Lassila & Tikanoja plc: Financial Statements Release 1 January–31 December 2024

Lassila & Tikanoja plc
Stock exchange release
13 February 2025 at 8:00 a.m

Lassila & Tikanoja plc: Financial Statements Release 1 January–31 December 2024

ADJUSTED OPERATING PROFIT INCREASED – ENVIRONMENTAL SERVICES, INDUSTRIAL SERVICES AND FACILITY SERVICES FINLAND IMPROVED THEIR PROFITABILITY

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

• Net sales for the final quarter were EUR 194.2 million (200.9). Net sales decreased by 3.4%. Adjusted operating profit was EUR 10.5 million (6.9) and operating profit was EUR -18.4 million (6.4). Earnings per share were EUR -0.56 (0.13).
• The operating profit for the final quarter was burdened by write-downs and provisions totalling approximately EUR 27.5 million related to the Facility Services business in Sweden. The entries have no impact on cash flow, and they are reported as items affecting comparability.
• Net sales for year 2024 totalled EUR 770.7 million (802.1). Net sales decreased by 3.9%. Adjusted operating profit was EUR 43.2 million (37.9) and operating profit was EUR 9.8 million (37.3). Earnings per share were EUR -0.05 (0.77).
• Net cash flow from operating activities after investments for year 2024 was EUR 40.8 million (50.9) and net cash flow from operating activities after investments per share was EUR 1.07 (1.33). In the first quarter of the year, net cash flow from operating activities was lower compared to the comparison period. In the following quarters, net cash flow from operating activities after investments strengthened clearly compared to the comparison period.
• The Board of Directors of Lassila & Tikanoja plc has decided to initiate the planning of the possible separation of its circular economy businesses Environmental and Industrial Services and facility services businesses into two independent listed companies. The plan is to separate the circular economy businesses into a newly listed company through a partial demerger of Lassila & Tikanoja plc.
• The company has decided to launch an efficiency programme aiming for improved performance at the beginning of 2025, encompassing both the circular economy and facility services businesses. The efficiency programme aims for an annual performance improvement of at least EUR 8 million by the end of 2026 compared to the 2023 level, including the impact on the annual cost level of having two separate listed companies.
• The Board of Directors proposes a dividend of EUR 0.50 per share, which corresponds to approximately 46.8 % of the net cash flow from operating activities after investments for year 2024.

Outlook for the year 2025

Net sales in 2025 are estimated to be at the same level as in the previous year, and adjusted operating profit is estimated to be at the same level or better compared to the previous year.

PRESIDENT AND CEO EERO HAUTANIEMI:

“Net sales for year 2024 totalled EUR 770.7 million (802.1). Adjusted operating profit was EUR 43.2 million (37.9). Environmental Services, Industrial Services and Facility Services Finland improved both their relative and absolute profitability despite the challenging business cycle. The company’s balance sheet and financial position remained strong.

In circular economy businesses, solid performance continued in 2024. Both Environmental Services and Industrial Services improved their profitability, and net sales of the divisions in total grew compared to the previous year. In Environmental Services, net sales were on par with the comparison period. In Industrial Services, net sales increased by 2.9 per cent from the previous year.

In Environmental Services, the challenging business environment was reflected in the demand for recycling and waste management services throughout the financial period. Especially in the construction industry customer segment, the demand decreased compared to the comparison period. In addition, the municipalisation of collection of packaging material waste from housing properties continued in 2024. Through the efficiency improvement measures implemented in the first half of the year, the costs of service production were successfully adapted to the current market situation. The division's market position remained solid in corporate and producer responsibility organisation customers and the position in the municipal contracts strengthened.

In Industrial Services, the hazardous waste business line saw strong demand throughout the year. In the process cleaning business, the annual maintenance breaks were carried out as planned and resourcing was successful. In the environmental construction business, the weak economic situation in the Finnish construction market was reflected in a decrease in the volumes of material flows delivered to material treatment centres. In Sweden, Industrial Services expanded to the Gävleborg region through an acquisition.

In facility services businesses, the year 2024 was twofold. In Finland, the net sales of facility services decreased as planned due to the termination of unprofitable customer agreements, and the operating profit more than doubled compared to the previous year. In Sweden, the adjusted operating loss of facility services increased as net sales decreased by 16.0 per cent from the comparison period.

In Facility Services Finland, all business lines achieved a better result than in the comparison period. Performance of the cleaning business was particularly strong. Measures to streamline the cost structure and the efficiency of the operations continued. The number of employees in the division has decreased by more than 450 people compared to the comparison period.

