LASSILA & TIKANOJA PLC INTERIM REPORT 28 October 2008 8.00 am
INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2008
- Net sales for the third quarter EUR 151.2 million (EUR 138.6 million);
operating profit EUR 17.6 million (EUR 15.5 million); operating profit excluding
non-recurring and imputed items EUR 16.3 million (EUR 16.9 million); earnings
per share EUR 0.31 (EUR 0.28)
- Net sales for January-September EUR 452.9 million (EUR 406.4 million);
operating profit EUR 50.6 million (EUR 36.7 million); operating profit excluding
non-recurring and imputed items EUR 36.4 million (EUR 41.0 million); earnings
per share EUR 0.99 (EUR 0.63)
- Full-year net sales are expected to increase by approximately 10%. Operating
profit is expected to be somewhat lower than in the previous year. Due to the
capital gain from Ekokem shares, earnings will exceed those for the previous
year.
- The equity ratio is expected to remain healthy and the financing for 2009 has
been secured.
GROUP NET SALES AND FINANCIAL PERFORMANCE
Third quarter
Lassila & Tikanoja's net sales for the third quarter totalled EUR 151.2 million
(EUR 138.6 million), showing an increase of 9.1%. The growth was entirely
organic. The operating profit was EUR 17.6 million (EUR 15.5 million),
representing 11.6% (11.2%) of net sales. The operating profit excluding
non-recurring and imputed items was EUR 16.3 million (EUR 16.9 million).
Earnings per share were EUR 0.31 (EUR 0.28).
Strong organic growth continued. However, the general increase in costs and the
reduction in recycling volumes hampered financial performance in the third
quarter. Measures to boost production efficiency continued in order to adapt to
increased production costs, and prices were revised. Changes in the fair values
of oil derivatives raised operating profit by EUR 1.3 million (EUR -0.5
million).
January-September
The nine-month net sales increased by 11.4% to EUR 452.9 million (EUR 406.4
million), with corporate acquisitions accounting for 2.0 percentage points of
this growth. Operating profit amounted to EUR 50.6 million (EUR 36.7 million),
representing 11.2% (9.0%) of net sales. The operating profit excluding
non-recurring and imputed items was EUR 36.4 million (EUR 41.0 million).
Earnings per share were EUR 0.99 (EUR 0.63).
Organic growth outperformed market growth, and new service products were
introduced to the market. Operating profit fell due to a rise in the general
cost level, particularly in the prices of transport fuels. Similarly, the
reduction in recycling volumes and the decreased demand for recovered fuels and
biofuels attributable to the mild winter burdened financial performance. Changes
in the fair values of oil derivatives decreased operating profit by EUR 0.1
million (EUR 2.1 million).
A capital gain of EUR 14.3 million from the sale of Ekokem shares in January
increased the operating profit.
Financial summary
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| | 7-9/ | 7-9/ | Change | 1-9/ | 1-9/ | Change | 1-12/ |
| | 2008 | 2007 | % | 2008 | 2007 | % | 2007 |
| | | | | | | | |
--------------------------------------------------------------------------------
| Net sales, EUR | 151.2 | 138. | 9.1 | 452.9 | 406.4 | 11.4 | 554.6 |
| million | | 6 | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 16.3 | 16.9 | -3.6 | 36.4 | 41.0 | -11.2 | 54.3 |
| excluding | | | | | | | |
| non-recurring | | | | | | | |
| and imputed | | | | | | | |
| items, EUR | | | | | | | |
| million* | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 17.6 | 15.5 | 13.6 | 50.6 | 36.7 | 38.0 | 48.8 |
| profit, EUR | | | | | | | |
| million | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 11.6 | 11.2 | | 11.2 | 9.0 | | 8.8 |
| margin, % | | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 16.2 | 14.2 | 14.5 | 47.2 | 33.6 | 40.4 | 44.5 |
| tax, EUR million | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.31 | 0.28 | 10.7 | 0.99 | 0.63 | 57.1 | 0.83 |
| share, EUR | | | | | | | |
--------------------------------------------------------------------------------
| EVA, EUR million | 9.7 | 8.8 | 10.2 | 28.3 | 18.5 | 53.0 | 23.0 |
--------------------------------------------------------------------------------
* Breakdown of operating profit excluding non-recurring and imputed items is
presented at the end of the explanatory statement.
NET SALES AND FINANCIAL PERFORMANCE BY DIVISION
Environmental Services
July-September
The net sales of Environmental Services (waste management, recycling services,
L&T Biowatti, environmental products) rose by 8.6% to EUR 73.7 million (EUR 67.9
million). The operating profit was EUR 9.7 million (EUR 9.7 million), and the
operating profit excluding non-recurring and imputed items was EUR 9.7 million
(EUR 9.9 million).
Strong organic growth continued. Prices were revised and measures to boost
production efficiency continued. The profitability of recycling services
weakened due to smaller transport and processing volumes resulting from the
slowdown in construction and to the decrease in the sales prices of recycled raw
materials.
Construction of added capacity at the Kerava recycling plant proceeded in
schedule, and the first stage (recycled timber unit) is expected to be on line
early next year. Construction of the second stage (construction waste recycling
plant) is about to begin, and the plant is expected to be completed in about a
year.
L&T Biowatti reached its targets thanks to an increase in the demand for
biofuels during the period. However, the rising costs affected its operations,
and production limitations in the mechanical forest industry hampered the
procurement of byproducts for raw material. The wood pellet plant in Luumäki
with an annual capacity of about 20,000 tonnes was introduced at the beginning
of October.
International operations within Environmental Services expanded, and performance
developed favourably. Profitability development was particularly good in Latvia
thanks to production efficiency measures and decreased costs.
