2012-02-02 07:00:00 CET
2012-02-02 07:00:14 CET
REGULATED INFORMATION
Lassila & Tikanoja - Financial Statement Release
Lassila & Tikanoja plc: Financial statements 1 January-31 December 2011
Helsinki, Finland, 2012-02-02 07:00 CET (GLOBE NEWSWIRE) --
-- Net sales for the final quarter EUR 167.0 million (EUR
151.5
million); operating loss EUR 7.9 million (operating profit EUR
8.6
million); operating profit excluding non-recurring items EUR 9.6 million
(EUR
9.1
million); earnings per
share EUR -0.18 (EUR
0.14
)
-- Full-year net sales EUR 652.1 million (EUR
598.2
million); operating profit EUR 25.6 million (EUR
40.2
million); operating profit excluding non-recurring items EUR 44.3 million
(EUR
45.5
million); earnings per share EUR 0.44 (EUR
0.68
)
-- Full-year net sales is expected to remain at the 2011 level and operating
profit excluding non-recurring items is expected to remain at the 2011
level or to improve slightly in 2012.
-- Distribution of assets: The Board of Directors proposes a capital repayment
of EUR 0.55 per share
.
GROUP NET SALES AND FINANCIAL PERFORMANCE
Final quarter
Lassila & Tikanoja's net sales for the final quarter increased by 10.2% to EUR
167.0 million (EUR 151.5 million). Operating losses totalled EUR 7.9 million
(operating profit EUR 8.6 million), representing 4.7% (5.6%) of net sales.
Operating profit excluding non-recurring items was EUR 9.6 million (EUR 9.1
million). Earnings per share were EUR 0.18 negative (earnings per share EUR
0.14).
With the exception of Renewable Energy Sources, all divisions reported
continued net sales growth, approximately half of this growth being organic.
Increased waste and recycling volumes and the sustained healthy workload in
Property Maintenance prompted demand. In the cleaning business, growth was
generated by acquisitions made in the first half.
The year-on-year improvement in operating profit excluding non-recurring items
could be primarily attributed to the healthy workload in maintenance services
for technical systems and damage repair services. Operating losses excluding
non-recurring items sustained by the Renewable Energy Sources division and the
joint venture L&T Recoil, grew from the comparison period.
An impairment loss of EUR 17.1 million for the goodwill and other assets of the
Renewable Energy Sources division was recognised as a non-recurring cost in the
final quarter (an impairment of EUR 17.8 million was announced on 15 December
2011). The impairment loss is due to the weakening competitiveness of
wood-based fuels in the long term and a significant decline in government
subsidies for promoting the use of forest energy.
Year 2011
Lassila & Tikanoja's full-year net sales grew by 9.0% to EUR 652.1 million (EUR
598.2 million). Operating profit was EUR 25.6 million (EUR 40.2 million),
representing 3.9% (6.7%) of net sales, and operating profit excluding
non-recurring items was EUR 44.3 million (EUR 45.5 million). Earnings per share
were EUR 0.44 (EUR 0.68).
Net sales grew from the comparison period, as demand for Environmental Services
and industrial cleaning services perked up. The workload for Property
Maintenance remained strong throughout the year. In addition, the acquisitions
made in the first half boosted net sales. Acquisitions generated almost half of
net sales growth. Meanwhile, the sale of wood-based fuels fell clearly short of
the comparison period's level, due to their weak competitiveness.
Full-year operating profit excluding non-recurring items remained at the
comparison period's level. Higher salary, subcontracting and fuel costs, as
well as the temporary rise in waste disposal costs in the first half, eroded
profitability. All divisions implemented price increases to match the rise in
costs.
Full-year operating profit was taxed by the non-recurring impairment loss of
EUR 17.1 million recognised for the goodwill and other assets of the Renewable
Energy Sources division (an impairment of EUR 17.8 million was announced on 15
December 2011). In the comparison period, non-recurring costs of EUR 3.4
million were recognised for the discontinuation of the wood-pellet business.
The Group's tax rate was 19.2 per cent. A general decrease in the tax rate in
Finland, as well as the Administrative Court's decision on the tax
deductibility of dissolution loss write-off, lowered the tax rate.
Financial summary
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2011 2010 % 2011 2010 %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR million 167.0 151.5 10.2 652.1 598.2 9.0
Operating profit excluding 9.6 9.1 5.4 44.3 45.5 -2.7
non-recurring items, EUR
million*
Operating profit, EUR million -7.9 8.6 25.6 40.2 -36.4
Operating margin, % -4.7 5.6 3.9 6.7
Profit before tax, EUR million -9.0 7.6 21.0 36.0 -41.7
Earnings per share, EUR -0.18 0.14 0.44 0.68 -35.3
Capital repayment, EUR 0.55** 0.55**
*
EVA, EUR million -14.9 1.2 -2.2 10.1
--------------------------------------------------------------------------------
* Breakdown of operating profit excluding non-recurring items is presented
below the division reviews.
** Proposal by the Board of Directors
*** Dividend/share, EUR
NET SALES AND FINANCIAL PERFORMANCE BY DIVISION
Environmental Services
Final quarter
The division's net sales for the final quarter increased by 13.5% to EUR 84.0
million (EUR 74.0 million). Operating profit amounted to EUR 8.3 million (EUR
8.2 million), and operating profit excluding non-recurring items was EUR 8.3
million (EUR 8.2 million).
All services were able to grow their net sales, thanks to higher waste volumes
and service demand. Recycling volumes remained robust, even though prices of
secondary raw materials fell somewhat from the previous quarter.
New long-term service agreements were signed during the quarter. Of particular
importance was expansion of the coverage of an agreement on the recycling of
beverage containers with a refund value. The renewed agreement will enter into
force in the first half of 2012.
The division's operating profit remained at the comparison period's level,
primarily due to volume growth. In waste management, prices of services were
revised at the turn of the year to match higher production costs.
The performance of the joint venture L&T Recoil deteriorated from the
comparison period due to reduced demand for the end-product and lower prices.
However, the plant's reliability improved following a scheduled maintenance
shutdown in early autumn.
Although net sales generated by the division's international operations
remained largely unchanged from the comparison period, profitability declined
mainly due to weaker profitability in Latvia.
Year 2011
The division's full-year net sales increased by 12.4% to EUR 325.9 million (EUR
290.0 million). Operating profit amounted to EUR 34.0 million (EUR 33.7
million), and operating profit excluding non-recurring items was EUR 34.0
million (EUR 34.0 million).
The division's net sales growth was primarily organic and could be attributed
to the increase in waste volumes and healthy demand for industrial services.
Similarly, the volumes and price level of secondary raw materials improved
until the early autumn, but prices started to fall slightly at the year-end.
The acquisition of Papros Oy in the second quarter strengthened the division's
position in the recycled fibre markets.
The division's operating profit was at the comparison period's level. In the
first half, profitability was affected by lower than planned operating rates of
recycling plants, a temporary increase in waste disposal costs, and increased
production costs. The division did not entirely succeed in adapting its process
cleaning services to fluctuations in demand, but extensive service
shutdown-related assignments in the summer months were completed successfully.
The joint venture L&T Recoil was able to improve its net sales from the
comparison period. The plant's operating rate and reliability improved towards
the year-end, even though the end-product supply failed to reach the target
level. The joint venture was able to decrease its losses from the comparison
period despite two, almost month-long maintenance shutdowns during the year.
The division's year-on-year net sales from international operations remained
unchanged but operating profit declined slightly. The competitive environment
for Environmental Services in Latvia has become increasingly tight, which
hampered business development and eroded profitability.
