Good morning, ladies and gentlemen. Welcome to the third quarter result announcement of Tomra Systems ASA. My name is Stefan Ranstrand, I am the Group CEO. Together with me here is Espen Gundersen, our CFO, and Elisabeth Sandnes, our Investor Relations head. The quarter had a few highlights. I think it's worth mentioning a good momentum in the Sorting business, with good order intake as a result of that. Somewhat calmer Collection Solutions. We had high activity or have very high activities now in Australia as we are ramping up for the start of the New South Wales Container Deposit go live, December 1st. Basically Compac, our acquisition, is on track. Revenues in the quarter ended at NOK 1.855 billion, slightly down in Collection and up in Sorting Solutions. Gross margins broadly unchanged.
They were slightly up in Collection Solutions, we had a slight dilution in Sorting as a result of Compac, which was expected. We see an increase in operating expenses. Number one, of course, is that we have now consolidated in Compac in our books. They were not with us a year ago. We have some additional costs in ramping up for Australia. Earnings, EBITA, ended at NOK 303 million. Cash flow at NOK 375 million. We had an order intake in Sorting Solutions that went up 22%, ending at NOK 724 million, and resulting in that we now have an all-time high order backlog of NOK 924 million. If I look at the broader picture where Tomra is operating, we do have a very focused portfolio around Collection Solutions and around Sorting Solutions.
We are based on sensor technologies. We are active, you could say, in two main segments. One is what we traditionally call recycling. With the solutions we have both in Collection and Sorting. A more modern word, which you will probably hear more from us, is circular economy. It's really about how can we bring bottles and cans into new life. With the discussions, with the developments I see in the market, I see that we are very well-positioned in the fact that we do have both Collection and Sorting. How is that, you might ask? Well, a lot of consumer goods companies now start looking to really taking care of their sustainability agenda, trying to build a model where they can produce new products out of recycled material.
They need that both to secure material at a lower cost. Also in order to show that they take responsibility. The biggest challenge in this model, or one of the biggest challenges, are actually to get hold of the material. By having Collection Solutions that can collect in a high-quality way with continuous volumes is an enabler. The processes to do new products out of recycled material requires a lot of know-how. I dare to say, to a large extent, we are a good partner for that. We have a lot of know-how to help these consumer goods companies to do that. It's still at an early stage. I see that's a big driver going forward. It's good that we can work on these concepts early to build smart circular economy solutions with the use of the platform of Tomra capabilities.
The second leg we are strong in, and also here a market leader, is in food sorting. The world is moving with very high speed here. As we see large cities growing up, I call them smart cities, with a lot of urban citizens, that trend will continue. Predominantly, I see the changes very rapidly happening in emerging markets in countries like China, Southeast Asia, are very quick here. Where you see strong urbanization growth, people get wealth, they want to consume in a convenient way. Smart cities, the rise of e-commerce, requires for good logistical and quality control in the food supply chain. Remember, food needs to be sourced from globally. In order to bring a blueberry on your plate every day, that blueberry is not brought up in one region or grown in one region. It's grown from a global base.
To have the right technologies enabling the quality control, the sorting of that, is critical. I see this megatrends, urbanization, smart cities, bigger wealth with middle-class consumers growing critical, and also the trends that people want to have better, healthier food and want to have the ability to buy. In combination with e-commerce are strong drivers going forward. We are still at an early stage here, but I see strong directions going this way, and we want to be playing a role in that moment. That is a short introduction. I will let Espen go through some of the numbers now and come back later.
Stefan. Yes, quick look at currency. The US dollar has weakened, and as we are exposed to US dollars, this also had an impact on our performance. Some headwind from currencies. We have also on the bottom here showing the exposure on the different currency systems. Some small adjustments compared to previous figures, but also with that follow this closer and model this just for your information. Looking at the P&L. As Stefan said, Collection slightly weaker compared to same quarter last year because of lower activity in Sweden and Germany. Strong growth in sorting, 8% up, and then, of course, Compac on top. Margin stable overall. Operating expenses up mainly because of Compac. Without Compac, adjusted for currencies, we are 4% up, which is again mainly is explained by the ramp-up cost in New South Wales, which we also will come back on later slides.
