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2013-08-06 07:00:01 CEST 2013-08-06 07:00:05 CEST REGULATED INFORMATION Lassila & Tikanoja - Interim report (Q1 and Q3)Lassila & Tikanoja plc: Interim Report 1 January - 30 June 2013Helsinki, Finland, 2013-08-06 07:00 CEST (GLOBE NEWSWIRE) -- Net sales for the second quarter EUR 168.9 million (EUR 169.7 million); operating profit EUR 8.5 million (EUR 14.1 million); operating profit excluding non-recurring items EUR 13.4 million (EUR 12.1 million); earnings per share EUR 0.14 (EUR 0.24) Net sales for January-June EUR 336.6 million (EUR 341.0 million); operating profit EUR 14.8 million (EUR 19.1 million); operating profit excluding non-recurring items EUR 20.2 million (EUR 17.2 million); earnings per share EUR 0.26 (EUR 0.31) Non-recurring costs primarily attributable to the EUR 5.0 million write-down on EcoStream Oy's shares. Full-year net sales in 2013 are expected to remain at the 2012 level. Operating profit, excluding non-recurring items, is expected to remain at the 2012 level or improve slightly. CEO PEKKA OJANPÄÄ: “We pursued our strategy implementation in the second quarter, and the efficiency improvement measures produced the expected results. We were able to improve our operating profit year-on-year and to generate a strong cash flow. The current economic uncertainty is reflecting on demand in the industrial sector and on the material flows in retail trade, which in turn is halting our net sales growth.” GROUP NET SALES AND FINANCIAL PERFORMANCE Second quarter Lassila & Tikanoja's net sales for the second quarter decreased by 0.5% to EUR 168.9 million (EUR 169.7 million). Operating profit was EUR 8.5 million (EUR 14.1 million), and operating profit excluding non-recurring items was EUR 13.4 million (EUR 12.1 million), representing 7.9% (7.2%) of net sales. Earnings per share were EUR 0.14 (EUR 0.24). Comparable net sales includes EUR 3.3 million worth of net sales generated by L&T Recoil and the divested parts of the eco product business. Gain from the sale of L&T Recoil shares boosted operating profit by EUR 4.2 million in the comparison period while the non-recurring write-down of EUR 5.0 million on EcoStream Oy shares reduced it in the review period. January-June Lassila & Tikanoja's net sales for January-June amounted to EUR 336.6 million (EUR 341.0 million); an decrease of 1.3%. Operating profit was EUR 14.8 million (EUR 19.1 million), and operating profit excluding non-recurring items was EUR 20.2 million (EUR 17.2 million), representing 6.0% (5.0%) of net sales. Earnings per share were EUR 0.26 (EUR 0.31). Comparable net sales includes EUR 7.3 million worth of net sales generated by L&T Recoil and the divested parts of the eco product business. Operating profit was taxed by the non-recurring reorganisation costs of EUR 0.7 million (EUR 2.0 million). Gain from the sale of L&T Recoil shares boosted operating profit by EUR 4.2 million in the comparison period while the non-recurring write-down of EUR 5.0 million on EcoStream Oy shares reduced it in the review period. Financial summary 4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/ 2013 2012 % 2013 2012 % 2012 -------------------------------------------------------------------------------- -------------------------------------------- Net sales, EUR million 168.9 169.7 -0.5 336.6 341.0 -1.3 674.0 ------------------------------ ------ Operating profit excluding 13.4 12.1 10.0 20.2 17.2 17.1 47.4 non-recurring items, EUR million* ------------------------------ ------ Operating margin excluding 7.9 7.2 6.0 5.0 7.0 non-recurring items, % ------------------------------ ------ Operating profit, EUR million 8.5 14.1 -40.0 14.8 19.1 -22.5 48.4 ------------------------------ ------ Operating margin, % 5.0 8.3 4.4 5.6 7.2 ------------------------------ ------ Profit before tax, EUR 7.9 10.8 -26.9 13.8 14.8 -6.6 43.0 million ------------------------------ ------ Earnings per share, EUR 0.14 0.24 -41.7 0.26 0.31 -16.1 0.89 ------------------------------ ------ EVA, EUR million 3.4 7.9 -57.0 4.3 6.4 -32.8 24.1 -------------------------------------------------------------------------------- * Breakdown of operating profit excluding non-recurring items is presented below the division reviews. NET SALES AND FINANCIAL PERFORMANCE BY DIVISION Environmental Services Second quarter The division's net sales for the second quarter were down by 3.7% to EUR 66.6 million (EUR 69.1 million). Operating profit totalled EUR 9.1 million (EUR 12.4 million) and operating profit excluding non-recurring items was EUR 9.1 million (EUR 8.7 million). Comparable net sales includes EUR 3.3 million worth of net sales generated by L&T Recoil and the divested parts of the eco product business. Despite the decrease in material flows in the recycling, building and retail sectors, the division was able to improve its profitability. Efficiency enhancement measures and effective cost control contributed to the increase in operating profit. January-June The Environmental Services division's net sales for January-June amounted to EUR 126.8 million (EUR 134.6 million), showing a decrease of 5.8%. Operating profit totalled EUR 15.3 million (EUR 16.6 million) and operating profit excluding non-recurring items was EUR 15.3 million (EUR 13.0 million). Comparable net sales includes EUR 7.3 million worth of net sales generated by L&T Recoil and the divested parts of the eco product business. Comparable net sales remained at the comparison period's level even though the recycling material volume declined following the slowdown in the building and retail trade sectors. Net sales growth could be attributed to new customer contracts and positive developments in the waste management business. Efficiency enhancement measures and effective cost control contributed to the increase in operating profit. Industrial