LASSILA & TIKANOJA PLC: FINANCIAL STATEMENTS RELEASE 1 JANUARY - 31 DECEMBER 2010
03-02-11 kl. 3/2 2011 06:00 | Lassila & Tikanoja Oyj 9,87 (0,00%)
Helsinki, Finland, 2011-02-03 07:00 CET (GLOBE NEWSWIRE) --
LASSILA & TIKANOJA PLC Financial Statements Release 3 February 2011 8.00 AM
LASSILA & TIKANOJA PLC: FINANCIAL STATEMENTS RELEASE 1 JANUARY - 31 DECEMBER
2010
-- Net sales for the final quarter EUR 151.5 million (EUR 148.0 million);
operating profit EUR 8.6 million (EUR 8.5 million); operating profit
excluding non-recurring items EUR 9.1 million (EUR 8.7 million); earnings
per share EUR 0.14 (EUR 0.14)
-- Full-year net sales EUR 598.2 million (EUR 582.3 million); operating profit
EUR 40.2 million (EUR 50.3 million); operating profit excluding
non-recurring items EUR 45.5 million (EUR 51.3 million); earnings per share
EUR 0.68 (EUR 0.85)
-- The investments made in Renewable Energy Sources (L&T Biowatti) and in
L&T Recoil have not generated the profits expected, and operations
continued to make a loss.
-- Net sales and operating profit excluding non-recurring items in 2011 are
expected to remain at the 2010 level.
-- A dividend of EUR 0.55 per share is proposed.
GROUP NET SALES AND FINANCIAL PERFORMANCE
Final quarter
Lassila & Tikanoja's net sales for the final quarter increased by 2.3% to EUR
151.5 million (EUR 148.0 million). Operating profit was EUR 8.6 million (EUR
8.5 million), representing 5.6% (5.7%) of net sales, and operating profit
excluding non-recurring items was EUR 9.1 million (EUR 8.7 million). Earnings
per share came to EUR 0.14 (EUR 0.14).
The large number of commissioned assignments, due to heavy snowfalls in the
early winter and the improved demand for Environmental Services, boosted net
sales. Meanwhile, net sales for the Renewable Energy Sources division (L&T
Biowatti) were below the previous year's level.
Profitability was eroded by the higher than expected land cleaning costs
associated with the Kerava recycling plant investment and the heavy snowfall in
southern Finland in the early winter, which resulted in high subcontracting and
overtime costs.
The 2010 financial year
Full-year net sales amounted to EUR 598.2 million (EUR 582.3 million), showing
an increase of 2.7%. Operating profit was EUR 40.2 million (EUR 50.3 million),
representing 6.7% (8.6%) of net sales. Operating profit excluding non-recurring
items fell to EUR 45.5 million (EUR 51.3 million). Earnings per share were EUR
0.68 (EUR 0.85).
Net sales grew, thanks to the large number of commissioned and contract
assignments in the property maintenance sector, caused by heavy snowfalls. The
demand for Environmental Services perked up in the second half, and prices of
secondary raw materials rose significantly. The Renewable Energy Sources
division's (L&T Biowatti) net sales fell below the previous year's level,
because of the low price level of fossil fuels and emission rights.
All other divisions except Property Maintenance saw their full-year operating
profit excluding non-recurring items decline from the figure for the comparison
period.The investments made in Renewable Energy Sources (L&T Biowatti) and in
L&T Recoil have not generated the profits expected, and operations continued to
make a loss. The preliminary agreement negotiated in the spring for L&T
Recoil's ownership rearrangement was cancelled.
Non-recurring restructuring costs of EUR 1.5 million and a EUR 3.4 million cost
associated with the discontinuation of L&T Biowatti's wood pellet business were
recognised for the year.
Financial summary
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2010 2009 % 2010 2009 %
--------------------------------------------------------------------------------
Net sales, EUR million 151.5 148.0 2.3 598.2 582.3 2.7
--------------------------------------------------------------------------------
Operating profit excluding 9.1 8.7 4.7 45.5 51.3 -11.3
non-recurring items, EUR million*
---------------------------------- -------
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 tax, EUR million 7.6 7.4 1.9 36.0 45.0 -20.1
---------------------------------- -------
Earnings per share, EUR 0.14 0.14 0.68 0.85
---------------------------------- -------
Dividend per share, EUR 0.55** 0.55
---------------------------------- -------
EVA, EUR million 1.2 -0.1 10.1 16.5 -38.8
--------------------------------------------------------------------------------
* Breakdown of operating profit excluding non-recurring items is presented
below the division reviews.
** Proposal by the Board of Directors
NET SALES AND FINANCIAL PERFORMANCE BY DIVISION
Environmental Services
Final quarter
The division's net sales for the final quarter were up by 4.0%, to EUR 74.0
million (EUR 71.2 million). The operating profit was EUR 8.2 million (EUR 6.8
million), and operating profit excluding non-recurring items totalled EUR 8.2
million (EUR 6.9 million).
Net sales from domestic operations grew from the comparison period's level,
thanks to stronger demand for waste management services and higher operating
rates in the industry. Net sales growth in the recycling business was fuelled
by the rise in secondary raw material prices. Recycling volumes also showed
growth, although more moderate than the price development.