Balance sheet, rather uneventful. If you adjust for currencies and adjust for the Compac acquisition, you will see that it's more or less similar to what we saw 12 months ago. We have some seasonality, particularly in the U.S. activity within Collection, and consequently, we have to compare all this 12 months back to find the right seasonality. Doing that, you will also see that the working capital is almost identical to what it was one year ago, little north of NOK 1 billion, and we therefore also continue to have a strong cash flow for the month and also the quarter and year to date. Going into fourth quarter, we did have some negative impact from New South Wales ramp-up, which we'll again come back to. Just mentioning here when we're talking about cash flows. Leaving the stage for you, Stefan.
Collection, a market where we founded Tomra, very dear to us, a focus area. We have a leadership position in this segment. Our estimated market share is 75%, and there has been no changes in that. We are maintaining our strong market situation here. We do see in this quarter, number 1, that Sweden, where we had a replacement a year ago. Due to technical reasons, we had to replace lots of machines in the Swedish install base. That was ended last year, beginning of this year, and consequently, that impacts the results that we do not have this event anymore. As you know, we are in the midst of a replacement event in Germany as well. We will come back to some more details around that. Espen will talk shortly about that, how that looks. Also here, we had an estimate for the event over four years.
It seems that this is happening, but we had quite a strong activity in the beginning of the period. Hence, we expect this year and next year to be somewhat slower. Nothing unexpected here, fully in line with what we had expected. The big event right now is the ramp-up in New South Wales. Just to be prudent, revenues ended at just north of NOK 1 billion. Gross margin slightly up due to portfolio reasons. Operating expenses of NOK 200 million. Here, up about 5%, and that is almost entirely due to New South Wales. Good cost control in the base business. Of course, when we have to invest in new markets, we have to also accept that the operating expenses go up as we build an organization. That means also that we got a slight decrease in the earnings EBITDA, ending at NOK 236 million.
I will go in and talk a little bit more about the New South Wales. New South Wales decided to introduce a deposit legislation for about 7.5 million inhabitants. That system is planned to go live December 1. It is a complex project. It is far away, basically as far as you can come from Norway. It is a new system for us. To get a new market. We did not have any installation in that geography before. Consequently, we have now put a lot of efforts. It is one of the biggest projects we have ever executed in the history of Tomra. As I look at it right now, we assess that we are on track. We are targeting to be able to switch on the system as planned. I should not with guarantee say that there will not be any hiccups, but we are in a good stage here.
It means that we have to deliver a lot of RVMs in a short period of time. Remember, we got the approval to do this end of July, so it is not too many months, and it is quite a long shipment time down to the Southern Hemisphere. We also have to produce a lot of equipment locally. A lot of news here for us. We also have a joint venture here with a leading waste management company called Cleanaway. We have signed a partnership with one of the leading retail chains in Australia, Woolworths. It is interesting. Strategically, it is a high importance. It is a new market. That is good because we know that traditionally, Collection need this kind of new events to continue to grow.
It is good because we are seeing that when we go into new markets, we see that the frames, the conditions are slightly changing. If you think of Tomra 10 years back, we were selling traditional RVMs to retail. It was pretty much a standalone solution built into the store, and it was a traditional container deposit. We had to focus on shipping machines, servicing machines, and also taking care of the clearance and administration. Now when we move on to a market like Australia here, we are, in order to make the system function, in need to work with someone else, a partnership, a collaboration for the logistics and for handling of the plastic processing. That is now, in this case, Cleanaway. It's great for us to learn to work that way. The machines are actually more like, we call them kiosks. They are standing not in store.
They're standing somewhere close to retail or in some locations. Again, partly a hybrid. They are also designed in a partly different way. They can take different type of fractions and so on. In addition to that, we have a partnership with a retail chain. There are some few new elements here, which I think is good for us to test out. As we move on to new markets, as the market demands or requirements are changing, it's very important for us to learn new models as we go. I think if you look at collection solutions today compared to where we were, say, 10 years ago, you will see that we have moved on quite a bit. We will build up about 500 collection points, and about half of them will be fully automated, between two and four RVMs per installation.
