2017-02-01 07:00:01 CET
2017-02-01 07:00:01 CET
REGULATED INFORMATION
Lassila & Tikanoja - Financial Statement Release
Lassila & Tikanoja plc: Financial Statements 1 January – 31 December 2016
Lassila & Tikanoja plc
Stock Exchange Release
1 February 2017 8.00 am
Lassila & Tikanoja plc: Financial Statements 1 January – 31 December 2016
- Net sales for the final quarter increased by 1.9% to EUR 168.3 million (EUR
165.2 million), operating profit was EUR 10.5 million (EUR 9.7 million) and
earnings per share EUR 0.22 (EUR 0.18)
- Full-year net sales increased by 2.4% to EUR 661.8 million (EUR 646.3
million), operating profit was EUR 50.5 million (EUR 49.9 million) and earnings
per share EUR 1.13 (EUR 0.98)
- Full-year net sales and operating profit in 2017 are expected to remain at
the 2016 level
- The Board of Directors proposes a dividend of EUR 0.92 per share
CEO PEKKA OJANPÄÄ:
“Lassila & Tikanoja’s result for 2016 was in line with our expectations. Net
sales grew organically and due to strategically targeted acquisitions. Facility
Services and Industrial Services substantially improved their profitability.
The strong performance of these two divisions compensated for the weaker result
of Environmental Services due to the decreased demand for, and low prices of,
recyclable raw materials and solid recovered fuels. The prices of recyclable
raw materials and solid recovered fuels are still below the long-term averages
and the situation is not expected to change in the short run. Price competition
in cleaning services also remained intense.
The year 2016 was in many ways similar to the previous few years. The business
environment is in constant flux, with the rate of change only accelerating
further. While there are signs of an upturn in the air, economic recovery will
take a long time. This underscores the significance of renewal and the
improvement of productivity in all of our businesses. In line with our
strategy, our focus in 2017 remains on strengthening our market position and
ensuring profitability and cash flow.
GROUP NET SALES AND FINANCIAL PERFORMANCE
October–December
Lassila & Tikanoja’s net sales for the final quarter increased by 1.9% to EUR
168.3 million (EUR 165.2 million). Operating profit totalled EUR 10.5 million
(EUR 9.7 million), representing 6.2% (5.9%) of net sales. Earnings per share
were EUR 0.22 (EUR 0.18).
In the final quarter, the Industrial Services achieved organic growth in net
sales of 5.3% due to strong demand for services. Net sales grew by 3.6% in
Environmental Services and by 0.1% in Facility Services, organically and due to
acquisitions. The net sales of the Renewable Energy Sources division declined
by 1.1% due to the weak demand for energy wood.
Operating profit improved significantly in Facility Services and Renewable
Energy Sources. Operating profit also grew in Industrial Services. The
operating profit of Environmental Services was substantially lower than in the
comparison period. The Group’s operating profit was reduced by cost provisions
for efficiency improvement measures implemented at the end of the year,
totalling approximately EUR 0.7 million.
Year 2016
Net sales for 2016 increased by 2.4% to EUR 661.8 million (EUR 646.3 million).
Operating profit totalled EUR 50.5 million (EUR 49.9 million), representing
7.6% (7.7%) of net sales. Earnings per share were EUR 1.13 (EUR 0.98).
Net sales grew by 6.6% in Industrial Services organically, 1.9% in Facility
Services, mostly organically, and 3.2% in Environmental Services, due to
acquisitions. The net sales of the Renewable Energy Sources division declined
by 6.6% due to the low demand for wood-based fuels.
Profitability improved particularly in Facility Services and was also higher
than in the comparison period in Industrial Services. The operating profit of
Environmental Services and Renewable Energy Sources showed a substantial
decline.
The Group’s earnings per share was improved in the second quarter by a legally
valid decision handed down by the Administrative Court, according to which the
payment of approximately EUR 16.7 million made by the company in 2014 under the
L&T Recoil Oy guarantee commitment is tax-deductible as far as the payment is
not available from the bankrupt's estate . In previous financial reports, the
company has treated the payment as a non-tax deductible item due to the matter
being unfinished. The decision had a favourable impact of EUR 0.09 on earnings
per share.
Impact of new guidance from the European Securities and Markets Authority
The new guidance issued by the European Securities and Markets Authority (ESMA)
regarding Alternative Performance Measures entered into effect on 3 July 2016.
Lassila & Tikanoja presents Alternative Performance Measures in addition to
IFRS performance measures in order to illustrate the financial performance of
its business operations and to improve comparability between reporting periods.
Alternative Performance Measures should not be considered to be replacements
for the performance measures defined in the IFRS standards. The new guidance on
Alternative Performance Measures has no impact on the company’s reporting of
performance measures.
The Alternative Performance Measures reported by the company are EVA and cash
flow from operating activities per share. The calculation formulas for the
performance measures are presented at the end of the financial statements
release.
Financial summary
10–12/ 10–12/ Change 1–12/ 1–12/ Change
2016 2015 2016 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR million 168.3 165.2 1.9% 661.8 646.3 2.4%
Operating profit, EUR million 10.5 9.7 8.7% 50.5 49.9 1.2%
Operating margin, % 6.2 5.9 7.6 7.7
Profit before tax, EUR million 10.6 8.6 23.1% 50.1 47.7 5.1%
Earnings per share, EUR 0.22 0.18 24.6% 1.13 0.98 15.1%
Dividend/share, EUR 0.92* 0.85
Cash flow from operating 1.11 0.75 48.8% 1.99 1.99 0.0%
activities/share, EUR
EVA, EUR million 19.9 4.7 320.5% 30.7 30.3 1.3%
* Proposal by the Board of Directors
NET SALES AND OPERATING PROFIT BY DIVISION
Environmental Services
October–December
The net sales of the Environmental Services division grew by 3.6% in the final
quarter, mainly due to acquisitions. Net sales totalled EUR 66.5 million (EUR
64.2 million). Operating profit was EUR 6.5 million (EUR 7.4 million).
