Stock exchange release
Unless otherwise mentioned, the figures in brackets refer to the corresponding period in the previous year.
- Net sales for the first quarter were
EUR 184.4 million (198.8) - Operating profit was
EUR 2.9 million (0.7) - Earnings per share were
EUR 0.00 (0.01). Earnings per share were negatively affected by an increase in exchange differences. Exchange differences amounted toEUR -1.8 million (0.6) in the first quarter - The decrease in net sales was mainly attributable to the Q2/2019 divestment of the L&T Korjausrakentaminen business, which is included in the figures for the comparison period
- The increase in the business segments’ operating profit was particularly due to the improved result of Facility Services Finland
Outlook for 2020, updated
Full-year net sales for 2020 are expected to decrease year-on-year and operating profit is estimated to be EUR 30–40 million (40.5) excluding loss related to the discontinuation of Russian operations.
PRESIDENT AND CEO
“Net sales in the first quarter of 2020 decreased by 7.2% year-on-year and amounted to
The business environment in the first quarter can be characterised as challenging due to the industrial action in the early part of the year and the coronavirus epidemic that began in March. I am satisfied with our result in these somewhat exceptional circumstances.
The majority of Lassila & Tikanoja’s net sales is generated from services such as waste management and various maintenance services, which are essential for society and companies and will continue even during the coronavirus epidemic.
Nevertheless,
The increased sales of disinfection and cleaning services in the cleaning business have redused the negative result effects of the epidemic. During the remainder of the year, the impacts will also be mitigated by the temporary reduction of 2.6 percentage points in pension insurance payments in
Due to the reforms in waste management carried out by the state of
As part of Lassila & Tikanoja’s comprehensive contingency planning, the Group has conducted negotiations in its Finnish operations pursuant to the Act on Co-operation within Undertakings to enable flexible adjustments in response to declining demand. Lassila & Tikanoja’s financial position is strong and secure and the Group has taken additional measures to strengthen it.”
GROUP NET SALES AND FINANCIAL PERFORMANCE
January–March
Lassila & Tikanoja’s net sales for the first quarter amounted to
In Environmental Services, net sales declined and operating profit improved slightly year-on-year. In Industrial Services, net sales grew while operating profit declined. In Facility Services Finland, net sales declined but operating profit improved substantially year-on-year. In Facility Services Sweden, net sales and operating profit decreased year-on-year. The Group’s operating profit was improved by a gain of
Financial summary
1–3/2020 | 1–3/2019 | Change % | 1–12/2019 | |
Net sales, EUR million | 184.4 | 198.8 | -7.2 | 784.3 |
Operating profit, EUR million | 2.9 | 0.7 | 291.0 | 45.0 |
Operating margin, % | 1.6 | 0.4 | 5.7 | |
EBITDA, EUR million | 20.4 | 14.4 | 42.1 | 99.4 |
EBITDA, % | 11.1 | 7.2 | 12.7 | |
Profit before tax, EUR million | 0.1 | 0.4 | -86.1 | 42.0 |
Earnings per share, EUR | 0.00 | 0.01 | -89.9 | 0.90 |
Cash flow from operating activities/share, EUR | 0.51 | 0.58 | -12.2 | 2.46 |
EVA, EUR million | -3.4 | -5.2 | -35.4 | 19.8 |
Return on equity (ROE), % | 0.1 | 1.0 | 16.8 | |
Invested capital, EUR million | 364.7 | 388.5 | 380.5 | |
Return on invested capital (ROI), % | 3.2 | 1.5 | 12.4 | |
Equity ratio, % | 29.3 | 29.6 | 35.6 | |
Gearing, % | 95.6 | 97.4 | 66.8 | |
|
NET SALES AND OPERATING PROFIT BY DIVISION
Environmental Services
January–March
The division’s net sales for the first quarter totalled
Demand for the Environmental Services division’s services was at a good level particularly during the first half of the quarter. In the market for recycled raw materials, the prices of paperboard and cardboard were on a declining trend in particular, which contributed to the decrease in net sales. In addition, the impact of the coronavirus epidemic was reflected in the division’s business to some extent, particularly in the hotel and restaurant industry. The demand for renewable energy sources remained unchanged, but the difficult weather conditions hindered the harvesting of wood from forests.
Industrial Services
January–March
The division’s net sales for the first quarter grew to
Net sales grew due to new customer agreements for continuing services in spite of the effects on the business caused by industrial action as well as the postponement and cancellation of annual maintenance services. The decrease in operating profit was attributable to start-up costs related to new agreements, difficulties in resource allocation arising from industrial action as well as the postponement of maintenance shutdowns in the process industry resulting from the coronavirus epidemic.
