Stock exchange release
STRONG GROWTH IN ALL DIVISIONS
Unless otherwise mentioned, the figures in brackets refer to the corresponding period in the previous year.
- Net sales for the third quarter amounted to
EUR 198.4 million (184.8). Net sales increased by 7.4 per cent, of which 3.8 percentage points was organic growth. Adjusted operating profit wasEUR 18.5 million (17.5) and operating profit wasEUR 18.0 million (17.6). Earnings per share wereEUR 0.37 (0.37). - Net sales in January–September totalled
EUR 589.0 million (552.3). Adjusted operating profit wasEUR 32.3 million (29.7), operating profit wasEUR 32.3 million (18.3) and earnings per share wereEUR 0.64 (0.30). - Earnings per share were positively influenced by a reduction in net financial expenses to
EUR -2.5 million (-4.1). Exchange differences amounted toEUR 0.1 million (-1.3).
Outlook for the year 2021
Net sales in 2021 are estimated to grow and adjusted operating profit is estimated to be at the same level or better compared to the previous year.
PRESIDENT AND CEO
Lassila & Tikanoja’s services saw continued strong demand in the third quarter. In July–September, net sales increased by 7.4 per cent year-on-year, with organic growth amounting to 3.8 per cent. Adjusted operating profit improved year-on-year and totalled
The negative impacts of the COVID-19 pandemic on customer demand and the prices of secondary raw materials continued to dissipate in the third quarter. At the same time, the costs of service production were increased by the substantial increase in diesel prices as well as worsening labour shortages.
In spite of the cost pressures, the Environmental Services and Industrial Services divisions achieved a strong result. Performance remained 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 initiated in these business lines in August and will be completed during the fourth quarter. The aim is to achieve cost savings of approximately
In the third quarter, the
GROUP NET SALES AND FINANCIAL PERFORMANCE
July–September
Lassila & Tikanoja’s net sales for the third quarter amounted to
Net sales increased in Environmental Services, Facility Services Finland and Facility Services Sweden. Net sales decreased slightly in Industrial Services. Comparable operating profit improved in Environmental Services and remained on a par with the comparison period in Facility Services Sweden. Operating profit declined in Industrial Services and Facility Services Finland.
January–September
Net sales for January–September increased by 6.6% year-on-year and amounted to
Net sales grew across all business segments. Operating profit improved in Environmental Services, Industrial Services and Facility Services Sweden. In Facility Services Finland, operating profit was on a par with the comparison period.
In the comparison period, operating profit was improved by the temporary lowering of pension insurance contributions by 2.6 percentage points from 1 May to
Financial summary
7–9/2021 | 7–9/2020 | Change % | 1–9/2021 | 1–9/2020 | Change % | 2020 | |
Net sales, EUR million | 198.4 | 184.8 | 7.4 | 589.0 | 552.3 | 6.6 | 751.9 |
Adjusted operating profit, EUR million | 18.5 | 17.5 | 5.6 | 32.3 | 29.7 | 8.5 | 39.7 |
Adjusted operating margin, % | 9.3 | 9.5 | 5.5 | 5.4 | 5.3 | ||
Operating profit, EUR million | 18.0 | 17.6 | 2.0 | 32.3 | 18.3 | 76.3 | 28.2 |
Operating margin, % | 9.1 | 9.5 | 5.5 | 3.3 | 3.8 | ||
EBITDA, EUR million | 31.4 | 30.4 | 3.4 | 71.9 | 61.7 | 16.7 | 85.2 |
EBITDA, % | 15.8 | 16.4 | 12.2 | 11.2 | 11.3 | ||
Profit before tax, EUR million | 17.1 | 16.7 | 2.8 | 29.8 | 14.2 | 110.0 | 23.3 |
Earnings per share, EUR | 0.37 | 0.37 | -1.3 | 0.64 | 0.30 | 113.2 | 0.50 |
Net cash flow from operating activities after investments per share, EUR | 0.05 | 0.15 | -65.9 | -0.50 | 0.53 | -194.3 | 1.15 |
EVA, EUR million | 11.2 | 11.5 | -2.6 | 12.9 | -0.1 | 3.7 | |
Return on equity (ROE), % | 16.5 | 7.9 | 9.6 | ||||
Invested capital, EUR million | 410.0 | 372.5 | 10.1 | 379.2 | |||
Return on invested capital (ROI), % | 10.9 | 6.6 | 7.5 | ||||
Equity ratio, % | 33.1 | 32.2 | 33.0 | ||||
Gearing, % | 92.6 | 89.3 | 70.9 |
NET SALES AND OPERATING PROFIT BY DIVISION
Environmental Services
July–September
The division’s net sales for the third quarter increased to
January–September
The Environmental Services division’s net sales grew to
Organic growth strengthened in Environmental Services in the third quarter. Demand for separately ordered services as well as the prices of and demand for recycled raw materials returned to pre-pandemic levels. The number of corporate customers increased because of active sales to new customers.