Net sales for environmental products increased considerably and financial
performance improved.
January-September
Environmental Services' net sales for January-September totalled EUR 225.9
million (EUR 205.1 million); an increase of 10.1%. The operating profit was EUR
26.3 million (EUR 26.6 million), and the operating profit excluding
non-recurring and imputed items was EUR 26.3 million (EUR 27.8 million).
Due to the steep rise in the general cost level and transport fuel prices,
prices were revised. Financial uncertainty and particularly the slowdown in
construction lowered the amount of intake volumes at recycling plants. Measures
to enhance production efficiency were launched to adjust to higher production
costs.
Construction of substantial added capacity began at the Kerava recycling plant,
which will double the plant's capacity to almost 400,000 tonnes by 2010. At the
same time, the recovery rate will increase significantly. Due to the reduced
capacity of the landfill at the Kerava plant for technical reasons, the costs of
disposal of plant reject will increase. The industrial landfill site constructed
in Kotka will be opened before the end of the year.
The demand for L&T Biowatti's biofuels fell clearly short of the expected level
due to the exceptionally mild winter. The mild winter also hampered the
collection of forest processed chips and raised subcontracting costs. L&T
Biowatti will revise its organisation, expand its service offerings, and invest
in its own collecting, processing and transport equipment. The production of
wood pellets was launched at the beginning of the final quarter.
Business in Russia and Latvia developed as planned. Resources were increased to
expand international operations.
All units of Lassila & Tikanoja plc's Environmental Services received
certificates for quality, environmental management, occupational health and
safety. The objective of certification is to improve service and reinforce
shared operating procedures.
Net sales for environmental products increased and performance development was
positive.
Property and Office Support Services
July-September
The net sales of Property and Office Support Services (property maintenance and
cleaning services) grew by 8.4% to EUR 56.3 million (EUR 52.0 million). The
operating profit was EUR 4.8 million (EUR 4.2 million), and the operating profit
excluding non-recurring and imputed items was EUR 4.8 million (EUR 4.6 million).
The division's strong organic growth continued, particularly in property
maintenance, and additional services sold well in both product lines. Prices
were revised. Net sales from international operations increased in Russia and
Latvia.
The division's performance improved as a result of profit improvement in
property maintenance and smaller losses from international operations.
Production efficiency improvement measures continued to respond to rising
production costs, and the action programme to improve profitability in Sweden
proceeded according to plans.
January-September
The January-September net sales of Property and Office Support Services
increased by 13.2% to EUR 169.0 million (EUR 149.3 million). The operating
profit was EUR 7.6 million (EUR 7.0 million), and the operating profit excluding
non-recurring and imputed items was EUR 7.6 million (EUR 7.4 million).
Contract revenue increased, and the sales of additional services in both product
lines were successful. Production costs rose and price competition remained
intense. Operations were adapted to increased production costs, and prices were
revised.
New service products were introduced to the market. New products in cleaning
services included the L&T® EcoCleaning concept, which received the Nordic
Ecolabel, also known as the Swan label, as the first product of the industry in
Finland. The concept provides customers the opportunity to carry out concrete
environment-friendly actions.
The holding in Blue Service Partners was sold to the joint venture partner in
the beginning of February.
Loss from international operations declined, and operations in Russia and Latvia
developed as planned. In Sweden an extensive action programme has been launched
to improve profitability.
Industrial Services
July-September
The net sales of Industrial Services (hazardous waste management, industrial
solutions, damage repair services and wastewater services) went up by 15.2% to
EUR 22.9 million (EUR 19.9 million). The operating profit was EUR 3.7 million
(EUR 2.1 million), and the operating profit excluding non-recurring and imputed
items EUR 2.4 million (EUR 3.0 million).
Net sales increased in all product lines, and prices were revised. Fluctuation
in demand continued, which was challenging from the production adjustment
perspective. Demand for damage repair service was low in the third quarter.
There were several coinciding shutdowns in the industry, which resulted in
increased subcontracting. Furthermore, costs associated with the storage of raw
materials for the L&T Recoil re-refinery and the starting of operations burdened
the financial performance. The completion of the facility will be delayed until
next spring because of a design flaw in the piping. Changes in the fair value of
oil derivatives raised operating profit by EUR 1.3 million (EUR -0.5 million).
New partner agreements were signed in the industrial solutions business.
Key priorities in operations included profitability improvement and production
adjustment to the forthcoming slower winter season.
January-September
The January-September net sales of Industrial Services totalled EUR 62.3 million
(EUR 55.6 million); an increase of 12.1%. The operating profit was EUR 4.0
million (EUR 4.6 million), and the operating profit excluding non-recurring and
imputed items EUR 4.1 million (EUR 7.3 million).
Production could not be adapted quickly enough to the rapid fluctuations in the
demand for Industrial Services. Earnings were also adversely affected by
recycled fuel delivery difficulties early this year. Changes in the fair values
of oil derivatives amounted to EUR -0.1 million (EUR -2.1 million).
New partner agreements were made in damage repair services, and the service
network was expanded.
Prices were revised, and profitability improvement measures were initiated in
all product lines.
FINANCING
At the end of the period, interest-bearing liabilities amounted to EUR 10.9
million more than a year earlier. Net interest-bearing liabilities, totalling
EUR 117.6 million, increased by EUR 6.5 million from the comparison period and
by EUR 31.3 million from the beginning of the year. Net finance costs exceeded
those for the comparison period by EUR 0.1 million in the third quarter and by
EUR 0.4 million in January-September. Interest expenses increased by EUR 0.2
million in the third quarter and by EUR 0.6 million in January-September as a
result of the growth in interest-bearing liabilities and a rise in the interest
rate level.
