5 February 2003 8.30 am
Lassila & Tikanoja’s earnings per share improved and stood at EUR 1.00. The Board proposes a dividend of EUR 0.75 per share, which is 74.7% of the earnings per share. This year net sales are expected to grow at a clearly quicker pace than in 2002 and results are expected to improve.
NET SALES AND RESULTS
Lassila & Tikanoja’s net sales for the final quarter of 2002 came to EUR 68.8 million (EUR 62.5 million). Gross profit was EUR 11.4 million (EUR 10.3 million), corresponding to 16.6% of net sales (16.5%). Operating profit came to EUR 5.8 million (EUR 5.2 million) and operating margin was 8.5% (8.4%).
Net sales for the whole year came to EUR 267.2 million, showing an increase of 8.7%, of which 5 percentage points were organic growth. Profit before taxes came to EUR 23.2 million (EUR 21.5 million). Earnings per share were EUR 1.00 (EUR 0.94). Gross profit and gross profit as a percentage of net sales were boosted by improved operating efficiency. Lassila & Tikanoja acquired 16 minor companies in 2002. Marketing resources were strengthened considerably, which showed up as a distinct growth in new sales. The uncertainty of the economic outlook has slowed down the growth of net sales.
Marketing, sales and administrative costs were substantially higher than in 2001, mainly because of the changing of the company’s operating name (some EUR 1.5 million) and by the fact that the costs arising from operating as a listed company were not included in the figures for the first nine months of 2001. These costs have been apportioned to each division and they have reduced the net profits of each division.
Net sales from Environmental services (waste management, recycling, environmental products) totalled EUR 122.3 million (EUR 113.1 million), an increase of 8.2%. Operating profit came to EUR 15.9 million (EUR 13.5 million). The rise in profitability was a result of long-term intensification of waste management operations. The fleet has been reduced for three consecutive years while the volume has increased, mainly thanks to efficient route planning. Moreover, because the average age of the fleet has decreased, maintenance costs have fallen. In recycling services, net profits were burdened by high repair costs. The focus in improvement is on increasing waste recovery capacity and enhancing the efficiency of the waste treatment process. Net sales from environmental products increased and profitability improved.
Net sales from Property Services (property maintenance and cleaning) came to EUR 87.8 million (EUR 79.8 million), showing an increase of 10.0%. Operating profit was EUR 6.2 million (EUR 7.7 million). Operating profit from cleaning services was good despite being burdened by pension costs that were higher – as anticipated – than in the comparison period. Operating profit from cleaning services did not, however, reach the 2001 level. Operating profit for the Property Services was also burdened by the poor result from property maintenance for the first six months of the year. For the last six months, property services performed rather well, thanks to the implementation of new planning and production control systems and measures carried out in summer to intensify production.
Net sales from Industrial Services (hazardous waste management, industrial cleaning, damage repair services and sewer maintenance) were EUR 57.0 million (EUR 52.9 million), an increase of 7.8%. Net sales from all product lines increased, with the exception of industrial cleaning. Demand by industry dropped over the year. The growth in net sales came from certain major damage repair projects and corporate acquisitions. Operating profit was EUR 4.8 million (EUR 5.1 million). The results for the final quarter for industrial cleaning and damage repair services were disappointing. Both product lines were unsuccessful in managing subcontracting costs incurred from volume variation. To remedy the situation, the management of the lines was concentrated at the end of the year, and capacity is currently being brought into line with demand. A new production management system will be put into service in damage repair services during the first quarter of 2003.
FINANCING
Interest-bearing liabilities amounted to EUR 7.3 million less than a year earlier. Net financial expenses decreased by 23.3% from the previous year and stood at EUR 3.7 million (EUR 4.8 million). They were 1.4% of net sales and 13.7% of operating profit. EUR 5.7 million was released from working capital (EUR 0.7 million). The equity ratio was 41.0%(38.1%)and the gearing rate was 84.4 (91.9). Investments were financed out of cash flow from operations.