As I said, it's a logistical big project, also in terms of installing, getting site approval, et cetera. Also, the IT landscape requires us to build an IT interface towards the Cleanaway partner, an IT interface towards the new system operator, an IT interface towards the retail. Quite a lot of exciting things here, and I'm very pleased for it. The whole organization is very geared up, and we have people from basically all over the world being in Australia contributing. That's really also exciting for the organization in that regard. I'll show you a short video here if I am able to do it. Let me now see how I can get here, and I hope this will work.
Picking up your discarded drink bottles is about to get lucrative.
We are going to make it easy for everyone across the state to have a place they can go and get their refunds.
It's all thanks to these reverse vending machines, which crews worked through the night to install the first at Spring Farm.
It's a massive logistical exercise, which we're starting today.
The machines will take your used drink containers between 150 mils and three liters. In return, you'll be paid AUD 0.10 for each bottle, the money to go either to your chosen charity or into your bank account.
Oh, I think it's a fantastic idea.
I think it's a really, really good idea as long as people use it.
Here in Camden, this is just one of 180 reverse vending machines to be rolled out across the state. It's hoped that they will be a game changer for recycling in Australia. The scheme aims to reduce 40% of the state's litter by the year 2020. As we reclaim them, they go straight back in, and they can become bottles again. Samantha Brett, 7 News.
To round up, big project, very exciting. Top priority for us. We are very committed, and we want certainly to make a success here. It's not too far away in the future, so soon we will see the results, and the New South Wales population can start reverse vending. With that, I think I can hand over to Espen to go through more of the financials.
Thank you, Stefan. Just briefly on New South Wales, since I know some of you are eager to put some figures into your spreadsheets. The setup in New South Wales is that we have established a joint venture with Cleanaway, we have been awarded the contract for running the network of return points in New South Wales. It's a rather slim joint venture where they will do some manual sites, meaning not the automated sites. They will have the clearing with the scheme coordinators. The money deposit handling fees will go through them. Beside that, our responsibility has been outsourced either to Cleanaway, which will pick up the bottles, process and sell the material, and Tomra, which will build the Collection infrastructure via kiosk the RVMs and operate this infrastructure. Consequently, Tomra will do an investment which will hit our books.
How big, it's a little early to say how this will be, to use very round figures, you can assume that the fixed assets plus the working capital could, as a guess today, be around AUD 50 million. Particularly the working capital part is uncertain because it's a little how the cash flow will work within the system here. Just to give an idea of what this might be. At the same time, the revenue that's hitting Tomra's P&L above the EBIT line will be related to the volume going through our infrastructures. Today we don't know which volume that will hit our infrastructure. It's about the drinking consumption, it's about the return rate, and it's also about the fee structure we have established.
Over time, with a lot of assumptions and with a lot of uncertainty, we believe we can earn maybe around AUD 50 million as revenue per year in this infrastructure. This is that part that will hit our revenues and our P&L above the EBIT line. The joint venture will not be very visible and not big figures in this context and will be reported as an affiliated company, meaning below the finance line. That's some figures to play with, you have to do your own assumptions when it comes to this. We don't know exactly how this will turn out, particularly not on the revenue side, because it's very depending upon return rates. Also on the cost side, we have not run this yet and time will show exactly how this will run up.
Of course, rest assured, we do an investment based upon an assumption that we will do a decent return on the investment that we do in Australia. On the figures, very briefly repeating what Stefan said, Nordic down because of somewhat lower volume in Sweden. Europe down because of somewhat lower volume in Germany. North America flat or +1% adjusted for currencies. A rather stable month. OpEx summed it up, that's again NOK 11 million from New South Wales. Germany, as Stefan also mentioned, we have had a period where we, from 2015, where we kind of had the second replacement or replacement race in Germany, we have indicated the band between 2,007 and 2,700 machines per year. We came out high in the band the two first years, now it looks like we will be lower in the band the two next years.
