Annual / Quarterly Financial Statement • Feb 1, 2013
Annual / Quarterly Financial Statement
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"Our performance in the fourth quarter was in line with our expectations. Operating profit excluding nonrecurring items picked up from the comparison period, even though both fluctuations in the demand for services required by the industry and substantially greater snowfall in the early winter than in 2011 posed challenges to production efficiency. Our new organisation came into effect at the turn of the year and we are now focusing on its implementation in accordance with our strategy. We are building a consistent L&T in order to provide even better service to our customers."
Lassila & Tikanoja's net sales for the final quarter increased by 2.9% to EUR 171.8 million (EUR 167.0 million). Operating profit totalled EUR 9.7 million (operating loss EUR 7.9 million), representing 5.6% (-4.7%) of net sales. Operating profit excluding non-recurring items was EUR 10.5 million (EUR 9.6 million). Earnings per share were EUR 0.18 (earnings per share EUR -0.18).
Net sales saw year-on-year growth primarily due to the improved competitiveness of wood-based fuels. Fluctuations in the demand for process cleaning services for industry and the divestment of L&T's holding in the joint venture L&T Recoil in June cut into net sales.
In the fourth quarter, overall performance improved from the comparison period thanks to the higher profitability of Renewable Energy Sources and Swedish cleaning operations. More snow fell in the early winter than in the comparison period, which hampered production efficiency in property maintenance and Environmental Services in particular, and also increased subcontracting and production costs. Non-recurring costs totalling EUR 0.8 million were recognised in the fourth quarter from the reorganisation of operations.
An impairment loss of EUR 17.1 million for the goodwill and other assets of the Renewable Energy Sources division was recorded as a non-recurring cost in the comparison period.
Lassila & Tikanoja's full-year net sales grew by 3.4% to 674.0 EUR million (EUR 652.1 million). Operating profit was EUR 48.4 million (EUR 25.6 million), representing 7.2% (3.9%) of net sales, and operating profit excluding non-recurring items was EUR 47.4 million (EUR 44.3 million). Earnings per share were EUR 0.89 (EUR 0.44).
Net sales saw year-on-year growth primarily thanks to the higher demand for wood-based fuels, the volume growth of Environmental Services and the expansion of the damage repair network. Waste and recycling volumes remained at a good level during the entire year. Demand for process cleaning services for industry fluctuated greatly in the latter half of the year.
The overall performance improvement from the comparison period could be largely attributed to the divestment of holdings in the loss-making joint venture L&T Recoil at the end of June and the higher profitability of Renewable Energy Sources. The smaller loss posted by Swedish operations also improved performance. Fullyear profitability was eroded by the non-recurring compensation of about EUR 0.7 million paid in the second
quarter in accordance with the collective labour agreement and the increase in subcontracting and labour costs, particularly in Property Maintenance.
A non-recurring capital gain of EUR 4.2 million was recognised in the second quarter from the divestment of holdings in L&T Recoil Oy. At the same time, a non-recurring cost of EUR 2.0 million was recorded in financial expenses, consisting of interest receivable from subordinated loans granted to the joint venture. Furthermore, non-recurring costs totalling EUR 3.2 million from the rearrangement and efficiency enhancement measures taken in Environmental Services, Property Maintenance and the Swedish business were recognised during the report year.
| 10-12/ | 10-12/ | Change | 1-12/ | 1-12/ | Change | |
|---|---|---|---|---|---|---|
| 2012 | 2011 | % | 2012 | 2011 | % | |
| Net sales, EUR million | ||||||
| 171.8 | 167.0 | 2.9 | 674.0 | 652.1 | 3.4 | |
| Operating profit excluding non-recurring items, | ||||||
| EUR million* | 10.5 | 9.6 | 9.5 | 47.4 | 44.3 | 7.0 |
| Operating profit, EUR million | 9.7 | -7.9 | 48.4 | 25.6 | 89.0 | |
| Operating margin, % | 5.6 | -4.7 | 7.2 | 3.9 | ||
| Profit before tax, EUR million | 9.2 | -9.0 | 43.0 | 21.0 | 104.8 | |
| Earnings per share, EUR | 0.18 | -0.18 | 0.89 | 0.44 | 102.3 | |
| Capital repayment, EUR | 0.60** | 0.55 | ||||
| EVA, EUR million | 3.9 | -14.9 | 24.1 | -2.2 |
* Breakdown of operating profit excluding non-recurring items is presented below the division reviews.
** Proposal by the Board of Directors
The division's net sales for the final quarter decreased by 2.1 % to EUR 82.3 million (EUR 84.0 million). Operating profit amounted to EUR 7.8 million (EUR 8.3 million), and operating profit excluding non-recurring items was EUR 7.9 million (EUR 8.3 million).
Both the seasonal weak demand for process cleaning services for industry and the divestment of the holding in the joint venture L&T Recoil cut into the division's net sales. Waste and recycling volumes were on a par with the comparison period, and the prices of secondary raw materials (fibres, plastics, metals) remained good.
The division's profitability saw a year-on-year decline primarily due to the seasonal weak demand for process cleaning services for industry.
The net sales of the Environmental Services division's international operations declined from the comparison period due to the tougher competitive situation in Latvia.
The division's full-year net sales increased by 1.5% to EUR 330.7 million (EUR 325.9 million). Operating profit amounted to EUR 38.1 million (EUR 34.0 million), and operating profit excluding non-recurring items was EUR 35.0 million (EUR 34.0 million).
The healthy demand for waste management and industrial services was the key driver of net sales growth. However, industrial demand weakened during the latter half of the year. Waste volumes and the prices of secondary raw materials (fibres, plastics, metals) remained robust throughout the report year.
The division's operating profit remained on a par with the comparison period. Operating profit was boosted by higher profitability following the L&T Recoil divestment and successful production efficiency measures. However, performance was taxed by the increase seen in fuel and repair costs, particularly in the first half of the year, as well as weaker profitability in international operations.
At the end of the second quarter, L&T sold its 50 per cent holding in the joint venture L&T Recoil to the coowner, EcoStream Oy. After this arrangement, L&T owns slightly less than 20 per cent of EcoStream's shares and continues to serve as one of the suppliers of raw materials to the regeneration plant. A non-recurring capital gain of EUR 4.2 million on the arrangement was recorded for the second quarter.
The division's net sales for the final quarter totalled EUR 40.2 million (EUR 40.1 million); an increase of 0.3%. Operating profit amounted to EUR 2.0 million (EUR 0.9 million), and operating profit excluding non-recurring items was EUR 2.4 million (EUR 1.1 million).
The division's net sales remained on a par with the comparison period, even though competition made it harder to achieve the target price levels in new sales and commissioned assignments.
Operating profit saw year-on-year growth, primarily thanks to higher profitability in Swedish operations. Fixed cost management in Finnish operations was also successful.
The Cleaning and Office Support Services division's full-year net sales grew by 2.7% to EUR 161.5 million (EUR 157.3 million). Operating profit amounted to EUR 7.6 million (EUR 7.1 million), and operating profit excluding non-recurring items was EUR 9.1 million (EUR 7.5 million).
The division's net sales saw slight year-on-year growth as a result of acquisitions made in the previous spring. Demand for commissioned assignments remained good throughout the year in spite of heavy price competition.
