Quarterly Report • Apr 29, 2008
Quarterly Report
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Net sales for the first quarter stood at EUR 147.3 million (EUR 129.1 million). This represented an increase of 14.1%, 6.4 percentage points of which came from corporate acquisitions. The operating profit was EUR 22.8 million (EUR 9.2 million), which is 15.5% (7.1%) of net sales. The operating profit excluding nonrecurring and imputed items was EUR 8.8 million (EUR 10.3 million).
Strong organic growth continued thanks to successful new sales. The operating profit was improved by a capital gain of EUR 14.3 million on sale of Ekokem Oy Ab shares in January. The operating profit excluding non-recurring and imputed items was burdened by a decline in the demand for recycled fuels and biofuels due to the mild winter, as well as rapid fluctuations in the demand for Industrial Services. Operations outside Finland improved their performance.
| Financial summary | ||||
|---|---|---|---|---|
| 1-3/20 08 |
1-3/20 07 |
Change % |
1-12/20 07 |
|
| Net sales, EUR million | 147.3 | 129.1 | 14.1 | 554.6 |
| Operating profit excluding non-recurring and | ||||
| imputed items, EUR million* | 8.8 | 10.3 | -14.6 | 54.3 |
| Operating profit, EUR million | 22.8 | 9.2 | 48.8 | |
| Operating margin, % | 15.5 | 7.1 | 8.8 | |
| Profit before tax, EUR million | 21.7 | 8.3 | 44.5 | |
| Earnings per share, EUR | 0.51 | 0.15 | 0.83 | |
| EVA, EUR million | 15.7 | 3.6 | 23.0 | |
* Breakdown of operating profit excluding non-recurring and imputed items is presented at the end of the explan atory statement.
he net sales of Environmental Services (waste management, recycling services, L&T Biowatti, nvironmental products) amounted to EUR 75.5 million (EUR 65.4 million), an increase of 15.4%. The T e operating profit was EUR 8.4 million (EUR 8.8 million).
ste management continued thanks to successful new sales. The product line chieved its targets and improved its earnings. The performance of recycling services in Finland was burdened by increases in the purchase prices of certain waste materials. The operating profit for the comparison period included profits from a tyre recycling agreement that had expired in 2006. Strong organic growth of wa a
. New capacity will be completed step by step uring 2009 and 2010. The capacity of the Kerava plant will be doubled to almost 400,000 tonnes, and the The efficiency of collection was improved through new technical solutions. Construction of substantial added capacity was initiated at the Kerava recycling park d recovery rate will increase substantially. The capacity of the landfill at the Kerava plant has reduced due to technical reasons, which will increase the costs of final disposal of plant reject in the second half of the year. A landfill for industrial waste is being constructed in Kotka with estimated completion in the early autumn.
The demand for L&T Biowatti's biofuels was substantially lower than expected, which was due to the exceptionally mild winter. Warm weather also hampered the collection of forest processed chips, and subcontracting costs increased. L&T Biowatti fell clearly short of its target. Dependence from subcontractors is being reduced by investing in the company's own collecting, processing and transport equipment for forest processed chips. L&T Biowatti will start the production of wood pellets during the current year at Suonenjoki and Luumäki.
he business in Russia and Latvia developed as planned. Resources were increased to continue the ably T expansion of operations outside Finland. The performance of the Latvian operations developed favour but the high national inflation rate still imposes challenges on profitability.
The performance of Environmental Products improved as net sales increased and costs were kept in control.
erating profit was EUR 1.6 illion (EUR 1.1 million). The net sales of Property and Office Support Services (property maintenance and cleaning services) totalled EUR 55.6 million (EUR 48.7 million), an increase of 14.1%. The op m
inland were improved by good organic growth and corporate acquisitions completed last ear. Contract revenue increased, and the sales of additional services were successful. The Finnish Net sales in F y operations improved their earnings.
d the first inland. The concept provides customers the opportunity to carry out concrete nvironment-friendly actions. New service products were again introduced to the market. New products in cleaning services include L&T® Eco-cleaning concept, which received the Nordic ecolabel, also known as the Swan label, as the product of the industry in F e
y. The holding in Blue Service Partners was sold to the joint venture partner in the beginning of Februar
et sales from international operations increased in Russia and Latvia. The Russian operations posted a N positive operating profit. The focus in Sweden is on organic growth and on the introduction of planning and monitoring systems that improve profitability. The loss from international operations declined.
ervices and wastewater services) amounted to EUR 17.4 million (EUR 16.2 million), an increase of 7.6%. The net sales of Industrial Services (hazardous waste management, industrial solutions, damage repair s The division made an operating loss of EUR -0.9 million (EUR -0.1 million).
onmental ervices. The demand for Industrial Services is usually weakest early in the year but demand in the s exceptionally strong. The earnings were burdened by difficulties in delivering cycled fuels, as well as rapid fluctuations in the demand for services and the failure to adapt production to the changes quickly enough. The earnings were also burdened by changes in the fair values of oil derivatives amounting to EUR 0.3 million (EUR 1.1 million). The increase in net sales was mainly attributable to business operations transferred from Envir S comparison period wa re
ed to expand their service etwork. Demand for the division's services became more lively and normal towards the end of the period. The outlook for the entire year is mainly positive. Damage repair services continu n
the The joint venture L&T Recoil's re-refinery for used lubricating oil is expected to be completed towards end of the year.