The operating profit of Environmental Services was decreased by the lower
volume of recyclable materials at recycling plants, the reduced demand for
solid recovered fuels and the continued low market prices of secondary raw
materials.
Year 2016
The Environmental Services division’s full-year net sales grew by 3.2% to EUR
264.8 million (EUR 256.5 million). Operating profit totalled EUR 31.3 million
(EUR 35.8 million).
Previously completed acquisitions and stronger demand for waste management and
in the construction sector in particular increased the division’s net sales.
The division’s operating profit was affected by significant changes in the
business environment, such as a decline in the market for recyclable paper and
the responsibility for household packaging materials being shifted to
producers. The volumes and prices of secondary raw materials and solid
recovered fuels were also at a low level.
Industrial Services
October–December
The Industrial Services division’s net sales for the final quarter increased by
5.3% to EUR 21.4 million (EUR 20.3 million). Operating profit totalled EUR 2.6
million (EUR 1.8 million).
The net sales of the division’s services improved excellently particularly in
process cleaning, and net sales also grew in hazardous waste management and
environmental construction. Net sales decreased in sewer maintenance.
The division’s operating profit grew significantly, particularly due to the
improved profitability of hazardous waste management. Process cleaning also
achieved a year-on-year increase in operating profit. Profitability declined in
sewer maintenance and environmental construction.
Year 2016
The Industrial Services division’s full-year net sales grew by 6.6% to EUR 82.1
million (EUR 77.0 million).Operating profit totalled EUR 7.8 million (EUR 6.8
million).
The division’s net sales grew particularly in environmental construction. Net
sales also increased in process cleaning and sewer maintenance. The net sales
of hazardous waste management remained at the previous year’s level. The
division’s growth was entirely organic.
Profitability increased in all service lines, especially in environmental
construction. Operating profit improved substantially in process cleaning and
sewer maintenance. The improvement in profitability was made possible by strong
demand and the enhanced efficiency of operations.
Facility Services
October–December
The Facility Services division’s net sales for the final quarter increased by
0.1% to EUR 71.8 million (EUR 71.7 million). Operating profit was EUR 2.6
million (EUR 1.0 million).
The division’s net sales grew in renovation services and property maintenance,
but declined in the maintenance of technical systems and cleaning.
Operating profit grew year-on-year across all service lines due to previously
implemented efficiency improvement measures.
Year 2016
The Facility Services division’s full-year net sales grew by 1.9% to EUR 288.3
million (EUR 282.9 million). Operating profit amounted to EUR 13.5 million (EUR
8.1 million).
Net sales grew in renovation services, maintenance of technical systems and
cleaning, but declined in property maintenance.
The Facility Services division’s other service lines substantially improved
their profitability thanks to efficiency improvement measures, but the
profitability of cleaning declined as a result of price competition remaining
intense. The recovery of the construction market was reflected in higher demand
for renovation services and maintenance of technical systems.
Renewable Energy Sources
October–December
The final quarter net sales of Renewable Energy Sources (L&T Biowatti)
decreased by 1.1% to EUR 11.6 million (EUR 11.7 million). Operating profit
totalled EUR 0.7 million (EUR 0.3 million).
The division’s net sales declined due to the low demand for forest energy.
Operating profit grew in the final quarter, especially in southern Finland.
Year 2016
The full-year net sales of the Renewable Energy Sources division were down by
6.6% to EUR 36.8 million (EUR 39.4 million). Operating profit totalled EUR 1.5
million (EUR 2.1 million).
The year-on-year decline in the division’s net sales and operating profit was
mainly attributable to the low demand for forest energy due to the short
heating season, the weak profitability of electricity produced from wood chips
and the low price of competing fuels.
FINANCING
Cash flow from operating activities amounted to EUR 76.4 million (EUR 89.8
million). A total of EUR 2.7 million in working capital was released (EUR 9.5
million released). The exceptionally high cash flow from operating activities
in the comparison period was affected by the factoring of trade receivables
implemented in summer 2015.
At the end of the period, interest-bearing liabilities amounted to EUR 66.9
million (EUR 95.8 million).
Net interest-bearing liabilities amounted to EUR 38.7 million (EUR 41.8
million), showing a decrease of EUR 27.0 million from the previous quarter and
a decrease of EUR 3.1 million from the comparison period.
Net financial expenses in 2016 amounted to EUR 0.4 million (EUR 2.2 million).
Net financial expenses were 0.1% (0.3%) of net sales and they included EUR 1.4
million in exchange rate gains arising from the appreciation of the Russian
rouble.
The average interest rate on long-term loans (with interest rate hedging) was
1.6% (1.5%). Long-term loans totalling EUR 2.6 million will mature in 2017.
The equity ratio was 50.4% (46.5%) and the gearing rate was 17.3 (19.8). Liquid
assets at the end of the period amounted to EUR 28.2 million (EUR 54.0
million).
The EUR 100 million commercial paper programme and the committed limit
totalling EUR 100 million were not in use at the end of the period, as was the
case in the comparison period.
DISTRIBUTION OF ASSETS
The Annual General Meeting held on 17 March 2016 resolved that a dividend of
EUR 0.85 per share be paid on the basis of the balance sheet that was adopted
for the financial year 2015. The dividend, totalling EUR 32.6 million, was paid
to shareholders on 30 March 2016.