An expense of EUR 0.1 million arising from changes in the fair values of
interest rate swaps was recognised in the finance costs in the third quarter,
equalling to the amount for the comparison period.
In January-September, an expense of EUR 0.2 million arising from the change in
the fair value of interest rate swaps was recognised this year as well as in the
comparison period.
Net finance costs were 0.8% (0.8%) of net sales and 6.8% (8.4%) of operating
profit. The equity ratio was 44.9% (42.6%) and the gearing rate 57.3 (61.7).
Cash flows from operating activities in January-September amounted to EUR 41.8
million (EUR 34.4 million), and EUR 8.5 million (EUR 17.7 million) were tied up
in the working capital.
The equity ratio is expected to remain healthy, and financing for 2009 has
already been secured.
DIVIDEND
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 to the
shareholders on 11 April 2008.
CAPITAL EXPENDITURE
Capital expenditure totalled EUR 52.2 million (EUR 77.6 million). Production
plants were built and machinery and equipment were purchased and information
systems were replaced.
In the second quarter the property maintenance services business of Rantakylän
Talonhuolto Oy and in the first quarter the cleaning services business of
Siivouspalvelu Siivoset Oy and the cleaning services business of Siivousliike
Lainio Oy were acquired into Property and Office Support Services. The business
of Obawater Oy was acquired into waste water services within Industrial
Services. The combined annual net sales of the acquired businesses totalled EUR
0.7 million.
PERSONNEL
In January-September, the average number of employees converted into full-time
equivalents was 8,177 (7,723). At the end of the period, the total number of
full-time and part-time employees was 9,625 (9,226). Of them 7,326 (6,989)
people worked in Finland and 2,299 (2,237) people in other countries.
SHARE AND SHARE CAPITAL
Traded volume and price
The volume of trading in Lassila & Tikanoja plc shares on NASDAQ OMX Helsinki
from January through September was 15,370,189 which is 39.6% (39.0%) of the
average number of shares. The value of trading was EUR 261.4 million. The
trading price varied between EUR 12.88 and EUR 23.00. The closing price was EUR
13.80. The market capitalisation was EUR 535.4 million (EUR 876.9 million) at
the end of the period.
Share capital
At the beginning of the year the company's registered share capital amounted to
EUR 19,392,187. Since the beginning of the year, 14,500 shares have been
subscribed for pursuant to 2005A share options. After these subscriptions the
share capital is EUR 19,399,437, and the number of the shares 38,798,874 shares.
Share option scheme 2005
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. 32 key persons hold
176,000 2005B options and 40 key persons hold 221,500 2005C options. L&T Advance
Oy, a wholly-owned subsidiary of Lassila & Tikanoja plc, holds 8,000 2005A
options, 24,000 2005B options and 8,500 2005C options and these options will not
be exercised.
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 exercise period for 2005A options is
2 November 2007 to 29 May 2009, for 2005B options 3 November 2008 to 31 May
2010, and for 2005C options 2 November 2009 to 31 May 2011.
The outstanding 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. The
2005A options have been listed on NASDAQ OMX Helsinki since 2 November 2007.
Share option scheme 2008
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. 41 key persons hold 220,500 options and L&T Advance Oy 9,500
options.
The exercise price for the 2008 options 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 220,500 new shares, which is 0.6%
of the current number of shares.
Shareholders
At the end of the financial period, the company had 5,978 (5,050) shareholders.
Nominee-registered holdings accounted for 10.7% (13.3%) of the total number of
shares.
Notifications on major holdings
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%.
On 20 May 2008, Ilmarinen Mutual Pension Insurance Company announced that its
holding of the shares and votes in Lassila & Tikanoja plc had exceeded the
threshold of 10%.
Authorisation for the Board of Directors
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.
RESOLUTIONS BY THE ANNUAL GENERAL MEETING
The Annual General Meeting of Lassila & Tikanoja plc, which was held on 1 April
2008, adopted the financial statements for the financial year 2007 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 2007. The
dividend payment date was 11 April 2008.
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: Eero Hautaniemi, Lasse Kurkilahti, Juhani Lassila
and Juhani Maijala. Heikki Bergholm and Matti Kavetvuo were elected as new
members for the same term.
PricewaterhouseCoopers Oy, Authorised Public Accountants, were elected auditors
with Heikki Lassila, Authorised Public Accountant, acting as Principal Auditor.
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.
At its organising meeting following the Annual General Meeting, the Board of
Directors re-elected Juhani Maijala as Chairman of the Board and Juhani Lassila
as Vice Chairman.
SUMMARY OF STOCK EXCHANGE RELEASES PURSUANT TO ARTICLE 7, CHAPTER 2 OF THE
SECURITIES MARKETS ACT
On 22 January 2008, Lassila & Tikanoja sold its holding in the shares of Ekokem
Oy Ab to Ilmarinen Mutual Pension Insurance Company. Lassila & Tikanoja had
obtained possession of the shares over a 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-exempt capital gain arising from the
sale was recognised in the financial statements for the first quarter of the
year 2008. The positive effect of the sale on the profit for the period will be
EUR 14.2 million.
In a release disclosed on 22 July 2008, the company announced that the full-year
operating profit excluding non-recurring and imputed items is estimated to be
somewhat lower than in the previous year. Previously the company estimated that
the full-year financial performance will remain at the same level as in the
previous year.
On 3 October 2008, the company announced that the waste oil re-refinery of joint
venture L&T Recoil Oy will not be completed until next spring, while earlier it
was expected to be completed towards the end of this year. Flaws had been
detected in the piping design, which postpone the completion with a few months.
