2016-10-26 07:00:02 CEST
2016-10-26 07:00:02 CEST
REGLAMENTUOJAMA INFORMACIJA
Lassila & Tikanoja - Interim report (Q1 and Q3)
Lassila & Tikanoja plc: Interim Report 1 January – 30 September 2016
- Net sales for the third quarter increased by 4.0% to EUR 166.0 million (EUR
159.6 million), operating profit was EUR 19.1 million (EUR 19.3 million) and
earnings per share EUR 0.39 (EUR 0.38)
- Net sales for January–September increased by 2.6% to EUR 493.5 million (EUR
481.1 million), operating profit was EUR 39.9 million (EUR 40.2 million) and
earnings per share EUR 0.91 (EUR 0.80)
- Full-year net sales and operating profit in 2016 are expected to remain at
the 2015 level or improve slightly
CEO PEKKA OJANPÄÄ:
“Lassila & Tikanoja’s result for January–September was in line with our
expectations. The demand for, and prices of, recyclable raw materials and solid
recovered fuels are still below the long-term averages and the situation is not
expected to change in the short run. The price competition of services,
particularly cleaning, remained intense.
Net sales grew both organically and due to strategically targeted acquisitions.
The company’s profitability remained at a good level due to previously
implemented efficiency improvement measures.
In line with our strategy, our focus remains on strengthening our market
position and ensuring profitability and cash flow. We will continue to improve
the efficiency of our operations in order to respond to the changing business
environment and to ensure our future competitiveness.
GROUP NET SALES AND FINANCIAL PERFORMANCE
Third quarter
Lassila & Tikanoja’s net sales for the third quarter increased by 4.0% to EUR
166.0 million (EUR 159.6 million). Operating profit totalled EUR 19.1 million
(EUR 19.3 million). Earnings per share were EUR 0.39 (EUR 0.38).
Third quarter net sales grew by 1.3% in Facility Services and 5.4% in
Environmental Services. Net sales grew both organically and due to
acquisitions. The net sales of Industrial Services grew by 13.6% due to strong
demand. The net sales of the Renewable Energy Sources division declined by 4.6%
due to the weak demand for energy wood.
Operating profit improved significantly in Facility Services and Industrial
Services. The operating profit of Environmental Services was lower than in the
comparison period and the operating profit of Renewable Energy Sources showed a
substantial decline.
January–September
Net sales for January–September increased by 2.6% to EUR 493.5 million (EUR
481.1 million). Operating profit was EUR 39.9 million (EUR 40.2 million),
representing 8.1% (8.4%) of net sales. Earnings per share were EUR 0.91 (EUR
0.80).
During the first three quarters of the year, net sales grew by 7.0%
year-on-year in Industrial Services, 3.1% in Environmental Services and 2.5% in
Facility Services. The net sales of the Renewable Energy Sources division
declined by 8.9% year-on-year due to the low demand for wood-based fuels.
Profitability improved particularly in Facility Services and was also higher
than in the comparison period in Industrial Services. The operating profit of
Environmental Services was lower than in the comparison period. The operating
profit of Renewable Energy Sources showed a substantial decline.
The Group’s earnings per share was favourably affected in the second quarter by
a legally valid decision handed down by the Administrative Court, according to
which the payment of approximately EUR 16.7 million made by the company in 2014
under the L&T Recoil Oy guarantee commitment is tax-deductible. In previous
financial reports, the company has treated the payment as a non-tax deductible
item due to its tax deductibility not being confirmed. The decision had a
favourable impact of EUR 0.09 on earnings per share.
Impact of new guidance from the European Securities and Markets Authority
The new guidance issued by the European Securities and Markets Authority (ESMA)
regarding Alternative Performance Measures entered into effect on 3 July 2016.
Lassila & Tikanoja presents Alternative Performance Measures in addition to
IFRS performance measures in order to illustrate the financial performance of
its business operations and to improve comparability between reporting periods.
Alternative Performance Measures should not be considered to be replacements
for the performance measures defined in the IFRS standards. The new guidance on
Alternative Performance Measures has no impact on the company’s reporting of
performance measures.
The Alternative Performance Measures reported by the company are EVA and cash
flow from operating activities per share. The calculation formulas for the
performance measures are presented at the end of the interim report.
Financial summary
7–9/ 7–9/ Change 1–9/ 1–9/ Change 1–12/
2016 2015 2016 2015 2015
--------------------------------------------------------------------------------
Net sales, EUR million 166.0 159.6 4.0% 493.5 481.1 2.6% 646.3
Operating profit, EUR million 19.1 19.3 -1.2% 39.9 40.2 -0.6% 49.9
Operating margin, % 11.5 12.1 8.1 8.4 7.7
Profit before tax, EUR 18.7 18.4 1.7% 39.4 39.0 1.1% 47.7
million
Earnings per share, EUR 0.39 0.38 2.5% 0.91 0.80 13.1% 0.98
Cash flow from operating 0.76 1.09 -30.2% 0.88 1.58 -44.5% 2.33
activities/share, EUR
EVA, EUR million 14.1 14.4 -2.3% 24.9 25.6 -2.6% 30.3
--------------------------------------------------------------------------------
NET SALES AND OPERATING PROFIT BY DIVISION
Environmental Services
Third quarter
The Environmental Services division’s net sales for the third quarter increased
by 5.4% to EUR 68.2 million (EUR 64.7 million). The increase in net sales was
due to acquisitions and organic growth. Operating profit totalled EUR 10.2
million (EUR 11.0 million).
The operating profit of Environmental Services was decreased by the lower
volume of recyclable materials at recycling plants and the continued low market
prices of secondary raw materials.
January–September
The division’s net sales for the first three quarters increased by 3.1% to EUR
198.2 million (EUR 192.2 million). Operating profit totalled EUR 24.8 million
(EUR 28.4 million).
Previously completed acquisitions and stronger demand for waste management and
in the construction sector in particular increased the division’s net sales.