INVESTMENTS
Gross investments totalled EUR 33.6 million (EUR 14.8 million), of which EUR 12.0 million were acquisitions. Machinery and equipment was replaced, production premises were expanded and 16 minor company acquisitions were made. Depreciation came to EUR 22.2 million (EUR 22.0 million).
In December a sales contract was entered for the acquisition of cleaning company SPS Siivouspalvelut Oy from the Finland Post Group. The acquisition was effective from the beginning of the year 2003. The annual net sales of SPS Siivouspalvelut Oy are EUR 13.5 million and it employs approximately 700 persons.
COMPANY SHARES
The volume of trading in Lassila & Tikanoja plc shares on the Helsinki Exchanges from January through December was 2,889,677, which is 18.3% of the number of shares. The value of trading was EUR 45.9 million. The trading price varied between EUR 13.00 and EUR 22.25. The final trading price was EUR 15.50. The market capitalisation was EUR 245.3 million on 31 December 2002. The total number of shares is 15,826,308.
PROPOSAL BY THE BOARD OF DIRECTORS
The following proposal concerning distribution of the profit will be made by the company Board of Directors to the Annual General Meeting to be held on 1 April 2003:
|
Distributable assets according to the consolidated balance sheet on 31 Dec. 2002, EUR
|
67 606 759.00
|
|
Parent company profit 1 Jan. – 31 Dec. 2002, EUR |
5 764 774.05 |
|
Parent company retained earnings, EUR |
47 585 491.75 |
|
Distributable assets according to the parent company balance sheet 31 Dec. 2002, EUR |
53 350 265.80
|
|
|
|
|
The Board of Directors proposes that a dividend of EUR 0.75 be paid on each of the 15,826,308 shares, EUR |
11 869 731.00
|
|
Left on the retained earnings account, EUR |
41 480 534.80 |
|
Total, EUR |
53 350 265.80 |
In accordance with the decision of the Board of Directors, the record date for payment of the dividend is 4 April 2003. The Board of Directors proposes to the Annual General Meeting that the dividend be paid after the record period on 11 April 2003.
Earnings/share were EUR 1.00. The proposed dividend is 74.7% of the earnings per share.
SUMMARY OF STOCK EXCHANGE RELEASES IN CONFORMANCE WITH ARTICLE 7, CHAPTER 2 OF THE SECURITIES MARKETS ACT
On 5 March 2002 the Company announced that Säkkiväline Oy, subsidiary of Lassila & Tikanoja plc, will merge into the parent company on 1 April, 2002. After the merger, the business is conducted under the name Lassila & Tikanoja plc and the company launched a house brand, L&T.
On 9 April 2002 the Company issued a stock exchange release giving the decisions of the Annual General Meeting:
The AGM re-elected Lasse Kurkilahti and Soili Suonoja to the Board of Directors for the period 2002-2003. The Board of Directors comprises the following persons: Heikki Hakala, Lasse Kurkilahti, Juhani Lassila, Juhani Maijala and Soili Suonoja. Juhani Maijala is Chairman and Heikki Hakala Vice Chairman of the Board of Directors. PricewaterhouseCoopers Oy, Authorized Public Accountants, were elected auditors.
The AGM decided to issue stock options to key personnel of Lassila & Tikanoja and to a wholly-owned subsidiary of Lassila & Tikanoja plc.
The Company shall issue a maximum of 400,000 stock options. Each stock option entitles its holder to subscribe for one share of Lassila & Tikanoja plc. To each share one voting right is attached. As a result of such share subscription, the number of shares of Lassila & Tikanoja plc may increase by a maximum of 400,000 new shares, which is 2.5% of the current total number of shares and voting rights. So far the key persons have been entitled to subscribe for 128,000 stock options. The share subscription price for these options is EUR 19.42.
On 15 October 2002 the Company issued a stock exchange release giving preliminary information on the third quarter result.