In Facility Services Sweden, the decline in net sales and the increase in the adjusted operating loss were impacted by the discontinuation of a significant customer relationship in late 2023 as well as two public-sector customer agreements turning unprofitable during 2024. The measures to simplify operating models and adjust the cost level continued throughout 2024. The number of employees in the division decreased by 155 people from the comparison period. The turnaround in Facility Services Sweden progressed more slowly than expected, but the new customer accounts won towards the end of the year as well as the additional measures initiated to improve profitability create conditions for achieving a turnaround during 2025.

In December 2024, the company initiated the planning of the possible separation of its circular economy businesses Environmental and Industrial Services and facility services businesses into two independent listed companies. The plan is to separate the circular economy businesses into a newly listed company through a partial demerger of Lassila & Tikanoja plc. It is expected that the separation of the circular economy and facility services businesses could increase shareholder value by enabling both businesses to pursue their own strategies and growth opportunities more effectively.

Lassila & Tikanoja renewed its operating model in 2024. Continuing the operating model work, the company launched an efficiency programme aiming for improved performance at the beginning of 2025, encompassing both the circular economy and facility services businesses. The efficiency programme aims for an annual performance improvement of at least EUR 8 million by the end of 2026 compared to the 2023 level, including the impact on the annual cost level of having two separate listed companies. The efficiency programme focuses on, among other things, simplifying procedures and improving the efficiency of direct and indirect procurement and fleet usage.”

GROUP NET SALES AND FINANCIAL PERFORMANCE

October–December
Net sales for the last quarter totalled EUR 194.2 million (200.9), representing a year-on-year decrease of 3.4%. The organic decrease in net sales was 3.7%. Adjusted operating profit was EUR 10.5 million (6.9), representing 5.4% (3.4) of net sales. Operating profit was EUR -18.4 million (6.4), representing -9.5% (3.2) of net sales. Operating profit included items affecting comparability totalling EUR 28.9 million, consisting mainly of impairment of goodwill allocated to Facility Services Sweden, provisions relating to Facility Services Sweden’s onerous contracts and disputes as well as expenses arising from the restructuring of business operations. Earnings per share were EUR -0.56 (0.13).

Net sales increased in Environmental Services and decreased in the other divisions. Operating profit improved in Environmental Services, Industrial Services and Facility Services Finland and declined in Facility Services Sweden.

The result for the fourth quarter was negatively affected by net financial expenses rising to EUR -2.4 million (-2.1). The share of the profit of the joint venture Laania Oy amounted to EUR 0.9 million (1.1) in the last quarter of the year.

Year 2024
Net sales for 2024 totalled EUR 770.7 million (802.1), representing a year-on-year decrease of 3.9%. The organic decrease in net sales was 4.2%. Adjusted operating profit was EUR 43.2 million (37.9), representing 5.6% (4.7) of net sales. Operating profit was EUR 9.8 million (37.3), representing 1.3% (4.6) of net sales. Operating profit included items affecting comparability totalling EUR 33.4 million, consisting mainly of impairment of goodwill allocated to Facility Services Sweden, provisions relating to Facility Services Sweden’s onerous contracts and disputes as well as expenses arising from the restructuring of business operations. Earnings per share were EUR -0.05 (0.77).

Net sales increased in Industrial Services, were on par with the comparison period in Environmental services and decreased in Facility Services Finland and Sweden. Operating profit improved in Environmental Services, Industrial Services and Facility Services Finland and operating loss increased in Facility Services Sweden.

The result for the financial year was negatively affected by net financial expenses rising to EUR -8.6 million (-6.3). The result for the comparison period was positively affected by the fair value of EUR 1.3 million of an interest rate swap being recognised in financial items due to the termination of the interest rate swap. The result for the period was positively affected by L&T’s EUR 3.2 million (3.6) share of the profit of the joint venture Laania Oy.