During the year, several extensive service agreements were signed with retail
chains and producer liability organisations. A new Managreen service was
successfully launched on the market. This concept offers customers the ability
to manage their environmental management agreements and the related network
partners.
Cleaning and Office Support Services
Final quarter
The division's net sales for the final quarter totalled EUR 40.1 million (EUR
34.6 million); an increase of 16.0%. Operating profit amounted to EUR 0.9
million (EUR 0.2 million), and operating profit excluding non-recurring items
was EUR 1.1 million (EUR 0.3 million).
The division's net sales growth could be attributed to acquisitions made in the
first half. Furthermore, commissioned assignments in Finland sold better than a
year earlier.
The division's operating profit rose from the comparison period, thanks to the
Finnish operations. Meanwhile, the result from international operations was
clearly in the red, due to the integration costs affecting Swedish operations
and because of lost customers. A new operational enhancement programme was
launched in Sweden, with the objective of improving profitability and
operational efficiency.
Year 2011
The Cleaning and Office Support Services division's full-year net sales grew by
11.8% to EUR 157.3 million (EUR 140.6 million). Operating profit amounted to
EUR 7.1 million (EUR 7.5 million), and operating profit excluding non-recurring
items was EUR 7.5 million (EUR 8.0 million).
The division's year-on-year net sales growth could be primarily attributed to
acquisitions made in the first half (Hansalaiset in Finland and Östgöta Städ in
Sweden). Sales of commissioned assignments also grew from the comparison
period.
Start-up costs of new projects in the first half and higher-than-expected
integration costs associated with the acquisitions made in the second quarter
had a negative impact on the division's profitability.
In the comparison period, the EUR 0.7 million credit loss recognised for
Russian operations weakened the operating profit.
Property Maintenance
Final quarter
The division's net sales for the final quarter increased by 5.9% to EUR 33.5
million (EUR 31.6 million). Operating profit amounted to EUR 1.9 million (EUR
0.6 million), and operating profit excluding non-recurring items was EUR 1.9
million (EUR 0.6 million).
Strong demand for maintenance services for technical systems and in damage
repair services contributed to sustained net sales growth. In property
maintenance, the lack of snow in early winter restricted demand for
commissioned assignments.
Operating profit improved clearly from the comparison period, thanks to demand
for maintenance services for technical systems and damage repair services.
Year 2011
The Property Maintenance division's full-year net sales increased by 9.0% to
EUR 134.6 million (EUR 123.5 million). Operating profit amounted to EUR 8.2
million (EUR 7.8 million), and operating profit excluding non-recurring items
was EUR 8.2 million (EUR 7.9 million).
The division's net sales grew from the comparison period, thanks to successful
sales of commissioned assignments of property maintenance in the first half and
the strong workload in maintenance services for technical systems and damage
repair services. Heavy snowfall in the first half and more extensive
partnerships with insurance companies helped boost sales of commissioned
assignments.
The division's full-year operating profit rose despite increased production and
overtime costs. The profitability of commissioned assignments was also weaker
than a year earlier.
Renewable Energy Sources
Final quarter
Final-quarter net sales for Renewable Energy Sources (L&T Biowatti) were down
by 17.6%, to EUR 12.6 million (EUR 15.3 million). Operating loss amounted to
EUR 18.2 million (a loss of EUR 0.4 million), and operating loss excluding
non-recurring items was EUR 1.1 million (EUR 0.0 million).
Wood-based fuels continued to generate weak net sales in the final quarter, due
to intense competition and the mild and humid weather.
The division's operating profit excluding non-recurring items fell, even though
fixed costs were clearly lower than in the comparison period. In addition to
low demand, higher subcontracting costs also taxed profitability.
An impairment loss of EUR 17.1 million for goodwill and other assets was
recognised as a non-recurring cost for the quarter. The impairment is due to
the weakening competitiveness of wood-based fuels in the long term and a
significant decline in government subsidies for promoting the use of forest
energy.
Year 2011
The full-year net sales of Renewable Energy Sources (L&T Biowatti) were down by
17.6% to EUR 45.4 million (EUR 55.1 million). Operating loss amounted to EUR
21.3 million (a loss of EUR 6.6 million), and operating loss excluding
non-recurring items was EUR 3.8 million (a loss of EUR 3.1 million).
The competitiveness of wood-based fuels was weak throughout the year. In the
first half of the year, power plant customers did not receive any subsidy for
electricity generation from forest processed chips. As a result, several power
plants replaced forest processed chips with fossil fuels. The warm weather in
the autumn and in the early winter also curbed demand for forest processed
chips. Besides lower demand, profitability was also eroded by higher collection
and logistics costs.
A reorganisation programme involving fixed cost cuts and operational efficiency
enhancement measures was launched to improve the division's competitiveness.
An impairment loss of EUR 17.1 million for the division's goodwill and other
assets was recognised as a non-recurring cost. In the comparison period, the
non-recurring costs of EUR 3.4 million related to the discontinuation of the
wood-pellet business reduced operating profit.
BREAKDOWN OF OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS
EUR million 10-12/ 10-12/ 1-12/ 1-12/
2011 2010 2011 2010
--------------------------------------------------------------------------------
Operating profit -7.9 8.6 25.6 40.2
Non-recurring items:
Impairment of L&T Biowatti 17.1 17.1
Discontinuation of wood pellet production of L&T 0.4 0.1 3.4
Biowatti
Discontinuation of cleaning business in Moscow 0.1 0.4
Restructuring costs 0.4 1.5 1.5
--------------------------------------------------------------------------------
Operating profit excluding non-recurring items 9.6 9.1 44.3 45.5
FINANCING
Cash flows from operating activities amounted to EUR 74.5 million (EUR 63.8
million). EUR 3.2 million was released from the working capital (EUR 2.2
million tied up).
At the end of the year, interest-bearing liabilities amounted to EUR 135.2
million (EUR 126.8 million). Net interest-bearing liabilities amounted to EUR
127.2 million, showing an increase of EUR 14.8 million from the beginning of
the year.
Net finance costs in 2011 amounted to EUR 4.6 million (EUR 4.2 million). Net
finance costs were 0.7% (0.7%) of net sales. The average interest rate on
long-term loans (with interest-rate hedging) was 3.1% (3.3%). Long-term loans
totalling EUR 24.5 million will mature during 2012.
The equity ratio was 44.5% (46.5%) and the gearing rate 58.3 (50.3). Liquid
assets at the end of the period amounted to EUR 8.1 million (EUR 14.5 million).
The commercial paper programme was expanded to EUR 100 million (previously EUR
50 million) during the second half of the year. Of the commercial paper
programme, EUR 17 million (EUR 5.0 million) was in use at the end of the year.
A new three-year EUR 30 million committed limit agreement was signed during
last quarter. The earlier EUR 15.0 million committed limit will mature in June
2012. Committed limits were not in use, as was the case in the comparison
period.
DIVIDEND
The Annual General Meeting held on 17 March 2011 resolved on a dividend of EUR
0.55 per share. The dividend, totalling EUR 21.3 million, was paid to the
shareholders on 29 March 2011.
CAPITAL EXPENDITURE
Capital expenditure totalled EUR 70.6 million (EUR 39.3 million) in 2011, a
third of this consisting of acquisitions.
In the first quarter, Pentti Laurila Ky and businesses of Matti Hossi Ky and
PPT Luttinen Oy were acquired into Environmental Services. The business of
Kestosiivous Oy was acquired into Cleaning and Office Support Services and the
business of KH-Kiinteistöhuolto Oy was acquired into Property Maintenance.
