Luotea Plc · OMXHEX:LUOTEA
Luotea — Lassila & Tikanoja — Investor Presentation (February 2011)
40 slides from Luotea's investor presentation, February 2011
Slide 1: Lassila & Tikanoja plc Corporate Presentation
Lassila & Tikanoja plc Corporate Presentation February 2011 0 © Copyright Lassila & Tikanoja
Slide 2: Contents
Contents General information L&T in brief Divisions Shareholders Financial information Highlights of the year 2010 and Q4 Prospects 1 © Copyright Lassila & Tikanoja
Slide 3: L&T's divisions
L&T’s divisions Renewable Energy Environmental Cleaning and Office Property Sources (L&T Services Support Services Maintenance Biowatti) waste management recycling services property maintenance wastewater services cleaning services technical maintenance wood-based biofuels heavy-duty industrial offi
Slide 4: Breakdown of net sales and operating profit 2010
Breakdown of net sales and operating profit 2010 Net Operating Net sales 9% EUR million sales profit 11 20% 48% Environmental Services 290.0 33.7 Cleaning and Office 23% Support Services 140.6 7.5 Property Maintenance 123.5 7.8 Operating Renewable Energy Sources 55.1 -6.6 16% profit Inter-division -
Slide 5: L&T in 2010
Net sales, EUR million L&T in 2010 700 600 500 400 2010 2009 Change 300 Net sales, EUR million 598.2 582.3 2.7 200 Operating profit excl. EO items, 100 EUR million 45.5 51.3 -11.3 0 06 07 08 09 10 Operating profit, EUR million 40.2 50.3 -20.0 Earnings per share, EUR 0.68 0.85 -20.0 Operating profit,
Slide 6: L&T's international operations
L&T’s international operations • Around 10% of net sales in 2010 • L&T has operations in Sweden, Finland: Latvia, Moscow and Moscow region All L&T’s services • Expansion through acquisitions and Sweden: organic growth Cleaning services Russia: Waste management and recycling services Latvia: Waste ma
Slide 7: Environmental Services – From waste to useful materials
Percentage of net sales Environmental Services 2010 48% – From waste to useful materials • Collection and transport of waste and its processing into secondary raw materials and recovered fuel for sale, servicing and maintenance of wastewater systems and process Net sales industry equipment 300 200 •
Slide 8: Environmental Services – Regulation and attitudes as growth drivers
Environmental Services – Regulation and attitudes as growth drivers Stricter environmental regulations • EU directives: implemented through national legislation • National Waste Plan: In Finland the recovery rate target for municipal waste is 80% by the end of 2016; half of all municipal waste gener
Slide 9: L&T is building a recycling society
L&T is building a recycling society 8 © Copyright Lassila & Tikanoja Divisions, Environmental Services
Slide 10: Recycling of municipal waste in EU countries
Recycling of municipal waste in EU countries % 80 70 60 Target 2016 / 2020 (National Waste Plan, EU) 50 2007 40 2008 30 20 10 0 g s ce a m k S aly y he en e d en d l K in um ga an nd ur xe ar ec tri an n U pa an la ed It bo tu us m m rla gi re nl Ire S or Fr w el A er G Fi P B G Share of recycling a
Slide 11: L&T Recoil – Refining used lubricant oil into high quality base oil
L&T Recoil – Refining used lubricant oil into high quality base oil • Joint venture (50%) • Services include waste oil refining as well as sale of end products • Production plant in Hamina, Finland; feedstock collected from countries around the Baltic Sea • Capacity: 60,000 tons of used lubricants 1
Slide 12: Cleaning and Office Support Services – Multiple services from one service provider
Cleaning and Office Support Services Percentage of net sales 2010 23% – Multiple services from one service provider • Cleaning services from daily cleaning to special cleaning jobs, office support services such as reception and mailing Net sales • Net sales come mostly from long-term (2-3 years) ser
Slide 13: Cleaning and Office Support Services – Outsourcing as growth driver
Cleaning and Office Support Services – Outsourcing as growth driver • Trend: from in-house to outsourcing – In the Finnish public sector outsourcing rate remarkably below EU average • Centralisation of services to one multi-service provider • Growing importance of property management • Competition f
Slide 14: Property Maintenance – Added value for our customers
Property Maintenance Percentage of net sales 2010 20% – Added value for our customers • Property maintenance and maintenance of technical systems in properties such as residential buildings and industrial plants, damage repair services e.g. protection, cleaning and drying Net sales 120 • Net sales c