The division's operating profit improved substantially on the comparison period thanks to good performance in commissioned assignments and the higher profitability of Swedish operations. Operating profit is burdened by a rise in labour costs, which were not fully set off by service price hikes.
A non-recurring cost of EUR 1.0 million was recorded in the second quarter for the reorganisation of the Swedish operations.
The division's net sales for the final quarter increased by 3.3% to EUR 34.6 million (EUR 33.5 million). Operating profit amounted to EUR 0.5 million (EUR 1.9 million), and operating profit excluding non-recurring items was EUR 0.7 million (EUR 1.9 million).
The division's net sales saw slight year-on-year growth, primarily because more snow fell in the latter part of the year than in 2011.
Profitability weakened significantly from the comparison period due to a rise in production and subcontracting costs. Operating profit was also burdened by the smaller-than-usual size of commissioned assignments in damage repair services.
The Property Maintenance division's full-year net sales increased by 2.5% to EUR 138.0 million (EUR 134.6 million). Operating profit amounted to EUR 5.3 million (EUR 8.2 million), and operating profit excluding nonrecurring items was EUR 5.6 million (EUR 8.2 million).
Net sales saw a year-on-year increase primarily due to the growth in the workload following the expansion of the damage repair service network.
The division's operating profit weakened from the comparison period due to tighter price competition in property maintenance and higher subcontracting costs. Profitability was also burdened by the fact that snowfall was heavier in the latter part of the year than in the comparison period.
In damage repair services, even more new co-operation agreements were signed with insurance companies in the latter half of the year. These agreements are expected to bolster L&T's market position in the future and provide a steadier workload.
Final-quarter net sales for Renewable Energy Sources (L&T Biowatti) were up by 45.4%, to EUR 18.3 million (EUR 12.6 million). Operating profit amounted to EUR 0.3 million (a loss of EUR 18.2 million), and operating profit excluding non-recurring items was EUR 0.3 million (a loss of EUR 1.1 million).
Net sales saw substantial year-on-year growth due to better competitiveness of wood-based fuels. The division's profitability also improved significantly on the comparison period thanks to volume growth, lower depreciation and the management of fixed costs.
The full-year net sales of Renewable Energy Sources (L&T Biowatti) were up by 23.2% to EUR 55.9 million (EUR 45.4 million). Operating loss amounted to EUR 0.1 million (a loss of EUR 21.3 million), and operating profit excluding non-recurring items was EUR 0.1 million (a loss of EUR 3.8 million).
Net sales saw substantial year-on-year growth, as new sales rose thanks to the better demand for wood-based fuels in comparison with fossil fuels.
Operating profit also improved substantially due to volume growth and the more efficient cost structure, although the rainy summer and early autumn weakened the energy content of forest processed chips.
| 10-12/ | 10-12/ | 1-12/ | 1-12/ | |
|---|---|---|---|---|
| EUR million | 2012 | 2011 | 2012 | 2011 |
| Operating profit | 9.7 | -7.9 | 48.4 | 25.6 |
| Non-recurring items: | ||||
| Gain on sale of holding in L&T Recoil Oy | -4.2 | |||
| Impairment of hazardous waste treatment facilities | 0.2 | 0.5 | ||
| Impairment of L&T Biowatti | 17.1 | 17.1 | ||
| Discontinuation of wood pellet production of L&T Biowatti | 0.1 | |||
| Gain on sale of eco product business | -0.2 | -0.2 | ||
| Restructuring costs | 0.8 | 0.4 | 2.9 | 1.5 |
| Operating profit excluding non-recurring items | 10.5 | 9.6 | 47.4 | 44.3 |
Cash flows from operating activities amounted to EUR 80.5 million (EUR 74.5 million). EUR 6.4 million was released from the working capital (EUR 3.2 released).
At the end of the year, interest-bearing liabilities amounted to EUR 96.9 million (EUR 135.2 million). L&T Recoil accounted for EUR 18.1 million of the interest-bearing liabilities in the reference period. Guarantees of EUR 16.4 million given by Lassila & Tikanoja to other providers of finance for these liabilities are still in force. In addition L&T had receivables from EcoStream Group of EUR 4.9 million, of which EUR 4.2 million were past due on 31 December 2012. L&T's receivables and liabilities related to EcoStream holding were in total EUR 21.3 million.
Net interest-bearing liabilities amounted to EUR 82.3 million, showing a decrease of EUR 20.0 million on the final quarter and EUR 44.9 million from the beginning of the year.
Net finance costs decreased significantly in the final quarter and amounted to EUR 0.5 million (EUR 1.1 million). In 2012 net finance costs amounted to EUR 5.4 million (EUR 4.6 million). This increase could be attributed to the non-recurring cost recognition of EUR 2.0 million on interest receivable from subordinated loans given to L&T Recoil Oy in the second quarter. Due to the cost recognition, net finance costs were 0.8% (0.7%) of net sales.
The average interest rate on long-term loans (with interest-rate hedging) was 2.2% (3.1%). The interest hedging of loans remained unchanged at 68% (68%). Long-term loans totalling EUR 26.9 million will mature during 2013.
The equity ratio was 49.4% (44.5%) and the gearing rate 35.3 (58.3). Liquid assets at the end of the period amounted to EUR 14.6 million (EUR 8.1 million).
Of the EUR 100 million commercial paper programme, EUR 12.0 million (EUR 17 million) was in use at the end of the period. A committed limit totalling EUR 30.0 million, was not in use, as was the case in the comparison period.
The Annual General Meeting held on 15 March 2012 resolved that the profit for 2011 be placed in retained earnings and that no dividend be paid. A capital repayment of EUR 0.55 per share would be paid for the financial year 2011. The capital repayment, totalling EUR 21.3 million, was paid to the shareholders on 27 March 2012.
In 2012, gross capital expenditure amounted to EUR 49.4 million (EUR 70.6 million), of which EUR 9.4 million were related to acquisitions, including the slightly under 20 per cent holding in EcoStream Oy that was part of the L&T Recoil arrangement.
In the first quarter, the Property Maintenance division acquired the property maintenance businesses of IK Kiinteistöpalvelu Oy and the business of Jyvässeudun Talonmiehet Oy and Kiinteistöhuolto Markku Hyttinen Oy.
In the second quarter, the Environmental Services division acquired the waste management business of Sita Finland Oy in Oulu.
In the fourth quarter, the Environmental Services acquired business operations of the Munaistenmetsä material recovery area in Uusikaupunki.
In 2012 the average number of employees converted into full-time equivalents was 8,399 (8,513). The total number of full-time and part-time employees at the end of the period was 8,962 (9,357). Of them 7,035 (7,381) people worked in Finland and 1,927 (1,976) people in other countries.
According to the financial statements, Lassila & Tikanoja plc's unrestricted equity amount to EUR 114,473,686.13 with the operating profit for the period representing EUR 24,083,220.00. There were no substantial changes in the financial standing of the company after the end of the period, and the solvency test referred to in Chapter 13, section 2 of the Companies Act does not affect the amount of distributable assets.
The Board of Directors proposes to the Annual General Meeting that the profit for 2012 be placed in retained earnings and that no dividend be paid.