The division’s operating profit was decreased by the lower volume of recyclable
materials at recycling plants and the continued low market prices of secondary
raw materials.
Industrial Services
Third quarter
The Industrial Services division’s net sales for the third quarter increased by
13.6% to EUR 23.9 million (EUR 21.0 million). Operating profit totalled EUR 3.4
million (EUR 2.9 million).
The net sales of the division’s services increased year-on-year particularly in
environmental construction, and net sales also grew in sewer maintenance and
process cleaning. The net sales of hazardous waste services decreased.
The operating profit of environmental construction improved significantly.
Sewer maintenance and process cleaning also achieved a year-on-year increase in
operating profit. Reduced demand for services led to lower operating profit for
hazardous waste services.
January–September
The division’s net sales for January–September increased by 7.0% and amounted
to EUR 60.7 million (EUR 56.7 million). Operating profit totalled EUR 5.2
million (EUR 5.0 million).
The division’s net sales showed an increase from the comparison period. Net
sales increased in all service lines except hazardous waste.
Profitability improved particularly in environmental construction and also in
sewer maintenance, but declined in process cleaning and hazardous waste
services.
Facility Services
Third quarter
The Facility Services division’s net sales for the third quarter increased by
1.3% to EUR 71.5 million (EUR 70.5 million). Net sales grew both organically
and due to acquisitions. Operating profit was EUR 6.1 million (EUR 4.9
million).
Net sales grew in renovation services and cleaning, but declined in property
maintenance and the maintenance of technical systems.
The maintenance of technical systems business, the renovation business and the
property maintenance business achieved a substantial increase in profitability
following efficiency improvement measures implemented last year. The operating
profit of the cleaning business declined year-on-year.
January–September
The division’s net sales for January–September increased by 2.5% and amounted
to EUR 216.5 million (EUR 211.3 million). Operating profit totalled EUR 10.9
million (EUR 7.0 million).
Net sales grew in renovation services, maintenance of technical systems and
cleaning, but declined in property maintenance. Net sales increased in the
maintenance of technical systems business due to acquisitions.
The maintenance of technical systems business and the renovation business
achieved a substantial increase in profitability following efficiency
improvement measures implemented over the past year. Operating profit also
increased in the cleaning business and the property maintenance business.
Renewable Energy Sources
Third quarter
The third quarter net sales of Renewable Energy Sources (L&T Biowatti) were
down by 4.6% to EUR 5.3 million (EUR 5.6 million). The operating profit was EUR
0.1 million (EUR 0.6 million).
The division’s net sales and operating profit were affected by the low demand
for forest energy.
January–September
The net sales of the Renewable Energy Sources division) in January–September
were down by 8.9% to EUR 25.2 million (EUR 27.6 million). Operating profit
totalled EUR 0.8 million (EUR 1.8 million).
The division’s net sales declined mainly due to the short heating season and
the oversupply of biofuels and alternative fuels. Profitability declined
year-on-year.
FINANCING
Cash flow from operating activities in the beginning of the year was affected
by EUR 52 million in advance payments of employment pension contributions.
Unlike in the previous year, in 2016 the entire year’s contributions were paid
in January. In previous years, the payments have been made in four instalments.
The change in the payment schedule will have no effect on the full-year cash
flow.
Cash flow from operating activities amounted to EUR 33.6 million (EUR 60.9
million). A total of EUR 23.0 million in working capital was committed (EUR 3.4
million), with approximately EUR 10 million of this amount being related to the
change in the payment schedule of employment pension contributions, and the
remainder mainly consisting of increased trade receivables.
At the end of the period, interest-bearing liabilities amounted to EUR 95.6
million (EUR 99.9 million).
Net interest-bearing liabilities amounted to EUR 65.7 million (EUR 48.5
million), showing an increase of EUR 23.9 million from the beginning of the
year and an increase of EUR 17.1 million from the comparison period.
Net financial expenses in January–September were EUR 0.5 million in the
negative (EUR 1.2 million in the negative). Net financial expenses were 0.1%
(0.2%) of net sales and they included EUR 0.7 million in exchange rate gains
arising from the appreciation of the Russian rouble.
The average interest rate on long-term loans (with interest rate hedging) was
1.6% (1.5%). Long-term loans totalling EUR 31.7 million will mature during the
remainder of the year.
The equity ratio was 47.2% (45.9%) and the gearing rate was 30.7 (23.3). Liquid
assets at the end of the period amounted to EUR 30.0 million (EUR 51.3
million).
The EUR 100 million commercial paper programme was unused at the end of the
period (EUR 0.0 million). A committed limit totalling EUR 30.0 million was not
in use, as was the case in the comparison period.
DISTRIBUTION OF ASSETS
The Annual General Meeting held on 17 March 2016 resolved that a dividend of
EUR 0.85 per share be paid on the basis of the balance sheet that was adopted
for the financial year 2015. The dividend, totalling EUR 32.6 million, was paid
to shareholders on 30 March 2016.
CAPITAL EXPENDITURE
Gross capital expenditure in the first three quarters of the year totalled EUR
27.1 million (EUR 31.2 million), consisting primarily of machine and equipment
purchases, investments in information systems and acquisitions. Of the
significant ongoing information system projects, the deployment of the new ERP
system for Facility Services and the first deployments of new financial systems
will take place in late 2016 and early 2017.
PERSONNEL
In January–September, the average number of employees converted into full-time
equivalents was 7,278 (7,234). At the end of the period, Lassila & Tikanoja had
8,198 (8,345) full-time and part-time employees. Of these, 7,291 (7,462) worked
in Finland and 907 (883) in other countries.
SHARES AND SHARE CAPITAL
Traded volume and price
The volume of trading on Nasdaq Helsinki in January–September 2016, excluding
the shares held by the company in Lassila & Tikanoja plc, was 5,024,703 shares,
which is 13.1% (21.0%) of the average number of outstanding shares. The value
of trading was EUR 82.6 million (EUR 138.6 million). The highest share price
was EUR 18.25 and the lowest EUR 14.37. The closing price was EUR 17.25. At the
end of the period, the market capitalisation excluding the shares held by the
company was EUR 662.0 million (EUR 693.5 million).