NEAR-TERM UNCERTAINTIES
Although the markets in which L&T primarily operates are not highly cyclical,
slowdown in economy may reduce transport and recycling volumes and the number of
commissioned assignments. The slowdown in the construction business has already
translated into lower volumes of construction waste, and it is highly likely
that further slowdown is in the horizon. Planning and implementing work is more
difficult because of the rapid fluctuations in the demand for Industrial
Services, particularly in forest industry.
A further postponement in the starting of L&T Recoil's operations and changes in
the fair values of oil derivatives associated with the business 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 earnings
development. Heavier forest industry production restrictions are very likely,
which will hamper L&T Biowatti's supply of by-products for raw material. A
planned amendment to Latvian waste legislation may have adverse effects on the
competition situation for waste management in Riga.
PROSPECTS FOR THE REST OF THE YEAR
Full-year net sales are expected to increase by approximately 10 per cent. The
operating profit excluding non-recurring and imputed items is expected to be
somewhat lower than in the previous year. However, due to the capital gain from
Ekokem shares, earnings will exceed those for the previous year.
In Environmental Services, the slowdown in the construction and forest
industries will affect transport and intake volumes. In other respects, the
market outlook for Environmental Services is stable. The full-year operating
profit excluding non-recurring and imputed items for Environmental Services is
expected to be at a slightly lower level than a year ago.
The market outlook for Property and Office Support Services will remain stable.
However, the competitive environment will remain challenging, and the financial
uncertainties may reflect in the number of commissioned assignments. The
division's international operations are expected to improve their performance
but still remain in the red. The full-year operating profit excluding
non-recurring and imputed items from Property and Office Support Services is
expected to fall somewhat short of the previous year's level due to higher
social costs.
Strong fluctuations in the demand for Industrial Services are likely to continue
in the final quarter, and production adjustment measures will continue. After
the end of the period, a decision has been made to discontinue the division's
soil washing services which have been making a loss. As a result, a
non-recurring expense amounting to approximately EUR 2.6 million will be
recognised for the final quarter. The division's full-year operating profit
excluding non-recurring and imputed items will fall short of last year's level.
Operations will focus on profitability improvement. Investments will be lower
than in the previous year.
BREAKDOWN OF OPERATING PROFIT EXCLUDING NON-RECURRING AND IMPUTED ITEMS
--------------------------------------------------------------------------------
| EUR million | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| | 2008 | 2007 | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 17.6 | 15.5 | 50.6 | 36.7 | 48.8 |
--------------------------------------------------------------------------------
| Non-recurring items | | | | | |
--------------------------------------------------------------------------------
| Loss on sale of landfill | | 0.5 | | 1.8 | 2.3 |
| operations of Salvor and | | | | | |
| integration of the remaining | | | | | |
| Salvor's operations | | | | | |
--------------------------------------------------------------------------------
| Reorganisation of Property and | | 0.4 | | 0.4 | 0.4 |
| Office Support Services | | | | | |
| operations in Russia | | | | | |
--------------------------------------------------------------------------------
| Gain on sale of the shares of | | | -14.3 | | |
| Ekokem | | | | | |
--------------------------------------------------------------------------------
| Oil derivatives | -1.3 | 0.5 | 0.1 | 2.1 | 2.8 |
--------------------------------------------------------------------------------
| Operating profit excluding | 16.3 | 16.9 | 36.4 | 41.0 | 54.3 |
| non-recurring and imputed | | | | | |
| items | | | | | |
--------------------------------------------------------------------------------
CONDENSED FINANCIAL STATEMENTS 1 JANUARY-30 SEPTEMBER 2008
ACCOUNTING POLICIES
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 as adopted by the EU. 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 excluding the
tax-exempt gain on sale of Ekokem shares.
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.
INCOME STATEMENT
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| EUR 1000 | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| | 2008 | 2007 | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 151 243 | 138 569 | 452 938 | 406 441 | 554 613 |
--------------------------------------------------------------------------------
| Cost of goods sold | -129 | -116 792 | -396 756 | -348 719 | -478 151 |
| | 016 | | | | |
--------------------------------------------------------------------------------
| Gross profit | 22 227 | 21 777 | 56 182 | 57 722 | 76 462 |
--------------------------------------------------------------------------------
| Other operating income | 2 016 | 1 044 | 17 888 | 2 672 | 3 834 |
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| Selling and marketing | -3 491 | -3 156 | -11 711 | -10 866 | -14 616 |
| costs | | | | | |
--------------------------------------------------------------------------------
| Administrative | -2 941 | -2 797 | -9 232 | -8 686 | -11 614 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Other operating | -228 | -1 393 | -2 510 | -4 166 | -5 291 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 17 583 | 15 475 | 50 617 | 36 676 | 48 775 |
--------------------------------------------------------------------------------
| Finance income | 373 | 258 | 1 189 | 1 037 | 1 661 |
--------------------------------------------------------------------------------
| Finance costs | -1 719 | -1 552 | -4 625 | -4 107 | -5 978 |
--------------------------------------------------------------------------------
| Profit before tax | 16 237 | 14 181 | 47 181 | 33 606 | 44 458 |
--------------------------------------------------------------------------------
| Income tax expense | -4 303 | -3 499 | -8 745 | -9 074 | -12 291 |
--------------------------------------------------------------------------------
| Profit for the period | 11 934 | 10 682 | 38 436 | 24 532 | 32 167 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | | |
--------------------------------------------------------------------------------
| Equity holders of the | 11 929 | 10 680 | 38 432 | 24 278 | 31 909 |
| company | | | | | |