Services Second quarter The division's net sales for the second quarter totalled EUR 20.0 million (EUR 20.2 million), showing an decrease of 0.8%. Operating profit totalled EUR 1.9 million (EUR 2.2 million) and operating profit excluding non-recurring items was EUR 1.9 million (EUR 2.5 million). Demand for industrial services perked up in the second quarter. Meanwhile the demand for environmental construction and sewer maintenance services remained weak at the beginning of the second quarter, which had a negative effect on both net sales and operating profit. January-June The division's net sales for January-June totalled EUR 33.7 million (EUR 33.1 million), showing an increase of 2.0%. Operating profit totalled EUR 1.4 million (EUR 0.9 million) and operating profit excluding non-recurring items was EUR 1.4 million (EUR 1.3 million). Net sales grew following an increase in demand for process cleaning. Demand for sewer maintenance services and environmental construction was modest at the start of the year, but improved towards the end of the review period. The demand for our hazardous waste services remained strong throughout the period, helping to maintain a healthy profit level. Facility Services Second quarter The division's net sales for the second quarter were up by 1.4% to EUR 73.4 million (EUR 72.4 million). Operating profit totalled EUR 2.8 million (EUR 1.0 million) and operating profit excluding non-recurring items was EUR 2.9 million (EUR 2.1 million). The demand for damage repair services returned to normal and, especially in Sweden, the profitability of cleaning business improved year-on-year, affecting the second quarter's operating profit. January-June The division's net sales for January-June were down by 1.8% to EUR 149.2 million (EUR 152.0 million). Operating profit totalled EUR 3.3 million (EUR 2.6 million) and operating profit excluding non-recurring items was EUR 3.7 million (EUR 3.8 million). The division's net sales declined from the comparison period due to reduced demand for damage repair services and decline in the Swedish operations. Costs incurred from the expansion of technical systems services had a negative effect on profitability, as did the weak demand for damage repair services in the first half. The Facility Services division implemented efficiency enhancement measures to improve its profitability. Profitability improved in the cleaning business, particularly in Sweden. Renewable Energy Sources Second quarter Second quarter net sales of Renewable Energy Sources (L&T Biowatti) were up by 7.4% to EUR 13.0 million (EUR 12.1 million). The division recorded an operating profit of EUR 0.1 million (operating loss EUR 0.7 million), and an operating loss excluding non-recurring items of EUR 0.1 million (operating loss EUR 0.6 million). The demand for wood-based fuels remained brisk in the second quarter. Efficiency enhancement measures had a positive impact on the division's profitability. January-June January-June net sales of Renewable Energy Sources (L&T Biowatti) were up by 17.1% to EUR 34.8 million (EUR 29.7 million). Operating profit amounted to EUR 1.1 million (EUR 0.1 million), and operating profit excluding non-recurring items was EUR 0.9 million (EUR 0.2 million). There was a significant improvement in the division's net sales from the comparison period, due to strong demand for wood-based fuels. Profitability suffered from the weak energy content of fuels and higher logistics costs. Operating profit improved following net sales growth and the efficiency improvement measures. BREAKDOWN OF OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS EUR million 4-6/ 4-6/ 1-3/ 1-3/ 1-12/ 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Operating profit 8.5 14.1 14.8 19.1 48.4 Non-recurring items: Gain on sale of L&T Biowatti Oy -0.3 -0.3 equipment Impairment of Ecostream Oy shares 5.0 5.0 Gain on sale of holding in L&T -4.2 -4.2 -4.2 Recoil Oy Impairment of hazardous waste 0.3 0.3 0.5 treatment facilities Gain on sale of eco product -0.2 business Restructuring costs 0.2 1.9 0.7 2.0 2.9 -------------------------------------------------------------------------------- Operating profit excluding 13.4 12.1 20.2 17.2 47.4 non-recurring items FINANCING Cash flows from operating activities amounted to EUR 44.4 million (EUR 31.6 million). A total of EUR 9.7 million in working capital was released (EUR 2.4 million released). At the end of the period, interest-bearing liabilities amounted to EUR 89.0 million (EUR 129.5 million). L&T Recoil accounted for EUR 17.7 million of the interest-bearing liabilities in the reference period. Guarantees of EUR 16.4 million given by Lassila & Tikanoja to other providers of finance for these liabilities are still in force. In addition L&T had receivables from EcoStream Group of EUR 3.3 million. Net interest-bearing liabilities amounted to EUR 73.9 million, showing a decrease of EUR 8.4 million from the beginning of the year and EUR 38.8 million from the comparison period. Net finance costs in the January-June amounted to EUR 1.0 million (EUR 4.3 million). Net finance costs were 0.3% (1.3%) of net sales. The average interest rate on long-term loans (with interest-rate hedging) was 2.2% (2.5%). Long-term loans totalling EUR 16.2 million will mature during the rest of the year. The equity ratio was 47.3% (43.3%) and the gearing rate 33.9 (53.8). Liquid assets at the end of the period amounted to EUR 15.1 million (EUR 16.7 million). Of the EUR 100 million commercial paper programme, EUR 15.0 million (EUR 34.0 million) was in use at the end of the period. 