Own shares
At the end of the review period, the company held 420,868 of its own shares,
representing 1.1% 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 is 38,378,006. The average number of shares excluding the
shares held by the company was 38,371,974.
Shareholders
At the end of the period, the company had 10,697 (9,795) shareholders.
Nominee-registered holdings accounted for 17.6% (22.0%) of the total number of
shares.
Authorisation for the Board of Directors
The Annual General Meeting held on 17 March 2016 authorised Lassila & Tikanoja
plc’s Board of Directors to make decisions 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 the 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 share issue authorisation
is effective for 18 months.
RESOLUTIONS BY THE ANNUAL GENERAL MEETING
The Annual General Meeting, which was held on 17 March 2016, adopted the
financial statements and consolidated financial statements for 2015 and
released the members of the Board of Directors and the President and CEO from
liability.
The Annual General Meeting resolved that a dividend of EUR 0.85 per share,
totalling EUR 32.6 million, be paid on the basis of the balance sheet adopted
for the financial year 2015. It was decided that the dividend be paid on 30
March 2016.
The Annual General Meeting confirmed the number of members of the Board of
Directors as six. Heikki Bergholm, Eero Hautaniemi, Laura Lares, Sakari Lassila
and Miikka Maijala were re-elected, and Teemu Kangas-Kärki was elected as a new
member, to the Board until the end of the following Annual General Meeting.
KPMG Oy Ab, Authorised Public Accountants, was elected auditor. KPMG Oy Ab
named Lasse Holopainen, Authorised Public Accountant, as its principal auditor.
The resolutions of the Annual General Meeting were announced in more detail in
a stock exchange release on 17 March 2016.
BOARD OF DIRECTORS
The members of Lassila & Tikanoja plc’s Board of Directors are Heikki Bergholm,
Eero Hautaniemi, Teemu Kangas-Kärki, Laura Lares, Sakari Lassila and Miikka
Maijala. At its constitutive meeting after the Annual General Meeting, the
Board of Directors elected Heikki Bergholm as Chairman of the Board and Eero
Hautaniemi as Vice Chairman.
Eero Hautaniemi was elected as Chairman and Sakari Lassila and Teemu
Kangas-Kärki as members of the Audit Committee. Heikki Bergholm was elected as
the Chairman of the Personnel Committee and Miikka Maijala and Laura Lares as
members of the committee.
SUMMARY OF STOCK EXCHANGE RELEASES PURSUANT TO ARTICLE 4, CHAPTER 6 OF THE
SECURITIES MARKET ACT
On 4 January 2016, the company announced that it had concluded the repurchase
of its own shares that was announced on 2 September 2015. The repurchase of the
company’s own shares began on 15 September 2015 and the repurchase programme
ended on 31 December 2015. The final share purchase was realised on 21 December
2015. A total of 253,406 shares were purchased during the repurchase programme.
As of the conclusion of the repurchase programme, the company holds a total of
437,721 of its own shares, which corresponds to 1.1% of shares and votes.
On 3 February 2016, the company announced a change to its target range for
gearing for the strategy period 2014–2018. The new range is 0–70 per cent. The
previous range was 30–80 per cent. The change is based on the company’s strong
cash flow as well as the need to prepare for potential acquisitions and other
capital expenditure.
On 10 June 2016, the company announced that Tutu Wegelius-Lehtonen, Lic.Sc.
(Tech.), has been appointed Vice President for Facility Services starting from
1 July 2016, having previously served as L&T’s Director, Supply Chain, and as a
member of the Group Executive Board since February 2015. Tomi Kontinen, B.
Eng. (Logistics), was appointed Wegelius-Lehtonen’s successor as Director,
Supply Chain, and member of the Group Executive Board, starting from 1 July
2016.
EVENTS AFTER THE REVIEW PERIOD
The company management is not aware of any events of material importance that
might have affected the preparation of the interim report.
NEAR-TERM RISKS AND UNCERTAINTIES
Economic uncertainty may result in significant changes in the secondary raw
material markets for Environmental Services and the demand for Facility
Services and Industrial Services.
Low prices for fossil fuels may affect the demand of the recovered and
renewable fuels produced by the company.
The company is preparing to deploy new ERP and financial management systems in
late 2016 and in 2017. The deployment of the new systems may lead to temporary
overlapping costs arising from changes in the operating model, which can have a
negative effect on the company’s result.
More detailed information on Lassila & Tikanoja’s risks and risk management is
available in the 2015 Annual Report, and in the Report of the Board of
Directors and the consolidated financial statements.
OUTLOOK FOR THE YEAR 2016
Full-year net sales and operating profit in 2016 are expected to remain at the
2015 level or improve slightly.
