Yahoo Finance Lassila & Tikanoja plc: Financial Statements Release 1 January–31 December 2022
Lassila & Tikanoja plc
Stock exchange release
9 February 2023 at 8:00 a.m.
Lassila & Tikanoja plc: Financial Statements Release 1 January–31 December 2022
A STRONG YEAR IN CIRCULAR ECONOMY BUSINESSES, HIGHER COSTS WEIGHED DOWN THE RESULT OF FACILITY SERVICES
Unless otherwise mentioned, the figures in brackets refer to the corresponding period in the previous year.
Net sales for the final quarter were EUR 210.1 million (223.5). Net sales decreased by 6.0%. Net sales growth excluding the renewable energy sources business was 2.9%.
Adjusted operating profit for the final quarter was EUR 9.6 million (10.1) and operating profit was EUR 12.9 million (9.9). The Group's operating profit was increased by a gain of EUR 4.3 million recognised on the sale of the share of renewable energy sources business to a newly established joint venture.
L&T’s circular economy businesses, namely Environmental Services and Industrial Services, achieved a strong operating result in 2022. In Industrial Services, net sales increased by 25.6 per cent.
In Facility Services in Finland and Sweden, the higher general cost level had a negative effect on profitability. Both divisions launched programmes during the review period to simplify and increase the efficiency of their operating models. These programmes will continue in 2023.
Net sales for 2022 amounted to EUR 844.1 million (812.5). Adjusted operating profit was EUR 40.9 million (42.4) and operating profit was EUR 42.9 million (42.2). Earnings per share were EUR 0.83 (0.90).
Net cash flow from operating activities after investments per share was EUR 1.08 (0.05).
The Board of Directors proposes a dividend of EUR 0.47 per share.
Outlook for the year 2023
Net sales and adjusted operating profit in 2023 are estimated to be at the same level as in the previous year even though the comparison period includes net sales from the renewable energy sources business in the amount of EUR 35.4 million.
PRESIDENT AND CEO EERO HAUTANIEMI:
“The year 2022 was exceptional and the business environment changed significantly. The economic uncertainty caused by Russia’s invasion of Ukraine, the sharp rise in costs and interest rates and the significantly higher-than-usual level of sickness-related absences affected all of the company’s divisions.
The development of net sales was positive in 2022, but adjusted operating profit declined slightly due to the weak result of Facility Services Finland and Sweden. Net cash flow from operating activities was strong, as was the company’s financial position.
L&T’s circular economy businesses, namely Environmental Services and Industrial Services, achieved a good operative result in 2022.
In Environmental Services, net sales growth excluding the renewable energy sources business came to 8.1 per cent. The number of corporate customers and producer responsibility organisation customers grew. The division’s environmental responsibility management and consulting capabilities and organisation were strengthened.
In Industrial Services, net sales increased by 25.6 per cent, of which 6.6 per cent was organic growth. Industrial Services expanded its operations into the Swedish market and strengthened its market position in hazardous waste in Finland through an acquisition. In the environmental construction business, a number of demanding contaminated soil restoration projects were carried out for industrial customers.
In Facility Services in Finland and Sweden, profitability was weighed down by the higher general cost level, worsening labour shortages, high employee turnover and sickness-related absences being significantly higher than average. The profit performance of Facility Services Sweden was weighed down not only by inflation but also the weaker-than-expected sales of additional services. Both divisions launched programmes during the review period to simplify and increase the efficiency of their operating models. These programmes will continue in 2023.
L&T’s businesses are not particularly sensitive to economic cycles. Nevertheless, inflation and rising interest rates create uncertainty in the operating environment.
In 2024, the Environmental Services division will focus particularly on corporate customers and producer responsibility organisations as the progress of municipalisation reduces the significance of households as customers.
The Industrial Services division will continue to invest in the development of new hazardous waste recycling solutions and process cleaning methods in both Finland and Sweden.
Facility Services Finland and Sweden will continue to focus on improving operational efficiency and profitability. Particularly in Finland, unprofitable customer agreements will be terminated and the scope of operations will be reassessed. In Sweden, the focus will be on simplifying the operating model.”