The division's profitability was taxed by machinery repair costs that were
higher than in the comparison period, and the higher than expected land
cleaning costs associated with the Kerava recycling plant. Compensation was
paid by the City of Kerava for the early hand-over of the leased land areas.
The net increase in operating profit excluding non-recurring items that
resulted from the arrangements in Kerava was EUR 0.6 million.
The reliability of operations at joint venture L&T Recoil's plant improved,
thanks to the repair investments conducted in the early autumn. Higher demand
and the rising global market prices for oil pushed the price of the plant's end
product, base oil, into an upward turn. Nevertheless, the final quarter's
operating profit excluding non‑recurring items remained in the red.
The 2010 financial year
The Environmental Services division's net sales for 2010 grew by 2.0%, to EUR
290.0 million (EUR 284.2 million). Operating profit totalled EUR 33.7 million
(EUR 36.0 million), and operating profit excluding non‑recurring items was EUR
34.0 million (EUR 36.7 million).
Waste volumes grew, thanks to recovery in industrial operations and
construction. Similarly, the demand for secondary raw materials picked up from
the previous year's level and their price took a marked upward turn. Demand for
process cleaning and hazardous waste services perked up after a time of
sluggish demand in the first half, and partnership agreements were signed with
industrial clients.
The exceptionally heavy snowfall seen in the course of the year strained waste
management production efficiency and decreased the demand for industrial
services in the first half. In the comparison period, major project-based
assignments boosted net sales and improved profitability.
The second stage of the Kerava recycling plant's investment programme was
completed. A new combined recycling plant for construction waste and trade and
industrial waste was introduced at the start of the year, resulting in an
increase in the recovery rate of the waste processed at the Kerava plant.
Joint venture L&T Recoil's re-refinery experienced some technical problems,and
an investment shutdown was carried out at the plant in August-September, which
helped improve the plant's reliability. L&T Recoil's full-year operating loss
stands at EUR 3.6 million (a loss of EUR 3.8 million). In the final quarter,
losses shrank from the comparison period.
Net sales for international operations remained at the previous year's level,
and profitability improved. The challenging market conditions in Latvia have
held back business development. The first recycling facility was introduced in
Russia.
Cleaning and Office Support Services
Final quarter
The Cleaning and Office Support Services division's net sales for the final
quarter fell by 3.1%, to EUR 34.6 million (EUR 35.7 million). The operating
profit was EUR 0.2 million (EUR 1.7 million), and operating profit excluding
non-recurring items came to EUR 0.3 million (EUR 1.8 million).
Net sales from domestic operations fell slightly from the previous year's
level, withnew project start-up costs weakening profitability.
Net sales from international operations were at the comparison period's level.
The operating profit excluding non‑recurring items continued to be negative.
The 2010 financial year
The division's net sales for 2010 fell by 1.9%, to EUR 140.6 million (EUR 143.3
million). Operating profit totalled EUR 7.5 million (EUR 10.3 million), and
operating profit excluding non-recurring items was EUR 8.0 million (EUR 10.6
million).
Both net sales from Finnish operations and profitability declined from the
comparison period's level as a result of fierce price competition. Despite the
challenging market conditions, sales of commissioned assignments remained at
the 2009 level.Net sales from international operations were at the comparison
period's level. The operating profit excluding non-recurring items continued to
be negative even though Swedish operations were able to cut their losses.
A credit loss of EUR 0.7 million was recognised in Russia in the first half,
and the business was divested at the end of the third quarter.
Property Maintenance
Final quarter
The division's net sales for the final quarter were up by 22.3%, to EUR 31.6
million (EUR 25.8 million). The operating profit was EUR 0.6 million (EUR 1.1
million), and operating profit excluding non-recurring items was EUR 0.6
million (EUR 1.1 million).
The division's significant increase in net sales from the comparison period
could be attributed to the commissioned assignments brought about by the
exceptionally heavy snowfall in the second half. The order book for maintenance
services for technical systems and for damage repair services remained healthy.
Higher subcontracting and overtime costs eroded the division's profitability.
The 2010 financial year
The division's net sales for 2010 totalled EUR 123.5 million (EUR 100.2
million); an increase of 23.3%. Its operating profit was EUR 7.8 million (EUR
7.4 million), and operating profit excluding non-recurring items was EUR 7.9
million (EUR 7.5 million).
A larger contract portfolio and the commissioned assignments resulting from the
year's exceptionally cold and snowy weather boosted the division's net sales,
bringing them above the previous year's level.
The order book for damage repair services remained healthy throughout the year.
Service contracts were renewed, and new partnership agreements with insurance
companies were signed. The demand for maintenance services for technical
systems improved, particularly toward year-end 2010, following growth in the
construction industry.
Operating profit excluding non-recurring items improved as a consequence of net
sales growth and management of fixed costs.
Renewable Energy Sources
Final quarter
Final-quarter net sales for Renewable Energy Sources (L&T Biowatti) were down
by 13.8%, to EUR 15.3 million (EUR 17.7 million). The division recorded an
operating loss of EUR 0.4 million (a loss of EUR 0.3 million), and an operating
profit excluding non-recurring items of EUR 0.0 million (a loss of EUR 0.3
million).
