Lassila & Tikanoja plc: Financial Statements 1 January–31 December 2021

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Lassila & Tikanoja plc
Stock exchange release
27 January 2022 at 8:00 a.m.

Lassila & Tikanoja plc: Financial Statements 1 January–31 December 2021

STRONG ORGANIC GROWTH

Unless otherwise mentioned, the figures in brackets refer to the corresponding period in the previous year.

  • Net sales for the final quarter were EUR 223.5 million (199.6). Net sales increased by 12.0 per cent, of which 8.7 percentage points was organic growth. Adjusted operating profit was EUR 10.1 million (9.9), and operating profit was EUR 9.9 million (9.9). Earnings per share were EUR 0.26 (0.20).

  • Net sales for 2021 amounted to EUR 812.5 million (751.9). Adjusted operating profit, including a negative impact of EUR 1.0 million due to the change in the accounting principles for cloud computing arrangements, was EUR 42.4 million (39.7), operating profit was EUR 42.2 million (28.2), and earnings per share were EUR 0.90 (0.50).

  • Earnings per share were positively influenced by a reduction in net financial expenses to EUR -3.3 million (-4.9). Exchange differences amounted to EUR 0.3 million (-1.4).

  • The Board of Directors proposes a dividend of EUR 0.46 per share.

Outlook for the year 2022

The company estimates that the impact of the Omicron variant of COVID-19 will have a negative effect on the Group’s result in the first quarter, as customer sites reduce their operations due to the government restrictions and increased sickness-related absence of personnel.

Net sales and adjusted operating profit in 2022 are estimated to be at the same level as in the previous year.

PRESIDENT AND CEO EERO HAUTANIEMI:

“The year 2021 was characterised by the COVID-19 pandemic, and there were many uncertainties in the operating environment. The demand for Lassila & Tikanoja’s services began to recover during the second quarter, and strong development continued during the second half of the year. However, the costs of service production were increased by the substantial increase in diesel prices, as well as a worsening labour shortage.

Full-year net sales grew by 8.1% year-on-year. Organic growth was 6.6%. Adjusted operating profit, including a negative impact of EUR 1.0 million due to the change in the accounting principles for cloud computing arrangements, improved year-on-year and totalled EUR 42.4 million (39.7).

All divisions grew organically in 2021, and the growth was also accelerated by three acquisitions in accordance with our strategy. The Environmental Services and Industrial Services divisions achieved a strong result. Performance was weak in the property maintenance and technical services business lines in Facility Services Finland. Measures to simplify the organisational structure and improve cost-efficiency were successfully implemented during the fourth quarter. The measures aim to achieve annual cost savings of a minimum of EUR 3 million starting from 2022.

Customer experience improved significantly from the previous year, and personnel satisfaction developed favourably. In absolute terms, the climate impacts of our own operations were slightly higher than last year, but emissions declined in relation to kilometres driven. Our carbon handprint, or emissions saved through our operations, corresponded to the annual emissions of more than 110,000 Finns. CDP ranked Lassila & Tikanoja “Leadership A-” for its climate activities. Besides L&T, 12 Finnish companies received a Leadership rating. In the reputation survey for the general public, Lassila & Tikanoja’s reputation was better than ever.

During 2021, we reviewed our strategy in relation to changes in the operating environment. The ongoing green transition strongly supports our business. The circular economy plays an increasingly critical role in combatting climate change and biodiversity loss. We identified a lot of growth opportunities in both the materials business and the built environment. The circular economy and sustainable business solutions that support it are at the heart of our strategy.

In the strategy period 2022–2026, L&T seeks growth in its core businesses by strengthening its market share. Our strong balance sheet and customer base, that has grown in all divisions, creates an excellent foundation for organic an inorganic growth during the strategy period.

We want to be the best sustainability partner for our customers and an excellent workplace for the best experts in the field. During the strategy period, we will invest in reforming our operating models, which will enable even more cost-efficient service production.

Even though the COVID-19 pandemic continues to affect our operating environment, the work done in 2021 and the updated strategic guidelines provide a good starting point for 2022.”

GROUP NET SALES AND FINANCIAL PERFORMANCE

October–December
Lassila & Tikanoja’s net sales for the fourth quarter amounted to EUR 223.5 million (199.6), an increase of 12.0% year-on-year. The rate of organic growth was 8.7%. Adjusted operating profit was EUR 10.1 million (9.9), representing 4.5% (5.0%) of net sales. Operating profit was EUR 9.9 million (9.9), representing 4.4% (5.0%) of net sales. The change in the accounting principles for cloud computing arrangements in the financial year 2021 had a negative impact of EUR 1.0 million on the result for the last quarter. Earnings per share were EUR 0.26 (0.20).