The Board of Directors proposes to the Annual General Meeting that, based on the balance sheet to be adopted for 2012, a capital repayment of EUR 0.60 per share be made. Capital is repaid from the reserve for invested unrestricted equity. Capital is repaid to shareholders included in the company shareholder register maintained by Euroclear Finland Oy on the record date, 15 March 2013. The Board proposes to the Annual General Meeting that the capital repayment be made on 22 March 2013.
No capital repayment shall be paid on shares held by the company on the dividend payment record date of 15 March 2013. On the day the proposal for the distribution of assets was made, the number of shares entitling to capital repayment was 38,692,064, which means the total amount of the capital repayment would be EUR 23,215,238.40.
The volume of trading excluding the shares held by the company in Lassila & Tikanoja plc shares on NASDAQ OMX Helsinki in 2012 was 9,973,989 which is 25.8% (23.0%) of the average number of outstanding shares. The value of trading was EUR 105.1 million (EUR 108.2 million). The trading price varied between EUR 8.59 and EUR 12.15. The closing price was EUR 11.64. The market capitalisation excluding the shares held by the company was EUR 450.4 million (EUR 444.5 million) at the end of the period.
At the beginning of the period, the company held 113,305 of its own shares and at the end 106,810 of its own shares, representing 0.3% of all shares and votes.
The company's registered share capital amounts to EUR 19,399,437, and the number of outstanding shares to 38,692,064 shares. The average number of shares excluding the shares held by the company totalled 38,688,373.
Lassila & Tikanoja plc's Board of Directors decided on 14 December 2011 on a share-based incentive programme. Rewards was based on the EVA result of Lassila & Tikanoja group without L&T Recoil. Based on the programme a maximum of 65,520 shares of the company could be granted. The programme covered 22 persons. Under the programme, 13,983 shares will be granted for 2012.
Lassila & Tikanoja plc's Board of Directors decided on 17 December 2012 on a new share-based incentive programme. The programme's earnings period began on 1 January 2013 and ends on 31 December 2013. Potential rewards to be paid for the year 2013 will be based on the EVA result of Lassila & Tikanoja group. Potential rewards will be paid partly as shares and partly in cash. A maximum total of 53,300 Lassila & Tikanoja plc shares may be paid out on the basis of the programme. The programme covers 10 persons.
At the end of the financial period, the company had 9,382 (9,365) shareholders. Nominee-registered holdings accounted for 17.2% (13.0%) of the total number of shares.
The Annual General Meeting held on 15 March 2012 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.
The Board of Directors is authorised to purchase a maximum of 500,000 company shares, which is 1.3% of the total number of shares. The share issue authorisation will be effective for 18 months.
The Board of Directors is authorised to transfer a maximum of 500,000 company shares, which is 1.3% of the total number of shares. The share issue authorisation will be effective until 31 March 2014.
The Annual General Meeting of Lassila & Tikanoja plc, which was held on 15 March 2012, adopted the financial statements for the financial year 2011 and released the members of the Board of Directors and the Presidents and CEOs from liability.
The AGM resolved that the profit for 2011 be placed in retained earnings and that no dividend be paid. A capital repayment of EUR 0.55 per share, as proposed by the Board of Directors, would be paid for the financial year 2011 on the basis of the balance sheet adopted. The capital repayment, totalling EUR 21.3 million, payment date was resolved to be on 27 March 2012.
The Annual General Meeting confirmed the number of the members of the Board of Directors five. The following Board members were re-elected to the Board until the end of the following AGM: Heikki Bergholm, Eero Hautaniemi, Hille Korhonen, Sakari Lassila and Miikka Maijala.
KPMG Oy Ab, Authorised Public Accountants, was elected auditor. KPMG Oy Ab has announced that it will name 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 15 March 2012.
The members of the Board of Directors are Heikki Bergholm, Eero Hautaniemi, Hille Korhonen, Sakari Lassila and Miikka Maijala. In its constitutive meeting the Board elected Heikki Bergholm as Chairman of the Board and Eero Hautaniemi as Vice Chairman.
From among its members, the Board elected Eero Hautaniemi as Chairman and Sakari Lassila and Miikka Maijala as members of the audit committee. Heikki Bergholm was elected as Chairman of the remuneration committee and Hille Korhonen as member of the committee.
In a release published on 13 January 2012 the company announced that Antti Tervo has been appointed Chief Procurement Officer and Group Executive of Lassila & Tikanoja plc as of 14 February 2012.
In a release on 9 February 2012 the company announced that Lassila & Tikanoja plc has redeemed the remaining 30 percent of share capital of L&T Biowatti Oy as agreed in an agreement signed 18 December 2006.
In a release published on 26 April 2012 the company announced that it is launching a new operational enhancement programme to improve its profitability and to adapt operations to the current market environment.
In a release published on 2 May 2012 the company announced that Jorma Mikkonen, Vice President, Environmental Services, leaves the Group Executive Board of Lassila & Tikanoja plc.
In a release published on 8 May 2012 the company announced that Lassila & Tikanoja plc and EcoStream Oy are negotiating on a business transaction in which Lassila & Tikanoja will sell its 50 percent holding in the joint venture L&T Recoil Oy to EcoStream Oy, a co-owner.
In a release published on 25 June 2012 the company announced that it has sold its 50 percent holding in joint venture L&T Recoil Oy to the co-owner, EcoStream Oy.
In a release published on 7 September 2012 the company announced its new strategy. The core businesses of the new clarified portfolio are environmental, industrial and facility services. From 1 January 2013, L&T's reporting segments are Environmental Services, Industrial Services, Facility Services, and Renewable Energy Sources. The new financial targets are: organic growth over 5%, return on investment (ROI) 20%, operating profit 9% and gearing 30–80%.
In a release published on 7 September 2012 the company announced changes in company's management. Petri Salermo (QBA, born 1970) has been appointed Vice President, Environmental Services effective from 1 January 2013, Ville Rantala (M.Sc. Econ., born 1971) has been appointed Vice President, Industrial Services effective from 1 January 2013 and Petri Myllyniemi (M.Sc. Econ.; B.Sc. Eng., born 1964) has been appointed Vice President, Facility Services, effective from 7 January 2013. For the time being, Juha Simola and Henri Turunen will continue to act as the Vice Presidents of the current Property Maintenance and Cleaning and Office Support Services divisions and as members of the Group Executive Board.
In a release published on 14 September 2012 the company announced it is hosting a Capital Markets Day. The aim of the day was to present L&T's new strategy.
In a release published on 24 October 2012 the company announced that Timo Leinonen has been appointed Chief Financial Officer and Group Executive of Lassila & Tikanoja plc as of 23 January 2013.
In a release published on 9 November 2012 the company announced that Juha Simola, Vice President, Property Maintenance and Group Executive will leave his position at Lassila & Tikanoja plc on 9 November 2012.
In a release published on 14 November 2012 the company announced that Henri Turunen, Vice President, Cleaning and Office Support Services and Group Executive will leave Lassila & Tikanoja plc on 20 November 2012.
Economic uncertainty may cause major changes in the Environmental Services division's secondary raw material markets and in industrial customer relationships.
Uncertainties associated with government subsidies for renewable fuels and with their continuity could affect demand for the Renewable Energy Sources division's services.
More detailed information on L&T's risks and risk management is available in the Annual Report for 2011, in the report of the Board of Directors, and in the consolidated financial statements.