CAPITAL EXPENDITURE
Gross capital expenditure in 2016 totalled EUR 41.6 million (EUR 49.6 million),
consisting primarily of machine and equipment purchases, investments in
information systems and acquisitions. Of the significant ongoing information
system projects, the deployment of the new ERP system for Facility Services and
the first deployments of new financial systems took place in late 2016 and
early 2017.
PERSONNEL
In 2016, the average number of employees converted into full-time equivalents
was 7,199 (7,099). At the end of the period, Lassila & Tikanoja had 7,931
(8,085) full-time and part-time employees. Of these, 7,023 (7,192) worked in
Finland and 908 (893) in other countries.
PROPOSAL FOR THE DISTRIBUTION OF ASSETS
According to the financial statements, Lassila & Tikanoja plc's unrestricted
equity amounts to EUR 103,632,967.71 with the operating profit for the period
representing EUR 38,541,799.58. 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 a dividend
of EUR 0.92 per share be paid for the financial year 2016.
The dividend is paid to shareholders included in the company shareholder
register maintained by Euroclear Finland Oy on the record date, 20 March 2017.
The Board proposes to the Annual General Meeting that the dividend be paid on
27 March 2017.
No dividend shall be paid on shares held by the company on the record date of
20 March 2017.
On the day the proposal for the distribution of assets was made, the number of
shares entitling to dividend was 38,378,006, which means the total amount of
the dividend would be EUR 35,307,765.52.
Earnings per share amounted to EUR 1.13. The proposed dividend, EUR 0.92 per
share, is 81.3% of the earnings per share.
L&T’s online Annual Report, which includes the report by the Board of Directors
and the financial statements for 2016, will be published in the week starting
on 20 February 2017 at www.lassila-tikanoja.fi/annualreport2016.
SHARES AND SHARE CAPITAL
Traded volume and price
The volume of trading on Nasdaq Helsinki in 2016, excluding the shares held by
the company in Lassila & Tikanoja plc, was 6,475,324 shares, which is 16.9%
(26.0%) of the average number of outstanding shares. The value of trading was
EUR 110.1 million (EUR 172.4 million). The highest share price was EUR 19.59
and the lowest EUR 14.37. The closing price was EUR 19.20. At the end of the
review period, the market capitalisation excluding the shares held by the
company was EUR 736.9 million (EUR 695.1 million).
Own shares
At the end of the period, the company held 420,868 of its own shares,
representing 1.1% of all shares and votes.
Share capital and number of shares
The company’s registered share capital amounts to EUR 19,399,437 and the number
of outstanding shares is 38,378,006. The average number of shares excluding the
shares held by the company was 38,375,007.
Shareholders
At the end of the period, the company had 10,812 (9,790) shareholders.
Nominee-registered holdings accounted for 17.6% (21.6%) of the total number of
shares.
Authorisation for the Board of Directors
The Annual General Meeting held on 17 March 2016 authorised Lassila & Tikanoja
plc’s Board of Directors to make decisions on the repurchase of the company’s
own shares using the company’s unrestricted equity. In addition, the Annual
General Meeting authorised the Board of Directors to decide on the share issue
and the issuance of special rights entitling their holders to shares.
The Board of Directors is authorised to purchase a maximum of 2,000,000 company
shares (5.2% of the total number of shares). The repurchase authorisation is
effective for 18 months.
The Board of Directors is authorised to decide on the issuance of new shares or
shares which may be held by the company through a share issue and/or issuance
of option rights or other special rights conferring entitlement to shares,
referred to in Chapter 10, Section 1 of the Finnish Companies Act, so that
under the authorisation, a maximum of 2,000,000 shares (5.2% of the total
number of shares) may be issued and/or conveyed. The share issue authorisation
is effective for 18 months.
RESOLUTIONS BY THE ANNUAL GENERAL MEETING
The Annual General Meeting, which was held on 17 March 2016, adopted the
financial statements and consolidated financial statements for 2015 and
released the members of the Board of Directors and the President and CEO from
liability.
The Annual General Meeting resolved that a dividend of EUR 0.85 per share,
totalling EUR 32.6 million, be paid on the basis of the balance sheet adopted
for the financial year 2015. It was decided that the dividend be paid on 30
March 2016.
The Annual General Meeting confirmed the number of members of the Board of
Directors as six. Heikki Bergholm, Eero Hautaniemi, Laura Lares, Sakari Lassila
and Miikka Maijala were re-elected, and Teemu Kangas-Kärki was elected as a new
member, to the Board until the end of the following Annual General Meeting.
KPMG Oy Ab, Authorised Public Accountants, was elected auditor. KPMG Oy Ab
named Lasse Holopainen, Authorised Public Accountant, as its principal auditor.
The resolutions of the Annual General Meeting were announced in more detail in
a stock exchange release on 17 March 2016.
BOARD OF DIRECTORS
The members of Lassila & Tikanoja plc’s Board of Directors are Heikki Bergholm,
Eero Hautaniemi, Teemu Kangas-Kärki, Laura Lares, Sakari Lassila and Miikka
Maijala. At its constitutive meeting after the Annual General Meeting, the
Board of Directors elected Heikki Bergholm as Chairman of the Board and Eero
Hautaniemi as Vice Chairman.
Eero Hautaniemi was elected as Chairman and Sakari Lassila and Teemu
Kangas-Kärki as members of the Audit Committee. Heikki Bergholm was elected as
the Chairman of the Personnel Committee and Miikka Maijala and Laura Lares as
members of the committee.