In the second quarter, the Environmental Services division acquired Papros Oy
and Full House Oy. The Cleaning and Office Support Services division acquired
Savon Kiinteistöhuolto- ja Siivouspalvelu Oy, Varkauden Kiinteistönhoito ja
Siivouspalvelu Oy, Jo-Pe Huolto Oy, Östgöta Städ Ab and WTS-Palvelut Oy. The
Cleaning and Office Support Services and the Property Maintenance divisions
acquired the Hansalaiset Oy group including its subsidiaries.
In the final quarter the Environmental Services division acquired Paraisten
Puhtaanapito Oy. The Cleaning and Office Support Services division acquired
Palvelusiivous Ulla Haavisto Oy and the Property Maintenance division acquired
Nastolan Talohuolto Oy.
After the period, the Property Maintenance division acquired the property
mainantenance businesses of IK Kiinteistöpalvelu Oy and the business of
Jyvässeudun Talonmiehet Oy and Kiinteistöhuolto Markku Hyttinen Oy.
PERSONNEL
In 2011 the average number of employees converted into full-time equivalents
was 8,513 (7,835). The total number of full-time and part-time employees at the
end of the period was 9,357 (8,732). Of them 7,381 (6,849) people worked in
Finland and 1,976 (1,883) people in other countries.
PROPOSAL FOR THE DISTRIBUTION OF ASSETS
According to the financial statements, Lassila & Tikanoja plc's unrestricted
equity amount to EUR 111,645,234.28 with the operating profit for the period
representing EUR 11,521,380.63. 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 the profit
for 2011 be placed in retained earnings and that no dividend be paid.
The Board of Directors proposes to the Annual General Meeting that, based on
the balance sheet to be adopted for 2011, a capital repayment of EUR 0.55 per
share be made. Capital is repaid from the reserve for invested unrestricted
equity. Capital is repaid to shareholders included in the company shareholder
register maintained by Euroclear Finland Oy on the record date, 20 March 2012.
The Board proposes to the Annual General Meeting that the capital repayment be
made on 27 March 2012.
No dividend shall be paid on shares held by the company on the dividend payment
record date of 20 March 2012. On the day the proposal for the distribution of
assets was made, the number of shares entitling to capital repayment was
38,685,569, which means the total amount of the capital repayment would be EUR
21,277,062.95.
SHARE AND SHARE CAPITAL
Traded volume and price
The volume of trading excluding the shares held by the company in Lassila &
Tikanoja plc shares on NASDAQ OMX Helsinki in 2011 was 8,915,140 which is 23.0%
(20.0%) of the average number of outstanding shares. The value of trading was
EUR 108.2 million (EUR 111.1 million). The trading price varied between EUR
9.49 and EUR 15.18. The closing price was EUR 11.49. At the end of the period,
the company held 113,305 of its own shares. The market capitalisation excluding
the shares held by the company was EUR 444.5 million (EUR 570.6 million) at the
end of the period.
Own shares
At the beginning of the period, the company held 60,758 of its own shares and
at the end 113,305 of its own shares, representing 0.3% of all shares and
votes. Based on the authorisation given by the Annual General Meeting 2010, the
company repurchased 50,000 shares in the period from 12 September to 23
September 2011 at a total acquisition cost of EUR 0.5 million. On 5 April 2011,
a total of 2,547 shares of Lassila & Tikanoja plc were returned to the company
free of consideration, by virtue of the terms of the share-based incentive
programme of 2009.
Share capital and number of shares
The company's registered share capital amounts to EUR 19,399,437, and the
number of outstanding shares to 38,685,569 shares. The average number of shares
excluding the shares held by the company totalled 38,721,908.
Share option scheme 2005
The exercise period for the 2005C options ended on 31 May 2011.
Share option scheme 2008
In 2008, 230,000 share option rights were issued, each entitling its holder to
subscribe for one share of Lassila & Tikanoja plc. 33 key persons hold 168,000
options and L&T Advance Oy 62,000 options.
The exercise price is EUR 16.20. It was reduced by EUR 0.07 as of 22 March
2011. The exercise price of the share options shall, as per the dividend record
date, be reduced by the amount of dividend which exceeds 70% of the profit per
share for the financial period to which the dividend applies. However, only
such dividends whose distribution has been agreed upon after the option pricing
period and which have been distributed prior to the share subscription are
deducted from the subscription price. The exercise price shall, however, always
amount to at least EUR 0.01. The exercise period is from 1 November 2010 to 31
May 2012.
As a result of the exercise of the outstanding 2008 share options, the number
of shares may increase by a maximum of 168,000 new shares, which is 0.4% of the
current number of shares. The 2008 options have been listed on NASDAQ OMX
Helsinki since 1 November 2010.
Share-based incentive programme 2009
Lassila & Tikanoja plc's Board of Directors decided on 24 March 2009 on a
share-based incentive programme. The programme included three earnings periods
one year each, of which the first one began on 1 January 2009 and the last one
ended on 31 December 2011. No rewards were paid for the year 2011. Rewards were
based on the EVA result of Lassila & Tikanoja group. The programme covered 23
persons.
Share-based incentive programme 2012
Lassila & Tikanoja plc's Board of Directors decided on 14 December 2011 on a
new share-based incentive programme. Rewards will be based on the EVA result of
Lassila & Tikanoja group without L&T Recoil. They will be paid partly as shares
and partly in cash. The part paid in cash will cover the taxes caused by the
reward. Based on the programme a maximum of 65,520 shares of the company can
be granted. The company will buy the shares from the stock market. The
programme covers 22 persons.
Shareholders
At the end of the financial period, the company had 9,365 (9,151) shareholders.
Nominee-registered holdings accounted for 13.0% (12.2%) of the total number of
shares.
Authorisation for the Board of Directors
The Annual General Meeting held on 31 March 2010 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 and on the issuance of these
shares.
The Board of Directors is authorised to transfer a maximum of 500,000 company
shares, which is 1.3% of the total number of shares. The share issue
authorisation will be effective for four years and it revokes the authorisation
to issue shares issued by the Annual General Meeting 2009. The authorisation
for the repurchase of the company's own shares has ended.
The Board of Directors is not authorised to launch a convertible bond or share
option rights.
RESOLUTIONS BY THE GENERAL MEETINGS
The Extraordinary General Meeting of Lassila & Tikanoja plc, which was held on
8 September 2011, resolved on decreasing the share premium reserve of the
balance sheet at 31 December 2010 by EUR 50,672,564.52 by transferring all the
funds in the share premium reserve to the unrestricted equity reserve. The
resolutions of the Extraordinary General Meeting were announced in more detail
in a stock exchange release on 8 September 2011.
The Annual General Meeting of Lassila & Tikanoja plc, which was held on 17
March 2011, adopted the financial statements for the financial year 2010 and
released the members of the Board of Directors and the President and CEO from
liability. The AGM resolved that a dividend of EUR 0.55 per share, a total of
EUR 21.3 million, as proposed by the Board of Directors, be paid for the
financial year 2010. The dividend payment date was resolved to be 29 March
2011.
The Annual General Meeting confirmed the number of the members of the Board of
Directors six. The following Board members were re-elected to the Board until
the end of the following AGM: Heikki Bergholm, Eero Hautaniemi, Matti Kavetvuo,
Hille Korhonen and Miikka Maijala. Sakari Lassila was elected as a new member
for the same term.