AUTHORISATION FOR THE BOARD OF DIRECTORS
The Board of Directors is not authorised to effect any shares issues or to launch a convertible bond or a bond with warrants.
PROSPECTS FOR THE YEAR 2003
Demand for Lassila & Tikanoja services will steadily increase in the long term. Net sales are expected to grow at a clearly quicker pace in 2003 than in 2002 and results are expected to improve. This forecast is supported by, for example, the corporate acquisitions carried out last year, better sales resources and new production management systems.
STATEMENT OF INCOME
|
EUR 1000
|
1-12/2002
|
%
|
Pro forma
1-12/2001 |
%
|
Change % |
|
NET SALES |
267 175 |
100 |
245 818 |
100 |
8.7 |
|
Cost of goods sold
|
-217 611 |
-81.4 |
-201 853 |
-82.1 |
7.8 |
|
GROSS PROFIT |
49 564 |
18.6 |
43 965 |
17.9 |
12.7 |
|
Sales and marketing expenses |
-8 582
|
-3.2
|
-5 447
|
-2.2
|
|
|
Administration expenses |
-8 637 |
-3.2 |
-7 294 |
-3.0 |
|
|
Other operating income and expenses
|
409
|
0.2
|
563
|
0.2
|
|
|
OPERATING PROFIT BEFORE DEPRECIATION ON GOODWILL |
32 754
|
12.3
|
31 787
|
12.9
|
3.0
|
|
Depreciation on goodwill |
-5 905 |
-2.2 |
-5 499 |
-2.2 |
|
|
OPERATING PROFIT
|
26 849
|
10.0
|
26 288
|
10.7
|
2.1
|
|
Financial income and expenses
|
-3 677
|
-1.4
|
-4 794
|
-2.0
|
-23.3
|
|
PROFIT BEFORE EXTRAORDINARY ITEMS |
23 172
|
8.7
|
21 494
|
8.7
|
7.8
|
|
Extraordinary items
|
|
|
|
|
|
|
PROFIT BEFORE INCOME TAXES |
23 172
|
8.7
|
21 494
|
8.7
|
7.8
|
|
Income taxes |
-7 189 |
-2.7 |
-6 674 |
-2.7 |
|
|
Minority interests
|
-99 |
|
24 |
|
|
|
PROFIT FOR THE FINANCIAL YEAR |
15 884
|
5.9
|
14 844
|
6.0
|
7.0
|
|
BALANCE SHEET
EUR 1000 |
12/2002
|
12/2001
|
|
ASSETS
Fixed assets
|
|
|
|
Intangible assets |
83 795 |
81 607 |
|
Tangible assets |
89 396 |
81 536 |
|
Financial assets |
3 468 |
3 395 |
|
Fixed assets, total |
176 659 |
166 538 |
|
|
|
|
|
Current assets |
|
|
|
Inventories |
2 311 |
1 726 |
|
Non-current receivables |
1 |
1 |
|
Current receivables |
28 292 |
28 546 |
|
Cash at bank and in hand |
4 795 |
12 305 |
|
Current assets, total
|
35 399 |
42 578 |
|
Assets, total
|
212 058 |
209 116 |
|
SHAREHOLDERS' EQUITY AND LIABILITIES |
|
|
|
Shareholders’ equity |
|
|
|
Share capital |
7 913 |
7 913 |
|
Other restricted equity |
7 518 |
7 518 |
|
Equity share of accumulated appropriations |
2 943 |
2 179 |
|
Other unrestricted equity |
67 607 |
61 983 |
|
Shareholders’ equity, total
|
85 981 |
79 593 |
|
Minority interests |
895 |
|
|
Provisions |
526 |
526 |
|
|
|
|
|
Liabilities |
|
|
|
Deferred tax liability |
5 827 |
4 957 |
|
Non-current liabilities |
66 450 |
76 234 |
|
Current liabilities |
52 379 |
47 806 |
|
Liabilities, total
|
124 656 |
128 997 |
|
Shareholders' equity and liabilities, total |