Full-year net sales in 2013 are expected to remain at the 2012 level. Operating profit, excluding non-recurring items, is expected to remain at the 2012 level or improve slightly.
| EUR 1000 | 10-12/2012 | 10-12/2011 | 1-12/2012 | 1-12/2011 |
|---|---|---|---|---|
| Net sales | 171 791 | 167 001 | 673 985 | 652 130 |
| Cost of sales | -155 876 | -151 706 | -602 581 | -584 152 |
| Gross profit | 15 915 | 15 295 | 71 404 | 67 978 |
| Other operating income | 1 535 | 1 026 | 7 708 | 3 038 |
| Selling and marketing costs | -4 329 | -3 926 | -16 745 | -15 217 |
| Administrative expenses | -2 927 | -2 818 | -12 090 | -11 408 |
| Other operating expenses | -509 | -422 | -1 584 | -1 733 |
| Impairment, property, plant and equipment | -5 677 | -302 | -5 677 | |
| Impairment, goodwill and other intangible | ||||
| assets | -11 384 | -11 384 | ||
| Operating profit | 9 685 | -7 906 | 48 391 | 25 597 |
| Finance income | 102 | 329 | 860 | 1 041 |
| Finance costs | -614 | -1 428 | -6 256 | -5 644 |
| Profit before tax | 9 173 | -9 005 | 42 995 | 20 994 |
| Income tax expense | -2 117 | 2 140 | -8 543 | -4 030 |
| Profit for the period | 7 056 | -6 865 | 34 452 | 16 964 |
| Attributable to: | ||||
| Equity holders of the company | 7 055 | -6 865 | 34 459 | 16 960 |
| Non-controlling interest | 1 | 0 | -7 | 4 |
| Earnings per share for profit attributable to the equity holders of the company: | ||||
| Basic earnings per share, EUR | 0.18 | -0.18 | 0.89 | 0.44 |
| Diluted earnings per share, EUR | 0.18 | -0.18 | 0.89 | 0.44 |
| EUR 1000 | 10-12/2012 | 10-12/2011 | 1-12/2012 | 1-12/2011 |
|---|---|---|---|---|
| Profit for the period | 7 056 | -6 865 | 34 452 | 16 964 |
| Other comprehensive income, after tax | ||||
| Hedging reserve, change in fair value | -701 | 928 | 1 098 | -487 |
| Revaluation reserve | ||||
| Gains in the period | 1 | -13 | 2 | -4 |
| Current available-for-sale financial assets | 1 | -13 | 2 | -4 |
| Currency translation differences | -141 | 645 | 627 | 111 |
| Currency translation differences, non-controlling | ||||
| interest | -1 | 7 | 10 | -11 |
| Other comprehensive income, after tax | -841 | 1 567 | 1 737 | -391 |
| Total comprehensive income, after tax | 6 215 | -5 298 | 36 189 | 16 573 |
| Attributable to: | ||||
| Equity holders of the company | 6 216 | -5 305 | 36 186 | 16 580 |
| Non-controlling interest | 0 | 7 | 3 | -7 |
| 31.12.2012 | 31.12.2011 | ||||||
|---|---|---|---|---|---|---|---|
| EUR 1 000 | Before tax |
Tax expense/ benefit |
After tax |
Before tax |
Tax expense/ benefit |
After tax |
|
| Hedging reserve, change in fair value |
1 454 | -356 | 1 098 | -623 | 136 | -487 | |
| Revaluation reserve Current available-for-sale |
|||||||
| financial assets Currency translation differences |
2 694 |
-67 | 2 627 |
-5 169 |
1 -58 |
-4 111 |
|
| Currency translation differences non-controlling interest |
10 | 10 | -11 | -11 | |||
| Components of other comprehensive income |
2 160 | -423 | 1 737 | -470 | 79 | -391 |
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | ||
| Goodwill | 120 189 | 119 509 |
| Customer contracts arising from acquisitions | 7 880 | 10 591 |
| Agreements on prohibition of competition | 1 810 | 3 162 |
| Other intangible assets arising from business acquisitions | 57 | 78 |
| Other intangible assets | 8 494 | 11 149 |
| 138 430 | 144 489 | |
| Property, plant and equipment | ||
| Land | 3 844 | 4 589 |
| Buildings and constructions | 52 393 | 78 217 |
| Machinery and equipment | 121 179 | 120 015 |
| Other | 86 | 85 |
| Prepayments and construction in progress | 2 657 | 4 616 |
| 180 159 | 207 522 | |
| Other non-current assets | ||
| Available-for-sale investments | 7 284 | 605 |
| Finance lease receivables | 3 608 | 3 578 |
| Deferred tax assets | 3 845 | 6 323 |
| Other receivables | 2 755 | 3 315 |
| 17 492 | 13 821 | |
| Total non-current assets | 336 081 | 365 832 |
| Current assets | ||
| Inventories | 24 884 | 27 953 |
| Trade and other receivables | 103 925 | 91 629 |
| Derivative receivables | 1 290 | 419 |
| Prepayments | 491 | 438 |
| Current available-for-sale financial assets | 2 499 | 2 299 |
| Cash and cash equivalents | 12 083 | 5 770 |
| Total current assets | 145 172 | 128 508 |
| TOTAL ASSETS | 481 253 | 494 340 |
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Equity attributable to equity holders of the company | ||
| Share capital | 19 399 | 19 399 |
| Share premium reserve | ||
| Other reserves | -743 | -2 469 |
| Unrestricted equity reserve | 29 381 | 50 658 |
| Retained earnings | 150 233 | 133 125 |
| Profit for the period | 34 459 | 16 960 |
| 232 729 | 217 673 | |
| Non-controlling interest | 274 | 271 |
| Total equity | 233 003 | 217 944 |
| Liabilities | ||
| Non-current liabilities | ||
| Deferred tax liabilities | 31 313 | 29 389 |
| Retirement benefit obligations | 672 | 628 |
| Provisions | 4 304 | 2 500 |
| Borrowings | 57 961 | 92 914 |
| Other liabilities | 942 | 960 |
| 95 192 | 126 391 | |
| Current liabilities | ||
| Borrowings | 38 915 | 42 319 |
| Trade and other payables | 112 880 | 105 751 |
| Derivative liabilities | 1 129 | 1 850 |
| Tax liabilities | 14 | 85 |
| Provisions | 120 | |
| 153 058 | 150 005 | |
| Total liabilities | 248 250 | 276 396 |
| TOTAL EQUITY AND LIABILITIES | 481 253 | 494 340 |
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| Cash flows from operating activities | ||
| Profit for the period | 34 452 | 16 964 |
| Adjustments | ||
| Income tax expense | 8 543 | 4 030 |
| Depreciation, amortisation and impairment | 43 642 | 61 548 |
| Finance income and costs | 5 395 | 4 602 |
| Gain on sale of shares | -4 181 | |
| Other | 1 603 | -858 |
