact. If not, we see a stable quarter coming up for Collection. Food, we feel the underlying momentum in Food is good. At the same time, the short-term challenges experienced during second quarter will also continue into third quarter. There are regional outbreaks of COVID-19, which still makes it harder to meet and interact with customers.
As I mentioned, cancellation of fairs is a problem, building pipeline and new opportunities. Closed work borders make access to seasonal workers harder. This has and will continue to have a negative impact on the order intake in processed food. In TOMRA Recycling, as Stefan said, the majority of the business is going good in the waste recycling. Some segments, which is dependent upon commodity prices, has a setback. This, however, accounts for only a minor part of the TOMRA Recycling mining business. If you look at sorting division combined, due to the short-term challenges within food, the order intake is assumed to be down versus third quarter 2019, meaning third quarter 2020 will be down versus third quarter 2019. It will probably also be down versus second quarter 2020.
This is assumed to have a negative impact on the P&L performance in fourth quarter 2020, as we might move into fourth quarter with somewhat lower order backlog. On operating expenses, we believe in the future, and we invest to build an organization to prepare for this. We're already carrying significant costs related to this. Again, as we said, we want to refinance these activities because they're very important for us for executing upon the future opportunities and our strategy. At the same time, we are more cautious on spending and non-essential costs is kept at a low level. Consequently, it's a balancing act where we will both push the accelerator and the brake at the same time simultaneously.
Very round figures, we believe to be flat on operating expenses third quarter 2020 versus the third quarter 2019, currency adjusted, meaning increased costs in group functions related to circular economy will be compensated with somewhat lower cost in the business units. As always, currency will play a role and we will continue to have a tailwind from the Norwegian crown if the regime that we have today will stay out through third quarter. That concludes the presentation, and we're opening up questions from the web.
Georgiana, could I only say a few final words?
Yes, please, Stefan.
Dear all, we might have some customers and employees listening in here, and I just want to express gratitude to you all for your commitment, your dedication, and your passion during this period. Tomra could not be successful without your support. We are here for you today, we are here for you tomorrow, and we will return to normal conditions, and we are ready for it as you have seen. I hope that you see that most of our business is back on a normal situation right now, and we are committed to serve you going forward. Thank you very much, all employees, for your commitment during this difficult period. Thank you.
Thank you, Stefan. With that, we can start on the Q&A section. We have a first question from Knut Erik Løvstad from Kepler Cheuvreux. Do you have an indication of the size of the market in Scotland?
Okay. Maybe I should take that. Scotland has communicated their targets and the setup is now pretty clear. They have high ambitions, meaning they will form a modern system involving the use of RVMs. Collection targets increasing to 90% by 2025. All material types is included, PET, can, glass, and all drink types is included. It's a high deposit value, GBP 0.20. We believe that this will be a good system, and in many ways it looks like the Nordic systems that we know from before. In, say, modern systems using automated solutions, you usually see between 2,000 and 6,000 citizens per machine. With ambitions we see in Scotland, we will be closer to 2,000 than 6,000 is our guess for the time being. It's 5.5 million citizens in Scotland. You have the figures needed for doing estimates based upon what we know today.
Okay. The next question is from Mikkel Nyholt from Carnegie.
Sorry.
What is Tomra's take on chemical recycling? With, for example, pyrolysis getting more and more attention as a way or at least an attempt to recycle plastics, could it ever be a possible path for Tomra to either collaborate with or acquire such companies?
This will be a Stefan question. Yeah, you can say in general, thank you for the question, Mikkel. In general, you have two main ways to do the recycling. You can have a mechanical recycling, or you can have chemical recycling. Mechanical recycling is what we see to the largest degree today, and chemical recycling is innovation. Chemical recycling, I hope, will evolve to become good and effective, and it is complementary to the mechanical recycling. It is most likely more intense in capital investments and in use of energy and process equipment. It will, again, be complementary. We are working with already. We're in close contact with the main companies doing and aiming for doing chemical recycling, and not the least, thanks to our participation and membership of the Alliance to End Plastic Waste. You have many of the chemical and chemical recycling companies in there.