GROUP NET SALES AND FINANCIAL PERFORMANCE
October–December
Lassila & Tikanoja’s net sales for the fourth quarter amounted to EUR 210.1 million (223.5), a decrease of 6.0% year-on-year. Net sales growth excluding the effect of the renewable energy sources business was 2.9% and organic growth was 0.4%. Adjusted operating profit was EUR 9.6 million (10.1), representing 4.6% (4.5%) of net sales. Operating profit was EUR 12.9 million (9.9), representing 6.2% (4.4%) of net sales. Earnings per share were EUR 0.29 (0.26).
Net sales increased in Industrial Services and Facility Services Finland. Net sales decreased in Environmental Services and Facility Services Sweden. Operating profit improved in Industrial Services and Facility Services Finland, and declined in Environmental Services and Facility Services Sweden.
The Group’s adjusted operating profit was still negatively affected by the higher general cost level. Net financial expenses rose to EUR -1.6 million (-0.8). The Group's operating profit was increased by a gain of EUR 4.3 million recognised on the sale of the share of renewable energy sources business to a newly established joint venture.
Year 2022
Net sales for 2022 totalled EUR 844.1 million (812.5), an increase of 3.9% year-on-year. Net sales growth excluding the effect of the renewable energy sources business was 7.0%. Organic growth was 3.7%. Adjusted operating profit was EUR 40.9 million (42.4), representing 4.8% (5.2%) of net sales. Operating profit was EUR 42.9 million (42.2), representing 5.1% (5.2%) of net sales. Earnings per share were EUR 0.83 (0.90).
Net sales increased in Environmental Services, Industrial Services and Facility Services Finland. Net sales decreased in Facility Services Sweden. Operating profit improved in Environmental Services and Industrial Services, and declined in Facility Services in Finland and Sweden.
The Group’s adjusted operating profit was negatively affected by increased fuel prices and the higher general cost level. The sickness rate was exceptionally high during the review period, which had a negative impact particularly on the labour-intensive facility services business. The Group's operating profit was increased by a gain of EUR 4.3 million recognised on the sale of the share of renewable energy sources business to a newly established joint venture.
Net financial expenses rose to EUR -5.8 million (-3.3) and the effective tax rate increased to 16.7 per cent (11.8 per cent).
Financial summary
| 10–12/2022 | 10–12/2021 | Change % | 1–12/2022 | 1–12/2021 | Change % |
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Net sales, EUR million | 210.1 | 223.5 | -6.0 | 844.1 | 812.5 | 3.9 |
Adjusted operating profit, EUR million | 9.6 | 10.1 | -5.1 | 40.9 | 42.4 | -3.5 |
Adjusted operating margin, % | 4.6 | 4.5 |
| 4.8 | 5.2 |
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Operating profit, EUR million | 12.9 | 9.9 | 30.2 | 42.9 | 42.2 | 1.7 |
Operating margin, % | 6.2 | 4.4 |
| 5.1 | 5.2 |
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EBITDA, EUR million | 26.5 | 23.2 | 14.2 | 98.3 | 95.1 | 3.3 |
EBITDA, % | 12.6 | 10.4 |
| 11.6 | 11.7 |
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Profit before tax, EUR million | 12.2 | 9.1 | 33.8 | 37.8 | 39.0 | -3.0 |
Earnings per share, EUR | 0.29 | 0.26 | 11.1 | 0.83 | 0.90 | -8.3 |
Net cash flow from operating activities | 1.05 | 0.55 | 92.8 | 1.08 | 0.05 | 2,279.1 |
Return on equity (ROE), % |
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| 14.6 | 17.1 |
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Capital employed, EUR million |
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| 437.2 | 406.0 | 7.7 |
Return on capital employed (ROCE), % |
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| 10.4 | 10.8 |
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Equity ratio, % |
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| 34.3 | 34.2 |
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Gearing, % |
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| 75.9 | 79.4 |
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NET SALES AND OPERATING PROFIT BY DIVISION
Environmental Services
October–December
The division’s net sales for the fourth quarter decreased to EUR 71.1 million (89.9). Operating profit declined to EUR 6.2 million (7.1). Excluding the renewable energy sources business, the net sales of the Environmental Services division amounted to EUR 71.1 million (71.2) and operating profit was EUR 6.2 million (6.6).