The division's net sales declined even though cold weather at the year's end
spurred the demand for wood‑based fuels. The low prices of fossil fuels and
emission rights restricted demand.
The 2010 financial year
The Renewable Energy Sources division's net sales for 2010 were down by 14.1%,
to EUR 55.1 million (EUR 64.1 million). The operating loss totalled EUR 6.6
million (a loss of EUR 1.0 million), and the operating loss excluding
non-recurring items totalled EUR 3.1 million (a loss of EUR 0.6 million).
Both demand for wood-based fuels and their competitiveness declined from the
comparison period's level because of the low prices of emission rights and
fossil fuels (peat, coal, and oil). Profitability improved toward year-end 2010
because of the cold weather and measures to improve production efficiency.
A decision was made to discontinue the wood pellet business, as a result of the
unfavourable market conditions and the poor availability of raw materials. A
non-recurring expense of EUR 3.4 million was recognised for the
discontinuation.
BREAKDOWN OF OPERATING PROFIT EXCLUDING NON-RECURRING ITEMS
EUR million 10-12/ 10-12/ 1-12/ 1-12/
2010 2009 2010 2009
--------------------------------------------------------------------------------
-----------------------------
Operating profit 8.6 8.5 40.2 50.3
Non-recurring items:
Discontinuation of wood pellet production of 0.4 3.4
L&T Biowatti
Discontinuation of cleaning business in Moscow 0.1 0.4
Discontinuation of soil washing services -0.4
Restructuring costs 0.2 1.5 1.6
Closure of wood pellet plant in Luumäki 0.3
Refund of supplementary insurance fund of former -0.5
Lassila & Tikanoja
--------------------------------------------------------------------------------
Operating profit excluding non-recurring items 9.1 8.7 45.5 51.3
--------------------------------------------------------------------------------
FINANCING
Cash flows from operating activities amounted to EUR 63.8 million (EUR 66.2
million). EUR 2.2 million was tied up in the working capital (EUR 12.0
million).
At the end of the period, interest-bearing liabilities amounted to EUR 126.8
million (EUR 143.9 million). Net interest-bearing liabilities amounted to EUR
112.3 million, showing a decrease of EUR 4.0 million from the turn of the year.
New long-term loans were not taken out in 2010.
Long-term loans totalling EUR 22.2 million will mature in 2011. The average
interest rate of loans (with interest rate hedging)was 3.3% (3.2%).
Net finance costs amounted to EUR 4.2 million which is EUR 1.0 million below
the amount of the comparison period. Net finance costs were 0.7% (0.9%) of net
sales.
In 2010, a total of EUR 0.2 million (EUR -0.3 million) arising from the changes
in the fair values of interest rate swaps to which hedge accounting under IAS
39 is applied was recognised in other comprehensive income, after tax.
The equity ratio was 46.5% (44.1%) and the gearing rate 50.3 (53.5). Liquid
assets at the end of the period amounted to EUR 14.5 million (EUR 27.6
million).
Of the EUR 50 million commercial paper programme, EUR 5.0 million (EUR 0.0
million) was in use. The EUR 15.0 million committed limit, renewed in June for
two years, was not in use, as was the case in the comparison period.
DIVIDEND
The Annual General Meeting held on 31 March 2010 resolved on a dividend of EUR
0.55 per share. The dividend, totalling EUR 21.3 million, was paid to the
shareholders on 14 April 2010.
CAPITAL EXPENDITURE
Capital expenditure totalled EUR 39.3 million (EUR 44.9 million). The most
significant construction project was the Kerava combined recycling plant,
whichwas introduced for production use at year end.
In the second quarter, the property maintenance services business of
Kiinteistöpalvelu Oy Hollola was acquired into Property and Office Support
Services. The net sales of the acquired business totalled EUR 1.6 million. In
the final quarter, Säkkivaihto Oy was acquired into Environmental Services. The
net sales of the acquired business totalled EUR 1.1 million.
PERSONNEL
The average number of employees converted into full-time equivalents was 7,835
(8,113). The total number of full-time and part-time employees at the end of
the period was 8,732 (8,743). Of them 6,849 (6,762) people worked in Finland
and 1,883 (1,981) people in other countries.
PROPOSAL FOR THE DISTRIBUTION OF PROFIT
According to the financial statements, Lassila & Tikanoja plc's distributable
assets amount to EUR 71,211,992.73of which EUR 37,665,785.66 constitutes profit
for the financial period. There were no substantial changes in the financial
standing of the company after the end of the financial 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
General Meeting of Shareholders that distributable assets be used as follows:
A dividend of EUR 0.55 will be paid on each share. On the day when the
distribution of profit was proposed, the number of shares conferring
entitlement to receive dividend totalled 38,738,116 shares, on which the total
dividend payment would be EUR 21,305,963.80. No dividend shall be paid on
shares held by the company on the dividend payment record date.
In accordance with the resolution of the Board of Directors, the record date is
22 March 2011. The Board of
Directors proposes to the Annual General Meeting to be held on 17 March 2011
that the dividend be paid on 29 March 2011.
Earnings per share amounted to EUR 0.68. The proposed dividend is 81.4% of the
earnings per share.