SUMMARY OF STOCK EXCHANGE RELEASES PURSUANT TO ARTICLE 4, CHAPTER 6 OF THE
SECURITIES MARKET ACT
On 4 January 2016, the company announced that it had concluded the repurchase
of its own shares that was announced on 2 September 2015. The repurchase of the
company’s own shares began on 15 September 2015 and the repurchase programme
ended on 31 December 2015. The final share purchase was realised on 21 December
2015. A total of 253,406 shares were purchased during the repurchase programme.
As of the conclusion of the repurchase programme, the company holds a total of
437,721 of its own shares, which corresponds to 1.1% of shares and votes.
On 3 February 2016, the company announced a change to its target range for
gearing for the strategy period 2014–2018. The new range is 0–70 per cent. The
previous range was 30–80 per cent. The change is based on the company’s strong
cash flow as well as the need to prepare for potential acquisitions and other
capital expenditure.
On 10 June 2016, the company announced that Tutu Wegelius-Lehtonen, Lic.Sc.
(Tech.), has been appointed Vice President for Facility Services starting from
1 July 2016, having previously served as L&T’s Director, Supply Chain, and as a
member of the Group Executive Board since February 2015. Tomi Kontinen, B.
Eng. (Logistics), was appointed Wegelius-Lehtonen’s successor as Director,
Supply Chain, and member of the Group Executive Board, starting from 1 July
2016.
EVENTS AFTER THE REVIEW PERIOD
The company’s management is not aware of any events of material importance
after the review period that might have affected the preparation of the
financial statements release.
NEAR-TERM RISKS AND UNCERTAINTIES
Economic uncertainty may result in significant changes in the secondary raw
material markets for Environmental Services and the demand for Facility
Services and Industrial Services.
Fluctuations in the prices of fossil fuels may affect the demand of the
recovered and renewable fuels produced by the company.
The company began the deployment of a new ERP system in 2016 and will continue
the deployment process in 2017. The deployment of the new system may lead to
temporary overlapping costs arising from changes in the operating model, which
can have a negative effect on the company’s result.
More detailed information on Lassila & Tikanoja’s risks and risk management is
available in the 2016 Annual Report, which will be published on 23 February,
and in the Report of the Board of Directors and the consolidated financial
statements.
OUTLOOK FOR THE YEAR 2017
Full-year net sales and operating profit in 2017 are expected to remain at the
2016 level.
CONDENSED FINANCIAL STATEMENTS 1 JANUARY – 31 DECEMBER 2016
CONSOLIDATED INCOME STATEMENT
EUR million 10–12/2 10–12/2 1–12/2 1–12/2
016 015 016 015
--------------------------------------------------------------------------------
Net sales 168.3 165.2 661.8 646.3
Cost of sales -151.0 -149.7 -586.8 -572.0
--------------------------------------------------------------------------------
Gross profit 17.3 15.5 75.0 74.2
Other operating income 1.7 1.7 4.8 3.7
Sales and marketing expenses -3.2 -3.3 -12.5 -12.9
Administrative expenses -5.1 -3.7 -15.1 -13.0
Other operating expenses -0.1 -0.5 -1.8 -2.1
--------------------------------------------------------------------------------
Operating profit 10.5 9.7 50.5 49.9
Financial income 0.7 0.1 1.6 0.3
Financial expenses -0.6 -1.1 -2.0 -2.5
--------------------------------------------------------------------------------
Profit before tax 10.6 8.6 50.1 47.7
Income taxes -2.1 -1.8 -6.7 -9.7
--------------------------------------------------------------------------------
Profit for the period 8.5 6.8 43.4 37.9
Attributable to:
Equity holders of the company 8.5 6.8 43.4 37.9
Non-controlling interest 0.0 0.0 0.0 0.0
Earnings per share attributable to equity
holders of the parent company:
Earnings per share, EUR 0.22 0.18 1.13 0.98
Diluted earnings per share, EUR 0.22 0.18 1.13 0.98
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million 10–12/2016 10–12/2015 1–12/2016 1–12/2015
--------------------------------------------------------------------------------
Profit for the period 8.5 6.8 43.4 37.9
Items not to be recognised through
profit or loss
Items arising from re-measurement 0.0 0.1 0.0 0.1
of defined benefit plans
--------------------------------------------------------------------------------
Items not to be recognised through 0.0 0.1 0.0 0.1
profit or loss, total
Items potentially to be recognised
through profit or loss
Hedging reserve, change in fair 0.1 0.0 0.4 0.4
value
Currency translation differences 0.2 0.1 -0.1 0.1
Currency translation differences 0.0 0.0 0.0 0.0
recognised in profit or loss
Currency translation differences, 0.0 0.0 0.0 0.0
non-controlling interest
----------------------------------------------- ---------------------
Items potentially to be recognised 0.3 0.1 0.3 0.4
through profit or loss, total
--------------------------------------------------------------------------------
Total comprehensive income, after 8.8 7.0 43.7 38.4
tax
Attributable to:
Equity holders of the company 8.8 7.0 43.7 38.5
Non-controlling interest 0.0 0.0 0.0 0.0
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million 12/2016 12/2015
----------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets
Goodwill 116.5 113.7
Customer contracts arising from acquisitions 5.2 5.4
Agreements on prohibition of competition 0.1 0.2
Other intangible assets arising from business acquisitions 0.6 0.6
Other intangible assets 20.8 15.0