Net sales grew across all divisions. Comparable operating profit improved in Environmental Services and Industrial Services. In Facility Services, operating profit declined in Finland and Sweden.

Year 2021
Net sales for 2021 amounted to EUR 812.5 million (751.9), up 8.1% year-on-year. The rate of organic growth was 6.6%. Adjusted operating profit was EUR 42.4 million (39.7), representing 5.2% (5.3%) of net sales. Operating profit was EUR 42.2 million (28.2), representing 5.2% (3.8%) of net sales. Earnings per share were EUR 0.90 (0.50).

Net sales grew across all divisions. Operating profit improved in Environmental Services, Industrial Services, and Facility Services Sweden. Operating profit declined year-on-year in Facility Services Finland.

The realisation of occupational accident expenses concerning accidents that took place prior to 2018 had a negative effect of EUR 0.7 million on the Group’s adjusted operating profit. In the comparison period, operating profit was improved by the temporary lowering of pension insurance contributions by 2.6 percentage points from 1 May to 31 December 2020, which had a positive impact of approximately EUR 3.8 million in 2020. Other non-recurring items in the comparison period had a positive net effect of EUR 1.0 million on the Group’s operating profit. The items in question are not included in the figures of the Group’s businesses. Operating profit in the comparison period was negatively affected by costs of EUR 9.0 million recognised in relation to the discontinuation of Russian operations. The change in the accounting principles for cloud computing arrangements in the financial year 2021 had a negative impact of EUR 1.0 million on the result for the last quarter. The result for the period was positively influenced by a reduction in net financial expenses to EUR -3.3 million (-4.9). Exchange differences had an impact of EUR +0.3 million (-1.4) on financial expenses.

Financial summary

10–12/2021

10–12/2020

Change %

1–12/2021

1–12/2020

Change %

Net sales, EUR million

223.5

199.6

12.0

812.5

751.9

8.1

Adjusted operating profit, EUR million

10.1

9.9

1.9

42.4

39.7

6.9

Adjusted operating margin, %

4.5

5.0

5.2

5.3

Operating profit, EUR million

9.9

9.9

0.2

42.2

28.2

49.5

Operating margin, %

4.4

5.0

5.2

3.8

EBITDA, EUR million

23.2

23.5

-1.3

95.1

85.2

11.7

EBITDA, %

10.4

11.8

11.7

11.3

Profit before tax, EUR million

9.1

9.1

0.4

39.0

23.3

67.2

Earnings per share, EUR

0.26

0.20

30.0

0.90

0.50

79.8

Net cash flow from operating activities
after investments per share, EUR

0.55

0.62

-12.1

0.05

1.15

-96.1

EVA, EUR million

3.0

3.8

-20.3

15.9

3.7

332.4

Return on equity (ROE), %

17.1

9.6

Invested capital, EUR million

406.0

379.2

7.1

Return on invested capital (ROI), %

10.8

7.5

Equity ratio, %

33.7

33.0

Gearing, %

79.4

70.9


NET SALES AND OPERATING PROFIT BY DIVISION

Environmental Services

October–December
Net sales of Environmental Services for the fourth quarter grew to EUR 89.9 million (72.9). Operating profit was EUR 7.1 million (7.6), and comparable operating profit excluding Russia improved to EUR 7.1 million (6.2). The change in the accounting principles of cloud computing arrangements had a negative impact on profit of EUR 0.2 million.

Year 2021
Net sales of Environmental Services grew to EUR 320.5 million (289.4). Operating profit increased year-on-year and amounted to EUR 29.8 million (20.0). The comparison figure includes costs of EUR 9.0 million recognised in relation to the discontinuation of Russian operations. Excluding Russia, the operating profit of Environmental Services improved to EUR 29.8 million (28.4). The change in the accounting principles of cloud computing arrangements had a negative impact on profit of EUR 0.2 million.

In Environmental Services, demand for waste management and recycling services started to recover in the second quarter and remained strong for the rest of the year. Demand for separately ordered services as well as the prices of – and demand for – recycled raw materials practically returned to pre-pandemic levels in the third quarter. The number of corporate customers increased thanks to active sales to new customers, and the Sihvari Oy acquisition in June strengthened the Environmental Services division’s market position in the SME customer segment. Production costs were increased by strong price hikes in fuel prices, continuing throughout the year.