CONDENSED FINANCIAL STATEMENTS 1 JANUARY – 30 SEPTEMBER 2016
CONSOLIDATED INCOME STATEMENT
EUR million 7–9/20 7–9/20 1–9/20 1–9/20 1–12/2
16 15 16 15 015
--------------------------------------------------------------------------------
Net sales 166.0 159.6 493.5 481.1 646.3
Cost of sales -141.1 -135.7 -435.8 -422.4 -572.0
--------------------------------------------------------------------------------
Gross profit 24.9 24.0 57.7 58.7 74.2
Other operating income 0.6 0.6 3.2 2.0 3.7
Sales and marketing expenses -2.6 -2.9 -9.3 -9.6 -12.9
Administrative expenses -3.2 -2.8 -10.0 -9.3 -13.0
Other operating expenses -0.6 0.5 -1.6 -1.6 -2.1
Operating profit 19.1 19.3 39.9 40.2 49.9
Financial income 0.1 0.1 0.9 0.9 0.3
Financial expenses -0.5 -1.0 -1.4 -2.1 -2.5
--------------------------------------------------------------------------------
Profit before tax 18.7 18.4 39.4 39.0 47.7
Income taxes -3.7 -3.7 -4.5 -7.9 -9.7
--------------------------------------------------------------------------------
Profit for the period 14.9 14.7 34.9 31.1 37.9
Attributable to:
Equity holders of the company 14.9 14.7 34.9 31.1 37.9
Non-controlling interest 0.0 0.0 0.0 0.0 0.0
Earnings per share attributable to
equity holders of the parent company:
Earnings per share, EUR 0.39 0.38 0.91 0.80 0.98
Diluted earnings per share, EUR 0.39 0.38 0.91 0.80 0.98
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million 7–9/20 7–9/20 1–9/20 1–9/20 1–12/2
16 15 16 15 015
--------------------------------------------------------------------------------
Profit for the period 14.9 14.7 34.9 31.1 37.9
Items not to be recognised through
profit or loss
Items arising from re-measurement of 0.0 0.0 0.0 0.0 0.1
defined benefit plans
--------------------------------------------------------------------------------
Items not to be recognised through 0.0 0.0 0.0 0.0 0.1
profit or loss, total
Items potentially to be recognised
through profit or loss
Hedging reserve, change in fair value 0.1 0.2 0.3 0.4 0.4
Currency translation differences -0.3 -0.5 -0.4 0.0 0.1
Currency translation differences 0.0 0.0 0.0 0.0
recognised in profit or loss
Currency translation differences, 0.0 0.0 0.0 0.0 0.0
non-controlling interest
------------------------------------------------- -----------------------
Items potentially to be recognised -0.2 -0.3 0.0 0.4 0.4
through profit or loss, total
--------------------------------------------------------------------------------
Total comprehensive income, after tax 14.7 14.3 34.9 31.5 38.4
Attributable to:
Equity holders of the company 14.7 14.3 34.9 31.4 38.5
Non-controlling interest 0.0 0.0 0.0 0.0 0.0
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million 9/2016 9/2015 12/2015
--------------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets
Goodwill 116.4 113.4 113.7
Customer contracts arising from acquisitions 5.4 5.7 5.4
Agreements on prohibition of competition 0.1 0.2 0.2
Other intangible assets arising from business 0.6 0.6 0.6
acquisitions
Other intangible assets 19.6 12.6 15.0
--------------------------------------------------------------------------------
142.2 132.5 134.9
Property, plant and equipment
Land 5.0 5.0 5.0
Buildings and constructions 40.3 41.0 39.9
Machinery and equipment 102.2 105.6 111.0
Other 0.1 0.1 0.1
Prepayments and construction in progress 4.7 4.2 5.5
--------------------------------------------------------------------------------
152.3 155.9 161.5
Other non-current assets
Available-for-sale investments 0.6 0.6 0.6
Finance lease receivables 1.4 2.3 2.1
Deferred tax assets 5.5 2.5 2.4
Other receivables 1.8 2.1 2.0
--------------------------------------------------------------------------------
9.3 7.4 7.0
Total non-current assets 303.7 295.8 303.4
Current assets
Inventories 26.3 26.1 23.6
Trade and other receivables 95.3 92.6 84.4
Derivative receivables 0.1 0.0 0.0
Prepayments 10.7 1.1 0.3
Current available-for-sale financial assets 0.0 0.0 5.0
Cash and cash equivalents 30.0 51.3 49.0
--------------------------------------------------------------------------------
Total current assets 162.3 171.1 162.4
Total assets 466.0 467.0 465.8
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
EUR million 9/2016 9/2015 12/2015
--------------------------------------------------------------------------------
Equity
Equity attributable to equity holders of the parent
company
Share capital 19.4 19.4 19.4
Other reserves -3.4 -3.4 -3.4
Invested unrestricted equity reserve 0.4 0.5 0.5
Retained earnings 162.6 161.0 156.8
Profit for the period 34.9 31.1 37.9
--------------------------------------------------------------------------------
213.9 208.5 211.2
Non-controlling interest 0.2 0.2 0.1
--------------------------------------------------------------------------------
Total equity 214.1 208.7 211.4
Liabilities
Non-current liabilities
Deferred tax liabilities 24.3 24.2 24.9
Retirement benefit obligations 0.9 1.0 0.9
Provisions 4.4 4.1 4.1
Interest-bearing liabilities 62.7 92.2 61.0
Other liabilities 0.3 0.3 0.4
--------------------------------------------------------------------------------
92.5 122.0 91.2
Current liabilities
Interest-bearing liabilities 33.0 7.7 34.9
Trade and other payables 122.7 120.7 121.9
Derivative liabilities 0.2 0.9 1.1
Tax liabilities 1.5 4.3 1.4
Provisions 1.9 2.8 3.9
--------------------------------------------------------------------------------
159.4 136.3 163.2
Total liabilities 251.9 258.3 254.4
Total equity and liabilities 466.0 467.0 465.8
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million 1–9/ 1–9/ 1–12/