Slide 15: Property Maintenance – Services to be centralised to one service supplier
Property Maintenance – Services to be centralised to one service supplier • Trend: from in-house to outsourcing – In the Finnish public sector outsourcing rate of property services remarkably below EU average • Centralisation of services to one service supplier offering a wide range of services • Gr
Slide 16: Renewable Energy Sources (L&T Biowatti) – Clean energy from wood
Percentage of net sales Renewable Energy Sources (L&T Biowatti) 2010 9% – Clean energy from wood • L&T Biowatti provides comprehensive wood-based biofuel supply solutions to heating and power plants Net sales 60 • Majority of net sales from biofuel supplies; wide customer 50 40 base; long-term biofu
Slide 17: Renewable Energy Sources – Growth drivers
Renewable Energy Sources – Growth drivers • Trend: increasing the use of bioenergy and reducing carbon dioxide emissions – In Finland, target is to raise the proportion of energy consumption provided by renewable energy sources to 38% by 2020 (currently 28%) – Finland’s climate and energy strategy:
Slide 18: Renewable Energy Sources – From raw material procurement to fuel supply
Renewable Energy Sources – From raw material procurement to fuel supply • The whole chain from raw material procurement to fuel supply • Nationwide terminal and service network • Raw material from private and public forest owners through forestry services and from by-product flows of industry 17 © C
Slide 19: Major shareholders at 31 January 2011
Major shareholders at 31 January 2011 Shareholder Number of % of shares and shares of voting power 1 Ilmarinen Mutual Pension Insurance Company 2,854,858 7.4 2 Evald and Hilda Nissi Foundation 2,413,584 6.2 3 Mandatum Life Insurance Company Limited 2,256,397 5.8 4 Tapiola Mutual Pension Insurance Co
Slide 20: Number and structure of shareholders
Number and structure of shareholders Number of shareholders Shareholder structure 8000 Financial and insurance corp. Households 6000 Foreign and nominee registered 9179 Others 4000 7595 6135 4535 4985 2000 0 2006 2007 2008 2009 1/2011 19 © Copyright Lassila & Tikanoja Shareholders
Slide 21: Stable dividend: EUR 0.55 per share
Stable dividend: EUR 0.55 per share The amount of dividend is tied to the results for the financial year. Profits not considered necessary for ensuring the healthy development of the company are distributed to shareholders. Dividend Dividend/earning EUR % 0,60 90 80 70 0,40 60 50 0.55 0.55 0.55 0.55
Slide 22: Financial information: Highlights of the year 2010 and Q4 and prospects for 2011
Financial information: Highlights of the year 2010 and Q4 and prospects for the year 2011 21 © Copyright Lassila & Tikanoja
Slide 23: Highlights of the year 2010
Highlights of the year 2010 Growth • Net sales increased by 2.7% and totalled EUR 598.2m • Large number of commissioned assignments in Q1 and Q4 resulted by heavy snowfalls • Raising operating rates in the industry perked up demand for Environmental Services • Prices of secondary raw materials rose
Slide 24: Highlights of the year 2010
Highlights of the year 2010 Environmental Services • Recovery in operating rates in the industry increased demand • Market prices of secondary raw materials and their demand showed a clear improvement • Heavy snowfalls eroded production efficiency in Q1 and Q4 • Investment programme of Kerava recycl
Slide 25: Highlights of the year 2010
Highlights of the year 2010 Property Maintenance • Commissioned assignments caused by the exceptionally cold and snowy weather boosted the division's net sales • Work load for damage repair services remained healthy throughout the year • Demand for maintenance of technical systems grew thanks to gro
Slide 26: Highlights of Q410
Highlights of Q410 Net sales EUR 151.5m (EUR 148.0m) +2.3% (yoy) Netsales Net sales Net sales increased thanks to large number of commissioned assignments resulted by heavy snowfalls. Demand of Environmental Services improving. Operating profit EUR 8.6m (EUR 8.5m); operating profit Operating Operati
Slide 27: Environmental Services: Waste volumes increasing, demand picking up
Environmental Services: Waste volumes increasing, demand picking up Q4: Net Netsales salesEUR EUR74.0m 74.0m(EUR (EUR71.2m) 71.2m) • Net sales increased thanks to Q4: improving recycling volumes and Operating profit excl. EO items Operating profit excl. EO items EUR8.2m EUR 8.2m(EUR (EUR6.9m) 6.9m)