PricewaterhouseCoopers Oy, Authorised Public Accountants, was elected auditor.
The resolutions of the Annual General Meeting were announced in more detail in
a stock exchange release on 17 March 2011.
BOARD OF DIRECTORS
The members of the Board of Directors are Heikki Bergholm, Eero Hautaniemi,
Matti Kavetvuo (until 27 December 2011), Hille Korhonen, Sakari Lassila and
Miikka Maijala. In its constitutive meeting the Board elected Heikki Bergholm
as Chairman of the Board and Matti Kavetvuo as Vice Chairman.
From among its members, the Board elected Eero Hautaniemi as Chairman and
Sakari Lassila and Miikka Maijala as members of the audit committee. Heikki
Bergholm was elected as Chairman of the remuneration committee and Matti
Kavetvuo and Hille Korhonen as members of the committee.
Matti Kavetvuo, Vice Chairman of the Board, announced his resignation from the
Board of Directors on 27 December 2011 and Eero Hautaniemi was elected as the
new Vice Chairman of the Board.
CHANGES IN THE MANAGEMENT OF THE COMPANY
On 13 June 2011, the Board of Directors of Lassila & Tikanoja plc appointed
Pekka Ojanpää as President and CEO of the company. Mr Ojanpää assumed his
position as Lassila & Tikanoja's President and CEO on 1 November 2011. Ville
Rantala, CFO of Lassila & Tikanoja, appointed as acting President and CEO as of
13 June. Other changes in the management of the company are presented below.
SUMMARY OF STOCK EXCHANGE RELEASES PURSUANT TO ARTICLE 7, CHAPTER 2 OF THE
SECURITIES MARKETS ACT
In a release published on 22 March 2011, the company announced that M.Sc.
(Econ.) Ville Rantala has been appointed as Managing Director of L&T Biowatti
Oy and Vice President, Renewable Energy Sources division, as of 22 March 2011.
Rantala will also continue as CFO of Lassila & Tikanoja plc. Tomi Salo,
Managing Director of L&T Biowatti, will not continue in the company.
In a release published on 5 April 2011, the company announced that a total of
2,547 shares of Lassila & Tikanoja plc have been returned to the company free
of consideration, by virtue of the terms of the share-based incentive programme
of 2009.
In a release published on 13 June 2011, the company announced that the Board of
Directors of Lassila & Tikanoja plc has appointed Pekka Ojanpää as President
and CEO. Pekka Ojanpää acts as President of Kemira's Municipal & Industrial
segment. He previously worked as President of the Kemira Performance Chemicals
business area, and has held various executive positions at Nokia Corporation.
On 27 October 2011, the company announced that Mr Ojanpää assumed his position
as Lassila & Tikanoja's President and CEO on 1 November 2011. The Board of
Directors and Jari Sarjo, former President and CEO, agreed that Sarjo will
leave his position as President and CEO immediately. Ville Rantala, CFO of
Lassila & Tikanoja, was appointed as acting President and CEO as of 13 June.
In a release published on 7 December, the company announced that as of 1
January 2012, Kirsi Matero has been appointed HR Director and Group Executive
of Lassila & Tikanoja plc. Inkeri Puputti, current HR Director, will leave the
company.
In a release published on 15 December the company announced that it will
recognise an impairment loss of EUR 17.8 million for the goodwill of business
operations and other assets of the Renewable Energy Sources division in the
final quarter. The impairment loss is due to the weakening competitiveness of
wood-based fuels in the long term and a remarkable decline in government
subsidies for promoting the use of forest energy. The impairment loss is
treated as a non-recurring expense and it does not have cash flow effect.
In a release published on 16 December the company announced that Tuomas
Mäkipeska has been appointed Business Development Director and Group Executive
of Lassila & Tikanoja plc as of 16 February 2012, at the latest.
In a release published on 13 January the company announced that Antti Tervo has
been appointed Chief Procurement Officer and Group Executive of Lassila &
Tikanoja plc as of 14 February 2012.
NEAR-TERM UNCERTAINTIES
Economic uncertainty may cause remarkable changes in the Environmental Services
division's secondary raw material markets and in industrial customer
relationships.
Any disturbances in L&T Recoil plant's production could have a negative effect
on the Environmental Services division's performance. End-product and raw
material price fluctuations, as well as the plant's supply volumes, have a
major effect on L&T Recoil's performance.
Uncertainties associated with the government subsidies for renewable fuels and
their continuity could affect demand for the Renewable Energy Sources
division's services.
More detailed information on L&T's risks and risk management is available in
the Annual Report for 2010, in the report of the Board of Directors, and in the
consolidated financial statements.
OUTLOOK FOR THE YEAR 2012
The markets in which L&T primarily operates are mainly low-cyclical, and the
majority of the company's net sales comes from long-term service agreements.
However, general economic developments reflect on L&T's operations,
particularly commissioned environmental and support service assignments.
Despite the economic uncertainty, the outlook for Environmental Services is, by
and large, stable. The secondary raw material price development and the
operational reliability of L&T Recoil's plant in particular will affect the
division's profitability.
Prospects for Cleaning and Office Support Services and for Property Maintenance
are stable, but economic uncertainty is keeping competition tough in both
divisions.
Demand for L&T Biowatti's wood-based fuels is expected to grow slightly and the
division's profitability is expected to improve. Any changes in the government
subsidies for renewable fuels could, however, impact L&T Biowatti's raw
material procurement costs and demand for the end-product.
Full-year net sales is expected to remain at the 2011 level and operating
profit excluding non-recurring items is expected to remain at the 2011 level or
to improve slightly in 2012.