Industrial Services

October–December
The division’s net sales for the final quarter grew to EUR 28.7 million (27.6). Operating profit improved to EUR 1.7 million (1.5). The change in the accounting principles for cloud computing arrangements had a negative impact of EUR 0.6 million on the result.

Year 2021
The Industrial Services division’s net sales grew to EUR 105.1 million (101.8). Operating profit improved year-on-year and amounted to EUR 9.2 million (7.1). The change in the accounting principles for cloud computing arrangements had a negative impact of EUR 0.6 million on the result.

The Industrial Services division strengthened its market position in hazardous waste and process cleaning in 2021. In hazardous waste, volumes gradually returned to normal during the year. The focus on segment expertise brought results especially in the chemical industry segment, where new customer contracts were signed. In the project business, some of the construction projects planned for earlier in the year were postponed due to the COVID-19 pandemic, which made resource allocation more difficult and increased costs. There were fewer contaminated soil area projects started than in the previous year, and price competition intensified. The development of operational methods remained strong in Industrial Services. The COVID-19 pandemic caused changes in the annual industrial maintenance break cycle, and some of the annual maintenance breaks first planned for the beginning of 2021 were transferred to the third quarter. The overlap of annual maintenance breaks in the third quarter made resource optimisation more difficult and increased production costs due to increased subcontracting.

Facility Services Finland

October–December
The division’s net sales for the final quarter grew to EUR 63.0 million (60.5). Operating profit declined to EUR 0.6 million (1.9). The change in the accounting principles for cloud computing arrangements had a negative impact on profit of EUR 0.1 million.

Year 2021
The net sales of Facility Services Finland grew to EUR 243.1 million (232.3). Operating profit declined year-on-year to EUR 1.8 million (3.2). The change in the accounting principles for cloud computing arrangements had a negative impact on profit of EUR 0.1 million. In the comparison period, operating profit was improved by the temporary lowering of pension insurance contributions by 2.6 percentage points from 1 May to 31 December 2020, which had a positive impact of approximately EUR 2.1 million in 2020.

The cleaning business developed favourably throughout the year, and the market position strengthened. The market position in the food hygiene segment strengthened following the acquisition of Serveco Oy. The market position strengthened in the retail segment, and the service offering expanded with the acquisition of Spectra Oy. The Responsible Cleaning development programme was launched in the cleaning business during the second quarter, and it was well received by customers. In total, 316 cleaning sites were included in the development programme by the end of 2021, and more than 1,000 cleaners were trained in the use of sustainable cleaning methods during the year.

Performance was weak in the property maintenance and technical services business lines in Finland. Measures to improve cost efficiency and clarify the organisational structure were initiated in these service lines at the end of the third quarter. Four loss-making units were closed, and the business lines for property maintenance and technical services were brought under one management. The aim is to achieve annual cost savings of a minimum of EUR 3 million starting from 2022. The streamlined unit network will improve efficiency, and investments will continue in refrigeration equipment maintenance and energy efficiency services in particular.

Facility Services Sweden

October–December
The division’s net sales for the final quarter grew to EUR 43.8 million (40.0). Operating profit was EUR 1.3 million (1.5).

Year 2021
The net sales of Facility Services Sweden grew to EUR 149.8 million (134.5). Operating profit improved year-on-year and amounted to EUR 3.9 million (3.5).

The COVID-19 pandemic situation was difficult in the first quarter. The pandemic situation started to ease from the second quarter, and the market share developed favourably. The market position strengthened in the hospital segment in particular, and especially in the fourth quarter, due to a significant new customer account. Cleaning and food hygiene services also grew.

The COVID-19 pandemic had a negative impact on the demand for additional services in the municipal sector throughout the year. Fewer large technical services projects started than in the years before the pandemic, and some projects were delayed due to the global semiconductor shortage.

FINANCING

Net cash flow from operating activities amounted to EUR 1.7 million (44.0). A total of EUR 15.1 million in working capital was committed (EUR 2.1 million released). Working capital was increased by the growth of customer receivables due to higher net sales. Cash flow was reduced by acquisitions, which had a total impact of approximately EUR 23 million. Cash flow in the comparison period was favourably impacted by the sale of property included in property, plants, and equipment.

At the end of the period, interest-bearing liabilities amounted to EUR 195.6 million (186.7). Net interest-bearing liabilities totalled EUR 167.1 million (136.5). The average interest rate on long-term loans excluding IFRS 16 liabilities, with interest rate hedging, was 1.1% (1.3%).