NEW DIVISIONS
The company's internal reporting, as well as the segments reported externally,
were changed to reflect the new divisions (Environmental Services, Property and
Office Support Services and Renewable Energy Sources (L&T Biowatti)) at the
beginning of 2010.
As of 1 July 2010, Property and Office Support Services was divided into two
divisions: Cleaning and Office Support Services and Property Maintenance. The
company's financial reporting segments reflect the new divisions as of 1 July
2010. The financial reporting segments are Environmental Services, Cleaning and
Office Support Services, Property Maintenance and Renewable Energy Sources (L&T
Biowatti).
SHARE AND SHARE CAPITAL
Traded volume and price
The volume of trading excluding the shares held by the company in Lassila &
Tikanoja plc shares on NASDAQ OMX Helsinki in 2010 was 7,736,454, which is
20.0% (25.9%) of the average number of outstanding shares. The value of trading
was EUR 111.1 million (EUR 126.9 million). The trading price varied between EUR
12.85 and EUR 16.20. The closing price was EUR 14.73. The company holds 60,758
own shares. The market capitalisation excluding the shares held by the company
was EUR 570.6 million (EUR 619.9 million) at the end of the period.
Share capital and number of shares
The company's registered share capital amounts to EUR 19,399,437, and the
number of outstanding shares to 38,738,116 shares. The average number of shares
excluding the shares held by the company totalled 38,748,649.
Share option scheme 2005
In 2005, 600,000 share option rights were issued, each entitling its holder to
subscribe for one share of Lassila & Tikanoja plc. In the beginning of the
exercise period, 37 key persons held 200,000 2005C options. L&T Advance Oy, a
wholly-owned subsidiary of Lassila & Tikanoja plc, holds 30,000 2005C options
and these options will not be exercised. The exercise period for the 2005A has
ended on 29 May 2009 and for the 2005B options on 31 May 2010.
The exercise price for the 2005C options is EUR 26.87. The exercise periodfor
2005C options is 2 November 2009 to 31 May 2011.
As a result of the exercise of the outstanding 2005 share options, the number
of shares may increase by a maximum of 200,000 new shares, which is 0.5% of the
current number of shares. The 2005C options have been listed on NASDAQ OMX
Helsinki since 2 November 2009.
Share option scheme 2008
In 2008, 230,000 share option rights were issued, each entitling its holder to
subscribe for one share of Lassila & Tikanoja plc. 33 key persons hold 168,000
options and L&T Advance Oy 62,000 options.
The exercise price is EUR 16.27. 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 will be from 1 November 2010 to 31 May 2012.
As a result of the exercise of the outstanding 2008 share options, the number
of shares may increase by a maximum of 168,000 new shares, which is 0.4% of the
current number of shares. The 2008 options have been listed on NASDAQ OMX
Helsinki since 1 November 2010.
Share-based incentive programme
Lassila & Tikanoja plc's Board of Directors decided on 24 March 2009 on a
share-based incentive programme. The programme includes three earnings periods
one year each, of which the first one began on 1 January 2009 and the last one
ends on 31 December 2011. The basis for the determination of the reward is
decided annually. Rewards to be paid for the year 2010 will be based on the EVA
result of Lassila & Tikanoja group. They will be paid partly as shares and
partly in cash. The proportion paid in cash will cover taxes arising from the
reward.The programme covers 23 persons.
A maximum total of 180,000 Lassila & Tikanoja plc shares may be paid out on the
basis of the programme. The shares will be obtained in public trading, and
therefore the incentive programme will have no diluting effect on the share
value.
Shareholders
At the end of the financial period, the company had 9,151 (7,595) shareholders.
Nominee-registered holdings accounted for 12.2% (9.2%) of the total number of
shares.
Authorisation for the Board of Directors
The Annual General Meeting held on 31 March 2010 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 and on the issuance of these
shares. Shares will be repurchased otherwise than in proportion to the existing
shareholdings of the company's shareholders in public trading on the NASDAQ OMX
Helsinki Ltd at the market price quoted at the time of the repurchase.
The Board of Directors is authorised to repurchase and transfer a maximum of
500,000 company shares, which is 1.3% of the total number of shares. The
repurchase authorisation will be effective for 18 months and the share issue
authorisation for four years. These authorisations revoke the authorisation for
the repurchase of the company's own shares and the authorisation to issue
shares issued by the Annual General Meeting 2009.
The Board of Directors is not authorised to launch a convertible bond or share
option rights.
Own shares
At the end of the period, the company held 60,758 of its own shares,
representing 0.2% of all shares and votes. Based on the authorisation given by
the Annual General Meeting, the company repurchased 80,000 shares in the period
from 17 May to 2 June 2010 at a total acquisition cost of EUR 1.1 million. On
25 May 2010, the Board of Directors decided on a directed bonus issue involving
the issue, in which a total of 49,242 shares held by the company were issued to
the company's key personnel on 4 June 2010, as a part of the rewards for the
year 2009 of the share-based incentive programme.
RESOLUTIONS BY THE ANNUAL GENERAL MEETING
The Annual General Meeting of Lassila & Tikanoja plc, which was held on 31
March 2010, adopted the financial statements for the financial year 2009 and
released the members of the Board of Directors and 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
2009. The dividend payment date was resolved to be 14 April 2010.
The Annual General Meeting confirmed the number of the members of the Board of
Directors six. The following Board members were re-elected to the Board until
the end of the following AGM: Heikki Bergholm, Eero Hautaniemi, Matti Kavetvuo,
Hille Korhonen and Juhani Lassila. Miikka Maijala was elected as a new member
for the same term.