212 058 |
209 116 |
|
KEY FIGURES
|
12/2002
|
Pro forma
12/2001 |
|
Earnings/share, EUR |
1.00 |
0.94 |
|
Equity/share, EUR |
5.43 |
5.03 |
|
Dividend/share, EUR |
0.75* |
0.60 |
|
Dividend/earnings, % |
74.7* |
64.1 |
|
Dividend yield, % |
4.8* |
3.3 |
|
P/E ratio |
15.4 |
19.2 |
|
Cash flow from operations/share, EUR |
2.66 |
2.57 |
|
Return on equity, % (ROE) |
19.2 |
19.5 |
|
Return on invested capital, % (ROI) |
16.5 |
15.9 |
|
Equity ratio, % |
41.0 |
38.1 |
|
Gearing, % |
84.4 |
91.9 |
|
|
|
|
|
Gross investments, EUR 1000 |
33 640 |
14 804 |
|
Depreciation, EUR 1000 |
22 220 |
21 962 |
|
Net interest-bearing liabilities, EUR 1000 |
73 311 |
73 138 |
|
Average personnel, converted to full-time |
3 763 |
3 676 |
|
Number of shares traded as a percentage of the average |
18.3
|
5.4**
|
* Proposal by the Board of Directors
** From 1 October to 31 December 2001
CASH FLOW STATEMENT
|
EUR 1000
|
12/2002
|
Pro forma
12/2001 |
|
Cash flow before change in working capital |
48 599 |
47 772 |
|
Change in working capital |
5 664 |
719 |
|
Financial items and taxes |
-12 229 |
-7 769 |
|
Cash flow from operations
|
42 034 |
40 722 |
|
Investments in group companies |
-9 737 |
-316 |
|
Other investments |
-22 993 |
-15 655 |
|
Proceeds from sale of fixed assets |
1 766 |
1 637 |
|
Cash flow from investing activities
|
-30 964 |
-14 334 |
|
Dividends paid |
-9 484 |
-7 913 |
|
Change in interest-bearing liabilities |
-9 096 |
-9 315 |
|
Cash flow from financing
|
-18 580 |
-17 228 |
|
Change in cash and cash equivalents |
-7 510 |
9 160 |
FIGURES BY DIVISION
NET SALES
|
EUR 1000
|
12/2002
|
Pro forma
12/2001 |
Change %
|
|
Environmental Services |
122 327 |
113 087 |
8.2 |
|
Property Services |
87 841 |
79 836 |
10.0 |
|
Industrial Services |
57 007 |
52 895 |
7.8 |
|
Total |
267 175 |
245 818 |
8.7 |
OPERATING PROFIT
|
|
12/2002 |
|
Pro forma |
12/2001 |
|
|
EUR 1000
|
% of net sales |
EUR 1000
|
% of net sales |
|
Environmental Services |
15 863 |
13.0 |
13 515 |
12.0 |
|
Property Services |
6 219 |
7.1 |
7 659 |
9.6 |
|
Industrial Services |
4 767 |
8.4 |
5 114 |
9.7 |
|
Total |
26 849 |
10.0 |
26 288 |
10.7 |
QUARTERLY FIGURES
|
EUR 1000
|
Q402
|
Q302
|
Q202
|
Q102
|
|
NET SALES
|
|
|
|
|
|
Environmental Services |
31 819 |
32 151 |
31 017 |
27 340 |
|
Property Services |
22 914 |
21 710 |
21 543 |
21 674 |
|
Industrial Services |
14 116 |
16 455 |
14 483 |
11 953 |
|
Total |
68 849 |
70 316 |
67 043 |
60 967 |
|
|
|
|
|
|
|
OPERATING PROFIT |
|
|
|
|
|
Environmental Services |
3 726 |
5 464 |
3 792 |
2 881 |
|
Property Services |
1 694 |
2 686 |
572 |
1 267 |
|
Industrial Services |
414 |
2 770 |
1 474 |
109 |
|
Total
|
5 834 |
10 920 |
5 838 |
4 257 |
|
NET FINANCIAL EXPENSES |
