Stock exchange release
STRONG ORGANIC GROWTH
Unless otherwise mentioned, the figures in brackets refer to the corresponding period in the previous year.
- Net sales for the final quarter were
EUR 223.5 million (199.6). Net sales increased by 12.0 per cent, of which 8.7 percentage points was organic growth. Adjusted operating profit wasEUR 10.1 million (9.9), and operating profit wasEUR 9.9 million (9.9). Earnings per share wereEUR 0.26 (0.20). - Net sales for 2021 amounted to
EUR 812.5 million (751.9). Adjusted operating profit, including a negative impact ofEUR 1.0 million due to the change in the accounting principles for cloud computing arrangements, wasEUR 42.4 million (39.7), operating profit wasEUR 42.2 million (28.2), and earnings per share wereEUR 0.90 (0.50). - Earnings per share were positively influenced by a reduction in net financial expenses to
EUR -3.3 million (-4.9). Exchange differences amounted toEUR 0.3 million (-1.4). - The Board of Directors proposes a dividend of
EUR 0.46 per share.
Outlook for the year 2022
The company estimates that the impact of the Omicron variant of COVID-19 will have a negative effect on the Group’s result in the first quarter, as customer sites reduce their operations due to the government restrictions and increased sickness-related absence of personnel.
Net sales and adjusted operating profit in 2022 are estimated to be at the same level as in the previous year.
PRESIDENT AND CEO
“The year 2021 was characterised by the COVID-19 pandemic, and there were many uncertainties in the operating environment. The demand for Lassila & Tikanoja’s services began to recover during the second quarter, and strong development continued during the second half of the year. However, the costs of service production were increased by the substantial increase in diesel prices, as well as a worsening labour shortage.
Full-year net sales grew by 8.1% year-on-year. Organic growth was 6.6%. Adjusted operating profit, including a negative impact of
All divisions grew organically in 2021, and the growth was also accelerated by three acquisitions in accordance with our strategy. The Environmental Services and Industrial Services divisions achieved a strong result. Performance was weak in the property maintenance and technical services business lines in Facility Services Finland. Measures to simplify the organisational structure and improve cost-efficiency were successfully implemented during the fourth quarter. The measures aim to achieve annual cost savings of a minimum of
Customer experience improved significantly from the previous year, and personnel satisfaction developed favourably. In absolute terms, the climate impacts of our own operations were slightly higher than last year, but emissions declined in relation to kilometres driven. Our carbon handprint, or emissions saved through our operations, corresponded to the annual emissions of more than 110,000 Finns. CDP ranked
During 2021, we reviewed our strategy in relation to changes in the operating environment. The ongoing green transition strongly supports our business. The circular economy plays an increasingly critical role in combatting climate change and biodiversity loss. We identified a lot of growth opportunities in both the materials business and the built environment. The circular economy and sustainable business solutions that support it are at the heart of our strategy.
In the strategy period 2022–2026, L&T seeks growth in its core businesses by strengthening its market share. Our strong balance sheet and customer base, that has grown in all divisions, creates an excellent foundation for organic an inorganic growth during the strategy period.
We want to be the best sustainability partner for our customers and an excellent workplace for the best experts in the field. During the strategy period, we will invest in reforming our operating models, which will enable even more cost-efficient service production.
Even though the COVID-19 pandemic continues to affect our operating environment, the work done in 2021 and the updated strategic guidelines provide a good starting point for 2022.”
GROUP NET SALES AND FINANCIAL PERFORMANCE
October–December
Lassila & Tikanoja’s net sales for the fourth quarter amounted to
Net sales grew across all divisions. Comparable operating profit improved in Environmental Services and Industrial Services. In Facility Services, operating profit declined in
Year 2021
Net sales for 2021 amounted to
Net sales grew across all divisions. Operating profit improved in Environmental Services, Industrial Services, and Facility Services Sweden. Operating profit declined year-on-year in Facility Services Finland.