t the end of the period, interest-bearing liabilities amounted to EUR 2.3 million less than a year earlier. A Net interest-bearing liabilities, totalling EUR 87.5 million, decreased by EUR 0.6 million from the comparison period and increased by EUR 1.1 million from the beginning of the year.
et finance costs totalled EUR 1.1 million (EUR 0.9 million). Finance costs increased by EUR 0.3 million ir values of interest rate swaps was recognised in the finance costs. Net finance costs ere 0.7% (0.7%) of net sales and 4.8% (9.3%) of operating profit. N as a result of a rise in the interest rate level. An expense of EUR 0.1 million (EUR 0.1 million) arising from changes in the fa w
total of EUR 0.3 million arising from the change in the fair value of interest rate swaps to which hedge A accounting under IAS 39 is applied, was recognised as a reduction in equity.
operating activities mounted to EUR 11.6 million (EUR 9.3 million), and EUR 1.6 million were tied up in the working capital The equity ratio was 48.8% (40.5%) and the gearing rate 42.1 (54.6). Cash flows from a (EUR 5.1 million).
were included in equity on 31 March is year but belonged to non-interest-bearing liabilities in the comparison period. The improved equity ratio was attributable to the capital gain on the sale of Ekokem shares and the fact that this year's Annual General Meeting was held in April. Dividends th
The Annual General Meeting held on 1 April 2008 resolved on a dividend of EUR 0.55 per share. The dividend, totalling EUR 21.3 million, was paid on 11 April 2008.
. Capital expenditure totalled EUR 14.1 million (EUR 47.2 million). Production plants were built and machinery and equipment were purchased and information systems were replaced
services business of Siivouspalvelu Siivoset Oy and the cleaning services business of iivousliike Lainio Oy were acquired into Property and Office Support Services. The business of Obawater f The cleaning S Oy was acquired into waste water services within Industrial Services. The combined annual net sales o the acquired businesses totalled EUR 0.5 million.
s was 9,532 (8,805). f them 7,077 (6,650) people worked in Finland and 2,455 (2,155) people in other countries. In January-March, the average number of employees converted into full-time equivalents was 7,936 (6,881). At the end of the period, the total number of full-time and part-time employee O
he volume of trading in Lassila & Tikanoja plc shares on OMX Nordic Exchange Helsinki from January through March was 4.682.168, which is 12.1% (13.9%) of the average number of shares. The value of trading was EUR 88.9 million. The trading price varied between EUR 17.20 and EUR 23.00. The closing price was EUR 18.00. The market capitalisation was EUR 698.3 million (EUR 969.5 million) at the end of the period. T
At the beginning of the year the company's registered share capital amounted to EUR 19.392.187. After subscriptions made pursuant to 2005A options, the share capital increased by EUR 6,250 to EUR 19.398.437 and the number of the shares by 12,500 shares to 38.796.874 shares on 14 February 2008.
In 2005, 600,000 share options were issued, each entitling its holder to subscribe for one share of Lassila & Tikanoja plc. In the beginning of the exercise period, 25 key persons held 162,000 2005A options. 33 key persons hold 178,000 2005B options and 43 key persons hold 228,500 2005C options. L&T Advance Oy, a wholly-owned subsidiary of Lassila & Tikanoja plc, holds 8,000 2005A options, 22,000 2005B options and 1,500 2005C options.
The exercise price for the 2005A options is EUR 14.22, for 2005B options EUR 16.98 and for 2005C options EUR 26,87. The options issued under the share option plan 2005 entitle their holders to subscribe for a maximum of 1.4% of the current number of shares. 2005A options have been listed on the OMX Nordic Helsinki since 2 November 2007.
The Annual General Meeting of the year 2008 resolved to issue 230,000 share option rights, each entitling its holder to subscribe for one share of Lassila & Tikanoja plc. L&T Advance Oy holds all 230,000 option rights.
The exercise price for the 2008 options will be the trading volume weighted average price of the Company's share on the OMX Nordic Helsinki in May 2008, rounded off to the nearest cent. The exercise price of the share options shall, as per the dividend record date, be reduced by the amount of dividend which exceeds 70% of the profit per share for the financial period to which the dividend applies. However, only such dividends whose distribution has been agreed upon after the option pricing period and which have been distributed prior to the share subscription are deducted from the subscription price. The exercise price shall, however, always amount to at least EUR 0.01. The exercise period shall be from 1 November 2010 to 31 May 2012.
As a result of the exercise of the 2008 share options, the number of shares may increase by a maximum of 230,000 new shares, which is 0.59% of the current number of shares.
At the end of the financial period, the company had 5.263 (4.664) shareholders. Nominee-registered holdings accounted for 11.3% (8.2%) of the total number of shares.
On 26 March 2008, Varma Mutual Pension Insurance Company announced that its holding of the shares and votes in Lassila & Tikanoja plc had fallen to 4.52%.
The Board of Directors is not authorised to effect any share issues or to launch a convertible bond or a bond with warrants. Neither is the Board authorised to decide on the repurchase nor disposal of the company's own shares.
he Annual General Meeting of Lassila & Tikanoja plc, which was held on 1 April 2008, adopted the al year 2007 and released the members of the Board of Directors and T financial statements for the financi the President and CEO from liability. The AGM resolved that a dividend of EUR 0.55, a total of EUR 21.3 million, as proposed by the Board of Directors, be paid for the financial year 2007. The dividend payment date was 11 April 2008.