----------------------------------------------------------------------------
143.2 134.9
Property, plant and equipment
Land 5.3 5.0
Buildings and constructions 40.7 39.9
Machinery and equipment 104.8 111.0
Other 0.1 0.1
Prepayments and construction in progress 5.3 5.5
----------------------------------------------------------------------------
156.1 161.5
Other non-current assets
Available-for-sale investments 0.6 0.6
Finance lease receivables 1.2 2.1
Deferred tax assets 5.5 2.4
Other receivables 1.7 2.0
----------------------------------------------------------------------------
9.0 7.0
Total non-current assets 308.3 303.4
Current assets
Inventories 24.9 23.6
Trade and other receivables 90.5 84.4
Derivative receivables 0.3 0.0
Prepayments 0.6 0.3
Current available-for-sale financial assets 0.0 5.0
Cash and cash equivalents 28.2 49.0
----------------------------------------------------------------------------
Total current assets 144.5 162.4
Total assets 452.8 465.8
----------------------------------------------------------------------------
EQUITY AND LIABILITIES
EUR million 12/2016 12/2015
-----------------------------------------------------------------------------
Equity
Equity attributable to equity holders of the parent company
Share capital 19.4 19.4
Other reserves -3.1 -3.4
Invested unrestricted equity reserve 0.4 0.5
Retained earnings 162.7 156.8
Profit for the period 43.4 37.9
-----------------------------------------------------------------------------
222.8 211.2
Non-controlling interest 0.2 0.1
-----------------------------------------------------------------------------
Total equity 223.0 211.4
Liabilities
Non-current liabilities
Deferred tax liabilities 24.8 24.9
Retirement benefit obligations 1.0 0.9
Provisions 4.8 4.1
Borrowings 63.5 61.0
Other liabilities 0.3 0.4
-----------------------------------------------------------------------------
94.3 91.2
Current liabilities
Borrowings 3.4 34.9
Trade and other payables 129.9 121.9
Derivative liabilities 0.1 1.1
Tax liabilities 0.1 1.4
Provisions 2.0 3.9
-----------------------------------------------------------------------------
135.5 163.2
Total liabilities 229.8 254.4
Total equity and liabilities 452.8 465.8
-----------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS 1–12/201 1–12/201
EUR million 6 5
--------------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 43.4 37.9
Adjustments
Income taxes 6.7 9.7
Depreciation and impairment 38.8 40.0
Financial income and expenses 0.4 2.2
Gain on sale of shares 0.0 0.0
Other -2.1 0.7
--------------------------------------------------------------------------------
Net cash generated from operating activities before change 87.2 90.6
in working capital
Change in working capital
Change in trade and other receivables -2.5 11.8
Change in inventories -1.4 -1.0
Change in trade and other payables 6.6 -1.3
--------------------------------------------------------------------------------
Change in working capital 2.7 9.5
Interest paid -2.0 -1.7
Interest received 0.3 0.3
Income taxes -11.7 -8.9
--------------------------------------------------------------------------------
Net cash from operating activities 76.4 89.8
Cash flows from investing activities
Acquisition of subsidiaries and businesses, net of cash -1.8 -6.5
acquired
Prepayments for Group companies and businesses - -3.6
Purchases of property, plant and equipment and intangible -33.9 -37.6
assets
Proceeds from sale of property, plant and equipment and 0.8 0.0
intangible assets
Change in other non-current receivables 0.2 1.7
Dividends received 0.0 0.0
--------------------------------------------------------------------------------
Net cash used in investing activities -34.6 -46.1
Cash flows from financing activities
Change in short-term borrowings -0.2 0.2
Proceeds from long-term borrowings - 25.0
Repayments of long-term borrowings -34.8 -25.2
Dividends paid -32.6 -29.0
Acquisition of own shares - -4.7
--------------------------------------------------------------------------------
Net cash generated from financing activities -67.6 -33.7
Net change in liquid assets -25.9 10.0
Liquid assets at beginning of period 54.0 44.0
Effect of changes in foreign exchange rates 0.0 0.0
--------------------------------------------------------------------------------
Liquid assets at end of period 28.2 54.0
Liquid assets
EUR million 12/2016 12/2015
--------------------------------------------------------------------------------
Cash and cash equivalents 28.2 49.0
Available-for-sale financial assets 0.0 5.0
--------------------------------------------------------------------------------
Total 28.2 54.0
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR million Share Cur Hedgin Inves Re Equity Non- Total
capita rency g ted tained attributa Con equity
l transl reserv unrest earn- ble to trolli
a e ricted ings equity ng
tion equity holders intere
differ reserv of the st
ences e parent
company
--------------------------------------------------------------------------------
Equity on 1 19.4 -2.9 -0.4 0.5 194.7 211.2 0.1 211.4
Jan. 2016
Total
comprehensiv
e income
Profit for 43.4 43.4 0.0 43.4
the period
Items arising 0.0 0.0 0.0
from
re-measureme
nt of defined
benefit
plans
Hedging 0.4 0.4 0.4
reserve,
change in
fair value
Currency -0.1 -0.1 0.0 -0.1
translation
differences
--------------------------------------------------------------------------------
Total 0.0 -0.1 0.4 0.0 43.4 43.7 0.0 43.7
comprehensiv
e income
Transactions
with
shareholders
Share-based 0.0 0.5 0.5 0.5
benefits
Dividends -32.6 -32.6 -32.6
paid
Dividends 0.0 0.0 0.0