It's not likely that we will pass 3,000 machines in 2017, for instance. Sorting Solutions. As mentioned before, Sorting Solutions experience a good momentum right now. Revenues were up 8%, ending at 831 million NOK. Gross margin slightly down, predominantly as a dilution effect of that Compac is coming in. They do have a little bit lower gross margin. At this stage, we are of course working to improve that, but that was expected. Earnings, EBITDA of NOK 83 million. The nice side here is a sound 22% growth in order intake, ending at NOK 724 and an all-time high order backlog of 924 million NOK. Looking at the different sectors, starting with food. I mentioned briefly before, there are strong drivers. We need to produce more food. The market is shifting towards healthy food, strong drive in smart cities, but demand, of course, throughout the world.
I had the privilege to visit some 100 customers this summer, especially around the Compac side. Since that was new, I wanted to dive into that and understand. I see very positive feedback from that visit. We can see it's a continuous growth in investing in new crops. People are planting. You can basically see what's going to happen in three, four, five years. If there's an orange producer, an avocado producer, you see what they are processing today, and you can see the geographical areas that is under exploration. It's a nice thing.
The customers we have, they are very committed. They are mostly family businesses. They are running their operations, they are living there, and it's their baby. You can see big passion. They're operating in quite good markets. Fresh produce is sought after, is good pricing, and hence the willingness to invest is high. I thought a lot that Compac is well-positioned in the market. The technology is much appreciated. It's the best sorting grading system, what I get in the market, what the people tell me. It's running well. It's even to the point that we are now with our Spectrim, which is the, so to say, optical or the head of the brain of the whole sorting unit. It's even, in some cases, implanted on competitor equipment on top of their lane. Our grading system is state-of-the-art. That's good.
I think we can improve somewhat on the service, that's something we're looking at. That's feedback, that we are everywhere, service could be improved, and certainly that we take gladly as an improvement area. Overall, in food, both for the traditional Tomra Sorting Solutions and for Compac, we see good momentum, I don't see that there is a mood change here. Recycling has been tougher the last years, especially 2015, 2016, where we're facing some headwind, very much due to lower commodity prices. We see that that has stabilized. I was recently at a customer event we had with some 130 customers. Also here, I feel we are really leaders. We are a thought leader, we are a technology leader, we are the ones driving the industry, and we do have a market leadership position with an estimated 55%-60% market share. That's visible.
We have teams working on existing solutions. We have teams working on new solutions. We are in all critical geographies that are growing up. It's running well. On the recycling arena, we have to remember that China is a very important market. China has come out with a new event they call National Sword, which means that they will not allow import of waste, which happened in the past. They are banning that. Meaning that now, that waste that was previously exported to China needs to be handled somewhere else. We see a lot of initiatives now to actually invest in the domestic markets. Let's assume that waste is generated in America. Instead of shipping that waste to China, they will need to treat that in America and make valuables out of that. Again, that's a good driver, actually, in the industry.
Such an initiative like the Chinese have launched here, the so-called National Sword, is actually not negative for our industry. Hopefully, people see the opportunity to generate good recyclable raw materials in the local market, and by that, also creating green jobs. Recycling, I see that we have seen a recovery in the market, and we see that we are in a positive momentum. In the mining sector, I do not need to talk too much. It's still very small, but all I can say that it's going well. We have also good momentum here, but again, from very small numbers. Spend a few words rather on Compac. We did the acquisition. It was a turnaround company. It is a turnaround company. It came on our books in February this year. It's new for us.
We went in, we have spent a lot of time, very focused. Espen and myself, we have basically been there rolling every month. I've been there every second month, and Espen there every second. I'm on the crossing so that every month has been a visit. We have really worked much with the local leadership team. I dare to say we have a good leadership team. It's been strengthened, and we are pretty confident we are on a good way here. The broad message is we are on track. That's number one. We focused on a few important areas. Number one was to develop regional operating centers. In simple ways, you could say that's sales and service. But for Compac, it's more because, if you can see on the picture up on the top right corner here, it's quite big installations.