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 12 March 2013 resolved that the profit for 2012 be placed in retained earnings and that no dividend be paid. A capital repayment of EUR 0.60 per share was paid for the financial year 2012. The capital repayment, totalling EUR 23.2 million, was paid to the shareholders on 22 March 2013. CAPITAL EXPENDITURE Capital expenditure for January-June totalled EUR 16.7 million (EUR 27.8 million) and was mainly comprised of machine and equipment purchases. PERSONNEL In January-June the average number of employees converted into full-time equivalents was 8,002 (8,220). The total number of full-time and part-time employees at the end of the period was 9,567 (9,817). Of them 7,602 (7,689) people worked in Finland and 1,965 (2,128) people in other countries. 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 January-June was 3,796,733 which is 9.8% (14.6%) of the average number of outstanding shares. The value of trading was EUR 49.5 million (EUR 59.1 million). The trading price varied between EUR 11.60 and EUR 14.19. The closing price was EUR 13.40. The market capitalisation excluding the shares held by the company was EUR 518.7 million (EUR 362.1 million) at the end of the period. Own shares At the end of the period the company held 92,247 of its own share shares, representing 0.2% 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 to 38,706,627 shares. The average number of shares excluding the shares held by the company totalled 38,701,195. Share-based incentive programme 2013 Lassila & Tikanoja plc's Board of Directors decided on 17 December 2012 on a new share-based incentive programme. The programme's earnings period began on 1 January 2013 and ends on 31 December 2013. Potential rewards to be paid for the year 2013 will be based on the EVA result of Lassila & Tikanoja group. Potential rewards will be paid partly as shares and partly in cash. A maximum total of 53,300 Lassila & Tikanoja plc shares may be paid out on the basis of the programme. The programme covers 10 persons. Shareholders At the end of the period, the company had 9,485 (9,525) shareholders. Nominee-registered holdings accounted for 17.9% (15.3%) of the total number of shares. Authorisation for the Board of Directors The Annual General Meeting held on 12 March 2013 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 to shares. The Board of Directors is authorised to purchase a maximum of 500,000 company shares, which is 1.3% of the total number of shares. The repurchase authorisation will be effective for 18 months. The Board of Directors is authorised to decide on issuance of new shares or shares possibly held by the Company through share issue and/or issuance of option rights or other special rights entitling to shares, referred to in Chapter 10, Section 1 of the Finnish Companies Act, so that by virtue of the authorisation altogether 500,000 shares, which is 1.3% of the total number of shares, may be issued and/or conveyed at the maximum. The share issue authorisation will be effective for 18 months. RESOLUTIONS BY THE GENERAL MEETING The Annual General Meeting of Lassila & Tikanoja plc, which was held on 12 March 2013, adopted the financial statements for the financial year 2012 and released the members of the Board of Directors and the President and CEO from liability. The AGM resolved that the profit for 2012 be placed in retained earnings and that no dividend be paid. A capital repayment of EUR 0.60 per share, as proposed by the Board of Directors, was paid for the financial year 2012 on the basis of the balance sheet adopted. The capital repayment, totalling EUR 23.2 million, payment date was on 22 March 2013. The Annual General Meeting confirmed the number of the members of the Board of Directors five. The following Board members were re-elected to the Board until the end of the following AGM: Heikki Bergholm, Eero Hautaniemi, Hille Korhonen, Sakari Lassila and Miikka Maijala. 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 12 March 2013. BOARD OF DIRECTORS The members of the Board of Directors are Heikki Bergholm, Eero Hautaniemi, Hille Korhonen, Sakari Lassila and Miikka Maijala. In its constitutive meeting the Board elected Heikki Bergholm as Chairman of the Board and Eero Hautaniemi 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 Hille Korhonen as member of the committee. SUMMARY OF STOCK EXCHANGE RELEASES PURSUANT TO ARTICLE 4, CHAPTER 6 OF THE SECURITIES MARKETS ACT In a release published on 25 March 2013, the company announced the comparable figures for 2012 based on the new business structure. In a release published on 9 April 2013, the company announced that as part of EcoStream Oy's capital arrangements, Lassila & Tikanoja plc subscribed for EcoStream Oy shares for a total of EUR 2.0 million on 8 April 2013. The subscription price was EUR 3.00 per share. This subscription was financed through a conversion of Lassila & Tikanoja's remaining sale price receivable from the L&T Recoil Oy divestment, EUR 2.0 million, into EcoStream Oy shares. Consequently, the arrangement had no direct impact on cash flow. Following this arrangement and EcoStream Oy's other capital arrangements, Lassila & Tikanoja's ownership in EcoStream Oy fell to approximately 16.4 per cent. In connection with the arrangement, Lassila & Tikanoja's Board of Directors decided on a write-down of all shares held by Lassila & Tikanoja plc to EUR 3.00 per share. As a result of this write-down, the company will record an impairment of EUR 5.1 million on EcoStream Oy's shares for the second quarter. After the write-down, the balance sheet value of the EcoStream shares held by L&T will be approximately EUR 3.6 million. The impairment will be treated as a non-recurring cost item, with no impact on cash flow. EVENTS AFTER THE PERIOD In a release published on 1 July 2013, the company announced that the consideration of charges relating to L&T's overtime investigation was complete. The police investigation and the consideration of charges were aimed at the overtime work of 25 of L&T's property maintenance employees. On the basis of the