Year 2022
The full-year net sales of the Environmental Services division grew to EUR 321.2 million (320.5). Operating profit was EUR 30.3 million (29.8). Excluding the renewable energy sources business, the net sales of the Environmental Services division amounted to EUR 287.1 million (265.5) and operating profit was EUR 30.0 million (28.9).
In Environmental Services, growth was derived particularly from corporate customers and producer responsibility organisations. The producer responsibility organisation Suomen Pakkaustuottajat Oy chose L&T as its recycling partner for consumer plastic packaging in December. The agreement covers approximately 20,000 tonnes of consumer packaging plastic waste, which corresponds to approximately half of the packaging plastic waste collected in Finland each year. From the beginning of 2023, L&T will be responsible for the intermediate storage of plastic packaging waste as well as its collection and transport to Quantafuel ASA’s mechanical and chemical recycling plants in Denmark.
During the period under review, the organisational structure and operating model were reformed by assigning more commercial responsibility to the local organisation. Environmental responsibility management and consulting organisation grew, and its competencies were expanded.
The ERP system and related information system renewal programme continued in the division and progressed to the implementation stage. The system is scheduled to enter the deployment stage in the first half of 2024. The total investment in the system projects under the programme is estimated at approximately EUR 16.9 million, of which approximately EUR 6.2 million were realised by the end of 2022, with expenses of EUR 1.3 million recognised in 2022.
Due to the reform of the Waste Act in 2021, direct customer agreements with housing properties were transferred to municipal operators during the period under review, but the impact of these changes on net sales was compensated for by growth in the corporate customer segment.
The prices of recycled raw materials increased in the first half of the year. The prices of recycled raw materials subsequently stabilised and, in the case of certain fractions, began to decrease in the latter half of the year. The market prices of recycled cardboard and paperboard falling to less than half of the level seen in the early part of the year was particularly reflected in the net sales of the Environmental Services division. The reduced level of activity in the construction industry was also reflected in declining volumes towards the end of the year.
Fuel prices rose sharply at the end of February due to the war in Ukraine. The higher fuel costs were successfully passed on to customer prices through cost increases carried out in February–April.
The merger of the Environmental Services division’s renewable energy sources business with Neova Oy’s corresponding business was approved by the Finnish Competition and Consumer Authority, and the joint venture Laania Oy became operational on 1 July 2022. In the first half of the year, the net sales of the renewable energy sources business amounted to EUR 35.4 million, and the operating profit was EUR 0.3 million. In the financial year 2021, the net sales of the renewable energy sources business totalled EUR 56.9 million, and the operating profit was EUR 0.9 million. The business is no longer reported as part of the Environmental Services division after the second quarter of 2022. The net profit of the joint venture is consolidated in one line item under operating profit.
Industrial Services
October–December
The division’s net sales for the final quarter grew to EUR 36.3 million (28.7). Adjusted operating profit was EUR 3.1 million (1.7). Operating profit was EUR 2.3 million (1.7). Operating profit was reduced by a change of EUR 0.8 million in the fair value of the deferred consideration related to the acquisition of Sand & Vattenbläst i Tyringe AB (“SVB”) recognised in the final quarter of 2022, due to the positive development of the acquired company’s business.
Year 2022
The full-year net sales of the Industrial Services division grew to EUR 132.0 million (105.1). Adjusted operating profit was EUR 13.6 million (9.2). Operating profit was EUR 12.7 million (9.2). Operating profit was reduced by a change of EUR 0.8 million in the fair value of the deferred consideration related to the acquisition of Sand & Vattenbläst i Tyringe AB (“SVB”) recognised in the final quarter of 2022, due to the positive development of the acquired company’s business.
The Industrial Services division strengthened its position in hazardous and non-hazardous waste recycling services during the period under review by acquiring Fortum’s hazardous waste SME business in Finland at the beginning of February 2022. The takeover of the business acquired from Fortum went according to plan, and the demand for hazardous waste services was strong.
In the environmental construction business line, several demanding industrial soil decontamination projects were carried out. At the beginning of the year, a new material treatment center started its operations in Pori, Finland. The plant focuses particularly on processing industrial side streams.