-866 |
-954 |
-926 |
-931 |
|
PROFIT BEFORE EXTRAORDINARY ITEMS |
4 968
|
9 966
|
4 912
|
3 326
|
|
|
|
|
|
|
|
OPERATING MARGIN |
|
|
|
|
|
Environmental Services |
11.7 |
17.0 |
12.2 |
10.5 |
|
Property Services |
7.4 |
12.4 |
2.7 |
5.8 |
|
Industrial Services |
2.9 |
16.8 |
10.2 |
0.9 |
|
Lassila & Tikanoja |
8.5 |
15.5 |
8.7 |
7.0 |
|
|
Q401
|
Pro forma
Q301 |
Pro forma
Q201 |
Pro forma
Q101 |
|
NET SALES |
|
|
|
|
|
Environmental Services |
28 959 |
28 681 |
29 157 |
26 290 |
|
Property Services |
20 246 |
19 680 |
19 609 |
20 301 |
|
Industrial Services |
13 344 |
13 476 |
14 553 |
11 522 |
|
Total |
62 549 |
61 837 |
63 319 |
58 113 |
|
|
|
|
|
|
|
OPERATING PROFIT |
|
|
|
|
|
Environmental Services |
2 574 |
4 218 |
3 371 |
3 352 |
|
Property Services |
1 700 |
2 994 |
1 338 |
1 627 |
|
Industrial Services |
964 |
1 934 |
1 988 |
228 |
|
Total
|
5 238 |
9 146 |
6 697 |
5 207 |
|
NET FINANCIAL EXPENSES |
-931 |
-1 334 |
-1 178 |
-1 351 |
|
PROFIT BEFORE EXTRAORDINARY ITEMS |
4 307
|
7 812
|
5 519
|
3 856
|
|
|
|
|
|
|
|
OPERATING MARGIN |
|
|
|
|
|
Environmental Services |
8.9 |
14.7 |
11.6 |
12.8 |
|
Property Services |
8.4 |
15.2 |
6.8 |
8.0 |
|
Industrial Services |
7.2 |
14.4 |
13.7 |
2.0 |
|
Lassila & Tikanoja |
8.4 |
14.8 |
10.6 |
9.0 |
CONTINGENT LIABILITIES
|
EUR 1000
|
12/2002
|
12/2001
|
|
SECURITY FOR COMPANY LIABILITIES |
|
|
|
Pledges |
97 |
25 |
|
Real estate mortgages |
3 613 |
3 613 |
|
Corporate mortgages
|
25 |
|
|
LIABILITIES |
|
|
|
Leasing payments and liabilities |
312 |
360 |
DERIVATIVE CONTRACTS
|
EUR 1000
|
12/2002
|
12/2001
|
|
INTEREST RATE SWAPS |
|
|
|
Nominal values |
52 000 |
52 000 |
|
Market value |
-2 430 |
-1 410 |
The figures have not been audited.
Lassila & Tikanoja plc was registered on 30 September 2001, when Lassila & Tikanoja plc (former) was demerged into two new listed companies, Lassila & Tikanoja plc and ja J.W. Suominen Group plc. The financial data for the financial year 1 January to 31 December 2001 and for the time before the demerger consist of pro forma figures. They are based on the financial statements of the former Lassila & Tikanoja Group for the period from 1 January 1997 to 30 September 2001 and on the financial statements of the new Lassila & Tikanoja group for the period from 30 September to 31 December 2001. They have been calculated as if the demerger had taken place on 1 January 1997. The pro forma calculation principles are explained in detail in the Demerger Prospectus/Tender Offer Document of 1 March 2001, updated 26 September 2001.
Helsinki, 4 February 2003
LASSILA & TIKANOJA PLC
Board of Directors
Juhani Maijala
Chairman
For additional information please contact Jari Sarjo,
President and CEO, tel. +358 10 636 111.