CONDENSED FINANCIAL STATEMENTS 1 JANUARY-31 DECEMBER 2011
CONSOLIDATED INCOME STATEMENT
EUR 1000 10-12/201 10-12/201 1-12/201 1-12/201
1 0 1 0
--------------------------------------------------------------------------------
Net sales 167 001 151 507 652 130 598 193
Cost of sales -151 706 -137 761 -584 152 -531 066
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross profit 15 295 13 746 67 978 67 127
Other operating income 1 026 1 638 3 038 2 708
Selling and marketing costs -3 926 -3 804 -15 217 -13 779
Administrative expenses -2 818 -2 260 -11 408 -10 519
Other operating expenses -422 -767 -1 733 -2 686
Impairment, non-current assets -5 677 -5 677 -2 632
Impairment, goodwill and other -11 384 -11 384
intangible assets
--------------------------------------------------------------------------------
Operating profit -7 906 8 553 25 597 40 219
Finance income 329 323 1 041 1 053
Finance costs -1 428 -1 310 -5 644 -5 282
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit before tax -9 005 7 566 20 994 35 990
Income tax expense 2 140 -2 254 -4 030 -9 786
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit for the period -6 865 5 312 16 964 26 204
Attributable to:
Equity holders of the company -6 865 5 310 16 960 26 188
Non-controlling interest 0 2 4 16
Earnings per share for profit attributable to the equity holders of the company:
Basic earnings per share, EUR -0.18 0.14 0.44 0.68
Diluted earnings per share, EUR -0.18 0.14 0.44 0.68
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR 1000 10-12/ 10-12 1-12/ 1-12/
2011 /2010 2011 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit for the period -6 865 5 312 16 964 26 204
Other comprehensive income, after tax
Hedging reserve, change in fair value 928 314 -487 224
Revaluation reserve
Gains in the period -13 -3 -4 -58
--------------------------------------------------------------------------------
Current available-for-sale financial assets -13 -3 -4 -58
Currency translation differences 645 236 111 777
Currency translation differences, non-controlling 7 6 -11 14
interest
--------------------------------------------------------------------------------
Other comprehensive income, after tax 1 567 553 -391 957
--------------------------------------------------------------------------------
Total comprehensive income, after tax -5 298 5 865 16 573 27 161
Attributable to:
Equity holders of the company -5 305 5 856 16 580 27 130
Non-controlling interest 7 9 -7 31
TAX EFFECTS OF COMPONENTS OF OTHER COMPREHENSIVE INCOME
31.12.2 31.12.2010
011
EUR 1 000 Before Tax After Before Tax After
tax expens tax tax expense/b tax
e/ enefit
benefit
--------------------------------------------------------------------------------
Hedging reserve, change in -623 136 -487 302 -78 224
fair value
Revaluation reserve
Current available-for-sale -5 1 -4 -60 2 -58
financial assets
Currency translation 169 -58 111 1 275 -498 777
differences
Currency translation -11 -11 14 14
differences,
non-controlling interest
--------------------------------------------------------------------------------
Components of other -470 79 -391 1 531 -574 957
comprehensive income
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR 1000 12/2011 12/2010
----------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets
Goodwill 119 509 113 467
Customer contracts arising from acquisitions 10 591 4 736
Agreements on prohibition of competition 3 162 10 023
Other intangible assets arising from business acquisitions 78 1 229
Other intangible assets 11 149 13 226
----------------------------------------------------------------------------
----------------------------------------------------------------------------
144 489 142 681
Property, plant and equipment
Land 4 589 4 671
Buildings and constructions 78 217 78 908
Machinery and equipment 120 015 111 733
Other 85 85
Prepayments and construction in progress 4 616 5 303
----------------------------------------------------------------------------
----------------------------------------------------------------------------
207 522 200 700
Other non-current assets
Available-for-sale investments 605 598
Finance lease receivables 3 578 3 547
Deferred tax assets 6 323 3 924
Other receivables 3 315 3 401
----------------------------------------------------------------------------
----------------------------------------------------------------------------
13 821 11 470
Total non-current assets 365 832 354 851
Current assets
Inventories 27 953 27 957
Trade and other receivables 91 629 85 662
Derivative receivables 419 407
Prepayments 438 317
Current available-for-sale financial assets 2 299 9 895
Cash and cash equivalents 5 770 4 653
----------------------------------------------------------------------------
Total current assets 128 508 128 891
TOTAL ASSETS 494 340 483 742
----------------------------------------------------------------------------
EUR 1000 12/2011 12/2010
----------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity
Equity attributable to equity holders of the company
Share capital 19 399 19 399
Share premium reserve 50 673
Other reserves -2 469 -2 141
Unrestricted equity reserve 50 658
Retained earnings 133 125 128 597
Profit for the period 16 960 26 188
----------------------------------------------------------------------
217 673 222 716
Non-controlling interest 271 278
----------------------------------------------------------------------
Total equity 217 944 222 994
Liabilities
Non-current liabilities
Deferred tax liabilities 29 389 33 718
Retirement benefit obligations 628 615
Provisions 2 500 2 748
Borrowings 92 914 95 563
Other liabilities 960 364
----------------------------------------------------------------------
126 391 133 008
Current liabilities
Borrowings 42 319 31 261
Trade and other payables 105 751 94 891
Derivative liabilities 1 850 1 173
Tax liabilities 85 15
Provisions 400
----------------------------------------------------------------------
150 005 127 740
Total liabilities 276 396 260 748
TOTAL EQUITY AND LIABILITIES 494 340 483 742
----------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR 1000 12/201 12/201
1 0
--------------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 16 964 26 204
Adjustments
Income tax expense 4 030 9 786
Depreciation, amortisation and impairment 61 548 43 937
Finance income and costs 4 602 4 229
Other -858 1 570
--------------------------------------------------------------------------------
Net cash generated from operating activities before change in 86 286 85 726
working capital
Change in working capital
Change in trade and other receivables -7 843 -6 118
Change in inventories 9 4 874
Change in trade and other payables 11 055 -918
--------------------------------------------------------------------------------
Change in working capital 3 221 -2 162
Interest paid -6 165 -5 409
Interest received 1 020 914
Income tax paid -9 896 -15
259
--------------------------------------------------------------------------------
Net cash from operating activities 74 466 63 810
Cash flows from investing activities
Acquisition of subsidiaries and businesses, net of cash acquired -24 -1 655
430
Proceeds from sale of subsidiaries and businesses, net of sold 199
cash
Purchases of property, plant and equipment and intangible assets -45 -36
503 003
Proceeds from sale of property, plant and equipment and 1 850 3 655
intangible assets
Purchases of available-for-sale investments -20 -74
Change in other non-current receivables 98 -2 673
Dividends received 1
--------------------------------------------------------------------------------
Net cash used in investing activities -68 -36
005 550
Cash flows from financing activities
Change in short-term borrowings 8 712 5 091
Proceeds from long-term borrowings 20 000
Repayments of long-term borrowings -19 -23
761 166
Dividends paid -21 -21
284 301
Repurchase of own shares -517 -1 125
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash generated from financing activities -12 -40
850 501
EUR 1000 12/2011 12/2010
-------------------------------------------------------------
Net change in liquid assets -6 389 -13 241
Liquid assets at beginning of period 14 548 27 583
Effect of changes in foreign exchange rates -90 206
-------------------------------------------------------------
Liquid assets at end of period 8 069 14 548
Liquid assets
EUR 1000 12/2011 12/2010
-------------------------------------------------------------
Cash and cash equivalents 5 770 4 653
Available-for-sale financial assets 2 299 9 895
-------------------------------------------------------------
Total 8 069 14 548
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR Share Share Curre Reval Hedgin Invest Retai Equity Non-co
Total
1000 capita premi ncy uation g ed ned attrib ntroll
equity
l um transl reserv reserv unrest earni utabl ing
reserv ation e e ricte ngs e intere
e differ d to st
ences equity equity reserv holder
e s
of the
compan
y
--------------------------------------------------------------------------------
------
Equity 19 399 50 673 -1 523 -48 -570 0 154 222 278
222
at 785 716
994
1.1.2
011
Expens 183 183
183
e
recog
nitio
n of
share
-based
benef
its
Repurc -553 -553
-553
hase
of
own
share
s
Divide -21 -21
-21
nds 290 290
290
paid
Transf 52 -15 37
37
er
from
reval
uation
rese
rve
Transf -50 50 673
er 673
from
share
premi
um
reser
ve
Total 111 -4 -487 16 960 16 580 -7
16 573
compr
ehens
ive
incom
e
--------------------------------------------------------------------------------
------
--------------------------------------------------------------------------------
------
Equity 19 399 0 -1 412 0 -1 057 50 658 150 217 271
217
at 085 673
944
31.12
.2011
Equity 19 399 50 673 -2 300 10 -794 0 150 217 247
217
at 014 002
249
1.1.2
010
--------------------------------------------------------------------------------
------
--------------------------------------------------------------------------------
------
Expens 386 386
386
e
recog
nitio
n of
share
-based
benef
its
Repurc -489 -489
-489
hase
of
own
share
s
Divide -21 -21
-21
nds 313 313
313
paid
Total 777 -58 224 26 187 27 130 31
27 161
compr
ehensi
ve
incom
e
--------------------------------------------------------------------------------
------
--------------------------------------------------------------------------------
------
Equity 19 399 50 673 -1 523 -48 -570 0 154 222 278
222
at 785 716
994
31.12
.2010
KEY FIGURES
10-12/ 10-12/ 1-12/ 1-12/
2011 2010 2011 2010
--------------------------------------------------------------------------------
Earnings per share, EUR -0.18 0.14 0.44 0.68
Earnings per share, diluted, EUR -0.18 0.14 0.44 0.68
Cash flows from operating activities per share, 0.75 0.54 1.92 1.65
EUR
EVA, EUR million -14.9 1.2 -2.2 10.1
Capital expenditure, EUR 1000 14 893 12 458 70 590 39 321
Depreciation, amortisation and impairment, EUR 28 394 10 322 61 548 43 937
1000
Equity per share, EUR 5.63 5.75
Dividend/share, EUR 0.55
Dividend/earnings, % 81.4
Capital repayment / share, EUR 0.55*
Capital repayment / earnings, % 125.0*
Dividend yield, % 3.7
Capital repayment yield, % 3.7*
P/E ratio 26.2 21.8
Return on equity, ROE, % 7.7 11.9
Return on invested capital, ROI, % 7.6 11.6
Equity ratio, % 44.5 46.5
Gearing, % 58.3 50.3
Net interest-bearing liabilities, EUR 1000 127 112
165 277
Average number of employees in full-time 8 513 7 835
equivalents
Total number of full-time and part-time 9 357 8 732
employees at end of period
Number of outstanding shares adjusted for issues, 1000
shares
average during the period 38 722 38 749
at end of period 38 686 38 738
average during the period, diluted 38 762 38 773
* Proposal by the Board of Directors
ACCOUNTING POLICIES
This financial statements release is in compliance with IAS 34 standard. The
same accounting policies as in the annual financial statements for the year
2010 have been applied. The following new, revised or amended IFRS standards
and IFRIC interpretations that have become effective in 2011 have not had an
impact on the financial statements:
-- IAS 24 (revised) Related Party Disclosures
-- IAS
32 (amendment) Financial Instruments: Presentation - Classification of
Rights Issues
-- FRIC19 Extinguishing Financial Liabilities with Equity Instruments.