Financial summary

	10–12/2024		10–12/2023 restated1		Change %		1–12/2024		1–12/2023 restated1		Change %
Net sales, EUR million		194.2		200.9		-3.4		770.7		802.1		-3.9
Adjusted operating profit, EUR million		10.5		6.9		52.9		43.2		37.9		14.1
Adjusted operating margin, %		5.4		3.4				5.6		4.7
Operating profit, EUR million		-18.4		6.4				9.8		37.3		-73.6
Operating margin, %		-9.5		3.2				1.3		4.6
EBITDA, EUR million		19.1		20.5		-6.7		89.0		95.8		-7.1
EBITDA, %		9.9		10.2				11.5		11.9
Earnings per share, EUR		-0.56		0.13				-0.05		0.77
Net cash flow from operating activities after investments per share, EUR		0.75		0.60		25.4		1.07		1.33		-19.8
Return on equity (ROE), %								-0.8		12.9
Capital employed, EUR million								396.1		425.0		-6.8
Return on capital employed (ROCE), %								3.3		10.1
Equity ratio, %								35.4		36.7
Gearing, %								73.2		69.5

¹ The figures for year 2023 have been restated due to an error related to the previous period. All figures for year 2023 in this Financial Statements Release affected by the error have been restated. For more information on the correction please see note 12. Correction of an error in calculating depreciation.

NET SALES AND OPERATING PROFIT BY DIVISION

Environmental Services
October–December
The Environmental Services division’s net sales for the final quarter were EUR 69.9 million (68.9). Adjusted operating profit was EUR 5.4 million (3.3). Operating profit was EUR 5.1 million (3.3).  

Year 2024
The Environmental Services division’s net sales for 2024 totalled EUR 281.5 million (283.7). Adjusted operating profit was EUR 26.6 million (25.9). Operating profit was EUR 26.2 million (25.9).

In the Environmental Services division, the profitability improved in 2024, despite the challenging business environment affecting the demand for recycling and waste management services throughout the financial year. Especially in the construction industry customer segment, the demand decreased compared to the comparison period. In addition, the municipalisation of collection of packaging material waste from housing properties continued in 2024. Through the efficiency improvement measures implemented in the first half of the year, the costs of service production were successfully adapted to the current market situation. The division's market position remained solid in corporate and producer responsibility organisation customers. The position in the municipal contracts strengthened.

On 16 October 2024, the company announced that it had signed an agreement to acquire Stena Recycling Oy’s pallet business. The net sales of Stena Recycling Oy’s pallet business amounted to approximately EUR 10.5 million in 2023. The business includes the plant areas in Klaukkala and Lieto, and it employs approximately 13 people. The transaction is subject to the approval of the competition and consumer authority.

There has been a significant systems renewal project under way in Environmental Services, which also includes the deployment of a new ERP system. The implementation phase of the project began in the second half of 2024, during which the first pilot units transitioned to production. The total investment in the system projects by the end of 2024 was approximately EUR 19.1 million. L&T estimates to commence amortisation of the system renewal investment during the second quarter of 2025.
 
Industrial Services
October–December
The Industrial Services division’s net sales for the final quarter were EUR 36.3 million (37.9). Adjusted operating profit was EUR 4.5 million (3.8). Operating profit was EUR 3.7 million (3.6). Operating profit was reduced by a change of EUR 0.6 (0.2) million in the fair value of the deferred consideration related to the acquisition of Sand & Vattenbläst i Tyringe AB (“SVB”). The change in the fair value is due to the expected improvement of SVB’s EBITDA level in 2025.  

Year 2024
The Industrial Services division’s net sales for 2024 increased to EUR 145.1 million (141.0). Adjusted operating profit was EUR 16.2 million (14.0). Operating profit was EUR 15.1 million (13.8). Operating profit was reduced by a change of EUR 1.0 (0.2) million in the fair value of the deferred consideration related to the acquisition of Sand & Vattenbläst i Tyringe AB (“SVB”). The change in the fair value is due to the expected improvement of SVB’s EBITDA level in 2025.  

In Industrial Services, profitable growth continued. The hazardous waste business line saw strong demand. In the process cleaning business, the annual maintenance breaks were carried out as planned and resourcing was successful. In the environmental construction business, the weak economic situation in the Finnish construction market was reflected in a decrease in the volumes of material flows delivered to material treatment centres.

The process cleaning business of the Industrial Services division was expanded in Sweden to the Gävleborg region through an acquisition that was completed on 1 February 2024. L&T acquired the entire share capital of PF Industriservice AB, which provides process cleaning services.
PF Industriservice had net sales of approximately EUR 2.5 million in the financial year preceding the transaction, and it has approximately seven employees. PF Industriservice offers various process cleaning services to customers in the forest industry, energy sector and construction industry. Following the acquisition, the Industrial Services division has approximately 100 employees in Sweden, and process cleaning services are offered to industrial customers in southern and central Sweden.

Facility Services Finland
October–December
The Facility Services Finland division’s net sales for the final quarter totalled EUR 58.8 million (61.4). Adjusted operating profit was EUR 2.8 million (1.1). Operating profit was EUR 2.6 million (1.1).