General Meeting confirmed the number of the members of the Board of Directors six. The llowing Board members were re-elected to the Board until the end of the following AGM: Eero sse Kurkilahti, Juhani Lassila and Juhani Maijala. Heikki Bergholm and Matti Kavetvuo were The Annual fo Hautaniemi, La elected as new members for the same term.
uthorised Public Accountant, acting as Principal Auditor. PricewaterhouseCoopers Oy, Authorised Public Accountants, were elected auditors with Heikki Lassila, A
The Annual General Meeting approved the Board's proposal to issue 230,000 share options to key personnel of the Lassila & Tikanoja Group and/or to a wholly-owned subsidiary of Lassila & Tikanoja plc.
oard and Juhani Lassila as Vice Chairman. At its organising meeting following the Annual General Meeting, the Board of Directors re-elected Juhani Maijala as Chairman of the B
old its holding in the shares of Ekokem Oy Ab to Ilmarinen utual Pension Insurance Company. Lassila & Tikanoja had obtained possession of the shares over a sed in the financial statements for the first quarter of the year 2008. The positive effect of the sale n the profit for the period will be EUR 14.2 million. On 22 January 2008, Lassila & Tikanoja s M period of several years and they no longer had any connection to the business operations of the company and were, consequently, not essential for them. A tax-free capital gain arising from the sale will be recogni o
ngs nagement in Riga towards the end of the year. Changes in the fair values of oil derivatives associated with L&T Recoil's business depend on the development of world market prices for oil, and may have a substantial effect on the operating profit of Industrial Services. If the next winter is mild, this will have a negative impact on L&T Biowatti's earni development. A planned amendment to Latvian waste legislation may have adverse effects on the competition situation for waste ma
revious year. Earnings will improve due to the gain on the sale of the Ekokem hares. The demand prospects for Lassila & Tikanoja's markets remain mostly good. Cost development and passing the rise in the costs on to prices, however, will be challenging. Organic growth is expected to remain strong. Full-year net sales are expected to increase in line with the long-term target, which is more than 10 per cent. The operating profit excluding non-recurring and imputed items is expected to remain at the same level as in the p s
d a graphical expansion in Russia. The demand for Environmental Services is expected to remain good. Increased plant capacity an versatile service offering will probably improve L&T's market position. Increasing the capacity of recycling plants and landfills will continue along with geo
mand for fuels is expected to remain lower an previously expected also during the second quarter as customers are spending their excess inventory ellet-producing plants, one of which will be introduced into use in the summer and the other at the end of The second mild winter in a row hampered forest harvesting work and increased the costs of L&T Biowatti's raw materials and subcontracted services. The de th spared during the winter. During the rest of the year, L&T Biowatti will continue to make efforts to strengthen its procurement organisation and collection equipment for forest processed chips and build two p the year. L&T Biowatti's full-year earnings are expected to remain below the target.
he operating profit of Environmental Services as a whole is expected to match or exceed the previous of T year's level. However, a potential slowdown in new construction may be reflected in the intake volumes recycling plants.
ive re for t The market outlook for Property and Office Support Services remains good even though the competit situation is expected to remain challenging and margins are expected to remain tight. Costs in Finland a increased by a rise in social security costs. Earnings from international operations are expected to improve but the full-year result is expected to remain slightly negative. Increasing net sales are a focal point improving the profitability of international operations. The division's operating profit is expected to remain a the same level as in the previous year.
ervices is still mostly positive. Demand seems to have returned to ormal at the end of the review period, and L&T's position in the market has strengthened. Wastewater ing The market outlook for Industrial S n services and damage repair services will increase their capacity and improve their service ability in Finland. The construction of L&T Recoil's re-refinery is progressing, and the plant is expected to be completed towards the end of the year. The full-year operating profit of Industrial Services is expected to increase provided that the world market price of crude oil will not increase substantially and the test stage of the re-refinery will not become longer than expected.
vestments are expected to fall short of the previous year's level, with main emphasis on organic growth. In
| EUR million | 1-3/2008 | 1-3/2007 | 1-12/2007 |
|---|---|---|---|
| Operating profit | 22.8 | 9.2 | 48.8 |
| Non-recurring items: | |||
| Loss on sale of landfill operations of Salvor and integration of the | |||
| remaining Salvor's operations | 2.3 | ||
| Reorganisation of Property and Office Support Services | |||
| operations in Russia | 0.4 | ||
| Gain on sale of the shares of Ekokem | -14.3 | ||
| Oil derivatives | 0.3 | 1.1 | 2.8 |
| Operating profit excluding non-recurring and imputed items | 8.8 | 10.3 | 54.3 |
This interim financial report is in compliance with IAS 34, Interim Financial Reporting Standard. The same accounting policies as in the annual financial statements for the year 2007 have been applied. These interim financial statements have been prepared in accordance with the IFRS standards and interpretations being effective. Forthcoming standards and interpretations are presented in the accounting policies in Annual Report 2007. Income tax expense is based on the estimated average annual income tax rate, which would be applicable to expected total annual earnings.