-- IFRIC 14 (amendment) Prepayments of a Minimum Funding Requirement
-- annual improvements to IFRS.
The preparation of financial statements in accordance with IFRS require the
management to make such estimates and assumptions that affect the carrying
amounts at the balance sheet date for the assets and liabilities and the
amounts of revenues and expenses. Judgements are also made in applying the
accounting policies. Actual results may differ from the estimates and
assumptions.
The financial statements release has not been audited.
SEGMENT INFORMATION
Net sales
10-12/2011 10-12/2010
EUR 1000 Extern Inter-d Total Extern Inter-d Total Total net
al ivision al ivision sales,
change %
--------------------------------------------------------------------------------
Environmental 82 960 1 054 84 014 73 020 972 73 992 13.5
Services
Cleaning and 39 728 373 40 101 34 259 321 34 580 16.0
Office Support
Services
Property 32 901 550 33 451 30 810 786 31 596 5.9
Maintenance
Renewable Energy 11 412 1 166 12 578 13 418 1 848 15 266 -17.6
Sources
Eliminations -3 143 -3 143 -3 927 -3 927
--------------------------------------------------------------------------------
L&T total 167 0 167 151 0 151 10.2
001 001 507 507
1-12/2011 1-12/2010
EUR 1000 Extern Inter-d Total Extern Inter-d Total Total net
al ivision al ivision sales,
change %
--------------------------------------------------------------------------------
Environmental 322 3 620 325 286 3 771 290 12.4
Services 264 884 260 031
Cleaning and 155 1 454 157 139 1 216 140 11.8
Office Support 817 271 399 615
Services
Property 132 2 192 134 121 1 923 123 9.0
Maintenance 399 591 546 469
Renewable Energy 41 650 3 752 45 402 50 988 4 118 55 106 -17.6
Sources
Eliminations -11 018 -11 -11 028 -11
018 028
--------------------------------------------------------------------------------
L&T total 652 0 652 598 0 598 9.0
130 130 193 193
Operating profit
EUR 1000 10-12/ % 10-12/ % 1-12/ % 1-12/ %
2011 2010 2011 2010
--------------------------------------------------------------------------------
Environmental 8 305 9.9 8 204 11.1 33 970 10.4 33 674 11.6
Services
Cleaning and Office 937 2.3 181 0.5 7 131 4.5 7 524 5.4
Support Services
Property Maintenance 1 928 5.8 633 2.0 8 181 6.1 7 764 6.3
Renewable Energy -18 -144.6 -361 -2.4 -21 -46.8 -6 553 -11.9
Sources 189 250
Group admin. and -887 -104 -2 435 -2 190
other
--------------------------------------------------------------------------------
-----------------------------------------------------------
L&T total -7 906 -4.7 8 553 5.6 25 597 3.9 40 219 6.7
Finance costs, net -1 099 -987 -4 603 -4 229
--------------------------------------------------------------------------------
-----------------------------------------------------------
Profit before tax -9 005 7 566 20 994 35 990
Other segment information
EUR 1000 12/2011 12/2010
--------------------------------------------------------------------------------
Assets
Environmental Services 346 224 330 963
Cleaning and Office Support 54 302 39 007
Services
Property Maintenance 45 048 38 098
Renewable Energy Sources 27 346 49 113
Group admin. and other 2 528 1 902
Unallocated assets 18 892 24 659
--------------------------------------------------------------------------------
--------------------------------------------
L&T total 494 340 483 742
Liabilities
Environmental Services 57 367 50 300
Cleaning and Office Support 29 804 25 654
Services
Property Maintenance 15 889 15 784
Renewable Energy Sources 3 932 4 835
Group admin. and other 1 343 1 193
Unallocated liabilities 168 061 162 982
--------------------------------------------------------------------------------
--------------------------------------------
L&T total 276 396 260 748
EUR 1000 10-12/2011 10-12/201 1-12/2011 1-12/2010
0
--------------------------------------------------------------------------------
Capital expenditure
Environmental Services 10 098 9 007 43 362 31 409
Cleaning and Office Support 629 814 14 721 2 112
Services
Property Maintenance 4 007 2 440 11 776 5 074
Renewable Energy Sources 45 316 454 654
Group admin. and other 114 -119 277 72
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
L&T total 14 893 12 458 70 590 39 321
Depreciation and amortisation
Environmental Services 7 865 7 141 30 760 28 558
Cleaning and Office Support 1 354 980 4 928 4 023
Services
Property Maintenance 1 355 1 025 4 873 4 017
Renewable Energy Sources 758 1 176 3 919 4 702
Group admin. and other 1 7 5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
L&T total 11 333 10 322 44 487 41 305
Impairment
Renewable Energy Sources 17 061 17 061 2 632
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
L&T total 17 061 17 061 2 632
INCOME STATEMENT BY QUARTER
EUR 1000 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
2011 2011 2011 2011 2010 2010 2010 2010
--------------------------------------------------------------------------------
Net sales
Environmental 84 014 85 906 83 535 72 429 73 992 75 806 75 624 64 609
Services
Cleaning and 40 101 41 530 40 784 34 856 34 580 35 659 35 710 34 666
Office Support
Services
Property 33 451 31 322 30 879 38 939 31 596 26 926 28 090 36 857
Maintenance
Renewable Energy 12 578 7 213 9 600 16 011 15 266 7 617 12 097 20 126
Sources
Inter-division -3 143 -2 502 -2 612 -2 761 -3 927 -2 238 -2 507 -2 356
net sales
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
L&T total 167 163 162 159 151 143 149 153
001 469 186 474 507 770 014 902
Operating profit
Environmental 8 305 12 308 9 182 4 175 8 204 10 930 10 124 4 416
Services
Cleaning and 937 3 718 1 001 1 475 181 4 088 2 218 1 037
Office Support
Services
Property 1 928 3 582 769 1 902 633 3 263 1 075 2 793
Maintenance
Renewable Energy -18 -1 085 -1 325 -651 -361 -1 432 -3 900 -860
Sources 189
Group admin. and -887 -344 -767 -437 -104 -574 -762 -750
other
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
L&T total -7 906 18 179 8 860 6 464 8 553 16 275 8 755 6 636
Operating margin
Environmental 9.9 14.3 11.0 5.8 11.1 14.4 13.4 6.8
Services
Cleaning and 2.3 9.0 2.5 4.2 0.5 11.5 6.2 3.0
Office Support
Services
Property 5.8 11.4 2.5 4.9 2.0 12.1 3.8 7.6
Maintenance
Renewable Energy -144.6 -15.0 -13.8 -4.1 -2.4 -18.8 -32.2 -4.3
Sources
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
L&T total -4.7 11.1 5.5 4.1 5.6 11.3 5.9 4.3
Finance costs, -1 099 -1 277 -1 163 -1 064 -987 -1 272 -917 -1 053
net
--------------------------------------------------------------------------------
Profit before -9 005 16 902 7 697 5 400 7 566 15 003 7 838 5 583
tax
BUSINESS ACQUISITIONS
In business combinations, all property, plant and equipment acquired is
measured at fair value on the basis of the market prices of similar assets,
taking into account the age of the assets, wear and tear and similar factors.