PricewaterhouseCoopers Oy, Authorised Public Accountants, were elected auditors.
The Annual General Meeting approved the Board's proposals to amend article 11
of the Articles of Association and to authorise the Board of Directors to
repurchase the company's own shares and to issue shares.
The resolutions of the Annual General Meeting were announced in more detail in
a stock exchange release on 31 March 2010.
BOARD OF DIRECTORS
The members of the Board of Directors are Heikki Bergholm, Eero Hautaniemi,
Matti Kavetvuo, Hille Korhonen, Juhani Lassila and Miikka Maijala. In its
constitutive meeting the Board elected Matti Kavetvuo as Chairman of the Board
and Juhani Lassila as Vice Chairman.
From among its members, the Board elected Juhani Lassila as Chairman and Eero
Hautaniemi and Miikka Maijala as members of the audit committee.
The Board decided to establish a remuneration committee. From among its
members, the Board elected Matti Kavetvuo as Chairman and Heikki Bergholm and
Hille Korhonen as members of the remuneration committee.
SUMMARY OF STOCK EXCHANGE RELEASES PURSUANT TO ARTICLE 7, CHAPTER 2 OF THE
SECURITIES MARKETS ACT
In a release published on 25 January 2010, the company announced that it has
concluded statutory employer-employee negotiations which began on 8 December
2009. As a result of these negotiations, L&T will reduce 110 salaried employee
positions in Finland. The reductions will be realised partly through natural
attrition. The reductions form part of the measures currently undertaken in
order to reduce fixed costs and to adapt business activities to meet current
and future market situation.
In a release published on 1 April 2010, the company announced that, as of 1
July 2010, Property and Office Support Services are to be divided into two
divisions: Cleaning and Office Support Services and Property Maintenance. The
company's financial reporting segments will be changed to reflect the new
divisions as of 1 July 2010.
In a release published on 29 April 2010, the company announced that Lassila &
Tikanoja plc and EcoStream Oy have signed a preliminary agreement on a business
arrangement based on which Lassila & Tikanoja will sell its 50 percent holding
in the joint venture L&T Recoil Oy to EcoStream, a co-owner. The transaction
related to the preliminary agreement was intended to be completed by the end of
June 2010. In a release published on 22 June 2010, the company announced that
the time given to the transaction has been extended and the transaction is
intended to be completed by the end of September 2010. In a release published
on 1 October 2010, the company announced that the reorganisation of the
business will be cancelled as financing needed for the transaction by EcoStream
could not be completed as agreed in the preliminary agreement. Therefore, the
preliminary agreement expired.
In a release published on 26 May 2010, the company announced that L&T Biowatti
Oy, a subsidiary of Lassila & Tikanoja plc, will discontinue its wood pellet
business. Construction of a pellet plant in Suonenjoki, Finland, is almost
completed but market situation and difficulties in availability of suitable raw
material have postponed the start-up of the plant. The construction of the
plant will not be completed.
In a release published on 31 August 2010, the company announced that Laura
Aarnio, Accounting Director, leaves the Group Executive team of Lassila &
Tikanoja plc. She took up other duties within the company.
In a release published on 18 October 2010, the company announced that the
full-year operating profit excluding non-recurring items is estimated to be
slightly lower than in the previous year. Previously the company estimated that
the full-year financial performance will remain at the same level as in 2009.
Full-year net sales are estimated to remain at the 2009 level as estimated
previously.
In a release published on 29 December 2010, the company announced that the
Group Executive team will be renamed the Group Executive Board and some
functions organised at company level will be transferred to the divisions. At
the same time, the company announced that Kimmo Huhtimo, Director, leaves the
Group Executive team. He will take up the responsibility for customer-related
strategic programmes and projects in the company.
In a release published on 14 January 2011, the company announced that its
full-year operating profit excluding non-recurring items declined more than
anticipated earlier compared to the year 2009. Previously the company estimated
that the full-year financial performance will be slightly lower than in the
year 2009.
NEAR-TERM UNCERTAINTIES
If the operating rate target set for L&T Recoil's production is not reached,
this will have a negative impact on the Environmental Services division's
performance. End-product price fluctuations and changes in the availability of
raw material would have a major effect on L&T Recoil's performance.
The planned government support for renewable fuels should have a positive
effect on the demand for wood‑based fuels but with some delay, and with its
extend depending on these measures' scope and level. Sustained low prices of
emission rights may adversely affect the competitiveness of L&T Biowatti's
wood‑based fuels.
More detailed information on L&T's risks and risk management is available in
the Annual Report, in the report of the Board of Directors, and in the
consolidated financial statements.
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. Higher prices of secondary raw
materials and a rise in waste tax improve the outlook for the recycling
business.
The markets for Cleaning and Office Support Services and for Property
Maintenance are expected to remain challenging.
Demand for L&T Biowatti's wood-based fuels is expected to remain moderate. The
positive effect of the planned government support measures related to renewable
fuels is forecast to materialise in the second half.