| Net cash generated from operating activities before change in working capital | 89 454 | 86 286 |
| Change in working capital | ||
| Change in trade and other receivables | -10 574 | -7 843 |
| Change in inventories | -121 | 9 |
| Change in trade and other payables | 17 096 | 11 055 |
| Change in working capital | 6 401 | 3 221 |
| Interest paid | -5 070 | -6 165 |
| Interest received | 830 | 1 020 |
| Income tax paid | -11 127 | -9 896 |
| Net cash from operating activities | 80 488 | 74 466 |
| Cash flows from investing activities | ||
| Acquisition of subsidiaries and businesses, net of cash acquired | -2 498 | -24 430 |
| Proceeds from sale of subsidiaries and businesses, net of sold cash | 7 820 | |
| Purchases of property, plant and equipment and intangible assets | -40 659 | -45 503 |
| Proceeds from sale of property, plant and equipment and intangible assets | 2 826 | 1 850 |
| Purchases of available-for-sale investments | -20 | |
| Change in other non-current receivables | 560 | 98 |
| Dividends received | 1 | |
| Net cash used in investing activities | -31 950 | -68 005 |
| Cash flows from financing activities | ||
| Change in short-term borrowings | -5 781 | 8 712 |
| Proceeds from long-term borrowings | 10 200 | 20 000 |
| Repayments of long-term borrowings | -25 254 | -19 761 |
| Capital repayments paid | -21 254 | -21 284 |
| Repurchase of own shares | -517 | |
| Net cash generated from financing activities | -42 089 | -12 850 |
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| Net change in liquid assets | 6 449 | -6 389 |
| Liquid assets at beginning of period | 8 069 | 14 548 |
| Effect of changes in foreign exchange rates | 64 | -90 |
| Liquid assets at end of period | 14 582 | 8 069 |
| Liquid assets |
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| Cash and cash equivalents | 12 083 | 5 770 |
| Available-for-sale financial assets | 2 499 | 2 299 |
| Total | 14 582 | 8 069 |
| Cur | Equity attribut |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| rency | able | |||||||||
| Share | transla | Invested | Re | to equity | ||||||
| pre | tion | Reva | unrestric | tained | holders | Non | ||||
| Share | mium | differ | luation | Hedging | ted equity | ear | of the | controlling | Total | |
| EUR 1000 | capital | reserve | ences | reserve | reserve | reserve | nings | company | interest | equity |
| Equity at 1.1.2012 Expense recogni |
19 399 | 0 | -1 412 | 0 | -1 057 | 50 658 | 150 085 | 217 673 | 271 | 217 944 |
| tion of share based benefits |
125 | 125 | 125 | |||||||
| Repurchase of own shares |
||||||||||
| Capital repayment Total comprehen |
-21 277 | 22 | -21 255 | -21 255 | ||||||
| sive income | 627 | 2 | 1 098 | 34 459 | 36 186 | 3 | 36 189 | |||
| Equity at 31.12.2012 |
19 399 | 0 | -785 | 2 | 41 | 29 381 | 184 691 | 232 729 | 274 | 233 003 |
| Equity at | ||||||||||
| 1.1.2011 | 19 399 | 50 673 | -1 523 | -48 | -570 | 0 | 154 785 | 222 716 | 278 | 222 994 |
| Expense recogni | ||||||||||
| tion of share based benefits |
183 | 183 | 183 | |||||||
| Repurchase of own shares |
-553 | -553 | -553 | |||||||
| Dividends paid | -21 290 | -21 290 | -21 290 | |||||||
| Transfer from revaluation re |
||||||||||
| serve | 52 | -15 | 37 | 37 | ||||||
| Transfer from | ||||||||||
| share premium reserve |
-50 673 | 50 673 | ||||||||
| Total | ||||||||||
| comprehensive | ||||||||||
| income Equity at |
111 | -4 | -487 | 16 960 | 16 580 | -7 | 16 573 |
| 10-12/ | 10-12/ | 1-12/ | 1-12/ | |
|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |
| Earnings per share, EUR | 0.18 | -0.18 | 0.89 | 0.44 |
| Earnings per share, diluted, EUR | 0.18 | -0.18 | 0.89 | 0.44 |
| Cash flows from operating activities per share, EUR | 0.79 | 0.75 | 2.08 | 1.92 |
| EVA, EUR million | 3.9 | -14.9 | 24.1 | -2.2 |
| Capital expenditure, EUR 1000 | 13 120 | 14 893 | 49 385 | 70 590 |
| Depreciation, amortisation and impairment, EUR 1000 | 10 762 | 28 394 | 43 642 | 61 548 |
| Equity per share, EUR | 6.01 | 5.63 | ||
| Capital repayment / share, EUR | 0.60* | 0.55 | ||
| Capital repayment / earnings, % | 67.36* | 125.00 | ||
| Capital repayment yield, % | 5.2* | 4.8 | ||
| P/E ratio | 13.1* | 26.2 | ||
| Return on equity, ROE, % | 15.3 | 7.7 | ||
| Return on invested capital, ROI, % | 14.4 | 7.6 | ||
| Equity ratio, % | 49.4 | 44.5 | ||
| Gearing, % | 35.3 | 58.3 | ||
| Net interest-bearing liabilities, EUR 1000 | 82 294 | 127 165 | ||
| Average number of employees in full-time equivalents | 8 399 | 8 513 | ||
| Total number of full-time and part-time employees at end of | ||||
| period | 8 962 | 9 357 | ||
| Number of outstanding shares adjusted for issues, 1000 shares | ||||
| average during the period | 38 688 | 38 722 | ||
| at end of period | 38 692 | 38 686 | ||
| average during the period, diluted | 38 700 | 38 762 | ||
| * Proposal by the Board of Directors |
This financial statements release is in compliance with IAS 34 standard. The same accounting policies as in the annual financial statements for the year 2011 have been applied. The following new, revised or amended IFRS standards and IFRIC interpretations that have become effective in 2012 have not had an impact on the financial statements:
The preparation of financial statements in accordance with IFRS require the management to make such estimates and assumptions that affect the carrying amounts at the balance sheet date for the assets and liabilities and the amounts of revenues and expenses. Judgements are also made in applying the accounting policies. Actual results may differ from the estimates and assumptions.
The financial statements release has not been audited.