consideration of charges, the District Prosecutor for Helsinki has decided to press charges against 21 former and current management staff at Lassila & Tikanoja, including Pekka Ojanpää, President and CEO since 1 November 2011. NEAR-TERM RISKS AND UNCERTAINTIES Economic uncertainty may cause major changes in the Environmental Services division's secondary raw material markets and in the Industrial Services division's demand. Uncertainties associated with government subsidies for renewable fuels and with 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 2012, in the report of the Board of Directors, and in the consolidated financial statements. OUTLOOK FOR THE REST OF THE YEAR Full-year net sales in 2013 are expected to remain at the 2012 level. Operating profit, excluding non-recurring items, is expected to remain at the 2012 level or improve slightly. CONDENSED FINANCIAL STATEMENTS 1 JANUARY-30 JUNE 2013 CONSOLIDATED INCOME STATEMENT EUR 1 000 4-6/ 4-6/ 1-6/ 1-6/ 1-12/ 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Net sales 168 882 169 692 336 603 340 978 673 985 Cost of sales -149 488 -151 299 -303 855 -311 010 -602 581 -------------------------------------------------------------------------------- Gross profit 19 394 18 393 32 748 29 968 71 404 Other operating income 1 368 5 011 1 746 5 559 7 708 Selling and marketing costs -3 764 -4 945 -7 404 -9 036 -16 745 Administrative expenses -2 991 -3 408 -6 237 -6 416 -12 090 Other operating expenses -499 -605 -1 047 -696 -1 584 Impairment, non-current assets -5 027 -302 -5 027 -302 -302 Impairment, goodwill and other intangible assets -------------------------------------------------------------------------------- Operating profit 8 481 14 144 14 779 19 077 48 391 Finance income 110 148 231 503 860 Finance costs -700 -3 504 -1 229 -4 819 -6 256 -------------------------------------------------------------------------------- Profit before tax 7 891 10 788 13 781 14 761 42 995 Income tax expense -2 407 -1 447 -3 850 -2 656 -8 543 -------------------------------------------------------------------------------- Profit for the period 5 484 9 341 9 931 12 105 34 452 Attributable to: Equity holders of the company 5 484 9 342 9 935 12 111 34 459 Non-controlling interest 0 -1 -4 -6 -7 Earnings per share for profit attributable to the equity holders of the company: Basic earnings per share, EUR 0.14 0.24 0.26 0.31 0.89 Diluted earnings per share, 0.14 0.24 0.26 0.31 0.89 EUR CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME EUR 1 000 4-6/ 4-6/ 1-6/ 1-6/ 1-12/ 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Profit for the period 5 484 9 341 9 931 12 105 34 452 Other comprehensive income, after tax Items arising from re-measurement -189 of defined benefit plans -------------------------------------------------------------------------------- Total 0 0 0 0 -189 Hedging reserve, change in fair -1 213 348 -256 657 1 098 value Revaluation reserve Gains in the period -1 0 -2 3 2 -------------------------------------------------------------------------------- Current available-for-sale -1 0 -2 3 2 financial assets Currency translation differences -1 081 -601 -831 80 627 Currency translation differences, -20 -15 -16 3 10 non-controlling interest -------------------------------------------- Other comprehensive income, after -2 315 -268 -1 105 743 1 737 tax -------------------------------------------------------------------------------- Total comprehensive income, after 3 169 9 073 8 826 12 848 36 000 tax Attributable to: Equity holders of the company 3 189 9 089 8 846 12 851 35 997 Non-controlling interest -19 -16 -20 -3 3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION EUR 1 000 6/2013 6/2012 12/2012 -------------------------------------------------------------------------------- ASSETS Non-current assets Intangible assets Goodwill 119 917 119 735 120 189 Customer contracts arising from acquisitions 6 396 9 027 7 880 Agreements on prohibition of competition 1 079 2 534 1 810 Other intangible assets arising from business 46 67 57 acquisitions Other intangible assets 8 580 8 968 8 494 -------------------------------------------------------------------------------- 136 018 140 331 138 430 Property, plant and equipment Land 3 746 4 129 3 844 Buildings and constructions 49 957 47 604 52 393 Machinery and equipment 116 732 122 185 121 179 Other 85 85 86 Prepayments and construction in progress 4 352 5 423 2 657 -------------------------------------------------------------------------------- 174 872 179 426 180 159 Other non-current assets Available-for-sale investments 4 254 7 293 7 284 Finance lease receivables 3 623 3 848 3 608 Deferred tax assets 3 447 3 713 3 845 Other receivables 5 823 2 946 2 755 -------------------------------------------------------------------------------- 17 147 17 800 17 492 Total non-current assets 328 037 337 557 336 081 Current assets Inventories 26 044 26 941 24 884 Trade and other receivables 100 963 107 862 103 925 Derivative receivables 382 113 1 290 Prepayments 1 838 2 688 491 Current available-for-sale financial assets 6 997 2 499 Cash and cash equivalents 15 078 9 739 12 083 -------------------------------------------------------------------------------- Total current assets 144 305 154 340 145 172 TOTAL ASSETS 472 342 491 897 481 253 -------------------------------------------------------------------------------- EUR 1 000 6/2013 6/2012 12/2012 ------------------------------------------------------------------------------- EQUITY AND LIABILITIES Equity Equity attributable to equity holders of the company Share capital 19 399 19 399 19 399 Share premium reserve Other reserves -1 832 -1 729 -743 Unrestricted equity reserve 6 103 29 381 29 381 Retained earnings 184 216 150 200 150 233 Profit for the period 9 935 12 111 34 459 ------------------------------------------------------------------------------- 