Year 2024
The net sales of Facility Services Finland totalled EUR 238.0 million (250.0) in 2024. Adjusted operating profit was EUR 9.6 million (4.4). Operating profit was EUR 9.4 million (4.4).

In Facility Services Finland, all business lines achieved a better result than in the comparison period. There was strong demand for data-driven cleaning services and AI-assisted energy efficiency services in the division. Measures to streamline the cost structure and efficiency of the operations continued and the division's operating profit improved clearly. The number of employees in the division has decreased by more than 450 people compared to the comparison period.

Facility Services Sweden
October–December
The net sales of Facility Services Sweden decreased to EUR 31.0 million (34.5). Adjusted operating profit was EUR -1.5 million (-0.9). Operating profit was EUR -29.0 million (-0.9). Operating profit included items affecting comparability totalling EUR 27.5 million, consisting of impairment of goodwill, provisions relating to onerous contracts and disputes as well as expenses arising from the restructuring of business operations. Operating profit before the amortisation of purchase price allocations of acquisitions was EUR -28.7 million (-0.6).

Year 2024
The net sales of Facility Services Sweden division decreased to EUR 111.9 million (133.2) in 2024. Adjusted operating profit was EUR -7.5 million (-3.7). Operating profit was EUR -35.1 million (-3.7). Operating profit included items affecting comparability totalling EUR 27.5 million, consisting of impairment of goodwill, provisions relating to onerous contracts and disputes as well as expenses arising from the restructuring of business operations. Operating profit before the amortisation of purchase price allocations of acquisitions was EUR -33.8 million (-2.5).

The impairment of goodwill is due to weaker than anticipated development of net sales and operating profit in the Swedish facility services business. The provisions concerning onerous contracts relate to two public-sector customer agreements. According to the company’s estimate, the future expenses of these agreements will exceed their expected revenue.

The decline in net sales and weakening of profitability in Facility Services Sweden were impacted by the discontinuation of a significant customer relationship in late 2023 as well as two public-sector customer agreements turning unprofitable during 2024. The measures to simplify operating models and adjust the cost level continued throughout 2024. The number of employees in the division decreased by 155 people from the comparison period. The turnaround in Facility Services Sweden progressed more slowly than expected, but the new customer accounts won towards the end of the year as well as the additional measures initiated to improve profitability create conditions for achieving a turnaround during 2025.

FINANCING
Net cash flow from operating activities in 2024 totalled EUR 81.4 million (93.6). Net cash flow from operating activities after investments totalled EUR 40.8 million (50.9). Net cash flow from operating activities after investments for the financial year was reduced by acquisitions, which had a total impact of approximately EUR 1.5 million. In 2024, a total of EUR 3.2 million in working capital was released (5.1 released).  Net cash flow from operating activities for the comparison period was positively impacted by significant tax refunds as well as fair value of an interest rate swap being recognised in financial items due to the termination of the interest rate swap.

At the end of the financial year, interest-bearing liabilities amounted to EUR 186.8 million (193.7). Net interest-bearing liabilities totalled EUR 153.0 million (160.9). The average interest rate on long-term loans, excluding lease liabilities, with interest rate hedging, was 3.8% (4.0%). The company had no interest rate swaps at the end of the financial year.

The EUR 100.0 million commercial paper programme was unused at the end of the financial year, as was the case in the comparison period. The account limit totalling EUR 10.0 million and the committed credit limit totalling EUR 40.0 million were not in use, as was the case in the comparison period.

Net financial expenses totalled EUR -8.6 million (-6.3). Net financial expenses for the comparison period were affected positively by the fair value of EUR 1.3 million of an interest rate swap being recognised in financial items due to the termination of the interest rate swap. The effect of exchange rate changes on net financial expenses was -0.0 million (-0.0). Net financial expenses were 1.1% (0.8) of net sales.

The equity ratio was 35.4% (36.7) and the gearing ratio was 73.2% (69.5). The Group’s total equity amounted to EUR 209.2 million (231.3). Translation differences caused by changes in the exchange rate of the Swedish krona affected equity by EUR -2.1 million. Cash and cash equivalents at the balance sheet date totalled EUR 33.9 million (32.9).

DIVIDEND DISTRIBUTION
The Annual General Meeting held on 21 March 2024 resolved that a dividend of EUR 0.49 per share, totalling EUR 18.7 million, be paid on the basis of the balance sheet that was adopted for the financial year 2023. The dividend was paid to shareholders on 3 April 2024.