The realisation of occupational accident expenses concerning accidents that took place prior to 2018 had a negative effect of
Financial summary
10–12/2021 | 10–12/2020 | Change % | 1–12/2021 | 1–12/2020 | Change % | |
Net sales, EUR million | 223.5 | 199.6 | 12.0 | 812.5 | 751.9 | 8.1 |
Adjusted operating profit, EUR million | 10.1 | 9.9 | 1.9 | 42.4 | 39.7 | 6.9 |
Adjusted operating margin, % | 4.5 | 5.0 | 5.2 | 5.3 | ||
Operating profit, EUR million | 9.9 | 9.9 | 0.2 | 42.2 | 28.2 | 49.5 |
Operating margin, % | 4.4 | 5.0 | 5.2 | 3.8 | ||
EBITDA, EUR million | 23.2 | 23.5 | -1.3 | 95.1 | 85.2 | 11.7 |
EBITDA, % | 10.4 | 11.8 | 11.7 | 11.3 | ||
Profit before tax, EUR million | 9.1 | 9.1 | 0.4 | 39.0 | 23.3 | 67.2 |
Earnings per share, EUR | 0.26 | 0.20 | 30.0 | 0.90 | 0.50 | 79.8 |
Net cash flow from operating activities after investments per share, EUR | 0.55 | 0.62 | -12.1 | 0.05 | 1.15 | -96.1 |
EVA, EUR million | 3.0 | 3.8 | -20.3 | 15.9 | 3.7 | 332.4 |
Return on equity (ROE), % | 17.1 | 9.6 | ||||
Invested capital, EUR million | 406.0 | 379.2 | 7.1 | |||
Return on invested capital (ROI), % | 10.8 | 7.5 | ||||
Equity ratio, % | 33.7 | 33.0 | ||||
Gearing, % | 79.4 | 70.9 |
NET SALES AND OPERATING PROFIT BY DIVISION
Environmental Services
October–December
Net sales of Environmental Services for the fourth quarter grew to
Year 2021
Net sales of Environmental Services grew to
In Environmental Services, demand for waste management and recycling services started to recover in the second quarter and remained strong for the rest of the year. Demand for separately ordered services as well as the prices of – and demand for – recycled raw materials practically returned to pre-pandemic levels in the third quarter. The number of corporate customers increased thanks to active sales to new customers, and the
Industrial Services
October–December
The division’s net sales for the final quarter grew to
Year 2021
The Industrial Services division’s net sales grew to
The Industrial Services division strengthened its market position in hazardous waste and process cleaning in 2021. In hazardous waste, volumes gradually returned to normal during the year. The focus on segment expertise brought results especially in the chemical industry segment, where new customer contracts were signed. In the project business, some of the construction projects planned for earlier in the year were postponed due to the COVID-19 pandemic, which made resource allocation more difficult and increased costs. There were fewer contaminated soil area projects started than in the previous year, and price competition intensified. The development of operational methods remained strong in Industrial Services. The COVID-19 pandemic caused changes in the annual industrial maintenance break cycle, and some of the annual maintenance breaks first planned for the beginning of 2021 were transferred to the third quarter. The overlap of annual maintenance breaks in the third quarter made resource optimisation more difficult and increased production costs due to increased subcontracting.
Facility Services Finland
October–December
The division’s net sales for the final quarter grew to
Year 2021
The net sales of Facility Services Finland grew to
The cleaning business developed favourably throughout the year, and the market position strengthened. The market position in the food hygiene segment strengthened following the acquisition of
Performance was weak in the property maintenance and technical services business lines in
Facility Services Sweden
October–December
The division’s net sales for the final quarter grew to
Year 2021
The net sales of Facility Services Sweden grew to
The COVID-19 pandemic situation was difficult in the first quarter. The pandemic situation started to ease from the second quarter, and the market share developed favourably. The market position strengthened in the hospital segment in particular, and especially in the fourth quarter, due to a significant new customer account. Cleaning and food hygiene services also grew.
The COVID-19 pandemic had a negative impact on the demand for additional services in the municipal sector throughout the year. Fewer large technical services projects started than in the years before the pandemic, and some projects were delayed due to the global semiconductor shortage.
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 2021 amounted to
The equity ratio was 33.7% (33.0%), and the gearing ratio was 79.4% (70.9%). Liquid assets at the end of the period amounted to
DISTRIBUTION OF ASSETS
The Annual General Meeting held on
CAPITAL EXPENDITURE
Gross capital expenditure for 2021 amounted to
SUSTAINABILITY
Environmental responsibility
Climate benefits for customers created by L&T
2021 | 2020 | Target | Target to be achieved by | |
Carbon handprint (tCO2e) | 1,103,000 | 1,230,000 | growth faster than net sales |
The carbon handprint illustrates the climate benefits of a product, process or service, meaning 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.