217 821 209 362 232 729 Non-controlling interest 254 268 274 ------------------------------------------------------------------------------- Total equity 218 075 209 630 233 003 Liabilities Non-current liabilities Deferred tax liabilities 30 637 30 301 31 313 Retirement benefit obligations 894 667 672 Provisions 4 194 2 589 4 304 Borrowings 46 724 74 208 57 961 Other liabilities 879 1 021 942 ----------------------------------------------------- ----------------- 83 328 108 786 95 192 --------- Current liabilities Borrowings 42 293 55 260 38 915 Trade and other payables 127 648 116 630 112 880 Derivative liabilities 677 859 1 129 Tax liabilities 13 14 Provisions 321 719 120 ------------------------------------------------------------------------------- 170 939 173 481 153 058 Total liabilities 254 267 282 267 248 250 TOTAL EQUITY AND LIABILITIES 472 342 491 897 481 253 ------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS EUR 1 000 6/2013 6/2012 12/2012 -------------------------------------------------------------------------------- Cash flows from operating activities Profit for the period 9 931 12 105 34 452 Adjustments Income tax expense 3 850 2 657 8 543 Depreciation, amortisation and impairment 26 117 22 123 43 642 Finance income and costs 998 4 315 5 395 Gain on sale of shares -4 413 -4 181 Other -589 448 1 603 -------------------------------------------------------------------------------- Net cash generated from operating activities before 40 307 37 235 89 454 change in working capital Change in working capital Change in trade and other receivables -3 593 -17 313 -10 574 Change in inventories -1 156 -2 177 -121 Change in trade and other payables 14 478 21 853 17 096 -------------------------------------------------------------------------------- Change in working capital 9 729 2 363 6 401 Interest paid -1 267 -3 036 -5 070 Interest received 240 526 830 Income tax paid -4 640 -5 523 -11 127 -------------------------------------------------------------------------------- Net cash from operating activities 44 369 31 565 80 488 Cash flows from investing activities Acquisition of subsidiaries and businesses, net of -807 -2 498 cash acquired Proceeds from sale of subsidiaries and businesses, 7 820 7 820 net of sold cash Purchases of property, plant and equipment and -14 093 -21 381 -40 659 intangible assets Proceeds from sale of property, plant and equipment 781 255 2 826 and intangible assets Purchases of available-for-sale investments Change in other non-current receivables 198 368 560 Proceeds from sale of available-for-sale investments Dividends received 1 1 -------------------------------------------------------------------------------- Net cash used in investing activities -13 114 -13 744 -31 950 Cash flows from financing activities Change in short-term borrowings 2 997 16 087 -5 781 Proceeds from long-term borrowings 10 200 10 200 Repayments of long-term borrowings -10 425 -14 197 -25 254 Dividends paid and other asset distribution -23 197 -21 254 -21 254 Repurchase of own shares -------------------------------------------------------------------------------- Net cash generated from financing activities -30 625 -9 164 -42 089 EUR 1 000 6/2013 6/2012 12/2012 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net change in liquid assets 630 8 657 6 449 Liquid assets at beginning of period 14 582 8 069 8 069 Effect of changes in foreign exchange rates -134 10 64 Change in fair value of current available-for-sale investments -------------------------------------------------------------------------------- Liquid assets at end of period 15 078 16 736 14 582 Liquid assets EUR 1 000 6/2013 6/2012 12/2012 -------------------------------------------------------------------------------- Cash and cash equivalents 15 078 9 739 12 083 Available-for-sale financial assets 6 997 2 499 -------------------------------------------------------------------------------- Total 15 078 16 736 14 582 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY EUR 1 Share Share Cur-re Reva-l Hedgin Investe Re-tain Equity Non-co Total 000 capita premiu ncy uation g d ed attribu ntroll equity l m transl reserv reserv unrestr earning table ing reserv a-tion e e ic-ted s to intere e differ equity equity st -ences reserve holders of the company -------------------------------------------------------------------------------- ---------- Equity 19 399 0 -785 2 41 29 381 184 692 232 729 274 233 003 at 1.1.2 013 Amendm -189 -189 -189 ent in IAS19 -------------------------------------------------------------------------------- ---------- Equity 19 399 0 -785 2 41 29 381 184 503 232 540 274 232 814 at 1.1.2 013 Expens 18 18 18 e recog nition of share -based benef its Capita -23 278 299 -22 979 -22 979 l repay ment Total -831 -2 -256 9 935 8 846 -20 8 826 compr ehensi ve incom e Other -604 -604 -604 diffe rences -------------------------------------------------------------------------------- ---------- -------------------------------------------------------------------------------- ---------- Equity 19 399 0 -1 616 0 -215 6 103 194 151 217 821 254 218 075 at 30.6. 2013 Equity 19 399 0 -1 412 0 -1 057 50 658 150 085 217 673 271 217 944 at 1.1.2 012 Amendm 93 93 93 ent in IAS19 -------------------------------------------------------------------------------- ---------- Expens 0 e recog nition of share -based benef its Capita -21 277 22 -21 255 -21 255 l repay ment Total 80 3 657 12 111 12 851 -3 12 848 compr ehensi ve incom e -------------------------------------------------------------------------------- ---------- -------------------------------------------------------------------------------- ---------- Equity 19 399 0 -1 332 3 -400 29 381 162 311 209 362 268 209 630 at 30.6. 