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 interim financial statements have not been audited.
| 1-3 | 1-3 | 1-12 | ||
|---|---|---|---|---|
| EUR 1000 | /2008 | /2007 | Change % | /2007 |
| Net sales | 147 331 | 129 113 | 14.1 | 554 613 |
| Cost of goods sold | -131 802 | -112 442 | 17.2 | -478 151 |
| Gross profit | 15 529 | 16 671 | -6.9 | 76 462 |
| Other operating income | 14 926 | 642 | 3 834 | |
| Selling and marketing costs | -3 891 | -3 822 | 1.8 | -14 616 |
| Administrative expenses | -3 075 | -2 939 | 4.6 | -11 614 |
| Other operating expenses | -654 | -1 391 | -53.0 | -5 291 |
| Operating profit | 22 835 | 9 161 | 149.3 | 48 775 |
| Finance income | 394 | 315 | 25.1 | 1 661 |
| Finance costs | -1 494 | -1 167 | 28.0 | -5 978 |
| Profit before tax | 21 735 | 8 309 | 161.6 | 44 458 |
| Income tax expense | -2 002 | -2 243 | -10.7 | -12 291 |
| Profit for the period | 19 733 | 6 066 | 225.3 | 32 167 |
| Attributable to: | ||||
| Equity holders of the company | 19 724 | 5 894 | 31 909 | |
| Minority interest | 9 | 172 | 258 | |
| Earnings per share for profit attributable to the equity holders of the company: | ||||
| Earnings per share, EUR | 0.51 | 0.15 | 0.83 | |
| Earnings per share, EUR - diluted | 0.51 | 0.15 | 0.82 |
| EU R 1000 |
3/2008 | 3/2007 | 12/2007 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | |||
| Goodwill | 120 028 | 118 837 | 119 946 |
| Intangible assets arising from business combinations | 29 181 | 33 824 | 30 600 |
| Other intangible assets | 11 944 | 8 539 | 11 571 |
| Total | 161 153 | 161 200 | 162 117 |
| Property, plant and equipment | |||
| Land | 3 532 | 3 426 | 3 53 2 |
| Buildings and constructions | 38 614 | 37 813 | 39 594 |
| Machinery and equipment | 104 736 | 90 444 | 103 83 2 |
| Other | 82 | 290 | 82 |
| Advance payments and construction in progress | 9 682 | 3 390 | 4 830 |
| Total | 156 646 | 135 363 | 151 870 |
| Other non-current assets | |||
| Investments in associa tes |
3 | ||
| Available-for-sale investments | 40 8 |
2 976 | 410 |
| Finance le ase receivables |
4 33 7 |
3 300 | 3 823 |
| Deferred income tax assets | 1 015 | 793 | 924 |
| Other rec eivables |
6 21 |
230 | 236 |
| Total | 6 3 81 |
7 302 | 5 393 |
| Total non-current assets | 324 180 | 303 865 | 31 9 380 |
| Current assets | |||
| Inventories | 12 3 30 |
6 551 | 14 350 |
| Trade and other re ceivables |
78 6 39 |
72 084 | 71 824 |
| Derivative receiva bles |
6 67 |
950 | 1 189 |
| Advance paym ents |
3 0 19 |
3 827 | 774 |
| Available-for-sale i nvestments |
2 9 91 |
5 488 | 21 287 |
| Cash and cash equiva lents |
11 1 60 |
10 321 | 9 521 |
| Total current assets | 108 8 06 |
99 221 | 1 18 945 |
| TOTAL ASSETS | 432 986 | 403 086 | 438 325 |
| EUR 1000 | 3/2008 | 3/2007 | 12/2007 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Equity attributable to equity holders of the company |
|||
| Share cap ital |
19 398 | 19 275 | 19 392 |
| Share premium reserve | 50 645 | 47 902 | 50 474 |
| Other reserves | -602 | -227 | 14 055 |
| Reta ined earnings |
118 407 | 85 810 | 86 327 |
| Profit for the period | 19 724 | 5 894 | 31 909 |
| T otal |
20 7 572 |
15 8 654 |
20 2 157 |
| M inority interest |
190 | 2 626 | 187 |
| T otal equity |
207 762 | 1 61 280 |
202 344 |
| L iabilities |
|||
| Non-c urrent liabilities |
|||
| Deferred income tax liabili ties |
29 606 | 29 863 | 29 842 |
| P ension obligations |
555 | 40 5 |
542 |
| P rovisions |
962 | 834 | 953 |
| In terest-bearing liabilities |
8 0 039 |
6 4 182 |
8 1 411 |
| O ther liabilities |
512 | 453 | 500 |
| T otal |
111 674 |
95 737 |
113 248 |
| Current liabilities | |||
| Interest-bearing liabilities | 21 597 | 39 709 | 35 757 |
| T rade and other payables |
90 631 | 105 395 | 85 183 |
| Derivative liabilitie s |
1 127 | 350 | 897 |
| Tax liabilities | 131 | 451 | 794 |
| Provisions | 64 | 164 | 102 |
| Total | 113 550 |
146 069 |
12 2 733 |
| Total liabilities | 22 5 224 |
24 1 806 |
235 981 |
| TOTAL EQUITY AND LIABI LITIES |
4 32 986 |
4 03 086 |
43 8 325 |
| EUR 10 00 |
3/2008 | 3/2007 | 12/2007 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit for the period | 19 733 | 6 066 | 32 167 |
| Adjustm ents |
|||
| Income tax expense | 2 002 | 2 243 | 12 291 |
| Depreciation a nd amortisation and impairment |
9 239 | 7 718 | 33 432 |
| Finance income and cost s |
1 100 | 852 | 4 317 |
| Oil derivatives | 263 | 1 183 |
2 947 |
| Other | -15 170 | -466 | -859 |
| N et cash generated fro m operating activities before change in working |