It can take up to two months to do installations, so we need a crew to do that. We need to source third-party equipment, that needs to be done locally. We don't do that centrally because there's no global standard for that. A regional operating center, in our view, do not only need to do sales, marketing, and service in a geography, they also need to do product management, sourcing of third-party equipment, installation, and by that, it becomes quite a big operation as part of. Hence, we call it regional operating centers and not only sales and service. We do have now built up one North America. We are building up one in Australia and New Zealand. We are building up one in Latin America, and we will continue. It's a global opportunity, the business, but we are not really running globally yet.
We are really focusing on the core markets at this stage to get our model running, then we are ready to expand into new markets. I think there's a lot of opportunities, in the long run here going forward, to expand also new geographies. We experienced good orders growth. That was initiative number 2. We are dependent on the volume, and especially then launching the new technology Spectrim, which is going well. We also, when we took over this operation, experienced the company with four production sites. We have reduced that. We now have two, and they are focused. New Zealand makes the visual inspection system, and in China, we're producing the lanes, which you can see are the mechanical. It's a lot of labor, a lot of components. Hence we can source a lot of components locally and build them together for shipment in China.
They are then shipped in modules, kind of in containers so that it can be built up fairly quickly at site. We are on track on that. We just inaugurated our new factory August 28th in China, in Kunshan, just an hour west of Shanghai, and it looks good. That's going on. Further to that, Compac was a family-driven company out in New Zealand, a lot of resources were placed there. We're now moving resources into the markets, especially installation service. It is not viable to send people in and out. It costs too much money. It's too slow. Instead of that, we're in the regional operating centers building local resources to handle all of the installation and service, and that's on track.
The last item was to really get a good control of the business planning, of the business control, so the financial administration systems, the production planning, and I think that's also running very well. In essence, be close to the market with local activities, have a strong global control, focus on the core, deliver what we can do, and try to avoid full turnkey solutions. That's also on track, and continue to grow the business, develop people, and our market relationship. I am pleased with this, and as I said before, we are on track here. With that, I think it's time to hand over to Espen.
Yes. Figures. 8% growth without Compac and currencies. Compac is in there with NOK 158 million of revenues. Margins slightly down, mainly because of headwind on the U.S. dollar, also some Compac effect. Bottom line, NOK 83 million. Compac was very close to break even this quarter. Looking at the order intake, all-time high intake, if we're allowed to include Compac. Second to all-time high on overall Sorting Solutions. Revenues somewhat down compared to second quarter and also slightly below what we indicated three months ago. That also leads to an all-time high order backlog at the end of third quarter. Conversion ratio estimated for next quarter, meaning fourth quarter, is 75%-80% of the end backlog as of third quarter. Outlook. In Collection, the same trends that we've seen through the year is expected to continue. There will be slower Nordic compared to second quarter last year.
Germany will be slower, as also mentioned. We will have significant ramp-up cost from New South Wales. How much remains to be seen. If we again allow us to operate with very round figures, let's guess we will be around AUD 10 million. That will hit our P&L in fourth quarter related to the ramp-up. Then we will start to recognize revenue from 1st of December, but it will be low as it's a startup, so it is limited how much revenue and profit from that that could be recorded in fourth quarter. I mentioned AUD 50 million as a rough way to estimate what the revenue might be in the future, but also remember it will take some time to get there because of the ramp-up. The figure could be something different also because return rate and what have you of uncertainties around the exact figure here.
In sorting, there is good momentum in food, good momentum in recycling. We have indicated their conversion ratio, which indicate that fourth quarter will be an okay quarter for that segment as well. Remember currencies. With today's dollar rate, we have close to 7% headwind on the dollar, which will have a negative impact on the figures when you do your comparison against last year. With that, we open up for questions
We have one question coming in from the web. Can you give an update on the coming bottle deposit system in Scotland and Spain?
The question was. If you can speak louder, Scotland and Spain?
Yes.