2012 KEY FIGURES 4-6/ 4-6/ 1-6/ 1-6/ 1-12/ 2013 2012 2013 2012 2012 --------------------------------------------------------------------------------Earnings per share, EUR 0.14 0.24 0.26 0.31 0.89 Earnings per share, diluted, EUR 0.14 0.24 0.26 0.31 0.89 Cash flows from operating activities 0.45 0.59 1.15 0.82 2.08 per share, EUR EVA, EUR million 3.4 7.9 4.3 6.4 24.1 Capital expenditure, EUR 1000 10 737 16 359 16 656 27 833 49 385 Depreciation, amortisation and 15 540 11 297 26 118 22 123 43 641 impairment, EUR 1000 Equity per share, EUR 5.63 5.41 6.01 Return on equity, ROE, % 8.8 11.3 15.3 Return on invested capital, ROI, % 9.4 11.3 14.4 Equity ratio, % 47.3 43.3 49.4 Gearing, % 33.9 53.8 35.3 Net interest-bearing liabilities, EUR 73 939 112 732 82 294 1000 Average number of employees in 8 002 8 220 8 399 full-time equivalents Total number of full-time and 9 567 9 817 8 962 part-time employees at end of period Number of outstanding shares adjusted for issues, 1000 shares average during the period 38 701 38 686 38 688 at end of period 38 707 38 686 38 692 average during the period, diluted 38 710 38 709 38 701 ACCOUNTING POLICIES This interim report release is in compliance with IAS 34 standard. The same accounting policies as in the annual financial statements for the year 2012 have been applied. The following new, revised or amended IFRS standards and IFRIC interpretations that have become effective in 2013 have not had an impact on the financial statements: - IAS 19 (Amendment) Employee Benefits Key changes: The amendment eliminates the use of the 'corridor'approach. The definition of estimated return on funded defined benefit plan assets will change. Financial cost is determined on the net assets (included in the obligation and in the plan). Impact on statement of financial position on 31 December 2012 and statement of comprehensive income for the period 1 January 2012-31 December 2012 EUR 189 thousand. - IFRS 13 Fair Value Measurement The new standard sets out the requirement to determine fair value and to disclose related information in the financial statements; the new standard also includes a definition of fair value. The use of fair value is not extended, but the standard offers guidelines for value definition when another standard requires or permits fair value measurements. IFRS 13 extends the disclosure requirement for assets measured at fair value not included in financial assets. The EU has not yet approved the new standard for application. The new standard is not expected to have a material impact on consolidated financial statements. - IFRS 7 Financial Instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities The amendment includes more extensive disclosure requirements; entities are required to disclose numerical information on financial assets presented in net amount in the statement of financial position, and on financial assets subject to master netting arrangements or similar agreements, even if presented in gross amount in the statement of financial position. The amendment will be adopted for application in the 2013 financial statements. The required disclosures must be presented retrospectively. The amendment has not yet been approved for application in the EU. The amendment does not have a material impact on the consolidated financial statements. The preparation of financial statements in accordance with IFRS requires the management to make estimates and assumptions that affect the carrying amounts on the balance sheet date for assets and liabilities and the amounts of revenues and expenses. In addition, the management makes judgements when making decisions on application of accounting policies. Actual results may differ from the estimates and assumptions. The interim report has not been audited. SEGMENT INFORMATION Net sales 4-6/201 4-6/201 3 2 --------- ------------- EUR 1 000 Externa Inter-d Total Externa Inter-d Total Total net l ivision l ivision sales, change % -------------------------------------------------------------------------------- Environmenta 65 694 903 66 597 67 771 1 365 69 136 -3.7 l Services --------- ------------- Industrial 18 908 1 094 20 002 19 388 770 20 158 -0.8 Services --------- ------------- Facility 72 309 1 086 73 395 71 436 940 72 376 1.4 Services --------- ------------- Renewable 11 971 1 020 12 991 11 097 1 002 12 099 7.4 Energy Sources --------- ------------- Eliminations -4 103 -4 103 -4 077 -4 077 -------------------------------------------------------------------------------- L&T total 168 882 0 168 882 169 692 0 169 692 -0.5 --------- ------------- 1-6/201 1-6/201 3 2 --------- ------------- EUR 1 000 Externa Inter-d Total Externa Inter-d Total Total net l ivision l ivision sales, change % -------------------------------------------------------------------------------- Environmenta 124 801 1 997 126 798 131 543 3 060 134 603 -5.8 l Services --------- ------------- Industrial 31 988 1 744 33 732 31 577 1 504 33 081 2.0 Services --------- ------------- Facility 147 100 2 091 149 191 150 222 1 774 151 996 -1.8 Services --------- ------------- Renewable 32 714 2 047 34 761 27 636 2 047 29 683 17.1 Energy Sources --------- ------------- Eliminations -7 879 -7 879 -8 385 -8 385 -------------------------------------------------------------------------------- L&T total 336 603 0 336 603 340 978 0 340 978 -1.3 --------- ------------- 1-12/2012 EUR 1 000 External Inter-division Total ----------------------------------------------------------- Environmental Services 259 791 5 870 265 661 Industrial Services 66 863 3 133 69 996 Facility Services 295 451 4 042 299 493 Renewable Energy Sources 51 880 4 067 55 947 Eliminations -17 112 -17 112 ----------------------------------------------------------- L&T total 673 985 0 673 985 Operating profit EUR 1 000 4-6/ % 4-6/ % 1-6/ % 1-6/ % 1-12/ % 2013 2012 2013 2012 2012 -------------------------------------------------------------------------------- Environmen 9 059 13.6 12 368 