2016 2015 2015
--------------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 34.9 31.1 37.9
Adjustments
Income taxes 4.5 7.9 9.7
Depreciation and impairment 29.0 30.0 40.0
Financial income and expenses 0.5 1.2 2.2
Gain on sale of shares 0.0 0.0 0.0
Other -2.8 -0.1 0.7
--------------------------------------------------------------------------------
Net cash generated from operating activities before change 66.1 70.1 90.6
in working capital
Change in working capital
Change in trade and other receivables -18.2 2.9 11.8
Change in inventories -2.7 -3.5 -1.0
Change in trade and other payables -2.1 -2.8 -1.3
--------------------------------------------------------------------------------
Change in working capital -23.0 -3.4 9.5
Interest paid -1.4 -1.1 -1.7
Interest received 0.2 0.2 0.3
Income taxes -8.2 -4.9 -8.9
--------------------------------------------------------------------------------
Net cash from operating activities 33.6 60.9 89.8
Cash flows from investing activities
Acquisition of subsidiaries and businesses, net of cash -1.8 -5.9 -6.5
acquired
Proceeds from sale of subsidiaries and businesses, net of - - -
sold cash
Prepayments for Group companies and businesses - - -3.6
Purchases of property, plant and equipment and intangible -20.6 -23.4 -37.6
assets
Proceeds from sale of property, plant and equipment and 0.8 0.0 0.0
intangible
assets
Purchases of available-for-sale investments - 0.0 -
Change in other non-current receivables 0.2 1.3 1.7
Dividends received 0.0 0.0 0.0
--------------------------------------------------------------------------------
Net cash used in investing activities -21.3 -28.0 -46.1
Cash flows from financing activities
Change in short-term borrowings -0.2 0.0 0.2
Proceeds from long-term borrowings - 25.0 25.0
Repayments of long-term borrowings -3.5 -21.2 -25.2
Dividends paid and other asset distribution -32.6 -29.0 -29.0
Acquisition of own shares - -0.4 -4.7
L&T Recoil Oy guarantee commitment - - -
Other financing items - 0.0 0.0
--------------------------------------------------------------------------------
Net cash generated from financing activities -36.4 -25.6 -33.7
Net change in liquid assets -24.0 7.4 10.0
Liquid assets at beginning of period 54.0 44.0 44.0
Effect of changes in foreign exchange rates -0.1 0.0 0.0
--------------------------------------------------------------------------------
Liquid assets at end of period 30.0 51.3 54.0
Liquid assets
EUR million 1–9/ 1–9/ 1–12/
2016 2015 2015
--------------------------------------------------------------------------------
Cash and cash equivalents 30.0 51.3 49.0
Available-for-sale financial assets 0.0 0.0 5.0
--------------------------------------------------------------------------------
Total 30.0 51.3 54.0
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR Share Cur-re Reval- Hedg-i In-ves Re-tai Equity Non-co Total
millio capita ncy uation ng ted ned attribu ntrol- equity
n l transl reserv reserv unre-s earn-i t-able ling
a-tion e e tricte ngs to intere
differ d equity st
-ences equity holders
reserv of the
e parent
com-pan
y
--------------------------------------------------------------------------------
Equity 19.4 -2.9 0.0 -0.4 0.5 194.7 211.2 0.1 211.4
on 1
Jan.
2016
Total
compre
hensive
income
Profit 34.9 34.9 0.0 34.9
for
the
period
Items 0.0 0.0
arisin
g from
re-mea
suremen
t of
define
d
benefi
t plans
Hedging 0.3 0.3 0.3
reserv
e,
change
in
fair
value
Availab 0.0 0.0
le-for-
sale
financ
ial
assets
Currenc -0.4 -0.4 0.0 -0.3
y
transl
ation
differ
ences
--------------------------------------------------------------------------------
Total -0.4 0.3 34.9 34.9 0.0 34.9
compre
hensive
income
Transac
tions
with
shareh
olders
Share-b 0.0 0.4 0.4 0.4
ased
benefi
ts
Dividen -32.6 -32.6 -32.6
ds paid
Dividen 0.0 0.0 0.0
ds
return
ed
Acquisi 0.0 0.0
tion of
own
shares
--------------------------------------------------------------------------------
Transac 0.0 -32.2 -32.2 -32.2
tions
with
shareh
olders,
total
Other 0.1 0.1 0.1
change
s
--------------------------------------------------------------------------------
Equity 19.4 -3.3 0.0 -0.1 0.4 197.5 213.9 0.2 214.1
on 30
Sep.
2016
EUR Share Cur-re Reval- Hedg-i In-ves Re-tai Equity Non-co Total
millio capita ncy uation ng ted ned attribu ntrol- equity
n l transl reserv reserv unre-s earn-i t-able ling
a-tion e e tricte ngs to intere
differ d equity st
-ences equity holders
reserv of the
e parent
com-pan
y
--------------------------------------------------------------------------------
Equity 19.4 -3.0 0.0 -0.9 0.3 190.3 206.2 0.2 206.3
on 1
Jan.
2015
Total
compre
hensive
income
Profit 31.1 31.1 0.0 31.1
for
the
period
Items 0.0 0.0
arisin
g from
re-mea
suremen
t of
define
d
benefi
t plans
Hedging 0.5 -0.1 0.4 0.4
reserv
e,
change
in
fair
value
Availab 0.0 0.0
le-for-
sale
financ
ial
assets
Currenc 0.0 0.0 0.0 0.0
y
transl
ation
differ
ences
--------------------------------------------------------------------------------
Total 0.0 0.5 31.0 31.4 0.0 31.5
compre
hensive
income
Transac
tions
with
shareh
olders
Share-b 0.1 0.2 0.3 0.3
ased
benefi
ts
Dividen -29.0 -29.0 -29.0
ds paid
Dividen 0.0 0.0 0.0
ds
return
ed
Capital -0.8 -0.5 -0.5
repaym
ent
--------------------------------------------------------------------------------
Transac 0.1 -29.5 -29.4 -29.4
tions
with
shareh
olders,
total
Other 0.3 0.3 0.3
change
s
--------------------------------------------------------------------------------
Equity 19.4 -3.0 0.0 -0.4 0.5 192.1 208.5 0.2 208.7
on 30
Sep.