|||
| capital | 17 167 | 17 596 | 84 295 |
| Change in wo rking capital |
|||
| Change in trade and other receivables | -8 498 | -8 447 | -4 903 |
| Change in inventories |
2 007 | 1 020 | -6 824 |
| Change in trade and o ther payables |
4 862 | 2 308 | -1 450 |
| Change in working capital | -1 629 | -5 119 | -13 177 |
| Interest paid | -586 | - 669 |
-5 104 |
| Interest received | 303 | 333 | 1 460 |
| Income tax paid | -3 616 | -2 813 |
-12 041 |
| Net cash fro m operating activities |
11 639 | 9 328 | 55 433 |
| Cash flows from in vesting activities |
|||
| Acquisition of subsidiarie s and businesses, net of cash acquired |
-247 | - 31 510 |
-37 050 |
| Proceeds from subsidiari es and businesses, net of sold cash |
1 878 | ||
| Purchases of prop erty, plant and equipment and intangible assets |
-13 451 | -8 058 |
-49 109 |
| Proceeds fro m sale of property, plant and equipment and intangible |
|||
| assets | 681 | 227 | 2 261 |
| Purc hases of available-for-sale investments |
-1 | -104 | -147 |
| Change in othe r non-current receivables |
13 | 21 | 1 |
| Proceeds from sale of available-for-sale investments | 16 803 | 43 | 1 098 |
| Dividends received | 4 | ||
| N et cash used in investment activities |
3 798 | -39 381 | -81 064 |
| Cash flows from financing activities | |||
| Proceeds from share issue | 178 | 247 | 2 936 |
| Change in short-term borrowings | -3 759 | 21 485 | 23 011 |
| Proceeds from long-term borrowings | 50 302 | ||
| Repayments of long-term borrowings | -11 691 | -362 | -39 909 |
| Dividends paid | -180 | -21 360 | |
| Net cash generated from financing activities | -15 272 | 21 190 | 14 980 |
| Net change in liquid assets | 165 | -8 863 | -10 651 |
| Liquid assets at beginning of period | 14 008 | 24 790 | 24 790 |
| Effect of changes in foreign exchange rates | -24 | -117 | -131 |
| Change in fair value of current available-for-sale investments | 2 | -1 | |
| Liquid assets at end of period | 14 151 | 15 809 | 14 008 |
| EUR 1000 | 3/2008 | 3/2007 | 12/2007 |
|---|---|---|---|
| Cash | 11 160 | 10 321 | 9521 |
| Certificates of deposit and commercial papers | 2 9 9 1 | 5488 | 4 487 |
| Total | 14 151 | 15809 | 14 008 |
| Equity attributable | |||||||
|---|---|---|---|---|---|---|---|
| Share Revaluation | to equity | ||||||
| Share | premium | and other | Retained | holders of the | Minority | Total | |
| EUR 1000 | capital | reserve | reserves | earnings | company | interest | equity |
| Equity at 1.1.2008 | 19 3 9 2 | 50 474 | 14 055 | 118 236 | 202 157 | 187 | 202 344 |
| Hedging reserve, | |||||||
| change in fair value | $-314$ | $-314$ | $-314$ | ||||
| Current available for sale | |||||||
| investments, change in | |||||||
| fair value | $-14238$ | $-14238$ | $-14238$ | ||||
| Translation differences | $-105$ | $-105$ | -6 | $-111$ | |||
| Items recognised | |||||||
| directly in equity | $-14656$ | $-14656$ | -6 | $-14662$ | |||
| Profit for the period | 19724 | 19724 | 9 | 19733 | |||
| Total recognised | |||||||
| income and expenses | -14 656 | 19724 | 5 0 68 | 3 | 5 0 7 1 | ||
| Share option remuneration | |||||||
| Subscriptions | |||||||
| pursuant to 2002 options | 6 | 172 | 178 | 178 | |||
| Remuneration expense of | |||||||
| share options | 171 | 171 | 171 | ||||
| Equity at 31.3.2008 | 19 3 98 | 50 645 | $-602$ | 138 131 | 207 572 | 190 | 207 762 |
| Equity at 1.1.2007 | 19 264 | 47 666 | 326 | 106 904 | 174 160 | 2709 | 176 869 |
| Hedging reserve, | |||||||
| change in fair value | 22 | 22 | 22 | ||||
| Current available | |||||||
| for sale investments, | |||||||
| change in fair value | -6 | -6 | -6 | ||||
| Translation differences | $-569$ | 6 | $-563$ | $-563$ | |||
| Items recognised | |||||||
| directly in equity | $-553$ | 6 | $-547$ | $-547$ | |||
| Profit for the period | 5894 | 5894 | 172 | 6 0 66 | |||
| Total recognised | |||||||
| income and expenses | -553 | 5 900 | 5 3 4 7 | 172 | 5519 | ||
| Share option remuneration | |||||||
| Subscriptions | 11 | 236 | 247 | 247 | |||
| pursuant to 2002 options | |||||||
| Remuneration expense of share options |
102 | 102 | 102 | ||||
| Dividends paid | $-21202$ | $-21202$ | $-180$ | $-21382$ | |||
| Purchase of a minority | $-75$ | -75 | |||||
| Equity at 31.3.2007 | 19 275 | 47 902 | $-227$ | 91 704 | 158 654 | 2626 | 161 280 |
| 3/2008 | 3/2007 | 12/2007 | |
|---|---|---|---|
| Earnings per share, EUR | 0. 51 |
0.15 | 0.83 |
| Earnin gs per share, EUR - diluted |
0 .51 |
0.15 | 0.82 |