Industrial Services
July–September
The division’s net sales for the third quarter decreased to
January–September
The Industrial Services division’s net sales grew to
The Industrial Services division strengthened its market position in process cleaning and in hazardous waste. New customer agreements were also signed in the chemical industry, for example. Due to the COVID-19 pandemic, some of the annual maintenance projects originally planned for earlier in the year were postponed to the third quarter. The overlap of annual maintenance projects in the third quarter made resource optimisation more difficult and increased production costs due to increased subcontracting. In the project business, some of the construction projects planned for earlier in the year were also postponed due to the pandemic, which made resource allocation more difficult and increased costs.
Facility Services Finland
July–September
The division’s net sales for the third quarter grew to
January–September
The net sales of Facility Services Finland grew to
Good development continued in the cleaning business, with the division strengthening its market position particularly in the food industry and retail services. The number of customer sites included in the More sustainable cleaning development programme increased by 170 in July–September. Performance remained weak in property maintenance and technical services. Measures to improve cost efficiency and simplify the organisational structure were initiated in these business lines in August and will be completed during the fourth quarter. The aim is to achieve cost savings of approximately
Facility Services Sweden
July–September
The division’s net sales for the third quarter increased to
January–September
The net sales of Facility Services Sweden grew to
The COVID-19 pandemic situation in
FINANCING
Net cash flow from operating and investing activities amounted to
At the end of the period, interest-bearing liabilities amounted to
Of the
Net financial expenses in the first three quarters of the year amounted to
The equity ratio was 33.1% (32.2%) and the gearing rate was 92.6% (89.3%). 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 the reporting period amounted to
SUSTAINABILITY
Environmental responsibility
Climate benefits for customers created by L&T
1–9/2021 | 2020 | Target | Target to be achieved by | |
Carbon handprint (tCO2e) | 751,000 | 1,230,000 | growth faster than net sales | 2024 |
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.
Progress towards science-based emission reduction targets, using 2018 as the baseline
1–9/2021 | 2020 | Target | Target to be achieved by | |
Carbon footprint (tCO2e) | 27,700 | 36,700 | | |
Carbon footprint intensity (gCO2e/km) | 763 | 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. In the third quarter, we purchased 50 new electric vans for our business operations in
Social responsibility
Overall accident frequency
1–9/2021 | 2020 | Interim target | Interim target to be achieved by | |
Overall accident frequency (TRIF) | 23 | 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
1–9/2021 | 2020 | Interim target | Interim target to be achieved by | |
Occupational health rate (proportion of employees with no sickness-related absences) | 55 | 50 | 45 | 2024 |
Sickness-related absences (%) | 4.7 | 4.7 | 4.5 | 2024 |
In January-September, the sickness rate among employees was one percentage point higher than in the comparison period and the occupational health rate stayed on the same level, 55 per cent (55%).
Current issues related to sustainability
The guidelines set out to mitigate the COVID-19 pandemic – such as the remote work recommendation for office workers, maintaining safe distances to others and wearing face masks at L&T’s operating locations – remained in effect until the end of the third quarter.
PERSONNEL
In the first three quarters of the year, the average number of employees converted into full-time equivalents was 7,202 (7,249). At the end of the period, L&T had 8,729 (8,440) full-time and part-time employees. Of these, 7,362 (6,930) worked in
SHARES AND SHARE CAPITAL
Traded volume and price
The volume of trading during the first half of the year was 8.0 million shares, which is 21.0% (24.0%) 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 23,166 (18,964) shareholders. Nominee-registered holdings accounted for 9.1% (10.4%) 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 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, the board of directors at
Financial targets
Measure | Target |
Net Sales Growth, % | 5 % |
Return on | 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
The company’s management is not aware of any events of material importance after the review period that might have affected the preparation of this release.
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 expected to potentially cause disruptions in service production during 2021.
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 2020 Annual Report and in the Report of the Board of Directors and the consolidated financial statements.
Outlook for the year 2021
Net sales in 2021 are estimated to grow and adjusted operating profit is estimated to be at the same level or better compared to the previous year.
Board of Directors
President and CEO
For additional information, please contact:
Distribution:
Nasdaq
Major media
www.lt.fi
Attachment
- LT-Interim_Report_Q3_2021
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