CAPITAL EXPENDITURE
Gross capital expenditure for the financial year totalled EUR 37.5 million (60.3). The capital expenditure consisted primarily of machine and equipment purchases, as well as investments in information systems. Acquisitions accounted for approximately EUR 2 million (0) of the gross capital expenditure.

SUSTAINABILITY
L&T’s key sustainability indicators, carbon footprint and Total Recordable Incident Frequency developed favourably. The reduction in carbon footprint can be attributed to efforts in driver training and the increased use of renewable fuels. In terms of occupational safety, the company has extensively trained personnel on proactive safety measures and everyday safety thinking. The company will publish its Sustainability Report for 2024 in week 10.

Progress towards sustainability targets

Indicator	2024	2023	Target	Target to be achieved by
ENVIRONMENTAL RESPONSIBILITY
Carbon handprint (tCO2e) i.e. emissions prevented	-438,000	-457,000	growth faster than net sales
Carbon footprint (tCO2e) Scope 1&2	27,200	31,200	24,400	2030
SOCIAL RESPONSIBILITY
Total recordable incident frequency	19	23	15	2030
Sickness-related absences (%)	5.0	5.1	4	2030

PERSONNEL

In 2024, the average number of employees converted into full-time equivalents was 5,980 (6,743). At the end of the financial year, L&T had a total of 7,441 (8,159) full-time and part-time employees.

Number of employees at the end of the review period	2024	2023
Group	7,441	8,159
Finland	6,313	6,891
Sweden	1,128	1,268
Environmental Services	1,511	1,576
Industrial Services	657	679
Facility Services Finland	4,140	4,603
Facility Services Sweden	1,032	1,187
Group administration and other	101	114

SHARES AND SHARE CAPITAL

Traded volume and price
The volume of trading in L&T’s shares in 2024 was 8.6 million shares, which represents 22.5% (14.8) of the average number of outstanding shares. The value of trading was EUR 75.8 million (57.1). The highest share price was EUR 10.36 and the lowest 7.71 EUR The closing price was EUR 7.87. At the end of the financial year, the market capitalisation excluding the shares held by the company was EUR 300.5 million (373.9). 

Own shares
At the end of the period, the company held 609,941 of its own shares, representing 1.6% 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 was 38,188,933 at the end of the financial year. The average number of shares excluding the shares held by the company was 38,163,886.

Share-based incentive plans
In December 2022, the Board of Directors of Lassila & Tikanoja plc decided to establish two new long-term share-based incentive plans for the Group’s key employees. The aim of the new plans is to align the objectives of the company, shareholders and key employees in order to increase the value of the company in the long term, to retain the key employees at the company and to offer them competitive reward plans that are based on earning and accumulating the company’s shares as well as on appreciation of the share price. The Performance Share Plan 2023–2027 comprises three (3) three-year (3) performance periods covering the calendar years 2023–2025, 2024–2026 and 2025–2027.

During the performance period 2023–2025, the earning of rewards is based on the following performance criteria: return on capital employed (ROCE), total shareholder return (TSR) and reduction of the carbon footprint (ESG). The target group of the Performance Share Plan during the performance period 2023–2025 consists of approximately 36 key employees, including the Group’s President and CEO and the Group Executive Board.

During the performance period 2024–2026, the earning of rewards is based on the following performance criteria: return on capital employed (ROCE), total shareholder return (TSR) and reduction of the carbon footprint (ESG). The target group of the Performance Share Plan during the performance period 2024–2026 consists of approximately 38 key employees, including the Group’s President and CEO and the Group Executive Board.

During the performance period 2025–2027, the earning of rewards is based on the following performance criteria: return on capital employed (ROCE), total shareholder return (TSR), reduction of the carbon footprint (ESG) and revenue growth. The target group of the Performance Share Plan during the performance period 2025–2027 consists of approximately 50 key employees, including the Group’s President and CEO and the Group Executive Board.

The transitional share-based incentive scheme 2023–2026 consists of two (2) earnings periods of one (1) year each, corresponding to the calendar years 2023 and 2024. The earnings period is followed by a two-year retention period. The aim of the scheme is to support the transition from the old share-based incentive scheme to the new share-based incentive scheme.

