Slide 1: Lassila & Tikanoja Half-Year Financial Report 2023
LASSILA & TIKANOJA HALF-YEAR FINANCIAL REPORT 2023 Eero Hautaniemi, President & CEO Valtteri Palin, CFO 26 July 2023
Slide 2: In Focus in Q2
IN FOCUS IN Q2 • Net sales were EUR 207.5 million (219.1) • Net sales excluding the renewable energy sources business was on a par with the comparison period • Adjusted operating profit was EUR 9.2 million (11.0) • Facility Services Finland continued the positive development of its performance and I
Slide 3: Finland's new government programme promotes circular economy
FINLAND’S NEW GOVERNMENT PROGRAMME PROMOTES CIRCULAR ECONOMY • The role of municipalities in waste management is specified to be limited to household waste, and the activities of municipal companies in waste markets are to be more regulated than before • The development of well-functioning markets f
Slide 4: Net Sales
NET SALES -6.8% (Organic growth 1.3%) 7.3 -0.3 -1.6 -0.5 429.5 -0.1 400.2 -34.1 Group Environmental Industrial Facility Services Facility Services Other Renewable Group 1-6/2022 Services* Services Finland Sweden energy 1-6/2023 sources** MEUR Q2/23 Q2/22 Change% 1-6/23 1-6/22 Change% 2022 Environmen
Slide 5: Adjusted Operating Profit
ADJUSTED OPERATING PROFIT -3.7% -0,9 0,5 3,5 11.0 -2,6 -0,9 10.6 Adjusted operating Environmental Industrial Facility Services Facility Services Other Adjusted operating profit 1-6/2022 Services Services Finland Sweden profit 1-6/2023 MEUR Q2/23 Q2/22 Change% 1-6/23 1-6/22 Change% 2022 Environmental
Slide 6: Operating Profit by Division
OPERATING PROFIT BY DIVISION ENVIRONMENTAL SERVICES excl. renewable energy sources INDUSTRIAL SERVICES MEUR MEUR 11,1 7.0 9,9 6,2 8,5 3.3 2.3 3.9 3,2 2.8 0.2 0.1 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 FACILITY SERVICES FINLAND FACILITY SERVICES SWEDEN MEUR MEUR 0.5 -
Slide 7: Environmental Services
ENVIRONMENTAL SERVICES EXCL. RENEWABLE ENERGY SOURCES • The number of B2B and producer responsibility organization customers increased thanks to active sales efforts • Demand and prices of recycled raw materials remained low • New collective agreement increased personnel expenses in the second quart
Slide 8: Industrial Services
INDUSTRIAL SERVICES • The hazardous waste business saw strong demand • In the environmental construction business demand remained high and new customer projects were started 12.8% MEUR Q2/23 Q2/22 Change% 1-6/23 1-6/22 Change% 2022 Net sales 38.0 33.7 12.7 64.1 56.8 12.8 132.0 64.1 56.8 EBITDA 7.1 6
Slide 9: Facility Services Finland
FACILITY SERVICES FINLAND • The measures taken in the latter half of 2022 to streamline the cost structure continued • The increase in costs caused by the wage-related decisions reached in collective bargaining processes will be compensated by operational efficiency improvements and price increases
Slide 10: Facility Services Sweden
FACILITY SERVICES SWEDEN • Customer agreements in the Swedish business are mostly fixed-price contracts, and the increased production costs could not be passed on to customers • The division has a programme ongoing to simplify operating models and adapt them to the changed business environment. The
Slide 11: Solid roadmap for ICT solution renewal to modernise end-of-life systems
SOLID ROADMAP FOR ICT SOLUTION RENEWAL TO MODERNISE END-OF-LIFE SYSTEMS Environmental Services ERP renewal Planning Design Design Build Test & rollout Facility Services Sweden ERP upgrade HR & Finance system renewals Facility Services Industrial Services ERP renewal in phases ERP renewal continues F
Slide 12: Sustainability Highlights Q2/2023
SUSTAINABILITY HIGHLIGHTS Q2/2023 Circular economy roadmaps Good development in L&T’s CO2 emissions from created for several occupational safety own operations decreased industrial customers • Safety culture trainings in H1 due to increased use of • E.g. Valmet automotive’s ongoing – All L&T biofuel