Tangible assets will be depreciated over their useful life according to the
management's estimate, taking into account the depreciation principles observed
within the Group.
Intangible assets arising from business combinations are recognised separately
from goodwill at fair value at the time of acquisition if they are
identifiable. In connection with acquired business operations, the Group mostly
has acquired agreements on prohibition of competition and customer
relationships. The fair value of customer agreements and customer relationships
associated with them has been determined on the basis of estimated duration of
customer relationships and discounted net cash flows arising from current
customer relationships. The value of agreements on prohibition of competition
is calculated in a similar manner through cash flows over the duration of the
agreement. Other intangible assets will be amortised over their useful life
according to agreement or the management's estimate.
In addition to the skills of the personnel of the acquired businesses, goodwill
arising from business combinations comprises other intangible items. These
unidentified items include the potential for gaining new customers in the
acquired businesses and the opportunities for developing new products and
services, as well as the regionally strong position of an acquired business.
All business combinations also create synergy benefits that consist primarily
of savings in fixed production costs.
Changes in goodwill arising from acquisitions or acquisition costs may arise on
the basis of terms and conditions related to the acquisition price in the deeds
of sale. In many acquisitions a small portion of the acquisition price is
contingent on future events (less than 12 months). These conditional
acquisition prices are recorded at fair value at the time of acquisition, and
any changes will be recorded through profit or loss in the income statement for
the period. Changes in the acquisition prices made in 2009 and for the Biowatti
acquisition in 2007 will be recorded in goodwill in line with the old IFRS 3.
The consolidated net sales for the year 2011 would have been EUR 665.7 million
and the consolidated profit for the period EUR 17.6 million if all the
acquisitions had occurred on 1 January 2011. The realised net sales of the
acquired businesses have been added to the consolidated net sales, and their
realised profits and losses have been added to the consolidated profit in
accordance with interim accounts at the time of acquisition. Profit for the
period is stated less the current amortisation on intangible assets and
depreciation charges on property, plant and equipment. Synergy benefits have
not been accounted for.
The aggregate net sales of the acquired businesses totalled EUR 45.1 million in
2011.
Business combinations in aggregate
Consideration
EUR 1000 Fair values used in
consolidation
--------------------------------------------------------------------------------
Cash 27 830
Equity instruments
Contingent consideration 45
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total consideration transferred 27 875
Indemnification asset
Fair value of equity interest held before the acquisition
--------------------------------------------------------------------------------
Total consideration 27 875
Acquisition-related costs (included in the administrative 27
expenses in the consolidated financial statements)
Recognised amounts of identifiable assets acquired and liabilities assumed
Property, plant and equipment 4 281
Customer contracts 9 042
Agreements on prohibition of competition 3 336
Other intangible assets arising from business acquisitions 0
Other intangible assets 160
Non-current available-for-sale financial assets 122
Inventories 411
Trade and other receivables 5 914
Cash and cash equivalents 3 399
------------------------------------------------------------------
Total assets 26 666
Deferred tax liabilities 752
Non-current interest-bearing liabilities 45
Trade and other payables 8 475
Retirement benefit obligations 0
Contingent liability 0
------------------------------------------------------------------
Total liabilities 9 272
------------------------------------------------------------------
Total identifiable net assets 17 394
Non-controlling interest 0
Goodwill 10 481
------------------------------------------------------------------
------------------------------------------------------------------
Total 27 875
Acquisitions by Environmental Services
4 January 2011, Pentti Laurila Ky, an environmental management business
operating in the Keuruu and Multiala region in central Finland
1 February 2011, the Ypäjä-based Matti Hossi Ky, a waste management and
interchangeable platform business
1 March 2011, the PPT Luttinen Oy waste management business
1 May 2011, Papros Oy, an environmental management company, and Full House Oy,
a company specialising in the provision of environmental management services,
both operating in the Helsinki region and
1 October 2011, Paraisten Puhtaanapito Oy, a company providing waste
management, recycling and wastewater services.
Acquisitions by Cleaning and Office Support Services
1 January 2011, the cleaning business of Kestosiivous Oy, a company operating
in the Helsinki region
1 April 2011, the cleaning and property maintenance businesses of Varkaus-based
Savon Kiinteistöhuolto- ja Siivouspalvelu Oy, Varkauden Kiinteistönhoito ja
Siivouspalvelu Oy and Jo-Pe Huolto Oy
1 May 2011, Östgöta Städ Ab in Sweden, a cleaning service provider
1 June 2011, WTS-Palvelut Oy, a cleaning company operating in the Tampere
region.
1 November 2011, Palvelusiivous Ulla Haavisto Oy, a cleaning company operating
in the Forssa region.
Acquisitions by Cleaning and Office Support Services and Property Maintenance
1 April 2011, the Hansalaiset Oy group, including its subsidiaries, providing
cleaning and property maintenance services in the Helsinki, Turku, Tampere and
Oulu regions.
Acquisitions by Property Maintenance
1 March 2011, the operations of KH-Kiinteistöhuolto Oy operating in the
Nurmijärvi region.
1 December 2011, Nastolan Talohuolto Oy, property maintenance company operating
in Lahti region
Acquisitions by Prpperty Maintenance after the financial period
1 January 2012, the property maintenance operations of IK Kiinteistöpalvelu Oy.
1 February 2012 the business of Jyvässeudun Talonmiehet Oy and Kiinteistöhuolto
Markku Hyttinen Oy.
The accounting process for these acquisitions is still in progress.
The figures for these acquired businesses are stated in aggregate, because none
of them is of material importance when considered separately. Fair values have
been determined as of the time the acquisition was realised. No business
operations have been divested as a consequence of any acquisition. All
acquisitions have been paid for in cash. With share acquisitions, L&T was able
to gain 100% of the voting rights. The conditional consideration is tied to the
transfer of the customer contracts to Lassila & Tikanoja plc, and the estimates
of the fair values of considerations were determined on the basis of
probability-weighted final acquisition price. The estimates for the conditional
consideration have not changed between the time of acquisition and the balance
sheet date. Trade and other receivables have been recorded at fair value at the
time of acquisition. Individual acquisition prices have not been itemised
because none of them is of material importance when considered separately.