| 10-12/2012 Inter |
10-12/2011 Inter |
Total net sales, | |||||
|---|---|---|---|---|---|---|---|
| EUR 1000 | External | division | Total | External | division | Total | change % |
| Environmental | |||||||
| Services | 81 001 | 1 253 | 82 254 | 82 960 | 1 054 | 84 014 | -2,1 |
| Cleaning and Office | |||||||
| Support Services | 39 637 | 586 | 40 223 | 39 728 | 373 | 40 101 | 0,3 |
| Property | |||||||
| Maintenance | 33 890 | 676 | 34 566 | 32 901 | 550 | 33 451 | 3,3 |
| Renewable Energy | |||||||
| Sources | 17 263 | 1 024 | 18 287 | 11 412 | 1 166 | 12 578 | 45,4 |
| Eliminations | 0 | -3 539 | -3 539 | -3 143 | -3 143 | ||
| L&T total | 171 791 | 0 | 171 791 | 167 001 | 0 | 167 001 | 2,9 |
| 1-12/2012 Inter |
1-12/2011 Inter |
Total net sales, | |||||
|---|---|---|---|---|---|---|---|
| EUR 1000 | External | division | Total | External | division | Total | change % |
| Environmental | |||||||
| Services | 326 654 | 4 021 | 330 675 | 322 264 | 3 620 | 325 884 | 1,5 |
| Cleaning and Office | |||||||
| Support Services | 159 470 | 2 072 | 161 542 | 155 817 | 1 454 | 157 271 | 2,7 |
| Property | |||||||
| Maintenance | 135 981 | 1 970 | 137 951 | 132 399 | 2 192 | 134 591 | 2,5 |
| Renewable Energy | |||||||
| Sources | 51 880 | 4 067 | 55 947 | 41 650 | 3 752 | 45 402 | 23,2 |
| Eliminations | -12 130 | -12 130 | -11 018 | -11 018 | |||
| L&T total | 673 985 | 0 | 673 985 | 652 130 | 0 | 652 130 | 3,4 |
| 10-12/ | 10-12/ | 1-12/ | 1-12/ | |||||
|---|---|---|---|---|---|---|---|---|
| EUR 1000 | 2012 | % | 2011 | % | 2012 | % | 2011 | % |
| Environmental | ||||||||
| Services | 7 753 | 9,4 | 8 305 | 9,9 | 38 143 | 11,5 | 33 970 | 10,4 |
| Cleaning and Office | ||||||||
| Support Services | 2 017 | 5,0 | 937 | 2,3 | 7 641 | 4,7 | 7 131 | 4,5 |
| Property Maintenance | 499 | 1,4 | 1 928 | 5,8 | 5 339 | 3,9 | 8 181 | 6,1 |
| Renewable Energy | ||||||||
| Sources | 269 | 1,5 | -18 189 | -144,6 | -61 | -0,1 | -21 250 | -46,8 |
| Group admin. and | ||||||||
| other | -853 | -887 | -2 671 | -2 435 | ||||
| L&T total | 9 685 | 5,6 | -7 906 | -4,7 | 48 391 | 7,2 | 25 597 | 3,9 |
| Finance costs, net | -512 | -1 099 | -5 396 | -4 603 | ||||
| Profit before tax | 9 173 | -9 005 | 42 995 | 20 994 |
| EUR 1000 | 12/2012 | 12/2011 | ||
|---|---|---|---|---|
| Assets | ||||
| Environmental Services | 310 030 | 346 224 | ||
| Cleaning and Office Support Services | 56 056 | 54 302 | ||
| Property Maintenance | 49 662 | 45 048 | ||
| Renewable Energy Sources | 30 179 | 27 346 | ||
| Group admin. and other | 9 853 | 2 528 | ||
| Unallocated assets | 25 473 | 18 892 | ||
| L&T total | 481 253 | 494 340 | ||
| Liabilities | ||||
| Environmental Services | 61 068 | 57 367 | ||
| Cleaning and Office Support Services | 30 289 | 29 804 | ||
| Property Maintenance | 19 784 | 15 889 | ||
| Renewable Energy Sources | 6 094 | 3 932 | ||
| Group admin. and other | 1 378 | 1 343 | ||
| Unallocated liabilities | 129 637 | 168 061 | ||
| L&T total | 248 250 | 276 396 | ||
| EUR 1000 | ||||
| 10-12/2012 | 10-12/2011 | 1-12/2012 | 1-12/2011 | |
| Capital expenditure | ||||
| Environmental Services | 9 977 | 10 098 | 27 421 | 43 362 |
| Cleaning and Office Support Services | 1 031 | 629 | 4 917 | 14 721 |
| Property Maintenance | 1 999 | 4 007 | 9 810 | 11 776 |
| Renewable Energy Sources | 113 | 45 | 486 | 454 |
| Group admin. and other L&T total |
0 13 120 |
114 14 893 |
6 751 49 385 |
277 70 590 |
| Depreciation and amortisation | ||||
| Environmental Services | 7 815 | 7 865 | 31 774 | 30 760 |
| Cleaning and Office Support Services | 1 225 | 1 354 | 5 001 | 4 928 |
| Property Maintenance | 1 648 | 1 355 | 6 275 | 4 873 |
| Renewable Energy Sources | 70 | 758 | 281 | 3 919 |
| Group admin. and other | 3 | 1 | 9 | 7 |
| L&T total | 10 761 | 11 333 | 43 340 | 44 487 |
| Impairment Renewable Energy Sources |
0 | 17 061 | 302 | 17 061 |
| EUR 1000 | 10-12/ 2012 |
7-9/ 2012 |
4-6/ 2012 |
1-3/ 2012 |
10-12/ 2011 |
7-9/ 2011 |
4-6/ 2011 |
1-3/ 2011 |
|---|---|---|---|---|---|---|---|---|
| Net sales | ||||||||
| Environmental Services | 82 254 | 83 304 | 88 126 | 76 991 | 84 014 | 85 906 | 83 535 | 72 429 |
| Cleaning and Office | ||||||||
| Support Services | 40 223 | 41 340 | 40 658 | 39 321 | 40 101 | 41 530 | 40 784 | 34 856 |
| Property Maintenance | 34 566 | 31 368 | 31 718 | 40 299 | 33 451 | 31 322 | 30 879 | 38 939 |
| Renewable Energy | ||||||||
| Sources | 18 287 | 7 977 | 12 099 | 17 584 | 12 578 | 7 213 | 9 600 | 16 011 |
| Inter-division net sales | -3 539 | -2 773 | -2 909 | -2 909 | -3 143 | -2 502 | -2 612 | -2 761 |
| L&T total | 171 791 | 161 216 | 169 692 | 171 286 | 167 001 | 163 469 | 162 186 | 159 474 |
| Operating profit | ||||||||
| Environmental Services | 7 753 | 12 808 | 14 567 | 3 015 | 8 305 | 12 308 | 9 182 | 4 175 |
| Cleaning and Office | ||||||||
| Support Services | 2 017 | 4 544 | 235 | 845 | 937 | 3 718 | 1 001 | 1 475 |
| Property Maintenance | 499 | 3 299 | 790 | 751 | 1 928 | 3 582 | 769 | 1 902 |
| Renewable Energy | ||||||||
| Sources | 269 | -384 | -733 | 787 | -18 189 | -1 085 | -1 325 | -651 |
| Group admin. and other | -853 | -638 | -715 | -465 | -887 | -344 | -767 | -437 |
| L&T total | 9 685 | 19 629 | 14 144 | 4 933 | -7 906 | 18 179 | 8 860 | 6 464 |
| Operating margin | ||||||||
| Environmental Services | 9.4 | 15.4 | 16.5 | 3.9 | 9.9 | 14.3 | 11.0 | 5.8 |
| Cleaning and Office | ||||||||
| Support Services | 5.0 | 11.0 | 0.6 | 2.1 | 2.3 | 9.0 | 2.5 | 4.2 |
| Property Maintenance | 1.4 | 10.5 | 2.5 | 1.9 | 5.8 | 11.4 | 2.5 | 4.9 |
| Renewable Energy | ||||||||
| Sources | 1.5 | -4.8 | -6.1 | 4.5 | -144.6 | -15.0 | -13.8 | -4.1 |
| L&T total | 5.6 | 12.2 | 8.3 | 2.9 | -4.7 | 11.1 | 5.5 | 4.1 |
| Finance costs, net | -512 | -568 | -3 356 | -960 | -1 099 | -1 277 | -1 163 | -1 064 |
| Profit before tax | 9 173 | 19 061 | 10 788 | 3 973 | -9 005 | 16 902 | 7 697 | 5 400 |
In business combinations, all property, plant and equipment acquired is measured at fair value on the basis of the market prices of similar assets, taking into account the age of the assets, wear and tear and similar factors. Tangible assets will be depreciated over their useful life according to the management's estimate, taking into account the depreciation principles observed within the Group.