The earning of rewards for the 2023 and 2024 earnings periods is based the return on capital employed (ROCE) and the reduction of the carbon footprint (ESG). The target group of the transitional share-based incentive scheme for the earnings periods 2023 and 2024 consists of approximately 10 key employees, including the Group’s President and CEO and the Group Executive Board. The rewards paid in February 2024 based on the performance period 2023 corresponded to the value of approximately 42.998 Lassila & Tikanoja plc shares, also including the portion paid in cash.

Shareholders
At the end of the financial year, the company had 24,522 (24,959) shareholders. Nominee-registered holdings accounted for 13.9% (10.2) of the total number of shares.

Flagging notifications
On 26 August 2024, Lassila & Tikanoja plc received a notification pursuant to chapter 9, section 5 of the Securities Markets Act, according to which Protector Forsikring ASA’s shareholding in Lassila & Tikanoja increased above the 5% limit on 23 August 2024.

Authorisations for the Board of Directors
The Annual General Meeting held on 21 March 2024 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 of Lassila & Tikanoja plc, which was held on 21 March 2024, adopted the financial statements and consolidated financial statements for the financial year 2023, discharged the members of the Board of Directors and the President and CEO from liability, and adopted the remuneration report and remuneration policy for the company’s governing bodies. The Annual General Meeting resolved on the use of the profit shown on the balance sheet and the payment of dividend, the composition and remuneration of the Board of Directors, the election and remuneration of the auditor, the adoption and remuneration of the sustainability auditor, and authorising the Board of Directors to decide on the repurchase of the company’s own shares and on a share issue and the issuance of special rights entitling to shares.

The Annual General Meeting resolved that a dividend of EUR 0.49 per share be paid on the basis of the balance sheet adopted for the financial year 2023. It was decided that the dividend be paid on 3 April 2024.

The Annual General Meeting confirmed the number of members of the Board of Directors as seven (7) in accordance with the proposal of the Shareholders’ Nomination Board. Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen, Anni Ronkainen and Pasi Tolppanen were re-elected, and Juuso Maijala was elected as a new member to the Board until the end of the following Annual General Meeting. Jukka Leinonen was elected as the Chairman of the Board and Sakari Lassila was elected as the Vice Chairman.

The Annual General Meeting elected PricewaterhouseCoopers Oy, Authorised Public Accountants, as the company’s auditor. PricewaterhouseCoopers Oy has announced that it will name Samuli Perälä, Authorised Public Accountant, as the principal auditor. In addition, the company’s auditor was adopted also as the company’s sustainability auditor to audit the sustainability report for the financial year 2024.
The resolutions of the Annual General Meeting were announced in more detail in a stock exchange release on 21 March 2024.

BOARD OF DIRECTORS
The members of Lassila & Tikanoja plc’s Board of Directors are Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen, Juuso Maijala, Anni Ronkainen and Pasi Tolppanen. Lassila & Tikanoja plc’s Annual General Meeting held on 21 March 2024 elected Jukka Leinonen as the Chairman of the Board and Sakari Lassila as the Vice Chairman.

In its constitutive meeting held after the Annual General Meeting, the Board of Directors elected the members of the Audit Committee and the Personnel and Sustainability Committee from amongst its members. Sakari Lassila (Chairman), Teemu Kangas-Kärki, Juuso Maijala and Anni Ronkainen were elected to the Audit Committee. Jukka Leinonen (Chairman), Laura Lares and Pasi Tolppanen were elected to the Personnel and Sustainability Committee.

The company announced the composition of Lassila & Tikanoja plc’s Nomination Board on 27 September 2024. Lassila & Tikanoja plc’s three largest shareholders, who are entitled to appoint a representative to Lassila & Tikanoja plc’s Shareholders’ Nomination Board are the Evald and Hilda Nissin Säätiö foundation, a group of shareholders (Chemec Oy, CH-Polymers Oy, Maijala Eeva, Maijala Eeva, Maijala Investment Oy, Maijala Juhani, Maijala Juuso, Maijala Miikka, Maijala Mikko, Maijala Roope and Maijala Tuula), and Nordea Nordic Small cap Fund. These shareholders have appointed Juhani Lassila, Miikka Maijala and Tanja Eronen as their representatives in Lassila & Tikanoja’s Nomination Board. The Chairman of Lassila & Tikanoja plc’s Board of Directors, Jukka Leinonen, acts as the fourth member of the Nomination Board. The Chairman of the Nomination Board is Juhani Lassila.

CHANGES IN THE GROUP EXECUTIVE BOARD
On 8 April 2024, Lassila & Tikanoja announced that Juha Saarinen, M.Sc.(Tech.) has been appointed as Chief Purchasing Officer and a member of the Group Executive Board effective from 1 August 2024. Saarinen joined L&T from Kamux plc, where he served as Chief Purchasing Officer. 