2015
KEY FIGURES
7–9/20 7–9/20 1–9/20 1–9/20 1–12/2
16 15 16 15 015
--------------------------------------------------------------------------------
Earnings per share, EUR 0.39 0.38 0.91 0.80 0.98
Diluted earnings per share, EUR 0.39 0.38 0.91 0.80 0.98
Cash flow from operating 0.76 1.09 0.88 1.58 2.33
activities/share, EUR
EVA, EUR million* 14.1 14.4 24.9 25.6 30.3
Gross capital expenditure, EUR million 8.5 13.7 27.1 31.2 49.6
Depreciation, amortisation and 9.5 10.0 29.0 30.0 40.0
impairment, EUR million
Equity per share, EUR 5.58 5.41 5.51
Return on equity, % (ROE) 21.9 20.0 18.2
Return on invested capital, ROI, % 17.7 17.6 16.5
Equity ratio, % 47.2 45.9 46.5
Gearing, % 30.7 23.3 19.8
Net interest-bearing liabilities, EUR 65.7 48.5 41.8
million
Average number of employees in full-time 7,278 7,234 7,099
equivalents
Total number of full-time and part-time 8,198 8,345 8,085
employees at end of period
Number of outstanding shares adjusted
for issues, 1,000 shares
average during the period 38,374 38,610 38,590
at end of period 38,378 38,592 38,361
average during the period, diluted 38,389 38,613 38,605
* EVA = operating profit - cost calculated on invested capital (average of four
quarters) WACC: 2016 6.56%, 2015 6.51%
ACCOUNTING POLICIES
This interim report is in compliance with the IAS 34 (Interim Financial
Reporting) standard.
The interim report has been prepared with application of the IFRS standards and
interpretations in effect on 31 December 2015.
More detailed information on accounting policies is presented in the
consolidated financial statements of Lassila & Tikanoja plc dated 31 December
2015.
The information presented in the interim report has not been audited.
SEGMENT INFORMATION
Net sales
7–9/2016 7–9/2015
EUR million Extern Inter-di Total Extern Inter-div Total Total net
al vision al ision sales, change
%
--------------------------------------------------------------------------------
Environmental 67.5 0.8 68.2 64.1 0.7 64.7 5.4
Services
Industrial 22.5 1.4 23.9 20.6 0.4 21.0 13.6
Services
Facility 70.8 0.7 71.5 69.4 1.1 70.5 1.3
Services
Renewable 5.3 0.0 5.3 5.5 0.0 5.6 -4.6
Energy
Sources
Eliminations -2.9 -2.9 -2.3 -2.3
-------------------------------- ------------------- ---------------
------- -------
Total 166.0 0.0 166.0 159.6 0.0 159.6 4.0
1–9/2016 1–9/2015
EUR million Extern Inter-di Total Extern Inter-div Total Total net
al vision al ision sales, change
%
--------------------------------------------------------------------------------
Environmental 195.7 2.5 198.2 189.9 2.4 192.2 3.1
Services
Industrial 58.4 2.3 60.7 55.4 1.3 56.7 7.0
Services
Facility 214.3 2.2 216.5 208.4 2.9 211.3 2.5
Services
Renewable 25.1 0.1 25.2 27.5 0.1 27.6 -8.9
Energy
Sources
Eliminations -7.1 -7.1 -6.7 -6.7
-------------------------------- ------------------- ---------------
------- -------
Total 493.5 0.0 493.5 481.1 0.0 481.1 2.6
1–12/
2015
EUR million Extern Inter-di Total
al vision
---------------------------------------
Environmental 253.1 3.4 256.5
Services
Industrial 75.0 2.0 77.0
Services
Facility 279.0 4.0 282.9
Services
Renewable 39.2 0.2 39.4
Energy
Sources
Eliminations -9.5 -9.5
--------------------------------
-------
Total 646.3 0.0 646.3
Operating profit
EUR million 7–9/ % 7–9/ % 1–9/ % 1–9/ % 1–12/ %
2016 2015 2016 2015 2015
--------------------------------------------------------------------------------
Environmental 10.2 14.9 11.0 17.0 24.8 12.5 28.4 14.8 35.8 14.0
Services
Industrial Services 3.4 14.2 2.9 13.7 5.2 8.6 5.0 8.8 6.8 8.9
Facility Services 6.1 8.5 4.9 6.9 10.9 5.0 7.0 3.3 8.1 2.9
Renewable Energy 0.1 2.0 0.6 9.9 0.8 3.1 1.8 6.5 2.1 5.3
Sources
Group -0.7 -0.1 -1.8 -2.0 -3.0
administration and
other
--------------------------------------------------------------------------------
Total 19.1 11.5 19.3 12.1 39.9 8.1 40.2 8.4 49.9 7.7
OTHER SEGMENT INFORMATION
EUR million 9/2016 9/2015 12/2015
------------------------------------------------------------
Assets
Environmental Services 219.1 208.1 214.2
Industrial Services 72.2 73.6 71.4
Facility Services 113.5 102.3 97.6
Renewable Energy Sources 23.2 24.2 23.3
Group administration and 0.8 1.1 1.0
other
Unallocated assets 37.2 57.7 58.2
------------------------------------------------------------
L&T total 466.0 467.0 465.8
Liabilities
Environmental Services 52.9 50.0 52.1
Industrial Services 23.9 22.4 21.9
Facility Services 45.4 48.2 49.8
Renewable Energy Sources 6.5 6.0 4.8
Group administration and 1.4 1.9 2.1
other
Unallocated liabilities 121.8 129.8 123.7
------------------------------------------------------------
L&T total 251.9 258.3 254.4
EUR million 7–9/2016 7–9/2015 1–9/2016 1–9/2015 1–12/2015
--------------------------------------------------------------------------------
Capital expenditure
Environmental Services 4.0 5.8 13.4 14.3 24.4
Industrial Services 2.1 2.8 5.5 4.7 7.5
Facility Services 2.1 5.0 8.0 12.0 17.3
Renewable Energy Sources 0.2 0.1 0.3 0.2 0.3
Group administration and 0.0 0.0 0.0 0.0 0.0
other
--------------------------------------------------------------------------------
L&T total 8.5 13.7 27.1 31.2 49.6
Depreciation and amortisation
Environmental Services 4.9 5.0 14.8 14.9 19.9
Industrial Services 1.7 1.6 4.9 5.0 6.6
Facility Services 2.9 3.3 9.1 9.9 13.3
Renewable Energy Sources 0.1 0.1 0.2 0.2 0.3
Group administration and 0.0 0.0 0.0 0.0 0.0
other
--------------------------------------------------------------------------------