Net sales and operating profit excluding non-recurring items in 2011 are
expected to remain at the 2010 level.
CONDENSED FINANCIAL STATEMENTS 1 JANUARY-31 DECEMBER 2010
CONSOLIDATED INCOME STATEMENT
EUR 1000 10-12/ 10-12/ 1-12/ 1-12/
2010 2009 2010 2009
---------------------------------------------------------------------
---------------------------------------------------------------------
Net sales 151 507 148 041 598 193 582 306
Cost of sales -137 761 -132 487 -531 066 -505 699
---------------------------------------------------------------------
Gross profit 13 746 15 554 67 127 76 607
---------------------------------------------------------------------
Other operating income 1 638 429 2 708 2 425
Selling and marketing costs -3 804 -3 842 -13 779 -14 636
Administrative expenses -2 260 -3 167 -10 519 -11 705
Other operating expenses -767 -470 -2 686 -2 427
Impairment -2 632
Operating profit 8 553 8 504 40 219 50 264
---------------------------------------------------------------------
Finance income 323 224 1 053 1 290
Finance costs -1 310 -1 302 -5 282 -6 528
---------------------------------------------------------------------
Profit before tax 7 566 7 426 35 990 45 026
---------------------------------------------------------------------
Income tax expense -2 254 -1 917 -9 786 -11 881
---------------------------------------------------------------------
Profit for the period 5 312 5 509 26 204 33 145
---------------------------------------------------------------------
Attributable to:
Equity holders of the company 5 310 5 511 26 188 33 140
Minority interest 2 -2 16 5
Earnings per share for profit attributable to the equity holders of the company:
Basic earnings per share, EUR 0.14 0.14 0.68 0.85
Diluted earnings per share, EUR 0.14 0.14 0.68 0.85
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR 1000 10-12/ 10-12/ 1-12/ 1-12/
2010 2009 2010 2009
----------------------------------------------------------------------
Profit for the period 5 312 5 509 26 204 33 145
Other comprehensive income, after tax
Hedging reserve, change in fair value 313 98 223 -343
Current available-for-sale investments
Gains in the period -3 3 -58 -21
Current available-for-sale investments -3 3 -58 -21
----------------------------------------------------------------------
Currency translation differences 243 200 792 324
----------------------------------------------------------------------
Other comprehensive income, after tax 553 301 957 -40
----------------------------------------------------------------------
Total comprehensive income, after tax 5 865 5 810 27 161 33 105
Attributable to:
Equity holders of the company 5 856 5 721 27 130 33 020
Minority interest 9 89 31 85
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR 1000 12/2010 12/2009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS
Non-current assets
Intangible assets
Goodwill 113 467 113 771
Customer contracts arising from acquisitions 4 736 6 232
Agreements on prohibition of competition 10 023 11 641
Other intangible assets arising from business acquisitions 1 229 3 194
Other intangible assets 13 226 13 579
----------------------------------------------------------------------------
142 681 148 417
----------------------------------------------------------------------------
Property, plant and equipment
Land 4 671 4 015
Buildings and constructions 78 908 72 072
Machinery and equipment 111 733 110 817
Other 85 81
Prepayments and construction in progress 5 303 14 666
----------------------------------------------------------------------------
200 700 201 651
----------------------------------------------------------------------------
Other non-current assets
Available-for-sale investments 598 525
Finance lease receivables 3 547 4 425
Deferred tax assets 3 924 2 147
Other receivables 3 401 726
----------------------------------------------------------------------------
11 470 7 823
----------------------------------------------------------------------------
Total non-current assets 354 851 357 891
Current assets
Inventories 27 957 32 842
Trade and other receivables 85 662 77 702
Derivative receivables 407
Prepayments 317 370
Available-for-sale investments 9 895 18 484
Cash and cash equivalents 4 653 9 099
----------------------------------------------------------------------------
Total current assets 128 891 138 497
TOTAL ASSETS 483 742 496 388
EUR 1000 12/2010 12/2009
----------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity
Equity attributable to equity holders of the company
Share capital 19 399 19 399
Share premium reserve 50 673 50 673
Other reserves -2 141 -3 084
Retained earnings 128 597 116 874
Profit for the period 26 188 33 140
----------------------------------------------------------------------
222 716 217 002
Minority interest 278 247
----------------------------------------------------------------------
Total equity 222 994 217 249
Liabilities
Non-current liabilities
Deferred tax liabilities 33 718 33 622
Retirement benefit obligations 615 671
Provisions 2 748 2 100
Borrowings 95 563 120 969
Other liabilities 364 1 510
----------------------------------------------------------------------
133 008 158 872
Current liabilities
Borrowings 31 261 22 890
Trade and other payables 94 891 94 130
Derivative liabilities 1 173 1 073
Tax liabilities 15 2 119
Provisions 400 55
127 740 120 267
----------------------------------------------------------------------
Total liabilities 260 748 279 139
TOTAL EQUITY AND LIABILITIES 483 742 496 388
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR 1000 12/2010 12/2009
--------------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 26 204 33 145
Adjustments
Income tax expense 9 786 11 881
Depreciation, amortisation and impairment 43 937 40 334
Finance income and costs 4 229 5 238
Gain on sale of shares -70
Other 1 570 1 809
--------------------------------------------------------------------------------
Net cash generated from operating activities before change in 85 726 92 337
working capital
Change in working capital
Change in trade and other receivables -6 118 -4 654
Change in inventories 4 874 -14 022
Change in trade and other payables -918 6 689