Of the EUR 100.0 million commercial paper programme, EUR 0.0 million (15.0) was in use at the end of the period. A committed credit limit totalling EUR 30 million was not in use, as was the case in the comparison period. The Group took out a bank loan of EUR 25 million in the third quarter to finance acquisitions.

Net financial expenses in 2021 amounted to EUR -3.3 million (-4.9). The effect of exchange rate changes on net financial expenses was EUR 0.3 million (-1.4). Net financial expenses were 0.4% (0.7%) of net sales.

The equity ratio was 33.7% (33.0%), and the gearing ratio was 79.4% (70.9%). Liquid assets at the end of the period amounted to EUR 28.6 million (50.2). Overdue trade receivables and credit losses have not increased during the pandemic.


DISTRIBUTION OF ASSETS

The Annual General Meeting held on 18 March 2021 resolved that a dividend of EUR 0.40 per share be paid on the basis of the balance sheet that was adopted for the financial year 2020. The dividend, totalling EUR 15.2 million, was paid to shareholders on 29 March 2021.

CAPITAL EXPENDITURE

Gross capital expenditure for 2021 amounted to EUR 72.3 million (48.2). Acquisitions accounted for approximately EUR 31 million of the capital expenditure. Other capital expenditure consisted primarily of machine and equipment purchases, as well as investments in information systems and buildings.

SUSTAINABILITY

Environmental responsibility

Climate benefits for customers created by L&T

2021

2020

Target

Target to be achieved by

Carbon handprint (tCO2e)

1,103,000

1,230,000

growth faster than net sales

The carbon handprint illustrates the climate benefits of a product, process or service, meaning the emission reduction potential for the user. L&T’s carbon handprint reduces the customer’s carbon footprint. Our services generated emission reductions for customers through, for example, customers replacing virgin raw materials with secondary raw materials, and fossil fuels with biofuels and solid recovered fuels.

Recycling rate and material recovery

2021

2020

Target

Target to be achieved by

Recycling rate of material flows managed by L&T

58.4%

58.6%

60%

2024

The recycling rate is the weighted average of our customers’ recycling rates. It also includes materials that cannot yet be recycled. To increase our reuse and recycling rate, we actively look for new material streams whose refining rate we can increase. Reporting covers municipal waste collected from corporate customers, hazardous waste, industrial waste and construction waste in Finland. Slurry, contaminated soil and ash are excluded from reporting.

Progress towards science-based emission reduction targets, using 2018 as the baseline

2021

2020

Target

Target to be achieved by

Carbon footprint (tCO2e)

37,100

36,700



Carbon footprint intensity (gCO2e/km)

767

818

476

2030

L&T’s strategic objective is to halve the carbon footprint of its operations by 2030 and to reduce the indirect emissions generated by its supply chain. The emission reduction target set by L&T has been validated by the Science-Based Targets initiative. The achievement of this objective will be promoted by switching to zero-emission transport technologies and fuels and by opting for renewable energy at L&T’s properties. During 2021, L&T acquired 57 electric vans and the number of biogas-powered heavy-duty vehicles rose to 32 (10).

Social responsibility

Overall accident frequency


2021

2020

Interim target

Target to be achieved by

Overall accident frequency (TRIF)

24

24

20

2024

We use effective proactive measures – such as risk assessments, safety observations, Safety Walks and occupational safety sessions – to improve our safety as well as the safety of our customers and other stakeholders, while also eliminating risk factors.

Well-being at work



2021

2020

Interim target

Interim target to be achieved by

Occupational health rate Finland (proportion of employees with no sickness-related absences)



45

50

45

2024



Sickness-related absences Finland (%)



5.0

4.7

4.5

2024

In 2021, the sickness rate of personnel was at a low level until the last month of 2021. The Omicron variant of COVID-19 increased the sickness rate in December.

Current issues related to sustainability

CDP ranked Lassila & Tikanoja “Leadership A-” for its climate activities. Besides L&T, 12 Finnish companies received a Leadership rating.

PERSONNEL

In 2021, the average number of employees converted into full-time equivalents was 7,319 (7,197). At the end of the period, L&T had 8,171 (8,139) full-time and part-time employees. Of these, 7,003 (6,673) worked in Finland and 1,168 (1,466) in other countries.