Facility Services Finland
January–March
The division’s net sales for the first quarter totalled
Operating profit improved substantially year-on-year in all business lines. The positive development was attributable to new customer accounts as well as the improved productivity of operations, which was mainly due to the restructuring programme implemented in the final quarter of the previous year. The winter’s low snowfall also helped improve the result of the property maintenance business compared to the previous year.
Facility Services Sweden
January–March
The division’s net sales for the first quarter totalled
The effects of the coronavirus epidemic were clearly apparent at L&T in
FINANCING
Net cash flow from operating activities amounted to
At the end of the period, interest-bearing liabilities amounted to
Of the
Net financial expenses in the first quarter amounted to
The equity ratio was 29.3% (29.6) and the gearing rate was 95.6% (97.4). Liquid assets at the end of the period amounted to
DISTRIBUTION OF ASSETS
The Annual General Meeting held on
CAPITAL EXPENDITURE
Gross capital expenditure in the first quarter of 2020 totalled
PERSONNEL
In the first quarter, the average number of employees converted into full-time equivalents was 7,237
(7,234). At the end of the period,
SHARES AND SHARE CAPITAL
Traded volume and price
The volume of trading in January–March, excluding the shares held by the company in
Own shares
At the end of the period, the company held 693,589 of its own shares, representing 1.8% of all shares and votes.
Share capital and number of shares
The company’s registered share capital amounts to
Shareholders
At the end of the period, the company had 17,989 (14,506) shareholders. Nominee-registered holdings accounted for 10.4% (19.4) of the total number of shares.
Authorisations for the Board of Directors
The Annual General Meeting held on
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 share issue authorisation is effective for 18 months.
RESOLUTIONS BY THE ANNUAL GENERAL MEETING
The Annual General Meeting, which was held on
The Annual General Meeting resolved that a dividend of
The Annual General Meeting confirmed the number of members of the Board of Directors as seven.
The Annual General Meeting resolved to establish a permanent Shareholders’ Nomination Board. The Nomination Board shall be responsible for preparing and presenting proposals covering the remuneration and number of members of the Company’s Board of Directors as well as proposals on the members of the Board of Directors to the Annual General Meeting and, where needed, to an Extraordinary General Meeting. The Nomination Board shall also be responsible for identifying successors to existing Board members.
The resolutions of the Annual General Meeting were announced in more detail in a stock exchange release on
BOARD OF DIRECTORS
The members of
KEY EVENTS DURING THE REVIEW PERIOD
The key events are discussed in the other sections of this release.
EVENTS AFTER THE REVIEW PERIOD
On 8 April, the Group announced that it has signed a new revolving credit facility of
On 24 April, the Group issued a profit warning and lowered its guidance for 2020. The Group also announced discontinuation of Russian operations. According to the updated outlook the full-year net sales for 2020 are expected to decrease year-on-year and operating profit is estimated to be EUR 30‑40 million (40.5) excluding loss related to the discontinuation of Russian operations.
NEAR-TERM RISKS AND UNCERTAINTIES
The coronavirus epidemic and the restrictive measures issued by the authorities as well as production restrictions implemented by customers themselves may lead to a significant contraction or partial suspension of our service production at customer sites. The decline in industrial volume caused by the coronavirus epidemic has a negative impact on the demand for our services and the price of secondary raw materials. The majority of Lassila & Tikanoja’s net sales is generated from services such as waste management and various cleaning and maintenance services, which are essential for society and companies and will continue even during the coronavirus epidemic. Nevertheless,
Lower energy consumption reduces the price of emission rights and weakens the profitability of renewable energy sources, while decreasing oil prices have a reducing effect on our fuel costs.
The company has several ERP system renewal projects under way. Temporary additional costs arising from the system deployment projects and establishing the operating model may weigh down the company’s result.
In response to significant change in the operating situation,
More detailed information on Lassila & Tikanoja’s risks and risk management is provided in the 2019 Annual Report and in the Report of the Board of Directors and the consolidated financial statements.
Outlook for 2020, updated
Full-year net sales for 2020 are expected to decrease year-on-year and operating profit is estimated to be EUR 30–40 million (40.5) excluding loss related to the discontinuation of Russian operations.
Previous outlook for 2020 (
Net sales in 2020 are expected to be on par with 2019 and operating profit is expected to increase compared to 2019 (EUR 40.5 million). The effect of the divestment of
Conference ID: 355124
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Board of Directors
President and CEO
For additional information, please contact:
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. We help our customers maintain the value of their properties and materials while protecting the environment. We achieve this by delivering responsible and sustainable service solutions that make the daily lives of our customers easier. We operate in
Distribution:
Nasdaq
Major media
www.lt.fi
Attachment
- LT-Interim_report_Q1_2020
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