--------------------------------------------------------------------------------
Change in working capital -2 162 -11 987
Interest paid -5 409 -7 511
Interest received 914 1 505
Income tax paid -15 259 -8 156
--------------------------------------------------------------------------------
Net cash from operating activities 63 810 66 188
Cash flows from investing activities
Acquisition of subsidiaries and businesses, net of cash -1 655 -1 747
acquired
Proceeds from sale of subsidiaries and businesses, net of sold 199 197
cash
Purchases of property, plant and equipment and intangible -36 003 -42 735
assets
Proceeds from sale of property, plant and equipment and 3 655 4 328
intangible assets
Purchases of available-for-sale investments -74 -54
Change in other non-current receivables -2 673 -13
Proceeds from sale of available-for-sale investments 7
Dividends received 1 1
--------------------------------------------------------------------------------
Net cash used in investing activities -36 550 -40 016
Cash flows from financing activities
Change in short-term borrowings 5 091 -12 044
Proceeds from long-term borrowings 43 000
Repayments of long-term borrowings -23 166 -34 388
Dividends paid -21 301 -21 318
Repurchase of own shares -1 125 -356
--------------------------------------------------------------------------------
Net cash generated from financing activities -40 501 -25 106
--------------------------------------------------------------------------------
EUR 1000 12/2010 12/2009
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in liquid assets -13 241 1 066
Liquid assets at beginning of period 27 583 26 517
Effect of changes in foreign exchange rates 206 28
Change in fair value of current available-for-sale investments -28
--------------------------------------------------------------------------------
Liquid assets at end of period 14 548 27 583
--------------------------------------------------------------------------------
Liquid assets
EUR 1000 12/2010 12/2009
--------------------------------------------------------------------------------
Cash and cash equivalents 4 653 9 099
Certificates of deposit 9 895 18 484
--------------------------------------------------------------------------------
Total 14 548 27 583
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR 1000 Share Share Revalu Retaine Equity Minori Total
capita premiu ation d attributabl ty equity
l m and earning e intere
reserv other s to equity st
e reserv holders of
es the company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity at 19 399 50 673 -3 084 150 014 217 002 247 217 249
1.1.2010
Expense 386 386 386
recognition of
share-based
benefits
Repurchase of own -489 -489 -489
shares
Dividends paid -21 313 -21 313 -21 313
Total 943 26 187 27 130 31 27 161
comprehensive
income
------------------ --------
Equity at 19 399 50 673 -2 141 154 785 222 716 278 222 994
31.12.2010
--------------------------------------------------------------------------------
Equity at 19 399 50 673 -2 964 137 768 204 876 162 205 038
1.1.2009
Expense 757 757 757
recognition of
share-based
benefits
Repurchase of own -356 -356 -356
shares
Dividends paid -21 295 -21 295 -21 295
Total -120 33 140 33 020 85 33 105
comprehensive
income
--------------------------------------------------------------------------------
Equity at 19 399 50 673 -3 084 150 014 217 002 247 217 249
31.12.2009
--------------------------------------------------------------------------------
KEY FIGURES
10-12/ 10-12/ 1-12/ 1-12/
2010 2009 2010 2009
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.14 0.14 0.68 0.85
Earnings per share, diluted, EUR 0.14 0.14 0.68 0.85
Cash flows from operating activities per 0.54 0.53 1.65 1.71
share, EUR
EVA, EUR million 1.2 -0.1 10.1 16.5
Capital expenditure, EUR 1000 12 458 10 750 39 321 44 882
Depreciation, amortisation and impairment, EUR 10 322 10 418 43 937 40 334
1000
Equity per share, EUR 5.75 5.60
Dividend/share, EUR 0.55* 0.55
Dividend/earnings, % 81.4* 64.4
Dividend yield, % 3.7* 3.4
P/E ratio 21.8 18.7
Return on equity, ROE, % 11.9 15.7
Return on invested capital, ROI, % 11.6 14.5
Equity ratio, % 46.5 44.1
Gearing, % 50.3 53.5
Net interest-bearing liabilities, EUR 1000 112 277 116 276
Average number of employees in full-time 7 835 8 113
equivalents
Total number of full-time and part-time 8 732 8 743
employees at end of period
Number of outstanding shares adjusted for issues, 1000
shares
average during the period 38 749 38 781
at end of period 38 738 38 769
average during the period, diluted 38 773 38 784
* Proposal by the Board of Directors
ACCOUNTING POLICIES
This financial statements release is in compliance with IAS 34 Interim
Financial Reporting standard. The same accounting policies as in the annual
financial statements for the year 2010 have been applied. This financial
statements release has been prepared in accordance with the IFRS standards and
interpretations as adopted by the EU. The following amendments to standards
that have become effectivein 2010 have had an impact on the financial
statements release:
IFRS 3 (Amendment) Business combinations
The standard contains several significant changesto the treatment of business
combinations effected after the adoption of the amended standard and they have
a material impact on the Group's financial statements. The amendmentsaffectthe
amount of goodwill to be recognised from acquisitions and items recognised in
the income statement both in the period of the acquisitionand in the periods
where additional payments or additional acquisitions are made. For example, a
contingent consideration is recognised at acquisition-date fair value and
revaluations, if any, are recognised through profit or loss. Transaction costs
such as attorney's and consultant's fees are no longer included in the
acquisition cost but they are recognised in profit or loss.A minority interest
may be measured either at fair value or at the minority interest's
proportionate share of the acquiree's net assets. According to the transitional
provisions, business combinations that were effected before the adoption of the
standard will not be restated.