On 3 May 2024, the company announced that CFO Valtteri Palin had decided to pursue career opportunities outside L&T. On 6 May 2024, the company announced that Joni Sorsanen, M.Sc.(Econ.) had been appointed as Chief Financial Officer (CFO) and a member of the Group Executive Board of Lassila & Tikanoja. He took up his post on 10 July 2024. Sorsanen joined L&T from Consti plc, where he served as CFO.

On 16 May 2024, the company announced that Petri Salermo, Senior Vice President, Environmental Services, and Sirpa Huopalainen, General Counsel, had decided to pursue career opportunities outside L&T. In addition, Mikko Taipale, Senior Vice President, Facility Services Sweden, would no longer be a member of the Group Executive Board after 16 May, but he would continue to be employed by the company. From 16 May 2024 onwards, Antti Tervo, Senior Vice President, Industrial Services, has also been responsible for the Environmental Services division, and Antti Niitynpää, Senior Vice President, Facility Services Finland, has also been responsible for Facility Services Sweden. Hilppa Rautpalo, Senior Vice President, Human Resources, has also been responsible for legal affairs from 16 May 2024 onwards.

PARTIAL DEMERGER AND THE EFFICIENCY PROGRAMME
On 13 December 2024, the company announced, that the Board of Directors of Lassila & Tikanoja plc has decided to initiate the planning of the possible separation of its circular economy businesses Environmental and Industrial Services and facility services businesses into two independent listed companies. The plan is to separate the circular economy businesses into a newly listed company through a partial demerger of Lassila & Tikanoja plc.

According to the Board of Directors’ preliminary assessment, the separation of the circular economy and facility services businesses could increase shareholder value by enabling both businesses to pursue their own strategies and growth opportunities more effectively.

The Board of Directors of Lassila & Tikanoja estimates that planning the possible partial demerger will take approximately 12 months. The planning will start immediately. The possible partial demerger and listing of the circular economy businesses requires the approval of the Extraordinary General Meeting of Lassila & Tikanoja plc.

Lassila & Tikanoja renewed its operating model in 2024. Continuing the operating model work, the company will launch an efficiency programme aiming for improved performance at the beginning of 2025, encompassing both the circular economy and facility services businesses. The efficiency programme aims for an annual performance improvement of at least EUR 8 million by the end of 2026 compared to the 2023 level, including the impact on the annual cost level of having two separate listed companies.

As of 1 January 2025, Lassila & Tikanoja will have three reportable segments: Circular Economy Business, consisting of current Environmental Services and Industrial Services divisions, Facility Services Finland, and Facility Services Sweden. The change in reporting structure will be reflected in Lassila & Tikanoja's financial reporting starting from Q1 2025. Adjusted comparison figures based on the new segment structure will be published before the first interim report for 2025.

EVENTS AFTER THE REVIEW PERIOD
On 10 January 2025, the company announced that Lassila & Tikanoja’s Shareholders’ Nomination Board proposes to the Annual General Meeting to be held on 27 March 2025 that the Board of Directors to have eight (8) members. The Nomination Board proposes that, of the current members, Teemu Kangas-Kärki, Sakari Lassila, Jukka Leinonen, Juuso Maijala, Anni Ronkainen and Pasi Tolppanen be re-elected to the Board of Directors, and that Tuija Kalpala and Anna-Maria Tuominen-Reini be elected as new members to the Board of Directors. In addition, the Nomination Board proposes that Jukka Leinonen be elected as Chairman of the Board of Directors and Sakari Lassila as Vice Chairman. Of the current members of the Board of Directors, Laura Lares has informed the Nomination Board that she is not available for re-election for the next term of the Board of Directors. The CV’s of Tuija Kalpala and Anna-Maria Tuominen-Reini are available on Lassila & Tikanoja’s website at www.lt.fi/en/company/management-and-board-of-directors/board-of-directors. The current members of the Board of Directors are presented on the same page.                                                                                                                

According to the currently valid Articles of Association, the management of the company and the proper arrangement of its operations are the responsibility of a Board of Directors comprising a minimum of three (3) and a maximum of seven (7) members appointed by the General Meeting of Shareholders. The Nomination Board’s proposal requires an amendment to Article 4 of the Articles of Association, which will be included in full in the notice of the Annual General Meeting. Of the company’s shareholders, the Evald and Hilda Nissi Foundation, Nordea Nordic Small Cap Fund Oy and the group of shareholders consisting of Chemec Oy, CH-Polymers Oy, Maijala Eeva, Maijala Investment Oy, Maijala Juhani, Maijala Juuso, Maijala Miikka, Maijala Mikko, Maijala Roope and Maijala Tuula, who are represented on the Nomination Board and collectively represent approximately 22.1% of all shares and votes in the company, have declared that they are in favour of the proposal.