--------------------------------------------------------------------------------
| Minority interest | 5 | 2 | 4 | 254 | 258 |
--------------------------------------------------------------------------------
Earnings per share for profit attributable to the equity holders of the company:
--------------------------------------------------------------------------------
| Earnings per share, | 0.31 | 0.28 | 0.99 | 0.63 | 0.83 |
| EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.31 | 0.27 | 0.99 | 0.63 | 0.82 |
| EUR - diluted | | | | | |
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BALANCE SHEET
--------------------------------------------------------------------------------
| EUR 1000 | 9/2008 | 9/2007 | 12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Intangible assets | | | |
--------------------------------------------------------------------------------
| Goodwill | 119 498 | 120 167 | 119 946 |
--------------------------------------------------------------------------------
| Intangible assets arising from business | 26 081 | 32 324 | 30 600 |
| combinations | | | |
--------------------------------------------------------------------------------
| Other intangible assets | 12 270 | 9 425 | 11 571 |
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| Total | 157 849 | 161 916 | 162 117 |
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| Property, plant and equipment | | | |
--------------------------------------------------------------------------------
| Land | 3 690 | 3 519 | 3 532 |
--------------------------------------------------------------------------------
| Buildings and constructions | 38 218 | 37 950 | 39 594 |
--------------------------------------------------------------------------------
| Machinery and equipment | 109 693 | 98 168 | 103 832 |
--------------------------------------------------------------------------------
| Other | 114 | 275 | 82 |
--------------------------------------------------------------------------------
| Advance payments and construction in | 26 582 | 6 098 | 4 830 |
| progress | | | |
--------------------------------------------------------------------------------
| Total | 178 297 | 146 010 | 151 870 |
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| Other non-current assets | | | |
--------------------------------------------------------------------------------
| Investments in associates | | 3 | |
--------------------------------------------------------------------------------
| Available-for-sale investments | 502 | 2 978 | 410 |
--------------------------------------------------------------------------------
| Finance lease receivables | 4 827 | 3 605 | 3 823 |
--------------------------------------------------------------------------------
| Deferred income tax assets | 1 373 | 596 | 924 |
--------------------------------------------------------------------------------
| Other receivables | 644 | 252 | 236 |
--------------------------------------------------------------------------------
| Total | 7 346 | 7 434 | 5 393 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total non-current assets | 343 492 | 315 360 | 319 380 |
--------------------------------------------------------------------------------
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| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 17 261 | 14 197 | 14 350 |
--------------------------------------------------------------------------------
| Trade and other receivables | 84 827 | 87 259 | 71 824 |
--------------------------------------------------------------------------------
| Derivative receivables | 1 069 | 440 | 1 189 |
--------------------------------------------------------------------------------
| Advance payments | 2 994 | 2 068 | 774 |
--------------------------------------------------------------------------------
| Available-for-sale investments | 5 988 | 1 996 | 21 287 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 8 883 | 8 495 | 9 521 |
--------------------------------------------------------------------------------
| Total current assets | 121 022 | 114 455 | 118 945 |
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--------------------------------------------------------------------------------
| TOTAL ASSETS | 464 514 | 429 815 | 438 325 |
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--------------------------------------------------------------------------------
| EUR 1000 | 9/2008 | 9/2007 | 12/2007 |
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--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
| Equity | | | |
--------------------------------------------------------------------------------
| Equity attributable to equity holders of | | | |
| the company | | | |
--------------------------------------------------------------------------------
| Share capital | 19 399 | 19 376 | 19 392 |
--------------------------------------------------------------------------------
| Share premium reserve | 50 673 | 50 115 | 50 474 |
--------------------------------------------------------------------------------
| Other reserves | -757 | -3 | 14 055 |
--------------------------------------------------------------------------------
| Retained earnings | 97 556 | 86 166 | 86 327 |
--------------------------------------------------------------------------------
| Profit for the period | 38 432 | 24 278 | 31 909 |
--------------------------------------------------------------------------------
| Total | 205 303 | 179 932 | 202 157 |
--------------------------------------------------------------------------------
| Minority interest | 189 | 186 | 187 |
--------------------------------------------------------------------------------
| Total equity | 205 492 | 180 118 | 202 344 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred income tax liabilities | 29 952 | 29 504 | 29 842 |
--------------------------------------------------------------------------------
| Pension obligations | 632 | 510 | 542 |
--------------------------------------------------------------------------------
| Provisions | 1 128 | 928 | 953 |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 78 425 | 65 276 | 81 411 |
--------------------------------------------------------------------------------
| Other liabilities | 870 | 488 | 500 |
--------------------------------------------------------------------------------
| Total | 111 007 | 96 706 | 113 248 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 54 092 | 56 335 | 35 757 |
--------------------------------------------------------------------------------
| Trade and other payables | 92 601 | 95 022 | 85 183 |
--------------------------------------------------------------------------------
| Derivative liabilities | 1 078 | 440 | 897 |
--------------------------------------------------------------------------------
| Tax liabilities | 244 | 1 044 | 794 |
--------------------------------------------------------------------------------