L&T total 9.5 10.0 29.0 30.0 40.0
INCOME STATEMENT BY QUARTER
EUR million 7–9/2016 4–6/2016 1–3/2016 10–12/201 7–9/2015
5
--------------------------------------------------------------------------------
Net sales
Environmental Services 68.2 68.2 61.8 64.2 64.7
Industrial Services 23.9 20.9 15.9 20.3 21.0
Facility Services 71.5 72.8 72.2 71.7 70.5
Renewable Energy Sources 5.3 7.0 12.8 11.7 5.6
Interdivision net sales -2.9 -2.1 -2.1 -2.8 -2.3
--------------------------------------------------------------------------------
L&T total 166.0 166.9 160.7 165.2 159.6
Operating profit
Environmental Services 10.2 9.2 5.4 7.4 11.0
Industrial Services 3.4 2.1 -0.3 1.8 2.9
Facility Services 6.1 3.7 1.2 1.0 4.9
Renewable Energy Sources 0.1 0.0 0.7 0.3 0.6
Group administration and -0.7 -1.0 -0.1 -1.0 -0.1
other
--------------------------------------------------------------------------------
L&T total 19.1 14.1 6.8 9.7 19.3
Operating margin
Environmental Services 14.9 13.5 8.8 11.6 17.0
Industrial Services 14.2 10.3 -2.0 9.1 13.7
Facility Services 8.5 5.1 1.6 1.5 6.9
Renewable Energy Sources 2.0 0.3 5.1 2.6 9.9
--------------------------------------------------------------------------------
L&T total 11.5 8.4 4.2 5.9 12.1
Financial income and -0.4 -0.2 0.1 -1.0 -1.0
expenses, net
--------------------------------------------------------------------------------
Profit before tax 18.7 13.9 6.9 8.6 18.4
BUSINESS ACQUISITIONS, COMBINED
Fair value, total
EUR million 9/2016 9/2015 12/2015
--------------------------------------------------------------------------
Intangible assets 1.1 2.3 2.5
Property, plant and equipment 1.8 1.2 1.6
Investments 0.0 0.0 0.0
Receivables 1.7 1.4 1.4
Cash and cash equivalents 2.3 0.9 0.9
--------------------------------------------------------------------------
Total assets 6.9 5.9 6.4
Other liabilities 1.0 2.3 2.3
Deferred tax liabilities 0.0 0.3 0.3
--------------------------------------------------------------------------
Total liabilities 1.0 8.5 2.6
Net assets acquired 5.9 3.3 3.8
Total consideration 8.8 6.8 7.4
Goodwill 2.9 3.5 3.6
Effect on cash flow
Consideration paid in cash -8.8 -6.8 -7.4
Cash and cash equivalents of the acquired company 2.3 0.9 0.9
Paid in the previous year 3.6 - -
Unpaid 1.0 - -
--------------------------------------------------------------------------
Cash flow from investing activities -1.8 -5.9 -6.5
CHANGES IN INTANGIBLE ASSETS
EUR million 1–9/2016 1–9/2015 1–12/2015
---------------------------------------------------------------------
Carrying amount at beginning of period 134.9 125.7 125.7
Business acquisitions 1.4 5.8 6.0
Other capital expenditure 6.9 4.8 7.9
Disposals 0.2 0.0 0.0
Depreciation and impairment -3.4 -3.7 -5.0
Transfers between items 2.6 0.0 0.0
Exchange differences -0.4 0.0 0.2
---------------------------------------------------------------------
Carrying amount at end of period 142.2 132.5 134.9
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 1–9/2016 1–9/2015 1–12/2015
---------------------------------------------------------------------
Carrying amount at beginning of period 161.5 162.1 162.1
Business acquisitions 0.8 0.5 4.1
Other capital expenditure 18.0 20.1 31.5
Disposals -0.5 -0.8 -0.9
Depreciation and impairment -25.6 -26.3 -35.1
Transfers between items -2.6 0.0 0.0
Exchange differences 0.6 0.2 -0.2
---------------------------------------------------------------------
Carrying amount at end of period 152.3 155.9 161.5
CAPITAL COMMITMENTS
EUR million 1–9/2016 1–9/2015 1–12/2015
------------------------------------------------------------
Intangible assets 0.1 - -
Property, plant and equipment 9.9 8.2 6.3
------------------------------------------------------------
Total 9.9 8.2 6.3
FINANCIAL ASSETS AND LIABILITIES BY CATEGORY
EUR Financia Loans Availabl Financi Deriva Carrying Fair Fair
millio l assets and e-for-sa al tives amounts values value
n and other le liabili under by by hierar
30 liabilit receiva financia ties hedge balance balance chy
Septem ies bles l assets measure accoun sheet sheet level
ber at fair d at ting item item
2016 value amortis
through ed cost
profit
or loss
-------------------------------------------------------------------------
-------
Non-cur
rent
financ
ial
assets
Availab 00.6 0.6 0.6
le-for-
sale
invest
ments
Finance 1.4 1.4 1.4 3
lease
receiv
ables
Other 1.6 1.6 1.6 2
receiv
ables
Current
financ
ial
assets
Availab
le-for-
sale
invest
ments
Trade 88.4 88.4 88.4
and
other
receiv
ables
Finance 1.0 1.0 1.0
lease
receiv
ables
Derivat 0.1 0.1 0.1
ive
receiv
ables
Cash 30.0 30.0 30.0
and
cash
equiva
lents
-------------------------------------------------------------------------
Total 122.2 0.6 0.1 122.9 122.9
financ
ial
assets
Non-cur
rent
financ
ial
liabil
ities
Borrowi 59.6 59.6 59.6 2
ngs
Finance 3.1 3.1 3.1
lease
payabl
es
Other 0.0 0.0 0.0
liabil
ities
Current
financ
ial
liabil
ities
Borrowi 32.6 32.6 32.6
ngs
Finance 0.4 0.4 0.4
lease
payabl
es
Trade 68.7 68.7 68.7
and
other
payabl
es
Derivat 0.2 0.2 0.2 2
ive
liabil
ities
-------------------------------------------------------------------------
Total 164.4 0.2 164.6 164.6
financ
ial
liabil
ities
EUR Financia Loans Availabl Financ Deriva Carrying Fair Fair
million l assets and e-for-sa ial tives amounts values value
30 and other le liabil under by by hierar
Septemb liabilit receiva financia ities hedge balance balance chy
er 2015 ies bles l assets measur accoun sheet sheet level
at fair ed at ting item item