| C ash flows from operating activities per share, EUR |
0.30 | 0.24 | 1.43 |
| E VA, EUR million |
15.7 | 3.6 | 23.0 |
| Capital expenditure, EUR 1000 | 14 093 | 47 185 | 93 187 |
| Depreciation and amortisation, EUR 1000 | 9 239 | 7 718 | 33 432 |
| Equity per sh are, EUR |
5.35 | 4 .12 |
5.21 |
| Return on equity, ROE, % |
38. 5 |
1 4.4 |
17.0 |
| Return on invested capital, ROI, % |
29.5 | 14.6 | 17.6 |
| Equity ratio, % | 48.8 | 40.5 | 46.6 |
| Gearing, % | 42.1 | 54.6 | 42.7 |
| Net interest-bearing liab ilities, EUR 1000 |
87 486 | 88 082 | 86 360 |
| Average number of em ployees in full-time equivalents |
7 936 | 6 881 | 7 819 |
| Total num ber of full-time and part-time employees at end of period |
9 532 | 8 805 | 9 387 |
| Adjusted number of shares, 1000 shares |
|||
| average during the period |
38 791 | 3 8 539 |
38 670 |
| at end of period | 38 797 | 3 8 550 |
38 784 |
| average during period, diluted |
38 849 | 3 8 784 |
3 8 843 |
| N ET SALES |
|||||||
|---|---|---|---|---|---|---|---|
| E UR 1000 |
1-3/2008 | 1-3/2007 | Change % | 1-12/2007 | |||
| Environmental Services | 75 480 | 65 398 | 15.4 | 279 | 845 | ||
| Property and Office Support Services | 55 5 74 |
48 720 | 14.1 | 204 | 141 | ||
| Industrial Services | 17 375 | 16 150 | 7.6 | 75 479 |
|||
| Group admin. and other | 0 | 3 | 10 | ||||
| Inter-division net sales | -1 098 | -1 158 | -4 862 | ||||
| L assila & Tikanoja |
147 331 | 129 113 | 14.1 | 554 613 | |||
| OPERATING PROFIT | |||||||
| EUR 1000 | 1-3/2008 | % | 1-3 | /2007 | % | 1-1 2/2007 |
% |
| Environmental Services | 8 423 | 11.2 | 8 771 | 13.4 | 34 97 7 |
12.5 | |
| Property and Office Support Services | 1 609 |
2.9 | 1 087 | 2.2 | 11 005 | 5.4 | |
| Industrial Services | -878 | -5.1 | -139 | -0.9 | 4 769 | 6.3 | |
| G roup admin. and other |
13 681 | -558 | -1 976 | ||||
| Lassila & Tikanoja | 22 835 | 15.5 | 9 161 | 7.1 | 48 775 | 8.8 | |
| OTHER SEGMENT REPORTING | |||||||
| EUR 1000 | 1-3/2008 | 1-3/20 07 |
1-1 | 2/2007 | |||
| Assets | |||||||
| Environmental Services | 259 543 | 246 224 | 250 980 | ||||
| Property and Office Support Services | 75 489 | 69 432 | 75 508 | ||||
| Industrial Services | 80 333 | 66 009 | 78 311 | ||||
| Group admin. and other | 311 | 2 964 | 2 814 | ||||
| Non-allocated assets | 17 310 | 18 457 | 30 712 | ||||
| Lassila & Tikanoja | 432 986 | 403 086 | 438 325 | ||||
| Liabilities | |||||||
| Environmental Services | 40 937 | 44 678 | 36 935 | ||||
| Property and Office Support Services | 32 999 | 29 741 | 32 447 | ||||
| Industrial Services | 17 442 | 9 989 | 17 046 | ||||
| Group admin. and other | 665 | 22 154 | 667 | ||||
| Non-allocated liabilities | 133 181 | 135 244 | 148 886 | ||||
| Lassila & Tikanoja | 225 224 | 241 806 | 235 981 | ||||
| Capital expenditure | |||||||
| Environmental Services | 6 337 | 37 306 | 60 704 | ||||
| Property and Office Support Services | 2 435 | 8 496 | 20 040 | ||||
| Industrial Services | 5 321 | 1 340 | 12 267 | ||||
| Group admin. and other | 43 | 176 | |||||
| Lassila & Tikanoja | 14 093 | 47 185 | 93 187 | ||||
| Depreciation and amortisation | |||||||
| Environmental Services | 5 639 | 4 683 | 20 330 | ||||
| Property and Office Support Services | 2 091 | 1 752 | 7 782 | ||||
| Industrial Services | 1 508 | 1 282 | 5 315 | ||||
| Group admin. and other | 1 | 1 | 5 | ||||
| Lassila & Tikanoja | 9 239 | 7 718 | 33 432 |
| INCOME STATEMENT BY QUARTER | ||||||||
|---|---|---|---|---|---|---|---|---|
| $1 - 3$ | $10 - 12$ | $7 - 9$ | $4-6$ | $1 - 3$ | $10 - 12$ | $7-9$ | 4-6 | |
| EUR 1000 | /2008 | /2007 | /2007 | /2007 | /2007 | /2006 | /2006 | /2006 |
| Net sales | ||||||||
| Environmental Services | 75 480 | 74 788 | 67915 | 71744 | 65 398 | 53 765 | 52 696 | 51 420 |
| Property and Office | ||||||||
| Support Services | 55 574 | 54 798 | 51 963 | 48 660 | 48720 | 44 584 | 41 463 | 41 243 |
| Industrial Services | 17 375 | 19867 | 19890 | 19572 | 16 150 | 18 25 2 | 18 500 | 16785 |
| Group admin. and other | $\bf{0}$ | 1 | 3 | 3 | 3 | 3 | 19 | 26 |
| Inter-division net sales | $-1098$ | $-1282$ | $-1202$ | $-1220$ | $-1158$ | $-1242$ | $-1030$ | $-1044$ |
| Lassila & Tikanoja | 147 331 | 148 172 | 138 569 | 138 759 | 129 113 | 115 362 | 111 648 | 108 430 |
| Operating profit | ||||||||
| Environmental Services | 8 4 2 3 | 8 3 7 2 | 9730 | 8 1 0 4 | 8771 | 7 104 | 10 056 | 8 100 |
| Property and Office | ||||||||
| Support Services | 1609 | 4 0 1 5 | 4 2 1 3 | 1690 | 1 0 8 7 | 1 1 5 4 | 4833 | 1499 |