In February, Industrial Services expanded into the Swedish process cleaning services market by acquiring 70% of the shares of Sand & Vattenbläst i Tyringe AB (“SVB”), a provider of process cleaning services in Sweden. Operating in southern Sweden, SVB had net sales of approximately EUR 10 million in the previous financial year and has approximately 60 employees. The integration of the Swedish business progressed according to plan, and several successful industrial water treatment projects were carried out in the process cleaning business in Sweden. In the process cleaning business in Finland, resource allocation for annual maintenance services was successful in spite of maintenance services originally scheduled for the early part of the year being postponed to the autumn due to the COVID-19 pandemic and labour action.
Fuel prices rose sharply at the end of February due to the war in Ukraine. The higher fuel costs were, for the most part, passed on to customer prices through cost increases carried out in February–April.
Facility Services Finland
October–December
The division’s net sales for the final quarter grew to EUR 64.6 million (63.0). Operating profit was EUR 0.8 million (0.6).
Year 2022
The full-year net sales of Facility Services Finland grew to EUR 256.3 million (243.1). Operating profit declined to EUR -0.5 million (1.8).
Several significant new customer accounts were acquired and started in the cleaning business, and the demand for data-driven cleaning services increased. The demand for energy efficiency services increased during the review period.
The COVID-19 pandemic and other respiratory infections significantly increased sickness-related absences in the first and fourth quarters, which increased production costs in all service branches, especially in cleaning. Production costs were increased by higher fuel prices and general cost inflation. The increased production costs could not be fully passed on to customer prices.
In the cleaning business, the availability of labour declined and employee turnover increased significantly, which drove costs higher. Several new projects were launched to improve the availability of labour. Co-operation with municipal employment services and government organisations was intensified to ensure that jobs offered by L&T are better known by job seekers. L&T joined forces with Staffpoint to offer jobs to Ukrainian refugees. A group of workers from the Philippines was recruited for full-time cleaning work under contracts valid until further notice. The employees in question will start work in the first quarter of 2023.
Measures were taken in Facility Services Finland to improve operational efficiency and profitability throughout the period under review. Local and business line-specific change negotiations were conducted in the division in the second half of the year, leading to the termination of employment for approximately 70 white-collar employees and approximately 30 employees.
Facility Services Sweden
October–December
The division’s net sales for the final quarter decreased to EUR 39.8 million (43.8). Operating profit declined to EUR 0.5 million (1.3). Operating profit before the amortisation of purchase price allocations of acquisitions was EUR 0.8 million (1.9).
Year 2022
Facility Services Sweden’s full-year net sales decreased to EUR 140.4 million (149.8). Operating profit declined to EUR 0.4 million (3.9). Operating profit before the amortisation of purchase price allocations of acquisitions was EUR 2.2 million (6.0).
Production costs were increased by higher fuel prices and general cost inflation from February onwards. The COVID-19 pandemic increased sickness-related absences, particularly in the first quarter. Customer agreements in the Swedish business are mostly fixed-price contracts, and the increased production costs could not be passed on to customers in the form of price increases. The profit performance of Facility Services Sweden was lowered not only by inflation but also the weaker-than-expected sales of additional services. Adaptation measures were initiated in the division in the second quarter. The effort to simplify operating models and adapt them to the rapidly changing business environment will continue in 2023.
FINANCING
In 2022, cash flow from operating activities amounted to EUR 71.8 million (65.6). Net cash flow after investments came to EUR 41.1 million (1.7). Net cash flow from operating activities after investments was reduced by acquisitions, which had a total impact of approximately EUR 13 million (approximately EUR 23 million). Net cash flow after investments was increased by the repayment of a loan receivable of EUR 16.4 million by the joint venture in the final quarter of 2022. A total of EUR 6.2 million in working capital was committed (EUR 15.1 million committed).
At the end of the financial year, interest-bearing liabilities amounted to EUR 216.8 million (195.6). Net interest-bearing liabilities totalled EUR 167.3 million (167.1). The average interest rate of long-term loans, excluding lease liabilities, with interest rate hedging, was 2.5% (1.1%). Of the company’s floating rate loans totalling EUR 50 million, EUR 30 million have been converted into fixed rate loans by means of an interest rate swap.
The EUR 100.0 million commercial paper programme was unused at the end of the financial year as in the comparison period. The account limit totalling EUR 10.0 million as well as the committed credit limit totalling EUR 40.0 million were not in use, as was the case in the comparison period. The Group signed a credit limit linked to responsibility targets in May 2022. The credit limit will mature in the first quarter of 2025. The company issued senior unsecured sustainability-linked notes in the amount of EUR 75 million in May. The new notes will mature in the second quarter of 2028 and bear fixed annual interest at the rate of 3.375 per cent.