value amorti
through sed
profit cost
or loss
-------------------------------------------------------------------------
-------
Non-curr
ent
financi
al
assets
Availabl 0.6 0.6 0.6 3
e-for-sa
le
investm
ents
Finance 2.3 2.3 2.3 2
lease
receiva
bles
Other 1.9 1.9 1.9
receiva
bles
Current
financi
al
assets
Availabl
e-for-sa
le
financi
al
assets
Trade 86.5 86.5 86.5
and
other
receiva
bles
Finance
lease
receiva
bles
Derivati
ve
receiva
bles
Cash and 51.3 51.3 51.3
cash
equival
ents
-------------------------------------------------------------------------
Total 142.0 0.6 142.6 142.6
financi
al
assets
Non-curr
ent
financi
al
liabili
ties
Borrowin 92.2 92.2 91.5 2
gs
Other 0.1 0.1 0.1
liabili
ties
Current
financi
al
liabili
ties
Borrowin 7.7 7.7 7.7
gs
Trade 55.6 55.6 55.6
and
other
payable
s
Derivati 0.9 0.9 0.9 2
ve
liabili
ties
-------------------------------------------------------------------------
Total 155.6 0.9 156.4 155.7
financi
al
liabili
ties
CONTINGENT LIABILITIES
EUR million 9/2016 9/2015 12/2015
--------------------------------------------------------------------------------
Securities for own commitments
Mortgages on rights of tenancy 0.2 0.4 0.4
Company mortgages - 1.1 1.1
Other securities 0.1 0.2 0.2
Bank guarantees required for environmental permits 12.4 7.6 8.6
Other securities are security deposits.
Operating lease liabilities
EUR million 9/2016 9/2015 12/2015
--------------------------------------------------------------------------------
Maturity not later than one year 7.3 4.1 6.3
Maturity later than one year and not later than five 11.0 7.7 13.1
years
Maturity later than five years 3.9 2.0 1.6
--------------------------------------------------------------------------------
Total 22.2 13.7 21.0
Liabilities associated with derivative agreements
Interest rate swaps
EUR million 9/2016 9/2015 12/2015
--------------------------------------------------------------------------------
Nominal values of interest rate swaps
Maturity not later than one year 31.8 6.9 34.1
Maturity later than one year and not later than five 3.6 35.5 4.5
years
Maturity later than five years 0.0 0.0 0.0
--------------------------------------------------------------------------------
Total 35.5 42.3 38.6
Fair value -0.2 -0.5 -0.4
The interest rate swaps are used for the hedging of cash flow related to
floating rate loans, and hedge accounting under IAS 39 has been applied to
them. The hedges have been effective, and the changes in their fair values are
shown on the consolidated statement of comprehensive income for the period. The
fair values of the swap contracts are based on the market data on the interim
report date.
Commodity derivatives
EUR million 9/2016 9/2015 12/2015
--------------------------------------------------------------------------------
Nominal values of diesel swaps
Maturity not later than one year 1.2 1.7 1.6
Maturity later than one year and not later than five 0.0 0.0 0.0
years
--------------------------------------------------------------------------------
Total 1.2 1.7 1.6
Fair value 0.1 -0.4 -0.6
Commodity derivative contracts were signed for the hedging of future diesel oil
purchases. IAS 39-compliant hedge accounting is applied to these contracts, and
the effective change in fair value is recognised in the hedging reserve within
equity.
CALCULATION OF KEY FIGURES
Earnings per share:
profit attributable to equity holders of the parent company / adjusted average
basic number of shares
Diluted earnings per share:
profit attributable to equity holders of the parent company / adjusted average
diluted number of shares
Cash flows from operating activities/share:
cash flow from operating activities as in the statement of cash flows /
adjusted average
basic number of shares
EVA:
operating profit - cost calculated on invested capital (average of four
quarters)
WACC 2016: 6.56% and 2015: 6.51%
Equity per share:
profit attributable to equity holders of the parent company / adjusted basic
number of shares at end of period
Return on equity, % (ROE):
(profit for the period / equity (average)) x 100
Return on invested capital, % (ROI):
(profit before tax + financial expenses) / (total equity and liabilities -
non-interest-bearing liabilities (average)) x 100
Equity ratio, %:
equity / (total equity and liabilities - advances received) x 100
Gearing, %:
net interest-bearing liabilities / equity x 100
Net interest-bearing liabilities:
interest-bearing liabilities - liquid assets
Operating profit excluding non-recurring items:
operating profit +/- non-recurring items
Helsinki, 26 October 2016
LASSILA & TIKANOJA PLC
Board of Directors
Pekka Ojanpää
President and CEO
Additional information:
Pekka Ojanpää, President and CEO, tel. +358 10 636 2810
Timo Leinonen, CFO, tel. +358 400 793 073
Lassila & Tikanoja is a service company that is transforming consumer society
into an efficient
recycling society. In co-operation with our customers, we are reducing waste
volumes, extending
the useful lives of properties, recovering materials and decreasing the use of
raw materials and energy. We help our customers focus on their core business
and protect the environment. Together, we create well-being and jobs. With
operations in Finland, Sweden and Russia, L&T employs 8,000 persons. Net sales
in 2015 amounted to EUR 646.3 million. L&T is listed on Nasdaq Helsinki.
Distribution:
Nasdaq Helsinki
Major media
www.lassila-tikanoja.fi
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