| Industrial Services | $-878$ | 180 | 2 1 3 3 | 2 5 9 5 | $-139$ | 3 0 2 5 | 3730 | 2 0 0 5 |
| Group admin. and other | 13 681 | $-468$ | $-601$ | -349 | $-558$ | $-971$ | 1 2 3 3 | $-547$ |
| Lassila & Tikanoja | 22 835 | 12 099 | 15 475 | 12 040 | 9 1 6 1 | 10 312 | 19852 | 11 057 |
| Operating margin | ||||||||
| Environmental Services | 11.2 | 11.2 | 14.3 | 11.3 | 13.4 | 13.2 | 19.1 | 15.8 |
| Property and Office | ||||||||
| Support Services | 2.9 | 7.3 | 8.1 | 3.5 | $2.2\phantom{0}$ | 2.6 | 11.7 | 3.6 |
| Industrial Services | $-5.1$ | 0.9 | 10.7 | 13.3 | $-0.9$ | 16.6 | 20.2 | 11.9 |
| Lassila & Tikanoja | 15.5 | 8.2 | 11.2 | 8.7 | 7.1 | 8.9 | 17.8 | 10.2 |
| Finance costs, net | $-1100$ | $-1247$ | $-1294$ | $-924$ | $-852$ | $-366$ | $-740$ | $-391$ |
| Share of profits of | ||||||||
| associates | 18 | |||||||
| Profit before tax | 21 735 | 10852 | 14 181 | 11 116 | 8 3 0 9 | 9964 | 19 112 | 10 666 |
In September 2007, L&T obtained full ownership of Salvor Oy. The business operations of Salvor were reorganised and most of the operations were transferred from Environmental Services into Industrial Services. The figures
| Fair values used in | Carrying amounts | |
|---|---|---|
| EUR 1000 | consolidation | before consolidation |
| Property, plant and equipment | 63 | 63 |
| Customer contracts | 104 | |
| Agreements on prohibition of competition | 27 | |
| Trade and other receivables | 10 | 10 |
| Total assets | 204 | 73 |
| Net assets | 204 | 73 |
| Goodwill arising from acquisitions | 43 | |
| Acquisition cost | 247 | |
| Acquisition cost | 247 | |
| Cash flow effect of acquisitions | 247 |
The cleaning services business of Siivouspalvelu Siivoset Oy was acquired into Property and Office Support Services on 1 January 2008, and the cleaning services business of Siivousliike Lainio Oy on 1 March 2008. The business of Obawater Oy was acquired into waste water services within Industrial Services on 15 February 2008.
The aggregate net sales of the acquired companies totalled EUR 452 thousand. The aggregate acquisition cost was EUR 247 thousand, of which EUR 43 thousand was recognised in goodwill. All itemisations in accordance with IFRS 3 are not presented because the figures are immaterial.
The accounting policy concerning business combinations is presented in Annual Report 2007 under Note 2 of the consolidated financial statements and under Summary on significant accounting policies.
On 1 April 2008, the property maintenance services business of Rantakylän Talonhuolto Oy was acquired into Property and Office Support Services (annual net sales EUR 223 thousand).
| EUR 1000 | 1-3/2008 | 1-3/2007 | 1-12/2007 |
|---|---|---|---|
| Carrying amount at beginning of period | 16 2 117 |
1 24 407 |
124 407 |
| Business acquisitions | 174 | 38 441 | 41 885 |
| Other capital expenditure | 1 044 | 793 | 5 403 |
| Disposals | -1 | -345 | -1 546 |
| Amortisation and impairment | -2 229 | -1 899 | -7 921 |
| Transfers between items | 228 | ||
| Exchange differences | 48 | -197 | -339 |
| Carrying amount at end of perio d |
161 153 | 161 20 0 |
162 117 |
| EUR 1000 | 1-3/2008 | 1-3/2007 | 1-12/2007 |
|---|---|---|---|
| Carrying amount at beginning of perio d |
151 870 | 134 03 8 |
134 038 |
| Business acquisitions | 64 | 1 756 | 5 574 |
| Other capital expenditure | 12 811 | 6 136 | 40 147 |
| Disposals | -936 | -356 | -2 0 96 |
| Depreciation and impairment | -7 010 | -5 819 | -25 51 1 |
| Transfers between items | -228 | ||
| Exchange differences | -153 | -392 | -54 |
| Carrying amount at end of period | 156 646 | 135 363 | 151 870 |
| EUR 1000 | 1-3/2008 | 1-3/2007 | 1-12/2007 |
|---|---|---|---|
| Intangible assets | 1 815 | 116 | 70 |
| Property, plant and equipment | 14 908 | 7 232 | 8 646 |
| Total | 16 723 | 7 348 | 8 716 |
| The Group's share of capital commitments | |||
| of joint ventures | 12 500 | 425 | 8 584 |
(Joint ventures)
| EUR 1000 | 1-3/2008 | 1-3/2007 | 1-12/2007 |
|---|---|---|---|
| Sales | 301 | 300 | 1 851 |
| Purchases | 106 | 247 | |
| Non-current receivables | |||
| Capital loan receivable | 3 646 | 3 296 | 2 646 |
| Current receivables | |||
| Trade receivables | 89 | 76 | 110 |
| Current payables | |||
| Trade payables | 31 |
| EUR 1000 | 3/2008 | 3/2007 | 12/2007 |
|---|---|---|---|
| Securities for own commitments | |||
| Real estate mortgages | 10 192 |
10 850 | 10 114 |
| Corporate mortgages | 1 0 000 |
18 710 |
1 5 000 |
| Other secu rities |
1 73 |
161 | 182 |