returned
--------------------------------------------------------------------------------
Transactions 0.0 0.0 0.0 0.0 -32.1 -32.1 -32.1
with
shareholders
, total
Other changes 0.0 0.0 0.0
--------------------------------------------------------------------------------
Equity on 31 19.4 -3.0 -0.1 0.4 206.1 222.8 0.2 223.0
Dec. 2016
EUR million Share Cur Hedgin Inves Re Equity Non- Total
capita rency g ted tained attribut Con equity
l transl reserv unrest earn- able to trolli
a e ricted ings equity ng
tion equity holders intere
differ reserv of the st
ences e parent
com
pany
--------------------------------------------------------------------------------
Equity on 1 19.4 -3.0 -0.9 0.3 190.3 206.2 0.2 206.3
Jan. 2015
Total
comprehensive
income
Profit for the 37.9 37.9 0.0 37.9
period
Items arising 0.1 0.1 0.1
from
re-measuremen
t of defined
benefit plans
Hedging 0.5 -0.1 0.4 0.4
reserve,
change in
fair value
Currency 0.1 0.0 0.1 0.0 0.0
translation
differences
--------------------------------------------------------------------------------
Total 0.1 0.5 37.9 38.4 0.0 38.4
comprehensive
income
Transactions
with
shareholders
Share-based 0.1 0.2 0.3 0.3
benefits
Dividends paid -29.0 -29.0 -29.0
Dividends 0.0 0.0 0.0
returned
Capital -4.7 -4.7 -4.7
repayment
--------------------------------------------------------------------------------
Transactions 0.1 -33.5 -33.4 -33.4
with
shareholders,
total
Other changes 0.0 0.0 0.0
--------------------------------------------------------------------------------
Equity on 31 19.4 -2.9 -0.4 0.5 194.7 211.2 0.1 211.4
Dec. 2015
KEY FIGURES
10–12/ 10–12/ 1–12/ 1–12/
2016 2015 2016 2015
--------------------------------------------------------------------------------
Earnings per share, EUR 0.22 0.18 1.13 0.98
Diluted earnings per share, EUR 0.22 0.18 1.13 0.98
Cash flow from operating activities/share, EUR 1.11 0.75 1.99 2.33
EVA, EUR million* 19.9 4.7 30.7 30.3
Gross capital expenditure, EUR million 14.4 18.4 41.6 49.6
Depreciation, amortisation and impairment, EUR 9.8 10.0 38.8 40.0
million
Equity per share, EUR 5.81 5.51
Dividend/share, EUR 0.92** 0.85
Dividend/earnings, % 81,3 86.5
Effective dividend yield, % 4.8 4.7
P/E ratio 17.0 18.40
Return on equity, % (ROE) 20.0 18.2
Return on invested capital, ROI, % 17.4 16.5
Equity ratio, % 50.4 46.5
Gearing, % 17.3 19.8
Net interest-bearing liabilities, EUR million 38.7 41.8
Average number of employees in full-time 7,199 7,099
equivalents
Total number of full-time and part-time 7,931 8,085
employees at end of period
Number of outstanding shares adjusted for
issues, 1,000 shares
average during the period 38,375 38,590
at end of period 38,378 38,361
average during the period, diluted 38,390 38,605
* EVA = operating profit - cost calculated on invested capital (average of four
quarters) WACC: 2016 6.56%, 2015 6.51%
* Proposal by the Board of Directors
ACCOUNTING POLICIES
This interim report is in compliance with the IAS 34 (Interim Financial
Reporting) standard.
The interim report has been prepared with application of the IFRS standards and
interpretations in effect on 31 December 2016.
More detailed information on accounting policies is presented in the
consolidated financial statements of Lassila & Tikanoja plc dated 31 December
2016.
The information presented in the financial statements release has not been
audited.
SEGMENT INFORMATION
Net sales
10–12/ 10–12/
2016 2015
EUR million Extern Inter- Total Extern Inter- Total Total net sales,
al divisi al divisi change %
on on
Environmental 65.5 1.1 66.5 63.2 1.0 64.2 3.6
Services
Industrial 20.3 1.1 21.4 19.7 0.6 20.3 5.3
Services
Facility 71.0 0.8 71.8 70.6 1.1 71.7 0.1
Services
Renewable Energy 11.6 0.0 11.6 11.7 0.0 11.7 -1.1
Sources
Eliminations -3.0 -3.0 -2.8 -2.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 168.3 0.0 168.3 165.2 0.0 165.2 1.9
1–12/ 1–12/
2016 2015
EUR million Extern Inter- Total Extern Inter- Total Total net sales,
al divisi al divisi change %
on on
Environmental 261.2 3.6 264.8 253.1 3.4 256.5 3.2
Services
Industrial 78.7 3.4 82.1 75.0 2.0 77.0 6.6
Services
Facility 285.3 2.9 288.3 279.0 4.0 282.9 1.9
Services
Renewable Energy 36.6 0.2 36.8 39.2 0.2 39.4 -6.6
Sources
Eliminations -10.1 -10.1 -9.5 -9.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 661.8 0.0 661.8 646.3 0.0 646.3 2.4
Operating profit
EUR million 10–12/ % 10–12/ % 1–12/ % 1–12/ %
2016 2015 2016 2015
--------------------------------------------------------------------------------
Environmental Services 6.5 9.7 7.4 11.6 31.3 11.8 35.8 14.0
Industrial Services 2.6 11.9 1.8 9.1 7.8 9.5 6.8 8.9
Facility Services 2.6 3.6 1.0 1.5 13.5 4.7 8.1 2.9
Renewable Energy Sources 0.7 6.2 0.3 2.6 1.5 4.1 2.1 5.3
Group administration and -1.8 -1.0 -3.7 -3.0
other
--------------------------------------------------------------------------------
Total 10.5 6.2 9.7 5.9 50.5 7.6 49.9 7.7
OTHER SEGMENT INFORMATION
EUR million 12/2016 12/2015
----------------------------------------------------------------------------
Assets
Environmental Services 215.4 214.2
Industrial Services 69.5 71.4
Facility Services 97.2 97.6
Renewable Energy Sources 23.5 23.3
Group administration and other 11.1 1.0
Unallocated assets 36.0 58.2
----------------------------------------------------------------------------
L&T total 452.8 465.8
Liabilities
Environmental Services 54.7 52.1
Industrial Services 22.4 21.9
Facility Services 46.9 49.8
Renewable Energy Sources 7.0 4.8
Group administration and other 6.6 2.1
Unallocated liabilities 92.2 123.7
----------------------------------------------------------------------------