Lassila & Tikanoja received a notification from Nordea Funds Ltd on 31 January 2025, according to which its voting rights in Lassila & Tikanoja increased above 5 percent on 30 January 2025. Nordea Funds Ltd’s direct holding in Lassila & Tikanoja is 1,912,244.00 shares, which is 4.93% of Lassila & Tikanoja’s total shares and votes increased to 1,946,154.00, which is 5,02% of total voting rights.

NEAR-TERM RISKS AND UNCERTAINTIES
General economic uncertainty may affect the level of economic activity among customers, which may reduce the demand for L&T’s services. 

Changes in costs, such as the price of fuel and energy and interest rates, may have an impact on the company’s financial performance.

The Finnish Waste Act was amended in July 2021. Under the reforms to the Waste Act, municipalities take on a larger role in organising the collection of packaging materials and biowaste from housing properties. As a consequence of the reform, L&T’s direct customer agreements with housing properties on the separate collection of packaging waste and biowaste will be transferred to municipalities for competitive bidding gradually between 1 July 2022 and 1 July 2025. L&T estimates that, as a result of municipalisation, approximately EUR 30 million of the Finnish waste management market will be moved out of the scope of free competition between 2024 and 2026. L&T participates in the competitive tendering of municipal contracts and is a significant operator in municipal contracts. Nevertheless, L&T estimates that the overall impact of the change will be negative for the company.

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.

Production costs may be increased by regional challenges related to employee turnover and labour availability.

The geopolitical situation involves continued uncertainty due to Russia’s war of aggression. The indirect impacts on overall economic activity in Finland and Sweden may have a negative impact on net sales and profit.

The Group company Lassila & Tikanoja FM AB is a claimant and a defendant in legal proceedings in Sweden concerning unpaid receivables invoiced from a former customer of L&T. In June 2022, Lassila & Tikanoja FM AB took legal action in the District Court of Solna against the former customer company of L&T, demanding payment for unpaid receivables. At the end of the review period, the amount of receivables on the company’s balance sheet was approximately EUR 0.6 million. The former L&T customer company in question has rejected Lassila & Tikanoja FM AB’s claims and the payment obligation, and brought a counterclaim demanding compensation totalling approximately SEK 144 million from Lassila & Tikanoja FM AB. The dispute is still pending. Lassila & Tikanoja considers the counterclaim to be without merit and has not recognised any provisions in relation to it.
      
More detailed information on Lassila & Tikanoja’s risks and risk management is provided in the 2023 Annual Review and in the Report by the Board of Directors and the consolidated financial statements.

PROPOSAL FOR THE DISTRIBUTION OF PROFIT
According to the financial statements, Lassila & Tikanoja plc’s unrestricted equity amounts to EUR 40,376,673.92, with the profit for the period representing EUR 7,611,702.26 of this total. There were no substantial changes in the financial position 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 profits. 

The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.50 per share be paid for the financial year 2024. The dividend will be paid to shareholders entered in the company’s shareholder register maintained by Euroclear Finland Oy on the record date, 31 March 2025. The Board proposes to the Annual General Meeting that the dividend be paid on 7 April 2025.

No dividend shall be paid on shares held by the company on the record date of the dividend payment, 31 March 2025.

On the day the proposal for the distribution of profit was made, the number of shares entitling to dividend was 38,188,933, which means the total amount of the dividend would be EUR 19,094,466.50. The Group’s earnings per share amounted to EUR -0.05.

Lassila & Tikanoja’s Annual Report, which includes the Report by the Board of Directors and the financial statements for 2024, will be published in week 10 at lt.fi/en/investors/reports-presentations.

Helsinki 12 February 2025

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
Joni Sorsanen, CFO, tel. +358 50 443 3045

Lassila & Tikanoja is a service company that is putting the circular economy into practice. Together with our customers, we keep materials, manufacturing sites 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 approximately 7,400 people. Net sales in 2024 amounted to EUR 770.7 million. L&T is listed on Nasdaq Helsinki.

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

Attachment

• LT Financial statements release 2024