Net financial expenses amounted to EUR -5.8 million (-3.3). The increase in net financial expenses was attributable to higher interest-bearing liabilities due to acquisitions, an expense of EUR 0.3 million associated with the redemption of a bond, and the higher general interest rate level. The effect of exchange rate changes on net financial expenses was EUR -0.2 million (0.3). Net financial expenses were 0.7% (0.4%) of net sales.
The equity ratio was 34.3% (34.2%) and the gearing ratio was 75.9% (79.4%). The Group’s total equity was EUR 220.4 million (210.4). Translation differences caused by the depreciation of the Swedish krona affected equity by EUR -5.6 million and changes in the fair value of hedging instruments by EUR 1.3 million. Cash and cash equivalents at the end of the period amounted to EUR 49.5 million (28.6). Overdue trade receivables and credit losses have not increased as a result of the COVID-19 pandemic or the war in Ukraine.
DISTRIBUTION OF ASSETS
The Annual General Meeting held on 17 March 2022 resolved that a dividend of EUR 0.46 per share, totalling EUR 17.5 million, be paid on the basis of the balance sheet that was adopted for the financial year 2021. The dividend was paid to shareholders on 28 March 2022.
CAPITAL EXPENDITURE
Gross capital expenditure for 2022 came to EUR 58.2 million (72.3). Acquisitions accounted for approximately EUR 21 million of the capital expenditure (approximately EUR 31 million). In addition, the costs of internal work related to information system investments increased significantly compared to 2021. Other capital expenditure consisted primarily of machine and equipment purchases, as well as investments in information systems and buildings.
SUSTAINABILITY
Environmental responsibility
Climate benefits for customers created by L&T
| 2022 | 2021 | Target | Target to be achieved by |
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Carbon handprint (tCO2e) |
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| growth faster than net sales |
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The carbon handprint illustrates the climate benefits of a product, process or service, i.e. the emission reduction potential for the user. L&T’s carbon handprint reduces the customer’s carbon footprint. Our services generated emission reductions for customers through, for example, customers replacing virgin raw materials with secondary raw materials, and fossil fuels with biofuels and solid recovered fuels.
The carbon handprint of the renewable energy sources business is no longer reported as part of L&T’s carbon handprint in 2022. In 2021, L&T’s total carbon handprint excluding renewable energy sources was 528,000 tCO2e.
Recycling rate and material recovery
| 2022 | 2021 | Target | Target to be achieved by |
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Recycling rate of material flows managed by L&T, % | 59.4 | 58.4 | 65 | 2026 |
The recycling rate is the weighted average of our customers’ recycling rates. It also includes materials that cannot yet be recycled. To increase our reuse and recycling rate, we actively look for new material streams whose refining rate we can increase. Reporting covers municipal waste collected from corporate customers, hazardous waste, industrial waste and construction waste in Finland. Slurry, contaminated soil and ash are excluded from reporting.
Progress towards science-based emission reduction targets, using 2018 as the baseline
| 2022 | 2021 | Target | Target to be achieved by |
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Carbon footprint (tCO2e) |
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Carbon footprint intensity (gCO2e/km) |
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L&T’s strategic objective is to halve the carbon footprint of its operations by 2030, using 2018 as the baseline, and to reduce the indirect emissions generated by its supply chain. The emission reduction target set by L&T has been validated by the Science Based Targets initiative. The achievement of this objective will be promoted by switching to zero-emission transport technologies and fuels and by opting for renewable energy at L&T’s properties. Transport operations account for 95 per cent of the emissions generated by L&T’s own operations.
The fuel distribution obligation was adjusted in 2022 by reducing the biofuel component by 7.5 per cent in July. This change has not been taken into account in the emissions calculations reported in the financial statements release, as Statistics Finland has yet to update its fuel classification data in accordance with the change. Statistics Finland is expected to publish updated fuel classification data during spring 2023. L&T will subsequently calculate and report its carbon dioxide emissions for 2022 on its website using the updated emission factors. The total emissions of L&T’s own operations for 2022, calculated with the updated emission factors, are likely to be higher than those reported here.