L&T total 229.8 254.4
EUR million 10–12/2016 10–12/2015 1–12/2016 1–12/2015
----------------------------------------------------------------------------
Capital expenditure
Environmental Services 5.1 10.1 18.5 24.4
Industrial Services 2.8 2.9 8.2 7.5
Facility Services 6.5 5.3 14.5 17.3
Renewable Energy Sources 0.1 0.1 0.3 0.3
Group administration and other 0.0 0.0 0.0 0.0
----------------------------------------------------------------------------
L&T total 14.4 18.4 41.6 49.6
Depreciation and amortisation
Environmental Services 4.8 5.0 19.6 19.9
Industrial Services 1.8 1.6 6.7 6.6
Facility Services 3.2 3.4 12.2 13.3
Renewable Energy Sources 0.1 0.1 0.3 0.3
Group administration and other 0.0 0.0 0.0 0.0
----------------------------------------------------------------------------
L&T total 9.8 10.0 38.8 40.0
INCOME STATEMENT BY QUARTER
EUR million 10–12/201 7–9/2016 4–6/2016 1–3/2016 10–12/20
6 15
--------------------------------------------------------------------------------
Net sales
Environmental Services 66.5 68.2 68.2 61.8 64.2
Industrial Services 21.4 23.9 20.9 15.9 20.3
Facility Services 71.8 71.5 72.8 72.2 71.7
Renewable Energy Sources 11.6 5.3 7.0 12.8 11.7
Interdivision net sales -3.0 -2.9 -2.1 -2.1 -2.8
--------------------------------------------------------------------------------
L&T total 168.3 166.0 166.9 160.7 165.2
Operating profit
Environmental Services 6.5 10.2 9.2 5.4 7.4
Industrial Services 2.6 3.4 2.1 -0.3 1.8
Facility Services 2.6 6.1 3.7 1.2 1.0
Renewable Energy Sources 0.7 0.1 0.0 0.7 0.3
Group administration and -1.8 -0.7 -1.0 -0.1 -1.0
other
--------------------------------------------------------------------------------
L&T total 10.5 19.1 14.1 6.8 9.7
Operating margin
Environmental Services 9.7 14.9 13.5 8.8 11.6
Industrial Services 11.9 14.2 10.3 -2.0 9.1
Facility Services 3.6 8.5 5.1 1.6 1.5
Renewable Energy Sources 6.2 2.0 0.3 5.1 2.6
--------------------------------------------------------------------------------
L&T total 6.2 11.5 8.4 4.2 5.9
Financial income and 0.1 -0.4 -0.2 0.1 -1.0
expenses, net
--------------------------------------------------------------------------------
Profit before tax 10.6 18.7 13.9 6.9 8.6
BUSINESS ACQUISITIONS, COMBINED
Fair value, total
EUR million 1–12/2016 1–12/2015
-----------------------------------------------------------------------
Intangible assets 1.1 2.5
Property, plant and equipment 1.8 1.6
Investments 0.0 0.0
Receivables 1.7 1.4
Cash and cash equivalents 2.3 0.9
-----------------------------------------------------------------------
Total assets 6.9 6.4
Other liabilities 1.0 2.3
Deferred tax liabilities 0.0 0.3
-----------------------------------------------------------------------
Total liabilities 1.0 2.6
Net assets acquired 5.9 3.8
Total consideration 8.8 7.4
Goodwill 2.9 3.6
Effect on cash flow
Consideration paid in cash -8.8 -7.4
Cash and cash equivalents of the acquired company 2.3 0.9
Paid in the previous year 3.6 -
Unpaid 1.0 -
-----------------------------------------------------------------------
Cash flow from investing activities -1.8 -6.5
CHANGES IN INTANGIBLE ASSETS
EUR million 1–12/2016 1–12/2015
------------------------------------------------------------
Carrying amount at beginning of period 134.9 125.7
Business acquisitions 1.4 6.0
Other capital expenditure 9.2 7.9
Disposals 0.2 0.0
Depreciation and impairment -4.8 -5.0
Transfers between items 2.7 0.0
Exchange differences -0.4 0.2
------------------------------------------------------------
Carrying amount at end of period 143.2 134.9
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 1–12/2016 1–12/2015
------------------------------------------------------------
Carrying amount at beginning of period 161.5 162.1
Business acquisitions 0.8 4.1
Other capital expenditure 30.2 31.5
Disposals -0.7 -0.9
Depreciation and impairment -34.0 -35.1
Transfers between items -2.7 0.0
Exchange differences 1.0 -0.2
------------------------------------------------------------
Carrying amount at end of period 156.1 161.5
CAPITAL COMMITMENTS
EUR million 12/2016 12/2015
-----------------------------------------------
Intangible assets 0.1 -
Property, plant and equipment 7.2 6.3
-----------------------------------------------
Total 7.3 6.3
FINANCIAL ASSETS AND LIABILITIES BY CATEGORY
EUR million Loans and Availabl Financial Deriva Carryi Fair value
31 December other e-for-sa liabilities tives ng hierarchy
2016 receivables le measured under amount level
financia at effective hedge s
l assets interest accoun by
method t balanc
ing e
sheet
item
--------------------------------------------------------------------
------------
Non-current
financial
assets
Available-for 00.6 0.6
-sale
investments
Finance lease 1.2 1.2 3
receivables
Other 1.5 1.5 2
receivables
Current
financial
assets
Trade and 83.6 83.6
other
receivables
Finance lease 0.9 0.9
receivables
Derivative 0.3 0.3
receivables
Cash and cash 28.2 28.2
equivalents
--------------------------------------------------------------------
Total 115.4 0.6 0.3 116.3
financial
assets
Non-current
financial
liabilities
Borrowings 58.3 58.3 2
Finance lease 5.2 5.2
payables
Other 0.0 0.0
liabilities
Current
financial
liabilities
Borrowings 2.6 2.6
Finance lease 0.8 0.8
payables
Trade and 71.8 71.8
other
payables
Derivative 0.1 0.1 2
liabilities
--------------------------------------------------------------------
Total 138.6 0.1 138.7
financial
liabilities
The fair values of balance sheet items do not differ significantly from the
carrying values of balance sheet items.