Right. That is something we are definitely working on. We have been there for some time and done some pilots, so we are familiar with the requirements. There is no, to my knowledge, firm timeline. That is something we are geared up to. I think autumn 2019 has been an estimate.
We mentioned, yes.
Yeah. Again, let's not jump here until we have firm commitments. We believe it will come, and we are geared up to do that. When it comes to Spain, we have no news. We have been working, as you know, in Catalonia, Valencia, Balearic Islands, and to this date, we have no news of any movements there.
A second question from the web. Any positive outcome after the media announced China meetings in April?
There has been no news in China. We are working in the market to build up circular economy system. If we think about Collection Solutions, we will, in essence, require a container deposit legislation. There is nothing like that being announced at this stage. If it happens, it might not happen on the country level rather than on provinces or cities. We are close to it. We have activities in China. We have some 170 people there now. Of course, we are following what is happening on the political agenda. For sure, we know that circular economy is on top of the political agenda of the leading politicians. We know that smart cities, the waste generation will grow dramatically in China, and they have a big need to build up an infrastructure to handle that.
We remain positive that there might happen something in the future, but we have no facts at this stage.
Thank you. Glen Klingend from ABG. I obviously know that there is some uncertainty, but can you elaborate a bit on the Sorting sales and why you did not meet your own guidance for Q3?
I am always clear that there is no guidance here. It is just an indication based upon the current delivery schedule, how we believe it end up. It makes life a little easier for you also. When you come to quarter-end, year-end, some orders might slip into next quarter and so on. I think we are 4% behind or something. The U.S. dollar is also down with 4%. It is very small deviations against what we indicated. Sometimes we are above, sometimes we are below. We do not guide on long-term deliveries, and we have financial targets of at least growing this 10%. To give you something to use in your estimate for the quarterly previews, we give you this indication. Sometimes we are above, sometimes we are below, and there is nothing dramatic about that. To me, it is only about execution.
The important figure is the order intake. As you see, we are slightly below on the revenues, also we end up with all-time high order backlog. There is nothing dramatic around it.
Maybe I can just add to that we have had no hiccups or disturbances in operations. It is more timing of projects. The customer might be delayed. Two, three customers being delayed with their construction on new plant, meaning that they want to sort this later. That is the whole difference we are experiencing. Nothing else.
Gunnar Støver, DNB. On Compac, you talked about a lot of initiatives that you are implementing in order to obviously get the profitability up, et cetera. In order to get that business up to the margins that you are hoping for, do you have to do also something with the price point, et cetera, or is it more sort of internal improvements, logistics in order to get to where you want to get? Thank you.
I think the pricing is not huge opportunity. When the Spectrim was launched, that technology is brand new, actually. It was positioned with a premium price. We are a price leader today, pretty much by far, actually. That is good because the technology is leading. I visited one customer, just to give you an example of that, who installed the Spectrim. In the first year of use, and it was a bad season, he told me, they had 30% more Class One, and they could generate 12% more revenues. That is the P&L for our customers. That was huge. He said it was astronomic. For him, it was a fantastic success. I see similar stories, but that was the most quantified feedback I have ever got during the meetings. These projects, we will just go through quickly, are quite complex, as I said, right?
In the past, there was maybe not such a very well-defined strategy of Compac. They were struggling a little bit to, shall we do turnkey? Shall we focus on what we consider the core? We have driven this focus on the core. Just to give you a round number here, a project like this, if it's turnkey, then it's 100% right revenues. When it's only our graders and sorters, we, in such a project, will deliver about 40%-45%. It's quite a big part that is not core, if you understand me. It can be washers, bin tippers, conveyor belts. There will be very low margins on them, right?
By being able not to focus or not take them on our books, enabling the customer to buy them directly, we can point to the customer and say, "Buy this equipment. That's what we would have done. We don't need to mark it up." Which is not in our favor, which is not in your favor. You get it cheaper, you get the same thing. Or working through integrators who do this. This is dual strategy we have to work on here. We can avoid these going through our books. That has a big margin impact, you can imagine, because they basically dilute the whole P&L. We will see a little bit less revenues, but it's a good quality revenue. That's exactly what we want. Secondly, operations were not optimized. They were fairly low when it comes to quality and on-time delivery.