Recycling rate and material recovery
2021 | 2020 | Target | Target to be achieved by | |
Recycling rate of material flows managed by L&T | 58.4% | 58.6% | 60% | 2024 |
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
Progress towards science-based emission reduction targets, using 2018 as the baseline
2021 | 2020 | Target | Target to be achieved by | |
Carbon footprint (tCO2e) | 37,100 | 36,700 | | |
Carbon footprint intensity (gCO2e/km) | 767 | 818 | 476 | 2030 |
L&T’s strategic objective is to halve the carbon footprint of its operations by 2030 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. During 2021, L&T acquired 57 electric vans and the number of biogas-powered heavy-duty vehicles rose to 32 (10).
Social responsibility
Overall accident frequency
2021 | 2020 | Interim target | Target to be achieved by | |
Overall accident frequency (TRIF) | 24 | 24 | 20 | 2024 |
We use effective proactive measures – such as risk assessments, safety observations, Safety Walks and occupational safety sessions – to improve our safety as well as the safety of our customers and other stakeholders, while also eliminating risk factors.
Well-being at work
2021 | 2020 | Interim target | Interim target to be achieved by | |
Occupational health rate | 45 | 50 | 45 | 2024 |
Sickness-related absences | 5.0 | 4.7 | 4.5 | 2024 |
In 2021, the sickness rate of personnel was at a low level until the last month of 2021. The Omicron variant of COVID-19 increased the sickness rate in December.
Current issues related to sustainability
CDP ranked
PERSONNEL
In 2021, the average number of employees converted into full-time equivalents was 7,319 (7,197). At the end of the period, L&T had 8,171 (8,139) full-time and part-time employees. Of these, 7,003 (6,673) worked in
PROPOSAL FOR THE DISTRIBUTION OF ASSETS
According to the financial statements,
The Board of Directors proposes to the Annual General Meeting that a dividend of
No dividend shall be paid on shares held by the company on the record date of
On the day the proposal for the distribution of assets was made, the number of shares entitling to dividend was 38,112,478, which means the total amount of the dividend would be
Lassila & Tikanoja’s Annual Report, which includes the report by the Board of Directors and the financial statements for 2021, will be published in week 8 at www.lt.fi/en.
SHARES AND SHARE CAPITAL
Traded volume and price
The volume of trading during the year 2021 was 9.6 million shares, which is 25.2% (32.2%) of the average number of outstanding shares. The value of trading was
Own shares
At the end of the period, the company held 686,396 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 23,087 (20,731) shareholders. Nominee-registered holdings accounted for 9.6% (10.1%) 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 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 resolutions of the Annual General Meeting were announced in more detail in a stock exchange release on
BOARD OF DIRECTORS
The members of
Long-term targets
In October,
Financial targets
Measure | Target |
Net Sales Growth, % | 5% |
Return on investment, % (ROI) | 15% |
Gearing, % | Below 125% |
Sustainability and stakeholder targets
Measure | Target |
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.
KEY EVENTS DURING THE REVIEW PERIOD
On
On
On
EVENTS AFTER THE REVIEW PERIOD
On
The Chairman of the Board of Directors,
NEAR-TERM RISKS AND UNCERTAINTIES
The measures and recommendations issued by the authorities to restrict the COVID-19 pandemic, and the resulting customer-specific production restrictions and adjustment measures are still expected to cause disruptions in service production during 2022. The new coronavirus variants can spread more rapidly than the previous variants and increase the employee sickness rate. This can cause disturbances in service production.
Fluctuations in the price of oil influence both fuel costs and the prices of oil-based secondary raw materials, such as recycled plastic and regenerated lubricants.
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.
Challenges related to the availability of labour may increase production costs.
More detailed information on Lassila & Tikanoja’s risks and risk management will be provided in the 2021 Annual Report and in the Report of the Board of Directors and the consolidated financial statements.
Outlook for the year 2022
The company estimates that the impact of the Omicron variant of COVID-19 will have a negative effect on the Group’s result in the first quarter, as customer sites reduce their operations due to the government restrictions and increased sickness-related absence of personnel.
Net sales and adjusted operating profit in 2022 are estimated to be at the same level as in the previous year.
Board of Directors
President and CEO
For additional information, please contact:
Distribution:
Nasdaq
Major media
www.lt.fi/en
Attachment
- LT Financial Statement Release 2021
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