Slide 28: Cleaning and Office Support Services: Weak performance due to project start-up costs
Cleaning and Office Support Services: Weak performance due to project start-up costs Q4: Net sales EUR 34.6m (EUR 35.7m) • Net sales decreased in domestic Q4: Net sales EUR 34.6m (EUR 35.7m) Operatingprofit profitexcl. excl.EO EOitems items operations. Operating EUR0.3m EUR 0.3m(EUR (EUR1.8m) 1.8m)
Slide 29: Property Maintenance: Heavy snowfalls resulted in extra costs
Property Maintenance: Heavy snowfalls resulted in extra costs Q4: Netsales salesEUR EUR31.6m 31.6m(EUR (EUR25.8m) 25.8m) • Large number of Q4: Net Operating profit excl. EO items Operating profit excl. EO items commissioned assignments EUR0.6m EUR 0.6m(EUR (EUR1.1m) 1.1m) due to heavy snowfalls. 201
Slide 30: Renewable Energy Sources: Cold weather was for a little help
Renewable Energy Sources: Cold weather was for a little help Q4: Netsales salesEUR EUR15.3m 15.3m(EUR (EUR17.7m) 17.7m) • Low prices of fossil fuels and Q4: Net Operatingprofit Operating profitexcl. excl.EO EOitems items emission rights kept the EUR 0.0m (a loss of: EUR 0.3m) competitiveness of biof
Slide 31: Changes in Waste Tax Act
Changes in Waste Tax Act • Increase in waste tax effective on Jan 1st 2011 (30 EUR/t 40 EUR/t) • Tax base was broadened also to industrial landfills 50 40 30 20 10 0 96 98 00 02 04 06 08 10 12 19 19 20 20 20 20 20 20 20 • Development of waste tax in Finland in 1996-2011 and in 2012-2013 (EUR/t) 30 ©
Slide 32: Financial summary
Financial summary Change Change Q410 Q409 % 2010 2009 % Net sales, EUR million 151.5 148.0 2.3 598.2 582.3 2.7 Operating profit excl. EO items, EUR million 9.1 8.7 4.7 45.5 51.3 -11.3 Operating profit, EUR million 8.6 8.5 0.6 40.2 50.3 -20.0 Operating margin, % 5.6 5.7 6.7 8.6 Profit before taxes, E
Slide 33: Net sales by division
Net sales by division Change EUR million 2010 2009 % Environmental Services 290.0 284.2 2.0 Cleaning and Office Support Services 140.6 143.3 -1.9 Property Maintenance 123.5 100.2 23.3 Renewable Energy Sources 55.1 64.1 -14.1 Inter-division net sales -11.0 -9.5 L&T total 598.2 582.3 2.7 32 © Copyrigh
Slide 34: Operating profit by division
Operating profit by division Change EUR million 2010 2009 % Environmental Services 33.7 36.0 -6.4 Cleaning and Office Support Services 7.5 10.3 -27.0 Property Maintenance 7.8 7.4 5.2 Renewable Energy Sources -6.6 -1.0 Group administration and other -2.2 -2.4 Total operating profit 40.2 50.3 -20.0 Op
Slide 35: Key figures
Key figures Q410 Q409 2010 2009 Earnings per share, EUR 0.14 0.14 0.68 0.85 EVA, EUR million 1.2 -0.1 10.1 16.5 Capital expenditure, EUR million 12.5 10.8 39.3 44.9 Depreciation, amortisation and 10.3 10.4 43.9 40.3 impairment, EUR million Return on equity, % (ROE) 11.9 15.7 Return on invested capit
Slide 36: Operating cash flow, cumulative
Operating cash flow, cumulative MEUR 70 60 50 40 30 20 10 0 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 -10 Operating activities Investment activities • Operating cash flow was EUR 63.8m (EUR 66.2m) • EUR 2.2m was tied up in the working capital (EUR 12.0m) • Capex in 2010 was lo
Slide 37: Long-term loans
Long-term loan portfolio Long-term loans 31 December 2010 Maturity structure of long-term loans Pension institutions 31 December 2010 30% MEUR 30 Credit institutions 70% 20 Variable interest rate 30% 10 Fixed interest rate 70% 0 2010 2011 2012 2013 2014 2015 2016 and Total EUR 115.1 million, after a
Slide 38: Financial position
Financial position Interest-bearing debt Gearing ratio MEUR % 175 70 150 60 28 125 33 13 50 15 100 14 40 53.5 52.9 47.5 55.2 50.3 75 30 50 116 106 98 120 112 20 25 10 0 0 Q409 Q110 Q210* Q310 Q410 Q409 Q110 Q210* Q310 Q410 Net interest-bearing debt Liquid assets * Q210: excluding L&T Recoil 37 © Cop
Slide 39: Prospects for the year 2011
Prospects for the year 2011 The outlook for the Environmental Services division's waste management services and recycling business for 2011 has improved. Rising operating rates in the industry are expected to increase waste volumes and the demand for process cleaning and material recovery solutions.
Slide 40: Capital Markets Day
Capital Markets Day • CMD for analysts and institutional investors will be held at Kerava recycling park on 9 March • In addition to the presentations held by President and CEO Jari Sarjo and other management, there will be a tour at the new plants of the recycling park. • To attend the Capital Mark
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