We have focused a lot on that as part of this focused operations in New Zealand and China, and now we are almost at 100%. Keeping it there, of course, will be key. Remember, when you're producing a factory and then you send that to site, you have a team of, say, 20 people doing installations. That installation will take two months. If then the shipments from the factory come late, these people will be idle. If parts are missing that might need to go to the local iron store or to some local manufacturer to do some things, that explodes the cost. As a result, you get a margin dilution. It's very easy. Fix the operations, get it delivered quality on time, deliver on the core technology, try to avoid third-party equipment. The last but not least, to have local people.
We don't have to fly them out. A lot of time, a lot of cost in the airplane, which the customer is not paying for. I mean, they are paying for installation. If we have a local installation crew or remote installation crew, it doesn't really matter for the customer, but for us, it means the world. Fixing these simple things are actually what we are focusing on here. Maybe that didn't come across before so well. I'm convinced that we'll see, and we already do see, an increase in the margin. It's as simple as these things here. It's nothing rocket science here. It's pure normal management. Having said that, it's not that the previous management were not good enough. It was just they didn't have this capability because it's a family-owned company, quite small. They could not build this global base.
Being part of Tomra, we can leverage that. We do have local sales and service, we can capitalize on what we have as infrastructure. Hence also the synergies in this case. I hope that answers your question.
Mikael Nyholt, Carnegie. It's very nice to now see costs but also revenues coming in from New South Wales and Australia. I was wondering whether you could give an update on Queensland and Western Australia and what's going on there, because we know that the timeline there has been much more set than it has in Scotland and in Spain.
Would you like to take this one?
Queensland is the first one out. They, according to what they communicated, has the startup date 1st of July next year. It's a few months before there. Still, it's not completely clear what kind of models they want to run. We will be there, try to participate if there is a room for us in Queensland. So far, it seems they will choose a different avenue than the New South Wales has done. What concrete system that they will set up is a little too early to say because they have not finished the structure of the system. Let's see. If there's opportunities, we will be there. Western Australia is partly the same also. They're slightly further down the road, but they also seem to have commitment to do something on the recycling here.
We have, of course, hoped that we would see the same system all over Australia. At least initially, it seems that they are in tendency to develop in different directions here also. Canberra, which is kind of an island inside New South Wales, has also established a deposit system. That will be different from what they do in New South Wales. More bottles not returned to retail and so on. Sorry for being a little unclear on it, but we are partly only an observer here, and it's the state and the stakeholders locally that establish the systems. We'll be there and try to create business opportunities out of what they decide to do there.
I can add to that I did visit the authorities in Queensland, not in Western Australia, but in Queensland I did. They are, of course, very much observing how it's going, what's happening in New South Wales. We don't know exactly, as Espen said, what kind of system they will choose, but for sure they are observing what's happening in New South Wales, how well that system lands. I think the top priority for us is to make a good work in New South Wales, and maybe that could also be a platform to communicate around. To us, it's then important to be a speaking partner if they wish and when the launch process is when they set up the working groups, so we can be there and share our experiences with authorities. It's not in our control.
I just wanted to mention that with New South Wales being a top priority, and I think also in this context important.
One last question on the Sorting Solutions. I know you don't typically split between food, recycling, and mining, but is it possible to give a slight hint of how much more recycling make up of this year versus last year? Are we talking low single-digits, or are we talking like a significant increase in recycling with the uptick from commodity prices? Obviously, some of us were a bit surprised by both the activity level and the margin in Sorting Solutions this quarter. That would just give somewhat more flavor on the development. Thank you.
Yeah. It's not significant changes. We have usually said that the split between food, recycling, and mining is 60%, 30%, and 10% of revenues. This was before Compac. Compac comes on top. Looking at this year compared to last year, it's not a huge change in any respect. Food has been growing, recycling has been growing, and mining is growing as well also. Recycling probably slightly more. It's not a big swing. The percentages we have used historically is still pretty valid this year.
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