PROPOSAL FOR THE DISTRIBUTION OF ASSETS

According to the financial statements, Lassila & Tikanoja plc’s unrestricted equity amounts to EUR 67,190,797.35, with the operating profit for the period representing EUR 13,253,020.79 of this total. 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 0.46 per share be paid for the financial year 2021. The dividend is to be paid to shareholders included in the company shareholder register maintained by Euroclear Finland Oy on the record date, 21 March 2022. The Board proposes to the Annual General Meeting that the dividend be paid on 28 March 2022.

No dividend shall be paid on shares held by the company on the record date of 21 March 2022.

On the day the proposal for the distribution of assets was made, the number of shares entitling to dividend was 38,112,478, which means the total amount of the dividend would be EUR 17,531,739.88. Earnings per share amounted to EUR 0.90. The proposed dividend, EUR 0.46 per share, is 51.0% of the earnings per share.

Lassila & Tikanoja’s Annual Report, which includes the report by the Board of Directors and the financial statements for 2021, will be published in week 8 at www.lt.fi/en.


SHARES AND SHARE CAPITAL

Traded volume and price

The volume of trading during the year 2021 was 9.6 million shares, which is 25.2% (32.2%) of the average number of outstanding shares. The value of trading was EUR 137.6 million (166.1). The highest share price was EUR 16.10 and the lowest EUR 12.82. The closing price was EUR 13.44. At the end of the review period, the market capitalisation excluding the shares held by the company was EUR 512.2 million (573.9).

Own shares

At the end of the period, the company held 686,396 of its own shares, representing 1.8% of all shares and votes.

Share capital and number of shares

The company’s registered share capital amounts to EUR 19,399,437 and the number of outstanding shares is 38,112,478. The average number of shares excluding the shares held by the company was 38,111,312.

Shareholders

At the end of the period, the company had 23,087 (20,731) shareholders. Nominee-registered holdings accounted for 9.6% (10.1%) of the total number of shares.

Authorisations for the Board of Directors

The Annual General Meeting held on 18 March 2021 authorised Lassila & Tikanoja plc’s Board of Directors to decide 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 a 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 authorisation is effective for 18 months.

RESOLUTIONS BY THE ANNUAL GENERAL MEETING

The Annual General Meeting, which was held on 18 March 2021, adopted the financial statements and consolidated financial statements for 2020, released the members of the Board of Directors and the President and CEO from liability, and approved the Remuneration Report for the Governing Bodies.

The Annual General Meeting resolved that a dividend of EUR 0.40 per share, totalling EUR 15.2 million, be paid on the basis of the balance sheet adopted for the financial year 2020. It was decided that the dividend be paid on 29 March 2021.

The Annual General Meeting confirmed the number of members of the Board of Directors as seven. Heikki Bergholm, Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Laura Tarkka, and Pasi Tolppanen were re-elected to the Board until the end of the following Annual General Meeting, and Jukka Leinonen was elected as a new member.

KPMG Oy Ab, Authorised Public Accountants, was elected auditor. KPMG Oy Ab named Leenakaisa Winberg, 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 18 March 2021.

BOARD OF DIRECTORS

The members of Lassila & Tikanoja plc’s Board of Directors are Heikki Bergholm, Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen, Laura Tarkka, and Pasi Tolppanen. At its constitutive meeting after the Annual General Meeting, the Board of Directors elected Heikki Bergholm as Chairman of the Board and Sakari Lassila as Vice Chairman.

Sakari Lassila was elected as the Chairman of the Audit Committee and Teemu Kangas-Kärki, Laura Lares, and Jukka Leinonen as members. Heikki Bergholm was elected as the Chairman of the Personnel Committee and Laura Tarkka and Pasi Tolppanen as members.

Long-term targets

In October, Lassila & Tikanoja plc’s Board of Directors approved the updated targets for the strategy period 2022-2026 and decided on the continuing implementation of the Group strategy. The Group’s financial targets remain the same for the strategy period. The sustainability and stakeholder targets were updated to provide a more transparent view of the progress of the strategy, and the target levels were set on a higher level.

Financial targets

Measure

Target

Net Sales Growth, %

5%

Return on investment, % (ROI)

15%

Gearing, %

Below 125%

Sustainability and stakeholder targets

Measure

Target

Net Promoter Score, NPS

>50 by 2026

Employee Net Promoter Score, eNPS

>50 by 2026

Carbon handprint

Growth faster than net sales

Carbon footprint

-50% by 2030 in comparison to 2018

Sustainability and stakeholder measures are reported as part of the Group quarterly and annual reporting.

Lassila & Tikanoja does not consider the long-term financial targets as guidance for any fiscal year.