Social responsibility
Overall accident frequency
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| 2021 | Target | Target to be achieved by |
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L&T eliminates hazards and improves its own safety as well as the safety of customers and other stakeholders through effective proactive measures, such as risk assessments, safety observations, Safety Walks and occupational safety sessions.
Well-being at work
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| 2021 | Target | Target to be achieved by |
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Occupational health rate (proportion of employees with no sickness-related absences) |
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| 57 | 2026 |
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The objective of L&T’s personnel policies and plans is to ensure that the number, competence and retention of personnel are at the level required for effective performance. For a labour-intensive company, employees’ ability to work and function and maintain it throughout their careers until retirement on old-age pension is important.
The COVID-19 pandemic and other respiratory infections significantly increased sickness-related absences in the first and fourth quarters.
Current issues related to sustainability
CDP ranked Lassila & Tikanoja “Management B” for its climate activities. CDP is an international non-profit organisation that annually evaluates the environmental actions of businesses. CDP scores are based on the comprehensiveness of disclosure, awareness and management of environmental risks, and adherence to best practices in environmental management. The score can range from D to A, with A being considered a Leadership level score.
The sustainability figures in this release have not been externally assured yet. L&T will publish its externally assured sustainability scores as part of the Annual review during week 9.
PERSONNEL
In 2022, the average number of employees converted into full-time equivalents was 7,364 (7,319). At the end of the period, L&T had 8,371 (8,171) full-time and part-time employees. Of these, 7,020 (7,003) worked in Finland and 1,351 (1,168) in Sweden.
SHARES AND SHARE CAPITAL
Traded volume and price
The volume of trading during the year 2022 was 9.4 million shares, which is 24.7% (25.2%) of the average number of outstanding shares. The value of trading was EUR 104.9 million (137.6). The highest share price was EUR 13.62 and the lowest EUR 9.72. The closing price was EUR 10.64. At the end of the financial year, the market capitalisation excluding the shares held by the company was EUR 405.9 million (512.2).
Own shares
At the end of the financial year, the company held 653,256 of its own shares, representing 1.7% of all shares and votes.
Share capital and number of shares
The company’s registered share capital amounts to EUR 19,399,437 and the number of outstanding shares was 38,145,618 at the end of the period. The average number of shares excluding the shares held by the company was 38,116,180.
Share-based incentive plans
In December 2022, the Board of Directors of Lassila & Tikanoja Plc decided to establish two new long-term share-based incentive plans for the Group’s key employees. The aim of the new plans is to align the objectives of the company, shareholders and key employees in order to increase the value of the company in the long term, to retain the key employees at the company and to offer them competitive reward plans that are based on earning and accumulating the company’s shares as well as on appreciation of the share price. The Performance Share Plan 2023–2027 comprises three (3) three-year (3) performance periods covering the calendar years 2023–2025, 2024–2026 and 2025–2027.
During the performance period 2023–2025, the earning of rewards is based on the following performance criteria: return on capital employed (ROCE), total shareholder return (TSR) and reduction of the carbon footprint (ESG).
The target group of the Performance Share Plan during the performance period 2023–2025 consists of approximately 50 key employees, including the Group’s President and CEO and the Group Executive Board.
The transitional share-based incentive scheme 2023–2026 consists of two (2) earnings periods of one (1) year each, corresponding to the calendar years 2023 and 2024. The earnings period is followed by a two-year commitment period. The aim of the scheme is to support the transition from the old share-based incentive scheme to the new share-based incentive scheme. The target group of the transitional share-based incentive scheme for the earnings period 2023 consists of approximately 10 key employees, including the Group’s President and CEO and the Group Executive Board.
Shareholders
At the end of the financial year, the company had 24,556 (23,087) shareholders. Nominee-registered holdings accounted for 7.0% (9.6%) of the total number of shares.
Authorisations for the Board of Directors
The Annual General Meeting held on 17 March 2022 authorised Lassila & Tikanoja plc’s Board of Directors to decide on the repurchase of the company’s own shares using the company’s unrestricted equity. In addition, the Annual General Meeting authorised the Board of Directors to decide on a share issue and the issuance of special rights entitling their holders to shares.
The Board of Directors is authorised to purchase a maximum of 2,000,000 company shares (5.2% of the total number of shares). The repurchase authorisation is effective for 18 months.