17.9 15 283 12.1 16 640 12.4 34 251 12.9 tal Services Industrial 1 895 9.5 2 199 10.9 1 376 4.1 942 2.8 3 892 5.6 Services Facility 2 830 3.9 1 025 1.4 3 259 2.2 2 621 1.7 12 980 4.3 Services Renewable 94 0.7 -733 -6.1 1 061 3.1 54 0.2 -61 -0.1 Energy Sources Group -5 397 -715 -6 200 -1 180 -2 671 admin. and other -------------------------------------------------------------------------------- L&T total 8 481 5.0 14 144 8.3 14 779 4.4 19 077 5.6 48 391 7.2 Finance -590 -3 356 -998 -4 316 -5 396 costs, net -------------------------------------------------------------------------------- Profit 7 891 10 788 13 781 14 761 42 995 before tax Other segment information EUR 1 000 6/2013 6/2012 12/2012 --------------------------------------------------- Assets Environmental Services 220 751 239 502 228 457 Industrial Services 74 761 82 294 81 573 Facility Services 114 236 105 588 105 718 Renewable Energy Sources 26 665 28 838 30 179 Group admin. and other 10 823 9 704 9 853 Unallocated assets 25 106 25 971 25 473 --------------------------------------------------- L&T total 472 342 491 897 481 253 Liabilities Environmental Services 51 375 44 270 42 381 Industrial Services 22 199 19 431 18 687 Facility Services 51 791 49 397 50 073 Renewable Energy Sources 7 268 7 060 6 094 Group admin. and other 1 052 1 054 1 378 Unallocated assets 120 582 161 055 129 637 --------------------------------------------------- L&T total 254 267 282 267 248 250 EUR 1 000 4-6/ 4-6/ 1-6/ 1-6/ 1-12/ 2013 2012 2013 2012 2012 --------------------------------------------------------------------- Capital expenditure Environmental Services 4 885 3 774 7 357 8 055 16 149 Industrial Services 1 071 2 598 1 585 4 499 11 272 Facility Services 2 846 3 050 5 541 8 242 14 727 Renewable Energy Sources 37 233 82 330 486 Group admin. and other 1 898 6 704 2 091 6 707 6 751 --------------------------------------------------------------------- L&T total 10 737 16 359 16 656 27 833 49 385 Depreciation and amortisation Environmental Services 5 464 6 436 11 059 12 798 24 690 Industrial Services 1 684 1 676 3 347 3 320 7 084 Facility Services 3 287 2 813 6 526 5 561 11 276 Renewable Energy Sources 75 66 152 138 281 Group admin. and other 3 4 7 4 9 --------------------------------------------------------------------- L&T total 10 513 10 995 21 091 21 821 43 340 Impairment Environmental Services 302 302 302 Group admin. and other 5 027 5 027 --------------------------------------------------------------------- --------------------------------------------------------------------- L&T total 5 027 302 5 027 302 302 INCOME STATEMENT BY QUARTER EUR 1 000 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ 2013 2013 2012 2012 2012 2012 ------------------------------------------------------------------------------ Net sales Environmental Services 66 597 60 201 64 670 66 388 69 136 65 467 Industrial Services 20 002 13 730 18 770 18 145 20 158 12 923 Facility Services 73 395 75 796 74 789 72 708 72 376 79 620 Renewable Energy Sources 12 991 21 770 18 287 7 977 12 099 17 584 Group admin. and other Inter-division net sales -4 103 -3 776 -4 725 -4 002 -4 077 -4 308 ------------------------------------------------------------------------------ L&T total 168 882 167 721 171 791 161 216 169 692 171 286 Operating profit Environmental Services 9 059 6 224 6 592 11 019 12 368 4 272 Industrial Services 1 895 -519 1 161 1 789 2 199 -1 257 Facility Services 2 830 429 2 516 7 843 1 025 1 596 Renewable Energy Sources 94 967 269 -384 -733 787 Group admin. and other -5 397 -803 -853 -638 -715 -465 ------------------------------------------------------------------------------ L&T total 8 481 6 298 9 685 19 629 14 144 4 933 Operating margin Environmental Services 13.6 10.3 10.2 16.6 17.9 6.5 Industrial Services 9.5 -3.8 6.2 9.9 10.9 -9.7 Facility Services 3.9 0.6 3.4 10.8 1.4 2.0 Renewable Energy Sources 0.7 4.4 1.5 -4.8 -6.1 4.5 ------------------------------------------------------------------------------ ------------------------- L&T total 5.0 3.8 5.6 12.2 8.3 2.9 Finance costs, net -590 -408 -512 -568 -3 356 -960 ------------------------------------------------------------------------------ Profit before tax 7 891 5 890 9 173 19 061 10 788 3 973 BUSINESS ACQUISITIONS In January-June 2013 Lassila & Tikanoja made no business acquisitions. 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 1 000 1-6/2013 1-6/2012 1-12/2012 --------------------------------------------------------------------- Carrying amount at beginning of period 138 430 144 489 144 489 Business acquisitions 356 1 110 Other capital expenditure 1 466 954 2 322 Disposals -1 455 -1 957 Amortisation and impairment -3 570 -4 221 -8 023 Transfers between items Exchange differences -308 208 489 --------------------------------------------------------------------- Carrying amount at end of period 136 018 140 331 138 430 CHANGES IN PROPERTY, PLANT AND EQUIPMENT EUR 1 000 1-6/2013 1-6/2012 1-12/2012 --------------------------------------------------------------------- Carrying amount at beginning of period 180 159 207 522 207 522 Business acquisitions 515 2 438 Other capital expenditure 13 189 19 303 36 810 Disposals -525 -30 143 -31 258 Depreciation and impairment -17 521 -17 902 -35 619 Transfers between items Exchange differences -430 131 266 --------------------------------------------------------------------- Carrying amount at end of period 174 872 179 426 180 159 CAPITAL COMMITMENTS EUR 1 000 1-6/2013 1-6/2012 1-12/2012 ----------------------------------------------------------------------- Intangible assets 220 109 Property, plant and equipment 4 279 5 050 1 953 ----------------------------------------------------------------------- Total 4 279 5 270 2 062 The Group's share of capital commitments RELATED-PARTY TRANSACTIONS (Joint ventures) EUR 1 000 1-6/2013 1-6/2012 1-12/2012 ------------------------------------------------------ Sales 939 939 Other operating income 24 24 Interest income 391 391 Non-current receivables Capital loan receivable 0 0 Current receivables Trade receivables 0 0 Loan receivables 0 0 FINANCIAL ASSETS AND LIABILITIES BY CATEGORY EUR 1 Financial Loans Availab Financi Deriva Carryin Fair Fair 000 assets and and le-for- al tives g values value liabilitie other sale liabili under amounts by hierar s at fair receiva financi ties hedge by balance chy value bles al measure accoun balance sheet level through assets d at ting sheet item under profit or amortis item IFRS 7 loss ed cost -------------------------------------------------------------------------------- Non-cur rent financ ial assets Availab 4 253 4 253 4 253 3 le-for- sale invest ments Finance 3 623 3 623 3 826 lease receiv ables Other 5 822 5 822 5 822 receiv ables Current financ ial assets Trade 90 556 90 556 90 556 and other receiv ables Derivat 382 382 382 2 ive receiv ables Availab 2 le-for- sale financ ial assets Cash 15 078 15 078 15 078 and cash equiva lents -------------------------------------------------------------------------------- Total 115 079 4 253 382 119 714 119 917 financ ial assets Non-cur rent financ ial liabil ities Borrowi 46 725 46 725 46 893 ngs Other 561 561 561 liabil ities Current financ ial liabil ities Borrowi 42 294 42 294 ngs Trade 61 971 61 971 and other payabl es Derivat 677 677 677 2 ive liabil ities -------------------------------------------------------------------------------- Total 151 551 677 152 228 48 131 financ ial liabil ities CONTINGENT LIABILITIES Securities for own commitments EUR 1 000 6/2013 6/2012 12/2012 --------------------------------------------------------------------------- Mortgages on rights of tenancy 186 186 186 Company mortgages 583 460 583 Other securities 180 200 178 Bank guarantees required for environmental permits 8 694 5 848 6 483 Other securities are security deposits. Off balance sheet liabilities Lassila & Tikanoja plc has given a guarantee for a share of 50 percent of L&T Recoil Oy's financial liabilities. The guarantee is valid no later than the maturity date of the liabilities on 31 August 2014. The financial liabilities of L&T Recoil totalled EUR 32.8 million on 30 June 2013. Operating lease liabilities EUR 1 000 6/2013 6/2012 12/2012 -------------------------------------------------------------------------------- Maturity not later than one year 5 129 6 332 5 556 Maturity later than one year and not later than five 6 700 10 470 8 377 years Maturity later than five years 2 183 2 443 2 274 -------------------------------------------------------------------------------- Total 14 012 19 245 16 206 Liabilities associated with derivative agreements Interest rate swaps EUR 1 000 6/2013 6/2012 12/2012 -------------------------------------------------------------------------------- Nominal values of interest rate and currency swaps* Maturity not later than one year 17 824 14 229 Maturity later than one year and not later than five 20 339 28 940 years Maturity later than five years 1 818 2 727 -------------------------------------------------------------------------------- Total 39 981 0 45 896 Fair value -630 -1 129 Nominal value of interest rate swaps** Maturity not later than one year 4 000 0 Maturity later than one year and not later than five 18 364 0 years Maturity later than five years 3 636 0 -------------------------------------------------------------------------------- Total 0 26 000 0 Fair value -314 0 * The interest rate 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. 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 tonnes 6/2013 6/2012 12/2012 -------------------------------------------------------------------------------- Nominal values of diesel swaps Maturity not later than one year 4524 3 816 5 136 Maturity later than one year and not later than five 0 1 272 660 years -------------------------------------------------------------------------------- Total 4 524 5 088 5 796 Fair value, EUR 1000 -47 112 136 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 forwards EUR 1 000 6/2013 6/2012 12/2012 --------------------------------------------------------- Volume of forward contracts Maturity not later than one year 0 0 775 Fair value 0 0 4 Hedge accounting under IAS 39 has not been applied to forward contracts. Changes in fair values have been recognised in finance income and costs. Cross currency interest rate swaps EUR 1 000 6/2013 6/2012 12/201 2 -------------------------------------------------------------------------------- Maturity of cross currency interest rate swaps under hedge accounting Maturity not later than one year 11 200 12 444 12 800 Maturity later than one year and not later than five 13 067 22 596 16 667 years -------------------------------------------------------------------------------- Total 24 267 35 040 29 467 Fair value, EUR 1 000 382 -545 1 150 The contracts are used to hedge cash flow related to foreign currency floating rate loans. 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 0.4 million negative. 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 2012: 7.1% WACC 2013: 6.5% 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, 5 August 2013 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 or Timo Leinonen, CFO, tel. +358 400 793 073. Lassila & Tikanoja is a service company that is transforming the 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 to focus on their core business and to save the environment. Together, we create well-being and jobs. With operations in Finland, Sweden, Latvia and Russia, L&T employs 9,600 persons. Net sales in 2012 amounted to EUR 674.0 million. L&T is listed on NASDAQ OMX Helsinki. Distribution: NASDAQ OMX Helsinki Major media www.lassila-tikanoja.com |
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