Slide 13: Sustainability Score Card H1/2023
SUSTAINABILITY SCORE CARD H1/2023 • The fuel distribution obligation in Finland was adjusted in 2022 by reducing the biofuel component by 7.5 percentage points. Statistics Finland published the updated fuel classification data later in spring 2023, and they have been taken into account in the emissi
Slide 14: Key Figures
KEY FIGURES Q2/23 Q2/22 Change % 1-6/23 1-6/22 Change % 2022 Capital expenditure, MEUR 17.9 7.2 148.7 31.8 35.7 -11.1 58.2 Share of business acquisitions in capital expenditure, - 20.5 21.5 MEUR Depreciation, amortisation and impairment, MEUR 14.0 14.1 -0.6 28.0 27.9 0.4 55.4 Return on equity (ROE),
Slide 15: Net Working Capital
NET WORKING CAPITAL Q1/22* Q2/22* Q3/22 Q4/22 Q1/23 Q2/23 0,0 -5,0 -4.1 -2.8 -5.6 -4.6 -6.1 -5.1 -10,0 -15,0 -20,0 -25,0 -22.5 -30,0 -35,0 -35.3 -40,0 -37.5 -45,0 -41.6 -50,0 -46.8 -49.5 -55,0 -60,0 Net working capital, MEUR Net working capital, % of net sales Net working capital = Current assets -
Slide 16: Net Cash Flow and Net Investments
NET CASH FLOW AND NET INVESTMENTS 50,0 41.1 40,0 -37.8 -30.6 30,0 -27.4 -19.8 19.2 19.3 -19.2 20,0 10,0 -7.7 1.0 0,0 -6.0 -4.9 -10,0 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Net cash from operating activities after investments YTD, MEUR Net cash used in investment activities YTD, MEUR © Lassila & Tikanoj
Slide 17: Interest Bearing Debt and Liquidity
INTEREST BEARING DEBT AND LIQUIDITY 250 200 70 70 73 72 75 76 150 100 165 160 144 148 144 134 50 50 48 22 34 30 30 0 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Interest bearing debt, MEUR IFRS 16, MEUR Liquid assets, MEUR © Lassila & Tikanoja plc | Q2/2023 26 July 2023 19
Slide 18: Maturity Structure of Loans
MATURITY STRUCTURE OF LOANS Loans, MEUR Weighted average of effective interest rate 3.4% (2.4%) 80 70 60 30 % 50 40 75 30 20 40 10 18 70 % 0 2023 2024 2025 2026 2027 2028 Bond Bank loan Fixed Variable L&T will repay in total EUR 28 million of interest bearing debt during the year 2023 Loans do not i
Slide 19: Outlook for 2023
OUTLOOK FOR 2023 Net sales and adjusted operating profit in 2023 are estimated to be at the same level as in the previous year even though the comparison period includes net sales from the Renewable energy sources business in the amount of EUR 35.4 million. Q4/2020 & FY 2020 26 July 2023 21
Slide 20: Contacts
CONTACTS Eero Hautaniemi, CEO +358 10 636 2810 eero.hautaniemi@lassila-tikanoja.fi Valtteri Palin, CFO +358 40 734 7749 valtteri.palin@lassila-tikanoja.fi © Lassila & Tikanoja plc | Q2/2023 26 July 2023 22
Slide 21: Shareholders
SHAREHOLDERS
Slide 22: Shareholder Structure
SHAREHOLDER STRUCTURE Number of shareholders Shareholder structure 25 228 25 121 24 557 23 088 Others 34% 20 732 Households 43% 15 524 13 207 12 208 10 812 Foreign and nominee registered 10% Financial and 2016 2017 2018 2019 2020 2021 2022 Q1/23 Q2/23 insurance corp. 13% © Lassila & Tikanoja plc | Q
Slide 23: Major Shareholders on 30 June 2023
MAJOR SHAREHOLDERS ON 30 JUNE 2023 Shareholder Shares % Evald and Hilda Nissi’s Foundation 3,496,487 9.01 Mandatum Life Insurance Company Limited 1,805,483 4.65 Nordea Funds Ltd 1,681,319 4.33 Maijala Juhani 1,529,994 3.94 Åbo Akademi University Foundation 1,066,282 2.75 Bergholm Heikki 875,000 2.26
Slide 24: Appendix
APPENDIX
Slide 25: Key Figures
KEY FIGURES NET SALES Q2/2023 Q2/23 Q2/22 Change% 1-6/23 1-6/22 Change% 2022 Net sales, 207.5 219.1 -5.3 400.2 429.5 -6.8 844.1 18 % MEUR 35 % EBITDA, 23.2 24.2 -4.2 38.6 37.7 2.4 98.3 MEUR Operating 9.2 10.1 -9.2 10.6 9.8 8.1 42.9 16 % 207.5 profit, MEUR MEUR Operating 4.4 4.6 2.7 2.3 5.1 margin, %
Slide 26: © Lassila & Tikanoja plc | Q2/2023 26 July 2023
© Lassila & Tikanoja plc | Q2/2023 26 July 2023 28
Slide 27: © Lassila & Tikanoja plc | Q2/2023 26 July 2023
© Lassila & Tikanoja plc | Q2/2023 26 July 2023 29
Slide 28: Circular Economy - Made Real
CIRCULAR ECONOMY - MADE REAL _