| Provisions | | 150 | 102 |
--------------------------------------------------------------------------------
| Total | 148 015 | 152 991 | 122 733 |
--------------------------------------------------------------------------------
| Total liabilities | 259 022 | 249 697 | 235 981 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES | 464 514 | 429 815 | 438 325 |
--------------------------------------------------------------------------------
CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| EUR 1000 | 9/2008 | 9/2007 | 12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from operating activities | | | |
--------------------------------------------------------------------------------
| Profit for the period | 38 436 | 24 532 | 32 167 |
--------------------------------------------------------------------------------
| Adjustments | | | |
--------------------------------------------------------------------------------
| Income tax expense | 8 745 | 9 074 | 12 291 |
--------------------------------------------------------------------------------
| Depreciation and amortisation and | 28 067 | 24 540 | 33 432 |
| impairment | | | |
--------------------------------------------------------------------------------
| Finance income and costs | 3 436 | 3 070 | 4 317 |
--------------------------------------------------------------------------------
| Oil derivatives | 81 | 2 215 | 2 947 |
--------------------------------------------------------------------------------
| Gain on sale of shares | -14 258 | | |
--------------------------------------------------------------------------------
| Other | -906 | -583 | -859 |
--------------------------------------------------------------------------------
| Net cash generated from operating | 63 601 | 62 848 | 84 295 |
| activities before change in working capital | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in working capital | | | |
--------------------------------------------------------------------------------
| Change in trade and other receivables | -14 113 | -17 965 | -4 903 |
--------------------------------------------------------------------------------
| Change in inventories | -2 925 | -6 135 | -6 824 |
--------------------------------------------------------------------------------
| Change in trade and other payables | 8 525 | 6 385 | -1 450 |
--------------------------------------------------------------------------------
| Change in working capital | -8 513 | -17 715 | -13 177 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest paid | -3 554 | -2 424 | -5 104 |
--------------------------------------------------------------------------------
| Interest received | 1 093 | 747 | 1 460 |
--------------------------------------------------------------------------------
| Income tax paid | -10 858 | -9 056 | -12 041 |
--------------------------------------------------------------------------------
| Net cash from operating activities | 41 769 | 34 400 | 55 433 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing activities | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries and businesses, | -420 | -39 716 | -37 050 |
| net of cash acquired | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of subsidiaries and | | | 1 878 |
| businesses, net of sold cash | | | |
--------------------------------------------------------------------------------
| Purchases of property, plant and equipment | -53 285 | -32 157 | -49 109 |
| and intangible assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of property, plant and | 1 734 | 3 777 | 2 261 |
| equipment and intangible assets | | | |
--------------------------------------------------------------------------------
| Purchases of available-for-sale investments | -110 | -75 | -147 |
--------------------------------------------------------------------------------
| Change in other non-current receivables | -6 | 26 | 1 |
--------------------------------------------------------------------------------
| Proceeds from sale of available-for-sale | 16 813 | 942 | 1 098 |
| investments | | | |
--------------------------------------------------------------------------------
| Dividends received | 3 | 1 | 4 |
--------------------------------------------------------------------------------
| Net cash used in investment activities | -35 271 | -67 202 | -81 064 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing activities | | | |
--------------------------------------------------------------------------------
| Proceeds from share issue | 206 | 2 561 | 2 936 |
--------------------------------------------------------------------------------
| Change in short-term borrowings | 7 365 | 24 488 | 23 011 |
--------------------------------------------------------------------------------
| Proceeds from long-term borrowings | 20 000 | 30 000 | 50 302 |
--------------------------------------------------------------------------------
| Repayments of long-term borrowings | -11 864 | -17 092 | -39 909 |
--------------------------------------------------------------------------------
| Dividends paid | -21 315 | -21 361 | -21 360 |
--------------------------------------------------------------------------------
| Net cash generated from financing | -5 608 | 18 596 | 14 980 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net change in liquid assets | 890 | -14 206 | -10 651 |
--------------------------------------------------------------------------------
| Liquid assets at beginning of period | 14 008 | 24 790 | 24 790 |
--------------------------------------------------------------------------------
| Effect of changes in foreign exchange rates | -35 | -92 | -131 |
--------------------------------------------------------------------------------
| Change in fair value of current | 8 | -1 | |
| available-for-sale investments | | | |
--------------------------------------------------------------------------------
| Liquid assets at end of period | 14 871 | 10 491 | 14 008 |
--------------------------------------------------------------------------------
Liquid assets
--------------------------------------------------------------------------------
| EUR 1000 | 9/2008 | 9/2007 | 12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash | 8 883 | 8 495 | 9 521 |
--------------------------------------------------------------------------------
| Certificates of deposit and commercial papers | 5 988 | 1 996 | 4 487 |
--------------------------------------------------------------------------------
| Total | 14 871 | 10 491 | 14 008 |
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN EQUITY
--------------------------------------------------------------------------------
| EUR 1000 | Share | Share | Re-val | Re-ta | Equity | Mino-r | Total |
| | capit | premi | ua-tio | ined | attrib. | ity | equity |
| | al | um | n | earn- | to equity | inter- | |