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.
SEGMENT INFORMATION
As of 1 June 2009, business operations were regrouped into three divisions:
Environmental Services, Property and Office Support Services and Renewable
Energy Sources (L&T Biowatti). The company's internal reporting, as well as the
segments reported externally, were changed to reflect the new divisions at the
beginning of 2010. As of 1 July 2010, Property and Office Support Services was
divided into two divisions: Cleaning and Office Support Services and Property
Maintenance. Comparative figures have been restated accordingly.
Net sales
10-12/2010 10-12/2009
--------- ------------
EUR 1000 Externa Inter- Total Externa Inter- Total Total net
l divisi l divisi sales,
on on change %
--------------------------------------------------------------------------------
Environmental 73 020 972 73 992 70 197 981 71 178 4,0
Services
--------- ------------
Cleaning and 34 259 321 34 580 35 383 303 35 686 -3,1
Office Support
Services
--------- ------------
Property 30 810 786 31 596 25 388 441 25 829 22,3
Maintenance
--------- ------------
Renewable 13 418 1 848 15 266 17 073 629 17 702 -13,8
Energy Sources
--------- ------------
Eliminations -3 927 -3 927 -2 354 -2 354
--------------------------------------------------------------------------------
L&T total 151 507 0 151 507 148 041 0 148 041 2,3
--------- ------------
1-12/2010 1-12/2009
--------- ------------
EUR 1000 Externa Inter-d Total Externa Inter- Total Total net
l ivision l divisi sales,
on change %
--------------------------------------------------------------------------------
Environmental 286 260 3 771 290 031 280 632 3 587 284 219 2,0
Services
--------- ------------
Cleaning and 139 399 1 216 140 615 142 103 1 170 143 273 -1,9
Office Support
Services
--------- ------------
Property 121 546 1 923 123 469 98 311 1 853 100 164 23,3
Maintenance
--------- ------------
Renewable 50 988 4 118 55 106 61 260 2 865 64 125 -14,1
Energy Sources
--------- ------------
Eliminations -11 028 -11 028 -9 475 -9 475
--------------------------------------------------------------------------------
L&T total 598 193 0 598 193 582 306 0 582 306 2,7
--------- ------------
Operating profit
10-12/ % 10-12/ % 1-12/ % 1-12/ %
2010 2009 2010 2009
--------------------------------------------------------------------------------
Environmental Services 8 204 11.1 6 793 9.5 33 674 11.6 35 959 12.7
Cleaning and Office 181 0.5 1 697 4.8 7 524 5.4 10 308 7.2
Support Services
Property Maintenance 633 2.0 1 070 4.1 7 764 6.3 7 378 7.4
Renewable Energy -361 -2.4 -321 -1.8 -6 553 -11.9 -958 -1.5
Sources
Group admin. and other -104 -735 -2 190 -2 423
--------------------------------------------------------------------------------
L&T total 8 553 5.6 8 504 5.7 40 219 6.7 50 264 8.6
---------------------------------------------------
Finance costs, net -987 -1 078 -4 229 -5 238
--------------------------------------------------------------------------------
Profit before tax 7 566 7 426 35 990 45 026
---------------------------------------------------
Other segment information
EUR 1000 12/2010 12/2009
--------------------------------------------------------------------------------
Assets
Environmental Services 330 963 324 918
Cleaning and Office Support 39 007 41 278
Services
Property Maintenance 38 098 34 275
Renewable Energy Sources 49 113 63 436
Group admin. and other 1 902 473
Unallocated assets 24 659 32 008
--------------------------------------------------------------------------------
L&T total 483 742 496 388
--------------------------------------------
Liabilities
Environmental Services 50 300 51 510
Cleaning and Office Support 25 654 24 386
Services
Property Maintenance 15 784 12 926
Renewable Energy Sources 4 835 6 310
Group admin. and other 1 193 1 951
Unallocated liabilities 162 982 182 056
--------------------------------------------------------------------------------
L&T total 260 748 279 139
--------------------------------------------
EUR 1000 10-12/2010 10-12/200 1-12/2010 1-12/2009
9
--------------------------------------------------------------------------------
Capital expenditure
Environmental Services 9 007 8 005 31 409 36 346
Cleaning and Office Support 814 975 2 112 2 418
Services
Property Maintenance 2 440 1 530 5 074 3 809
Renewable Energy Sources 316 240 654 2 288
Group admin. and other -119 72 21
--------------------------------------------------------------------------------
L&T total 12 458 10 750 39 321 44 882
--------------------------------------------------------------------------------
Depreciation and
Skriv en kommentarer til denne artikel:
Send kommentar