KEY EVENTS DURING THE REVIEW PERIOD

On 27 July 2021, the company issued a positive profit warning and updated its net sales outlook for 2021. Net sales in 2021 are estimated to grow, and adjusted operating profit is estimated to be at the same level or better compared to the previous year.

On 30 July 2021, Antti Niitynpää (eMBA) was appointed Senior Vice President, Facility Services Finland and a member of the Group Executive Board, effective from 30 July 2021. His predecessor Tuomas Mäkipeska resigned and continued his career outside the company.

On 17 September 2021, the company announced the composition of Lassila & Tikanoja plc’s Nomination Board. Lassila & Tikanoja plc’s three largest shareholders, which are entitled to appoint a representative to Lassila & Tikanoja plc’s Shareholders’ Nomination Board, are a group of shareholders (Chemec Oy, CH-Polymers Oy, Maijala Eeva, Maijala Hannele, Maijala Heikki, Maijala Juhani, Maijala Juuso, Maijala Miikka, Maijala Mikko, Maijala Roope and Maijala Tuula), Mandatum Life Insurance Company Limited, and the Evald ja Hilda Nissin Säätiö foundation. These shareholders have appointed Miikka Maijala, Patrick Lapveteläinen and Juhani Lassila as their representatives in Lassila & Tikanoja’s Nomination Board. The Chairman of Lassila & Tikanoja plc’s Board of Directors, Heikki Bergholm, acts as the fourth member of the Nomination Board. The Chairman of the Nomination Board is Patrick Lapveteläinen.

EVENTS AFTER THE REVIEW PERIOD

On 12 January 2022, the company announced that Lassila & Tikanoja’s Shareholders’ Nomination Board, established by the Annual General Meeting on 12 March 2020, proposes to the Annual General Meeting to be held on 17 March 2022 that the Board of Directors have six (6) members. The Nomination Board proposes that Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen, Laura Tarkka, and Pasi Tolppanen are elected to the Board of Directors from among the current members.

The Chairman of the Board of Directors, Heikki Bergholm, has announced that he is no longer available for the election of the members of the Board of Directors. The candidates have informed the company that if they are elected, they will elect Jukka Leinonen as Chairman of the Board of Directors and Sakari Lassila as Vice Chairman.


NEAR-TERM RISKS AND UNCERTAINTIES

The measures and recommendations issued by the authorities to restrict the COVID-19 pandemic, and the resulting customer-specific production restrictions and adjustment measures are still expected to cause disruptions in service production during 2022. The new coronavirus variants can spread more rapidly than the previous variants and increase the employee sickness rate. This can cause disturbances in service production.

Fluctuations in the price of oil influence both fuel costs and the prices of oil-based secondary raw materials, such as recycled plastic and regenerated lubricants.

The company has several ERP system renewal projects under way. Temporary additional costs arising from system deployments and establishing the operating model may weigh down the company’s result.

Challenges related to the availability of labour may increase production costs.

More detailed information on Lassila & Tikanoja’s risks and risk management will be provided in the 2021 Annual Report and in the Report of the Board of Directors and the consolidated financial statements.

Outlook for the year 2022

The company estimates that the impact of the Omicron variant of COVID-19 will have a negative effect on the Group’s result in the first quarter, as customer sites reduce their operations due to the government restrictions and increased sickness-related absence of personnel.

Net sales and adjusted operating profit in 2022 are estimated to be at the same level as in the previous year.

Helsinki, 26 January 2022

LASSILA & TIKANOJA PLC

Board of Directors
Eero Hautaniemi
President and CEO

For additional information, please contact:
Eero Hautaniemi, President and CEO, tel. +358 10 636 2810
Valtteri Palin, CFO, tel. +358 40 734 7749

Lassila & Tikanoja is a service company that is putting the circular economy into practice. Together with our customers, we keep materials and properties in productive use for as long as possible and we enhance the use of raw materials and energy. This is to create more value with the circular economy for our customers, personnel and society in a broader sense. Achieving this also means growth in value for our shareholders. Our objective is to continuously grow our actions’ carbon handprint, our positive effect on the climate. We assume our social responsibility by looking after the work ability of our personnel as well as offering jobs to those who are struggling to find employment, for example. With operations in Finland and Sweden, L&T employs 8,171 people. Net sales in 2021 amounted to EUR 812.5 million. L&T is listed on Nasdaq Helsinki.

Distribution:
Nasdaq Helsinki
Major media
www.lt.fi/en

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