EUR million Loans and Available- Financial Deriva Carryi Fair
31 December 2015 other for-sale liabilities tives ng value
receivabl financial measured under amount hierarch
es assets at effective hedge s y level
interest accoun by
method t balanc
ing e
sheet
item
-----------------------------------------------------------------------
Non-current
financial
assets
Available-for-sa 0.6 0.6 3
le investments
Finance lease 2.1 2.1 2
receivables
Other 1.8 1.8
receivables
Current
financial
assets
Available-for-sa 5.0 5.0 2
le financial
assets
Trade and other 78.8 78.8
receivables
Finance lease
receivables
Derivative 0.0 0.0
receivables
Cash and cash 49.0 49.0
equivalents
-----------------------------------------------------------------------
Total financial 131.7 5.6 0.0 137.3
assets
Non-current
financial
liabilities
Borrowings 61.0 61.0 2
Other 0.1 0.1
liabilities
Current
financial
liabilities
Borrowings 34.9 34.9
Trade and other 57.6 57.6
payables
Derivative 1.1 1.1 2
liabilities
-----------------------------------------------------------------------
Total financial 153.5 1.1 154.6
liabilities
The fair values of balance sheet items do not differ significantly from the
carrying values of balance sheet items.
CONTINGENT LIABILITIES
EUR million 12/2016 12/2015
----------------------------------------------------------------------------
Securities for own commitments
Mortgages on rights of tenancy 0.2 0.4
Company mortgages - 1.1
Other securities 0.1 0.2
Bank guarantees required for environmental permits 10.9 8.6
Other securities are security deposits.
Operating lease liabilities
EUR million 12/2016 12/2015
----------------------------------------------------------------------------
Maturity not later than one year 7.3 6.3
Maturity later than one year and not later than five years 11.0 13.1
Maturity later than five years 3.9 1.6
----------------------------------------------------------------------------
Total 22.2 21.0
Liabilities associated with derivative agreements
Interest rate swaps
EUR million 12/2016 12/2015
----------------------------------------------------------------------------
Nominal values of interest rate swaps
Maturity not later than one year 31.8 34.1
Maturity later than one year and not later than five years 3.6 4.5
Maturity later than five years 0.0 0.0
----------------------------------------------------------------------------
Total 35.5 38.6
Fair value -0.2 -0.4
The interest rate swaps are used for the hedging of cash flow related to
floating rate loans, and hedge accounting under IAS 39 has been applied to
them. The hedges have been effective, and the changes in their fair values are
shown on the consolidated statement of comprehensive income for the period. The
fair values of the swap contracts are based on the market data on the balance
sheet date.
Commodity derivatives
EUR million 12/2016 12/2015
----------------------------------------------------------------------------
Nominal values of diesel swaps
Maturity not later than one year 1.2 1.6
Maturity later than one year and not later than five years 0.0 0.0
----------------------------------------------------------------------------
Total 1.2 1.6
Fair value 0.1 -0.6
Commodity derivative contracts were signed for the hedging of future diesel oil
purchases. IAS 39-compliant hedge accounting is applied to these contracts, and
the effective change in fair value is recognised in the hedging reserve within
equity.
CALCULATION OF KEY FIGURES
Earnings per share:
profit attributable to equity holders of the parent company / adjusted average
basic number of shares
Diluted earnings per share:
profit attributable to equity holders of the parent company / adjusted average
diluted number of shares
Cash flows from operating activities/share:
cash flow from operating activities as in the statement of cash flows /
adjusted average
basic number of shares
EVA:
operating profit - cost calculated on invested capital (average of four
quarters)
WACC 2016: 6.56% and 2015: 6.51%
Equity per share:
profit attributable to equity holders of the parent company / adjusted basic
number of shares at end of period
Return on equity, % (ROE):
(profit for the period / equity (average)) x 100
Return on invested capital, % (ROI):
(profit before tax + financial expenses) / (total equity and liabilities -
non-interest-bearing liabilities (average)) x 100
Equity ratio, %:
equity / (total equity and liabilities - advances received) x 100
Gearing, %:
net interest-bearing liabilities / equity x 100
Net interest-bearing liabilities:
interest-bearing liabilities - liquid assets
Operating profit excluding non-recurring items:
operating profit +/- non-recurring items
Helsinki, 1 February 2017
LASSILA & TIKANOJA PLC
Board of Directors
Pekka Ojanpää
President and CEO
Additional information:
Pekka Ojanpää, President and CEO, tel. +358 10 636 2810
Timo Leinonen, CFO, tel. +358 400 793 073
Lassila & Tikanoja is a service company that is transforming consumer society
into an efficient
recycling society. In co-operation with our customers, we are reducing waste
volumes, extending
the useful lives of properties, recovering materials and decreasing the use of
raw materials and energy. We help our customers focus on their core business
and protect the environment. Together, we create well-being and jobs. With
operations in Finland, Sweden and Russia, L&T employs 8,000 persons. Net sales
in 2016 amounted to EUR 661.8 million. L&T is listed on Nasdaq Helsinki.
Distribution:
Nasdaq Helsinki
Major media
www.lassila-tikanoja.fi
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