The Board of Directors is authorised to decide on the issuance of new shares or shares which may be held by the company through a share issue and/or issuance of option rights or other special rights conferring entitlement to shares, referred to in Chapter 10, Section 1 of the Finnish Companies Act, so that under the authorisation, a maximum of 2,000,000 shares (5.2% of the total number of shares) may be issued and/or conveyed. The authorisation is effective for 18 months.
RESOLUTIONS BY THE ANNUAL GENERAL MEETING
The Annual General Meeting, which was held on 17 March 2022, adopted the financial statements and consolidated financial statements for 2021, released the members of the Board of Directors and the President and CEO from liability as well as approved the Remuneration Report for the Governing Bodies.
The Annual General Meeting resolved that a dividend of EUR 0.46 per share, totalling EUR 17.5 million, be paid on the basis of the balance sheet adopted for the financial year 2021. It was decided that the dividend be paid on 28 March 2022.
The Annual General Meeting confirmed the number of members of the Board of Directors as six. Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen, Laura Tarkka and Pasi Tolppanen were re-elected to the Board until the end of the following Annual General Meeting.
The Annual General Meeting elected PricewaterhouseCoopers Oy, Authorised Public Accountants, as the auditor until the close of the next Annual General Meeting. PricewaterhouseCoopers Oy announced that it will name Samuli Perälä, Authorised Public Accountant, as the principal auditor.
The Annual General Meeting resolved to amend the third sentence of Section 4 of the Articles of Association so that the General Meeting elects the Chairman and the Vice-Chairman of the Board.
The resolutions of the Annual General Meeting were announced in more detail in a stock exchange release on 17 March 2022.
BOARD OF DIRECTORS
The members of Lassila & Tikanoja plc’s Board of Directors are Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen, Laura Tarkka and Pasi Tolppanen. At its constitutive meeting after the Annual General Meeting, the Board of Directors elected Jukka Leinonen as Chairman of the Board and Sakari Lassila as Vice Chairman.
Sakari Lassila was elected as the Chairman of the Audit Committee and Teemu Kangas-Kärki and Laura Tarkka as the members of the committee. The Board elected Jukka Leinonen as the Chairman of the Personnel and Sustainability Committee, with Laura Tarkka and Pasi Tolppanen as the members of the committee.
The company announced the composition of Lassila & Tikanoja plc’s Nomination Board on 9 September 2022. Lassila & Tikanoja plc’s three largest shareholders, which are entitled to appoint a representative to Lassila & Tikanoja plc’s Shareholders’ Nomination Board, are a group of shareholders (Chemec Oy, CH-Polymers Oy, Maijala Eeva, Maijala Hannele, Maijala Heikki, Maijala Juhani, Maijala Juuso, Maijala Miikka, Maijala Mikko, Maijala Roope and Maijala Tuula), the Evald and Hilda Nissi Foundation, and Mandatum Life Insurance Company Limited. These shareholders have appointed Miikka Maijala, Juhani Lassila and Patrick Lapveteläinen as their representatives in Lassila & Tikanoja’s Nomination Board. The Chairman of Lassila & Tikanoja plc’s Board of Directors, Jukka Leinonen, acts as the fourth member of the Nomination Board. The Chairman of the Nomination Board is Patrick Lapveteläinen.
Long-term targets
In September, Lassila & Tikanoja plc’s Board of Directors approved the Group’s targets for the strategy period 2023–2026 and decided on the continuing implementation of the Group’s strategy. The financial targets and the sustainability and stakeholder targets for the strategy period were unchanged.
Financial targets
Indicator | Target |
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Annual growth in net sales, % | 5% |
Return on capital employed, % | 15% |
Gearing, % | Below 125% |
Sustainability and stakeholder targets
Measure | Target |
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Net Promoter Score, NPS | >50 by 2026 |
Employee Net Promoter Score, eNPS | >50 by 2026 |
Carbon handprint | Growth faster than net sales |
Carbon footprint | -50% by 2030 in comparison to 2018 |
Sustainability and stakeholder measures are reported as part of the Group quarterly and annual reporting.
Lassila & Tikanoja does not consider the long-term financial targets as guidance for any fiscal year.