By annual net sales, the largest acquisitions were Hansalaiset Oy (EUR 11.0
million), Papros Oy (EUR 6.2 million), Full House Oy (EUR 3.2. million) and
Östgöta Städ Ab (EUR 11.8 million).
It is not possible to itemise the effects of the acquired businesses on the
consolidated net sales and profit for the period, because L&T integrates its
acquisitions into the current business operations as quickly as possible to
gain synergy benefits.
On 18 December 2006, an agreement was signed on the acquisition of the majority
(70%) of the shares of Biowatti Oy from the acting management of the company.
L&T also made a commitment to redeem the remaining 30 percent of the shares by
the beginning of the year 2012. The acquisition price for the 70 percent
portion was EUR 30.9 million, and it was settled in cash. No interest-bearing
liabilities were transferred in the acquisition. In the consolidated financial
statements the whole acquisition price (100%) was recognised as acquisition
cost. No minority interest was separated from the profit or equity, but the
estimated acquisition price of the remaining 30 percent was recognised as
interest-bearing non-current liability. The final price of the 30 percent
portion will be determined based on the future earnings of L&T Biowatti. The
estimate is assessed annually as of 31 December, or whenever any indication
exists. According to the assessment of 31 December 2011, the acquisition price
for the remaining 30 percent was reduced by EUR 239 thousand to EUR 2,411
thousand (EUR 2,650 thousand). The adjustment has no impact on the profit or
loss, as the adjustment was recognised accordingly under cost of the
combination, goodwill and interest-bearing liabilities.
The accounting policy concerning business combinations is presented in Annual
Report under Note 2 of the consolidated financial statements and under Summary
on significant accounting policies.
CHANGES IN INTANGIBLE ASSETS
EUR 1000 1-12/2011 1-12/2010
------------------------------------------------------------
Carrying amount at beginning of period 142 681 148 417
Business acquisitions 22 859 1 175
Other capital expenditure 2 646 2 944
Disposals -18 -1 760
Amortisation and impairment -23 865 -9 134
Transfers between items -4
Exchange differences 186 1 043
------------------------------------------------------------
Carrying amount at end of period 144 489 142 681
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR 1000 1-12/2011 1-12/2010
------------------------------------------------------------
Carrying amount at beginning of period 200 700 201 651
Business acquisitions 4 441 500
Other capital expenditure 40 616 34 628
Disposals -477 -1 711
Depreciation and impairment -37 683 -34 803
Transfers between items 4
Exchange differences -75 431
------------------------------------------------------------
Carrying amount at end of period 207 522 200 700
CAPITAL COMMITMENTS
EUR 1000 1-12/2011 1-12/2010
--------------------------------------------------------------
Intangible assets 0 0
Property, plant and equipment 4 593 5 106
--------------------------------------------------------------
---------------------
Total 4 593 5 106
The Group's share of capital commitments 0 0
of joint ventures
RELATED-PARTY TRANSACTIONS
(Joint ventures)
EUR 1000 1-12/2011 1-12/2010
---------------------------------------------
Sales 2 489 2 332
Other operating income 63 74
Interest income 707 505
Non-current receivables
Capital loan receivable 24 396 20 646
Current receivables
Trade receivables 2 710 2 375
Loan receivables 1 633 1 034
CONTINGENT LIABILITIES
Securities for own commitments
EUR 1000 12/2011 12/2010
--------------------------------------------------------------------
Mortgages on rights of tenancy 42 186 42 179
Company mortgages 21 460 21 460
Other securities 174 222
Bank guarantees required for environmental permits 5 702 4 634
Other securities are security deposits.
The Group has given no pledges, mortgages or guarantees on behalf of outsiders.
Operating lease liabilities
EUR 1000 12/2011 12/2010
----------------------------------------------------------------------------
Maturity not later than one year 7 708 8 087
Maturity later than one year and not later than five years 15 504 20 087
Maturity later than five years 4 185 4 509
----------------------------------------------------------------------------
-----------------
Total 27 397 32 683
Liabilities associated with derivative agreements
Interest rate and currency swaps
EUR 1000 12/2011 12/2010
----------------------------------------------------------------------------
Nominal values of interest rate and currency swaps*
Maturity not later than one year 13 429 11 010
Maturity later than one year and not later than five years 38 033 49 355
Maturity later than five years 267
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Total 51 462 60 632
Fair value -1 504 -1 173
Nominal value of interest rate swaps**
Maturity not later than one year 4 000
Maturity later than one year and not later than five years 19 455
Maturity later than five years 4 545
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Total 28 000
Fair value -144
* The interest rate and currency swaps are used to hedge cash flow related to a
floating rate loan, and hedge accounting under IAS 39 has been applied to it.
The hedges have been effective, and the changes in the fair values are shown in
the consolidated statement of comprehensive income for the period. On the
balance sheet date, the value of foreign currency loans was EUR 0.5 million
positive. The fair values of the swap contracts are based on the market data at
the balance sheet date.
** Hedge accounting under IAS 39 has not been applied to these interest rate
swaps. Changes in fair values
have been recognised in finance income and costs.
Commodity derivatives
metric tons 12/2011 12/2010
----------------------------------------------------------------------------
Nominal values of diesel swaps
Maturity not later than one year 2 544 7 596
Maturity later than one year and not later than five years 636 2 544
----------------------------------------------------------------------------
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Total 3 180 10 140
Fair value, EUR 1000 419 400
Commodity derivative contracts were concluded, for hedging of future diesel oil
purchases. IAS 39 -compliant hedge accounting will be applied to these
contracts, and the effective change in fair value will be recognised in the
hedging reserve within equity. The fair values of commodity derivatives are
based on market prices at the balance sheet date.
Currency derivatives
EUR 1000 12/2011 12/2010
--------------------------------------------------
Volume of forward contracts
Maturity not later than one year 1 079 196
Fair value -19 7
Hedge accounting under IAS 39 has not been applied to forward contracts.
Changes in fair values have been recognised in finance income and costs.
CALCULATION OF KEY FIGURES
Earnings per share:
profit attributable to equity holders of the parent company / adjusted average
basic number of shares
Earnings per share, diluted:
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 number of shares
EVA:
operating profit - cost calculated on invested capital (average of four
quarters)
WACC 2010: 8.7%
WACC 2011: 7.7%
Equity per share:
equity 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 investment, % (ROI):
(profit before tax + finance costs) / (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, 1 February 2012
LASSILA & TIKANOJA PLC
Board of Directors
Pekka Ojanpää
President and CEO
For additional information please contact:
Pekka Ojanpää, President and CEO, tel. +358 10 636 2810,
Ville Rantala, CFO, tel. +358 50 385 1442 or
Keijo Keränen, Head of Treasury & IR, tel. +358 50 385 6957.
Lassila & Tikanoja specialises in environmental management and property and
plant support services. L&T is a significant supplier of wood-based biofuels,
recovered fuels and recycled raw materials. With operations in Finland, Sweden,
Latvia and Russia, L&T employs 9,500 persons. Net sales in 2011 amounted to EUR
652 million. L&T is listed on NASDAQ OMX Helsinki.
Distribution:
NASDAQ OMX Helsinki
Major media
www.lassila-tikanoja.com
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