Intangible assets arising from business combinations are recognised separately from goodwill at fair value at the time of acquisition if they are identifiable. In connection with acquired business operations, the Group mostly has acquired agreements on prohibition of competition and customer relationships. The fair value of customer agreements and customer relationships associated with them has been determined on the basis of estimated duration of customer relationships and discounted net cash flows arising from current customer relationships. The value of agreements on prohibition of competition is calculated in a similar manner through cash flows over the duration of the agreement. Other intangible assets will be amortised over their useful life according to agreement or the management's estimate.
In addition to the skills of the personnel of the acquired businesses, goodwill arising from business combinations comprises other intangible items. These unidentified items include the potential for gaining new customers in the acquired businesses and the opportunities for developing new products and services, as well as the regionally strong position of an acquired business. All business combinations also create synergy benefits that consist primarily of savings in fixed production costs.
Changes in goodwill arising from acquisitions or acquisition costs may arise on the basis of terms and conditions related to the acquisition price in the deeds of sale. In many acquisitions a small portion of the acquisition price is contingent on future events (less than 12 months). These conditional acquisition prices are recorded at fair value at the time of acquisition, and any changes will be recorded through profit or loss in the income statement for the period. Profit for the period includes changes allocated to acquisition prices amounting to EUR 150 thousand. Changes in the acquisition prices made in 2009 and for the Biowatti acquisition in 2007 will be recorded in goodwill in line with the old IFRS 3.
The consolidated net sales for the year 2012 would have been EUR 674.1 million and the consolidated profit for the period EUR 34.5 million if all the acquisitions had occurred on 1 January 2012. The realised net sales of the acquired businesses have been added to the consolidated net sales, and their realised profits and losses have been added to the consolidated profit in accordance with interim accounts at the time of acquisition. Profit for the period is stated less the current amortisation on intangible assets and depreciation charges on property, plant and equipment. Synergy benefits have not been accounted for.
The aggregate net sales of the acquired businesses totalled EUR 1.9 million in 2012.
| Consideration | |
|---|---|
| EUR 1000 | Fair values used in consolidation |
| Cash | 2 690 |
| Equity instruments | |
| Contingent consideration | |
| Total consideration transferred | 2 690 |
| Indemnification asset | |
| Fair value of equity interest held before the acquisition | |
| Total consideration | 2 690 |
| Acquisition-related costs (included in the administrative | |
| expenses in the consolidated financial statements) | 6 |
| Recognised amounts of identifiable assets acquired and liabilities assumed | |
| Property, plant and equipment | 2 438 |
| Customer contracts | 618 |
| Agreements on prohibition of competition | 151 |
| Other intangible assets arising from business acquisitions | 0 |
| Other intangible assets | 0 |
| Non-current available-for-sale financial assets | 0 |
| Inventories | 2 |
| Trade and other receivables | 87 |
| Deferred tax assets | 96 |
| Cash and cash equivalents | 154 |
| Total assets | 3 546 |
| Deferred tax liabilities | 0 |
| Non-current interest-bearing liabilities | 44 |
| Trade and other payables | 54 |
| Retirement benefit obligations | 0 |
| Contingent liability | 1 098 |
| Total liabilities | 1 196 |
| Total identifiable net assets | 2 350 |
| Non-controlling interest | 0 |
| Goodwill | 340 |
| Total | 2 690 |
Acquisitions by Property Maintenance
1 January 2012, the property maintenance operations of IK Kiinteistöpalvelu Oy.
1 February 2012, the business of Jyvässeudun Talonmiehet Oy and Kiinteistöhuolto Markku Hyttinen Oy.
Acquisitions by Environmental Services
1 May 2012, the waste management business of Sita Finland Oy in Oulu.
11 October 2012 the business of material utilisation area of the Munaistenmetsä material recovery area in Uusikaupunki.
The figures for these acquired businesses are stated in aggregate, because none of them is of material importance when considered separately. Fair values have been determined as of the time the acquisition was realised. No business operations have been divested as a consequence of any acquisition. All acquisitions have been paid for in cash. With share acquisitions, L&T was able to gain 100% of the voting rights. The conditional consideration is tied to the transfer of the customer contracts to Lassila & Tikanoja plc, and the estimates of the fair values of considerations were determined on the basis of probability-weighted final acquisition price. The estimates for the conditional consideration have not changed between the time of acquisition and the balance sheet date. Trade and other receivables have been recorded at fair value at the time of acquisition. Individual
acquisition prices have not been itemised because none of them is of material importance when considered separately.
By net sales, the largest acquisition was the business of Jyvässeudun Talonmiehet Oy (EUR 858 thousand).
It is not possible to itemise the effects of the acquired businesses on the consolidated net sales and profit for the period, because L&T integrates its acquisitions into the current business operations as quickly as possible to gain synergy benefits.
On 18 December 2006, an agreement was signed on the acquisition of the majority (70%) of the shares of Biowatti Oy from the acting management of the company. L&T also made a commitment to redeem the remaining 30 percent of the shares by the beginning of the year 2012. The acquisition price for the 70 percent portion was EUR 30.9 million, and it was settled in cash. No interest-bearing liabilities were transferred in the acquisition. In the consolidated financial statements the whole acquisition price (100%) was recognised as acquisition cost. No minority interest was separated from the profit or equity, but the estimated acquisition price of the remaining 30 percent was recognised as interest-bearing current liability. The final price of the 30 percent portion was determined based on the future earnings of L&T Biowatti. In January 2012, L&T Biowatti's 30 per cent holding in the company was redeemed in accordance with the agreement. These shares were valued at EUR 2,411 thousand in the 2011 financial statements.
The accounting policy concerning business combinations is presented in Annual Report under Note 2 of the consolidated financial statements and under Summary on significant accounting policies.
In June 2012 Lassila & Tikanoja plc sold its holding in joint venture L&T Recoil Oy to the co-owner, EcoStream Oy. The selling price totalled EUR 16.7 million and was comprised of EUR 10 million paid in cash and 19.9% of EcoStream's share capital. The gain on sale was EUR 4.2 million. The gain on sale is shown in other operating income and is treated as on non-recurring item. L&T Recoil was a part of Environmental Services division. L&T still continues as one of the raw material suppliers of the plant in Hamina.
At 31 December 2012 Lassila & Tikanoja had a selling price receivable of EUR 2.0 million and account receivables related to oil deliveries of EUR 2.9 million from EcoStream.
Lassila & Tikanoja plc has given a guarantee for a share of 50 per cent of L&T Recoil Oy's financial liabilities. The guarantee is valid no later than the maturity date of the liabilities on 31 August 2014. The financial liabilities of L&T Recoil totalled EUR 32.8 million on 31 December 2012.
In December 2012 the selling of eco-products to Kekkilä Oy was completed. The selling price totalled EUR 1.1 million. The gain on sale of EUR 0.2 million was not substantial. This component of entity does not meet the criteria of presenting discontinued operations specified in IFRS 5.31-32.