| | | reser | and | ings | holders of | est | |
| | | ve | other | | the | | |
| | | | reserv | | company | | |
| | | | es | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity at | 19 | 50 | 14 055 | 118 | 202 157 | 187 | 202 |
| 1.1.2008 | 392 | 474 | | 236 | | | 344 |
--------------------------------------------------------------------------------
| Hedging | | | -46 | | -46 | | -46 |
| reserve, | | | | | | | |
| change in | | | | | | | |
| fair value | | | | | | | |
--------------------------------------------------------------------------------
| Current | | | -14 | | -14 233 | | -14 |
| available-fo | | | 233 | | | | 233 |
| r-sale | | | | | | | |
| investments, | | | | | | | |
| reversal of | | | | | | | |
| change in | | | | | | | |
| fair value | | | | | | | |
| due to sale | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | -533 | | -533 | -2 | -535 |
| differences | | | | | | | |
--------------------------------------------------------------------------------
| Items | | | -14 | | -14 812 | -2 | -14 |
| recognised | | | 812 | | | | 814 |
| directly in | | | | | | | |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | 38 | 38 432 | 4 | 38 436 |
| the period | | | | 432 | | | |
--------------------------------------------------------------------------------
| Total | | | -14 | 38 | 23 620 | 2 | 23 622 |
| recognised | | | 812 | 432 | | | |
| income and | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Share option | | | | | | | |
| remuneration | | | | | | | |
--------------------------------------------------------------------------------
| Subscription | 7 | 199 | | | 206 | | 206 |
| s | | | | | | | |
| pursuant to | | | | | | | |
| 2005 options | | | | | | | |
--------------------------------------------------------------------------------
| Remuneration | | | | 643 | 643 | | 643 |
| expense of | | | | | | | |
| share | | | | | | | |
| options | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | -21 | -21 323 | | -21 |
| paid | | | | 323 | | | 323 |
--------------------------------------------------------------------------------
| Equity at | 19 | 50 | -757 | 135 | 205 303 | 189 | 205 |
| 30.9.2008 | 399 | 673 | | 988 | | | 492 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity at | 19 | 47 | 326 | 106 | 174 160 | 2 709 | 176 |
| 1.1.2007 | 264 | 666 | | 904 | | | 869 |
--------------------------------------------------------------------------------
| Hedging | | | 92 | | 92 | | 92 |
| reserve, | | | | | | | |
| change in | | | | | | | |
| fair value | | | | | | | |
--------------------------------------------------------------------------------
| Current | | | -9 | | -9 | | -9 |
| available-fo | | | | | | | |
| r-sale | | | | | | | |
| investments, | | | | | | | |
| change in | | | | | | | |
| fair value | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | -412 | | -412 | 1 | -411 |
| differences | | | | | | | |
--------------------------------------------------------------------------------
| Items | | | -329 | | -329 | 1 | -328 |
| recognised | | | | | | | |
| directly in | | | | | | | |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | 24 27 | 24 278 | 255 | 24 533 |
| the period | | | | 8 | | | |
--------------------------------------------------------------------------------
| Total | | | -329 | 24 | 23 949 | 256 | 24 205 |
| recognised | | | | 278 | | | |
| income and | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Share option | | | | | | | |
| remuneration | | | | | | | |
--------------------------------------------------------------------------------
| Subscription | 112 | 2 449 | | | 2 561 | | 2 561 |
| s | | | | | | | |
| pursuant to | | | | | | | |
| 2002 options | | | | | | | |
--------------------------------------------------------------------------------
| Remuneration | | | | 452 | 452 | | 452 |
| expense of | | | | | | | |
| share | | | | | | | |
| options | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | -21 | -21 190 | -180 | -21 |
| paid | | | | 190 | | | 370 |
--------------------------------------------------------------------------------
| Purchase of | | | | | | -2 599 | -2 599 |
| a minority | | | | | | | |
--------------------------------------------------------------------------------
| Equity at | 19 | 50 | -3 | 110 | 179 932 | 186 | 180 |
| 30.9.2007 | 376 | 115 | | 444 | | | 118 |
--------------------------------------------------------------------------------
KEY FIGURES
--------------------------------------------------------------------------------
| | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| | 2008 | 2007 | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.31 | 0.28 | 0.99 | 0.63 | 0.83 |
--------------------------------------------------------------------------------
| Earnings per share, EUR - | 0.31 | 0.27 | 0.99 | 0.63 | 0.82 |
| diluted | | | | | |
--------------------------------------------------------------------------------
| Cash flows from operating | 0.41 | 0.25 | 1.08 | 0.89 | 1.43 |
| activities per share, EUR | | | | | |
--------------------------------------------------------------------------------
| EVA, EUR million | 9.7 | 8.8 | 28.3 | 18.5 | 23.0 |
--------------------------------------------------------------------------------
| Capital expenditure, EUR 1000 | 20 817 | 12 937 | 52 238 | 77 638 | 93 187 |
--------------------------------------------------------------------------------
| Depreciation and amortisation, | 9 448 | 8 719 | 28 067 | 24 540 | 33 432 |
| EUR 1000 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per share, EUR | | | 5.29 | 4.64 | 5.21 |
--------------------------------------------------------------------------------
| Return on equity, ROE, % | | | 25.1 | 18.3 | 17.0 |
--------------------------------------------------------------------------------
| Return on invested capital, | | | 21.0 | 18.1 | 17.6 |
| ROI, % | | | | | |
--------------------------------------------------------------------------------
| Equity ratio, % | | | 44.9 | 42.6 | 46.6 |
--------------------------------------------------------------------------------
| Gearing, % | | | 57.3 | 61.7 | 42.7 |
--------------------------------------------------------------------------------
| Net interest-bearing | | | 117 | 111 | 86 360 |
| liabilities, EUR 1000 | | | 646 | 121 | |
--------------------------------------------------------------------------------
| Average number of employees in | | | 8 177 | 7 723 | 7 819 |
| full-time equivalents | | | | | |
--------------------------------------------------------------------------------
| Total number of full-time and | | | 9 625 | 9 226 | 9 387 |
| part-time employees at end of | | | | | |
| period | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjusted number of shares, 1000 | | | | | |
| shares | | | | | |
--------------------------------------------------------------------------------
| average during the period | | | 38 795 | 38 637 | 38 670 |