We are definitely working on that. For us as a Tomra, it will not alter anything because for recycling, either mechanical recycling or chemical recycling, you will need to collect the material, and you will need to sort it. It's not that you just dump general waste into a bin, and then you make chemical recycling. No, you make a pre-sort of it, and then you can use more contaminated plastic can be, through chemical recycling, graded to much higher degrees where you could actually not recover it in a mechanical recycling. If you have multilayer type of material, chemical recycling would hopefully be the answer to that. For us, it would actually only be more opportunities because it would be more recycling made if chemical recycling is successful.
You will still need a collection technology, you will need a sorting technology, and the chemical recycling takes place after that. Either if it's mechanical or chemical, it will be both our customers. I hope I was clear, we are in deep collaboration with these partners, not the least, thanks to Alliance to End Plastic Waste.
The next question, there are actually two questions from Daniel Haugland at ABG. The first question, "OpEx was lower. Could you comment how this was split between collection sorting and what drives it? For example, lower travel expenses. Should one expect OpEx to increase again when revenues come back, or is the OpEx reduction more permanent?
Yeah. I saw this question came in, but I think we answered good on it after the question came in. If you go back to what we said, both on the units presentation and on the outlook, it was pretty clear in there, and you can read the split between out of the figures also. I don't think we need to elaborate more on that one.
The second question, also from Daniel Haugland, is, "Order intake lower in sorting. Could you please comment on the decrease and whether it was driven by food or recycling or metal?
Yeah. I think it's rather evenly split between the units. Those units we mentioned that has experienced the most challenges due to the situation are also the one with somewhat lower order intake. We talk processed food, and we talk metal recycling in general.
Thank you. The next question, also two questions from Fredrikke Casse. "Any update on the 2019 dividend payout?
Yeah, I think what was agreed at the AGM was that the board got a proxy to decide dividend. It's really a question for the board, and not for management. I assume that they look at the development in general, and both for Tomra and what other companies in same situation do, because many companies has postponed their dividend. Let's wait and see. I know they monitor the situation closely, and we'll come back to this at a later stage, but there's nothing more to communicate at this stage.
A follow-up question, any news on Canada and New Zealand? Also from Fredrikke Casse.
Canada its territories. They like U.S. do this territory or state by state. There are some news from British Columbia that they want to modernize their system. The same is going for Quebec, where they also want, where in January, government announced the plan to modernize and expand. The details in these systems or initiatives is not known. That's the two that's worth mentioning from Canada. In New Zealand, the government has sent signals that they want to introduce deposit by 2020, but they are working on the scheme details and what that might lead to is too early to say. Yes, there is activities in New Zealand where deposit is planned and they're looking into this, no doubt about that.
The next question is from Giacomo Fumagalli. Could you please clarify what you mean by slowdown of growth of ramp-up expenses in TOMRA Collection? Was the original forecast plus NOK 100 million? Where do you go from there? Will the saved costs be pushed out to 2021?
Round figures, we used NOK 100 million additional OpEx in 2019 related to the ramp-up in collection. Currently, we have the same run rate on, let's say, ramp-up related costs, which is future oriented above what we have done in a kind of a steady state situation. We will not add significant on top of this now. We will maintain this cost, which is very much related to us being present in markets where deposit is about to materialize. Currently, it doesn't seem that we will add additional cost on top of the current run rate. On circular economy, we continue to invest year-over-year. We will, for that reason, continue to see that group operations will report higher cost in both third and fourth quarter compared to the same quarter last year. It is stemming from the circular economy initiative.
Thank you, Espen. We have no further questions, so I think we conclude the Q&A section here. Thank you for listening in and I wish you a nice summer.