No disposals of subsidiaries or businesses were made in 2011.
| EUR 1 000 | L&T Recoil Oy |
|---|---|
| Property, plant and equipment and intangible assets | 31 329 |
| Inventories | 3 188 |
| Trade and other receivables | 5 516 |
| Cash and cash equivalents | 185 |
| Financial liabilities | -18 088 |
| Trade and other payables | -9 608 |
| Net assets | 12 522 |
| Total selling price | 16 702 |
| Received in cash | 8 004 |
| Selling price receivables | 1996 |
| EcoStream shares | 6 702 |
| EUR 1000 | 1-12/2012 | 1-12/2011 |
|---|---|---|
| Carrying amount at beginning of period | 144 489 | 142 681 |
| Business acquisitions | 1 110 | 22 859 |
| Other capital expenditure | 2 322 | 2 646 |
| Disposals | -1 957 | -18 |
| Amortisation and impairment | -8 023 | -23 865 |
| Transfers between items | ||
| Exchange differences | 489 | 186 |
| Carrying amount at end of period | 138 430 | 144 489 |
| EUR 1000 | 1-12/2012 | 1-12/2011 |
|---|---|---|
| Carrying amount at beginning of period | 207 522 | 200 700 |
| Business acquisitions | 2 438 | 4 441 |
| Other capital expenditure | 36 810 | 40 616 |
| Disposals | -31 258 | -477 |
| Depreciation and impairment | -35 619 | -37 683 |
| Transfers between items | ||
| Exchange differences | 266 | -75 |
| Carrying amount at end of period | 180 159 | 207 522 |
| EUR 1000 | 1-12/2012 | 1-12/2011 |
|---|---|---|
| Intangible assets | 109 | 0 |
| Property, plant and equipment | 1 953 | 4 593 |
| Total | 2 062 | 4 593 |
| The Group's share of capital commitments of joint ventures |
0 | 0 |
(Joint ventures)
| EUR 1000 | 1-12/2012 | 1-12/2011 |
|---|---|---|
| Sales | 939 | 2 489 |
| Other operating income | 24 | 63 |
| Interest income | 391 | 707 |
| Non-current receivables | ||
| Capital loan receivable | 0 | 24 396 |
| Current receivables | ||
| Trade receivables | 0 | 2 710 |
| Loan receivables | 0 | 1 633 |
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| Mortgages on rights of tenancy | 186 | 42 186 |
| Company mortgages | 583 | 21 460 |
| Other securities | 178 | 174 |
| Bank guarantees required for environmental permits | 6 483 | 5 702 |
Other securities are security deposits.
Lassila & Tikanoja plc has given a guarantee for a share of 50 percent of L&T Recoil Oy's financial liabilities.
The guarantee is valid no later than the maturity date of the liabilities on 31 August 2014. The financial liabilities of L&T Recoil totalled EUR 32.8 million on 31 December 2012.
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| Maturity not later than one year | 5 556 | 7 708 |
| Maturity later than one year and not later than five years | 8 377 | 15 504 |
| Maturity later than five years | 2 274 | 4 185 |
| Total | 16 206 | 27 397 |
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| Nominal values of interest rate swaps* | ||
| Maturity not later than one year | 14 229 | 13 429 |
| Maturity later than one year and not later than five years | 28 940 | 38 033 |
| Maturity later than five years | 2 727 | |
| Total | 45 896 | 51 462 |
| Fair value | -1 129 | -1 504 |
| Nominal value of interest rate swaps** | 0 | 4 000 |
| Maturity not later than one year | 0 | 19 455 |
| Maturity later than one year and not later than five years | 0 | 4 545 |
| Maturity later than five years | 0 | 28 000 |
| Total | 0 | -144 |
| Fair value | 0 | 4 000 |
* The interest rate swaps are used to hedge cash flow related to a floating rate loan, and hedge accounting under IAS 39 has been applied to it. The hedges have been effective, and the changes in the fair values are shown in the consolidated statement of comprehensive income for the period. The fair values of the swap contracts are based on the market data at the balance sheet date.
** Hedge accounting under IAS 39 has not been applied to these interest rate swaps. Changes in fair values have been recognised in finance income and costs.
| metric tons | 12/2012 | 12/2011 |
|---|---|---|
| Nominal values of diesel swaps | ||
| Maturity not later than one year | 5 136 | 2 544 |
| Maturity later than one year and not later than five years | 660 | 636 |
| Total | 5 796 | 3 180 |
| Fair value, EUR 1000 | 136 | 419 |
Commodity derivative contracts were concluded, for hedging of future diesel oil purchases. IAS 39 -compliant hedge accounting will be applied to these contracts, and the effective change in fair value will be recognised in the hedging reserve within equity. The fair values of commodity derivatives are based on market prices at the balance sheet date.
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| Volume of forward contracts | ||
| Maturity not later than one year | 775 | 1 079 |
| Fair value | 4 | -19 |
Hedge accounting under IAS 39 has not been applied to forward contracts. Changes in fair values have been recognised in finance income and costs.
| EUR 1000 | 12/2012 | 12/2011 |
|---|---|---|
| Maturity of cross currency interest rate swaps under hedge | ||
| accounting | ||
| Maturity not later than one year | 12 800 | 10 400 |
| Maturity later than one year and not later than five years | 16 667 | 29 467 |
| Total | 29 467 | 39 867 |
| Fair value, EUR 1000 | 1 150 | -183 |
The contracts are used to hedge cash flow related to foreign currency floating rate loans. The changes in the fair values are shown in the consolidated statement of comprehensive income for the period. On the balance sheet date, the value of foreign currency loans was EUR 1.2 million negative.
Earnings per share:
profit attributable to equity holders of the parent company / adjusted average basic number of shares
Earnings per share, diluted: profit attributable to equity holders of the parent company / adjusted average diluted number of shares
Cash flows from operating activities/share: cash flow from operating activities as in the statement of cash flows / adjusted average number of shares
EVA: operating profit - cost calculated on invested capital (average of four quarters) WACC 2011: 7.7% WACC 2012: 7.1%
Equity per share: equity attributable to equity holders of the parent company / adjusted basic number of shares at end of period
Return on equity, % (ROE): (profit for the period / equity (average)) x 100
Return on investment, % (ROI): (profit before tax + finance costs) / (total equity and liabilities - non-interest-bearing liabilities (average)) x 100 Equity ratio, %: equity / (total equity and liabilities - advances received) x 100
Gearing, %: net interest-bearing liabilities / equity x 100
Net interest-bearing liabilities: interest-bearing liabilities - liquid assets
Operating profit excluding non-recurring items: operating profit +/- non-recurring items
Helsinki, 31 January 2013
LASSILA & TIKANOJA PLC Board of Directors
Pekka Ojanpää President and CEO
For additional information please contact: Pekka Ojanpää, President and CEO, tel. +358 10 636 2810, Timo Leinonen, CFO, tel. +358 400 793 073 or Keijo Keränen, Head of Treasury & IR, tel. +358 50 385 6957.
Lassila & Tikanoja is a service company that is transforming the consumer society into an efficient recycling society. In co-operation with our customers we are reducing waste volumes, extending the useful lives of properties, recovering materials and decreasing the use of raw materials and energy. We help our customers to focus on their core business and to save the environment. Together, we create well-being and jobs. With operations in Finland, Sweden, Latvia and Russia, L&T employs 9,000 persons. Net sales in 2012 amounted to EUR 674,0 million. L&T is listed on NASDAQ OMX Helsinki.
Distribution: NASDAQ OMX Helsinki Major media www.lassila-tikanoja.com
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