| Bank guarantees required for environmental permits |
4 405 | 1 926 | 4 309 |
its. Other securities are security depos
he Group has given no pledges, mortgages or guarantees on behalf of outsiders. T
| O perating lease liabilities |
|||
|---|---|---|---|
| EUR 1000 | 3/2008 | 3/2007 | 12/2007 |
| Maturity not later than one year | 7 499 | 6 158 | 7 424 |
| Maturity later than one year and not later than five years | 15 7 21 |
1 3 255 |
1 5 611 |
| Maturity later than five yea rs |
4 397 | 3 483 | 3 905 |
| Total | 27 617 |
22 896 |
26 940 |
| E UR 1000 |
3/2008 | 3/2007 | 12/2007 |
|---|---|---|---|
| Nominal values of interest rate swaps* | |||
| Maturity not later than one year |
7 500 | 13 500 | 7 500 |
| M aturity later than one year and not later than five years |
15 000 | 30 500 | 15 000 |
| Total | 2 2 500 |
44 000 |
22 5 00 |
| Fair value | 280 | 665 | 394 |
| Nominal values of interest rate swaps** | |||
| Maturity not later than one year | 3 029 | 1 429 | 3 029 |
| Maturity later than one year and not later than five years |
18 514 | 5 714 |
1 8 514 |
| M aturity later than five years |
11 314 | 7 143 | 12 028 |
| T otal |
32 857 | 14 286 | 33 571 |
| Fair value | 279 | 549 | 703 |
Hedge accounting under IAS 39 has not been applied to these interest rate swaps. Changes in fair been recognised in finance in cos * values have come and ts.
The interest rate swaps are used to hedge cash flow related to a floating rate loan, and hedge ting under IAS 39 has been applied to it. The hedges have been effective, and the total change in s have been recognised in the hedging fund und uity. ** accoun the fair value er eq
| Currency derivatives E UR 1000 |
3/2008 | 3/2007 | 12/2007 |
|---|---|---|---|
| Nominal values of forward contracts* | |||
| Maturity not later than one year Fair value |
2 169 57 |
2 184 7 |
ing under IAS 39 has not been applied to the currency derivatives. C es in fair values ave been recognised in finance income and costs. * Hedge account hang h
| Oil derivatives | |||
|---|---|---|---|
| 1000 bbl | 3/2008 | 3/2 007 |
12/2007 |
| Raw oil put options | |||
| Volume maturing not later tha n one year |
227 | 12 | 182 |
| Volume mat uring later than one year and not later than five |
|||
| y ears |
169 | 396 | 226 |
| Total | 396 | 408 | 4 08 |
| Fair value EUR 1000 | 50 | 1 215 | 83 |
| Volume of sold raw oil futures | |||
| M aturity not later than one year |
42 | 42 | 42 |
| F air value EUR 1000 |
-1 127 | -265 | -897 |
Hedge accounting under IAS 39 has not been applied to oil derivatives. Changes in fair values have been erating expenses. recognised in other op
he fair values of the oil options have been determined on the basis of a generally used measurement e contracts are based on market prices at the balance sheet date. T model. The fair values of other derivativ
arnings per share: E
parent company /adjusted average number of shares profit attributable to equity holders of the
ities as in the cash flow statement / a average r of shar Cash flows from operating activities/share: cash flow from operating activ djusted numbe es
perating profit - cost calculated on invested capital (average of four quarters) before taxes EVA: o WACC 2007: 8.75% WACC 2008: 9.3%
ber of shares at year end Equity/share: profit attributable to equity holders of the parent company / adjusted num
Return on equity, % (ROE): (profit for the period / shareholders' equity (average)) x 100
Return on investment, % (ROI): (profit before tax + interest expenses and other finance costs) / (balance sheet total - non-interest-bearing liabilities (average)) x 100
%: hareholders' equity / (balance sheet total - advances received) x 100 Equity ratio, s
-bearing liabilities / shareholders' equity x 100 Gearing, %: net interest
Interest-bearing liabilities: Interest-bearing liabilities - liquid assets
2008 Helsinki 28 April
ASSILA & TIKANOJA PLC L Board of Directors
ent and CEO Jari Sarjo Presid
contact Jari Sarjo, 636 2810. For further information, please President and CEO, tel. +358 10
anagement and property and plant support services. L&T operative in Finland, Sweden, Latvia, Russia and Norway. Net sales in 2007 amounted to 555 million Lassila & Tikanoja specialises in environmental m is euro. L&T employs 9500 persons, 2400 of which are located outside Finland. L&T's shares are listed on OMX Nordic Exchange Helsinki.
Major media Distribution: OMX Nordic Exchange Helsinki www.lassila-tikanoja.com
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