CHANGES IN THE GROUP EXECUTIVE BOARD
In March 2022, Tina Hellstadius, MSc (Technology) was appointed Vice President, Facility Services Sweden and a member of the Group Executive Board effective from 19 April 2022. Hellstadius succeeded Erik Sundström, who retired on 30 June 2022. In December 2022, L&T’s CIO Edward Skärström was appointed as a member of the Group Executive Board effective from 1 January 2023.
EVENTS AFTER THE FINANCIAL YEAR
On 11 January 2023, the company announced that Lassila & Tikanoja’s Shareholders’ Nomination Board proposes to the Annual General Meeting to be held on 23 March 2023 that the Board of Directors have six (6) members. The Nomination Board proposes that Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen and Pasi Tolppanen be re-elected to the Board of Directors and that Anni Ronkainen be elected as a new member. Information on Anni Ronkainen is available on L&T’s website. Of the current members, Laura Tarkka has announced that she is no longer available for the election of the members of the Board of Directors. In addition, the Nomination Board proposes that Jukka Leinonen is elected as Chairman of the Board of Directors and Sakari Lassila as Vice Chairman.
NEAR-TERM RISKS AND UNCERTAINTIES
General economic uncertainty may affect the level of economic activity among customers, which may reduce the demand for L&T’s services.
Higher costs, such as fuel and energy, potential interest rate hikes and wage-related decisions in the labour market, may have a negative impact on the company’s financial performance.
The company has several ERP system renewal projects under way. Temporary additional costs arising from system deployments and establishing the operating model may weigh down the company’s result.
Production costs may be increased by challenges related to employee turnover, labour availability and higher sickness rates.
As the company has no operations or holdings in Russia, Belarus or Ukraine, and there are no significant Russian-owned companies in the customer base, the direct impacts of the war in Ukraine are expected to be minor. However, indirect impacts on overall economic activity in Finland and Sweden may have a negative impact on net sales and profit.
More detailed information on Lassila & Tikanoja’s risks and risk management will be provided in the 2021 Annual Review and in the Report by the Board of Directors and the consolidated financial statements.
PROPOSAL FOR THE DISTRIBUTION OF ASSETS
According to the financial statements, Lassila & Tikanoja plc’s unrestricted equity amounts to EUR 61,719,573.87, with the operating profit for the period representing EUR 11,946,564.10 of this total. There were no substantial changes in the financial standing of the company after the end of the period, and the solvency test referred to in Chapter 13, Section 2 of the Companies Act does not affect the amount of distributable assets.
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.47 per share be paid for the financial year 2022. The dividend will be paid to shareholders included in the company shareholder register maintained by Euroclear Finland Oy on the record date, 27 March 2023. The Board proposes to the Annual General Meeting that the dividend be paid on 3 April 2023.
No dividend shall be paid on shares held by the company on the record date of the dividend payment, 27 March 2023.
On the day the proposal for the distribution of assets was made, the number of shares entitling to dividend was 38,145,618, which means the total amount of the dividend would be EUR 17,928,440,46. The Group’s earnings per share amounted to EUR 0.83. The proposed dividend, EUR 0.47 per share, is 56.9% of the earnings per share.
Lassila & Tikanoja’s Annual Report, which includes the Report by the Board of Directors and the financial statements for 2022, will be published in week 9 at www.lt.fi/en.
Helsinki, 8 February 2023
LASSILA & TIKANOJA PLC
Board of Directors
Eero Hautaniemi
President and CEO
For additional information, please contact:
Eero Hautaniemi, President and CEO, tel. +358 10 636 2810
Valtteri Palin, CFO, tel. +358 40 734 7749
Lassila & Tikanoja is a service company that is putting the circular economy into practice. Together with our customers, we keep materials and properties in productive use for as long as possible and we enhance the use of raw materials and energy. This is to create more value with the circular economy for our customers, personnel and society in a broader sense. Achieving this also means growth in value for our shareholders. Our objective is to continuously grow our actions’ carbon handprint, our positive effect on the climate. We assume our social responsibility by looking after the work ability of our personnel as well as offering jobs to those who are struggling to find employment, for example. With operations in Finland and Sweden, L&T employs 8,371 people. In 2022, the company’s net sales amounted to EUR 844.1 million. L&T is listed on Nasdaq Helsinki.
Distribution:
Nasdaq Helsinki
Major media
www.lt.fi/en/
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