--------------------------------------------------------------------------------
| at end of period | | | 38 799 | 38 752 | 38 784 |
--------------------------------------------------------------------------------
| average during the period, | | | 38 825 | 38 837 | 38 843 |
| diluted | | | | | |
--------------------------------------------------------------------------------
SEGMENT REPORTING
NET SALES
--------------------------------------------------------------------------------
| EUR 1000 | 7-9/ | 7-9/ | Change | 1-9/ | 1-9/ | Change | 1-12/ |
| | 2008 | 2007 | % | 2008 | 2007 | % | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Environmental | 73 | 67 | 8.6 | 225 | 205 | 10.1 | 279 845 |
| Services | 740 | 915 | | 859 | 057 | | |
--------------------------------------------------------------------------------
| Property and | 56 | 51 | 8.4 | 168 | 149 | 13.2 | 204 141 |
| Office Support | 309 | 963 | | 997 | 343 | | |
| Services | | | | | | | |
--------------------------------------------------------------------------------
| Industrial | 22 | 19 | 15.2 | 62 333 | 55 612 | 12.1 | 75 479 |
| Services | 906 | 890 | | | | | |
--------------------------------------------------------------------------------
| Group admin. | | 3 | | | 9 | | 10 |
| and other | | | | | | | |
--------------------------------------------------------------------------------
| Inter-division | -1 | -1 | | -4 251 | -3 580 | | -4 862 |
| net sales | 712 | 202 | | | | | |
--------------------------------------------------------------------------------
| L&T total | 151 | 138 | 9.1 | 452 | 406 | 11.4 | 554 613 |
| | 243 | 569 | | 938 | 441 | | |
--------------------------------------------------------------------------------
OPERATING PROFIT
--------------------------------------------------------------------------------
| EUR 1000 | 7-9/ | % | 7-9/ | % | 1-9/ | % | 1-9/ | % | 1-12/ | % |
| | 2008 | | 2007 | | 2008 | | 2007 | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Environm | 9 | 13 | 9 73 | 14. | 26 298 | 11. | 26 60 | 13. | 34 | 12. |
| ental | 723 | .2 | 0 | 3 | | 6 | 5 | 0 | 977 | 5 |
| Services | | | | | | | | | | |
--------------------------------------------------------------------------------
| Property | 4 | 8. | 4 21 | 8.1 | 7 571 | 4.5 | 6 990 | 4.7 | 11 | 5.4 |
| and | 806 | 5 | 3 | | | | | | 005 | |
| Office | | | | | | | | | | |
| Support | | | | | | | | | | |
| Services | | | | | | | | | | |
--------------------------------------------------------------------------------
| Industri | 3 | 16 | 2 13 | 10. | 3 991 | 6.4 | 4 589 | 8.3 | 4 769 | 6.3 |
| al | 707 | .2 | 3 | 7 | | | | | | |
| Services | | | | | | | | | | |
--------------------------------------------------------------------------------
| Group | -653 | | -601 | | 12 757 | | -1 | | -1 | |
| admin. | | | | | | | 508 | | 976 | |
| and | | | | | | | | | | |
| other | | | | | | | | | | |
--------------------------------------------------------------------------------
| L&T | 17 | 11 | 15 | 11. | 50 617 | 11. | 36 | 9.0 | 48 | 8.8 |
| total | 583 | .6 | 475 | 2 | | 2 | 676 | | 775 | |
--------------------------------------------------------------------------------
OTHER SEGMENT REPORTING
--------------------------------------------------------------------------------
| EUR 1000 | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| | 2008 | 2007 | 2008 | 2007 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | | | | | |
--------------------------------------------------------------------------------
| Environmental Services | | | 272 673 | 264 576 | 250 980 |
--------------------------------------------------------------------------------
| Property and Office | | | 74 500 | 74 674 | 75 508 |
| Support Services | | | | | |
--------------------------------------------------------------------------------
| Industrial Services | | | 97 478 | 74 573 | 78 311 |
--------------------------------------------------------------------------------
| Group admin. and other | | | 443 | 2 875 | 2 814 |
--------------------------------------------------------------------------------
| Non-allocated assets | | | 19 420 | 13 117 | 30 712 |
--------------------------------------------------------------------------------
| L&T total | | | 464 514 | 429 815 | 438 325 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | | | | | |
--------------------------------------------------------------------------------
| Environmental Services | | | 42 747 | 51 660 | 36 935 |
--------------------------------------------------------------------------------
| Property and Office | | | 30 647 | 29 918 | 32 447 |
| Support Services | | | | | |
--------------------------------------------------------------------------------
| Industrial Services | | | 20 337 | 13 427 | 17 046 |
--------------------------------------------------------------------------------
| Group admin. and other | | | 651 | 765 | 667 |
--------------------------------------------------------------------------------
| Non-allocated | | | 164 640 | 153 927 | 148 886 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| L&T total | | | 259 022 | 249 697 | 235 981 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital expenditure | | | | | |
--------------------------------------------------------------------------------
| Environmental Services | 11 003 | 8 283 | 25 317 | 52 136 | 60 704 |
--------------------------------------------------------------------------------
| Property and Office | 1 336 | -394 | 6 109 | 16 941 | 20 040 |
| Support Services | | | | | |
--------------------------------------------------------------------------------
| Industrial Services | 8 399 | 4 918 | 20 733 | 8 388 | 12 267 |
--------------------------------------------------------------------------------
| Group admin. and other | 79 | 130 | 79 | 173 | 176 |
--------------------------------------------------------------------------------
| L&T total | 20 817 | 12 937 | 52 238 | 77 638 | 93 187 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Depreciation and | | | | | |
| amortisation | | | | | |
--------------------------------------------------------------------------------
| Environmental Services | 5 739 | 5 199 | 17 068 | 14 936 | 20 330 |
--------------------------------------------------------------------------------
| Property and Office | 2 139 | 2 200 | 6 382 | 5 718 | 7 782 |
| Support Services | | | | | |
--------------------------------------------------------------------------------
| Industrial Services | 1 570 | 1 318 | 4 615 | 3 883 | 5 315 |
--------------------------------------------------------------------------------
| Group admin. and other | | 2 | 2 | 3 | 5 |
--------------------------------------------------------------------------------
| L&T total | 9 448 | 8 719 | 28 067 | 24 540 | 33 432 |
--------------------------------------------------------------------------------
INCOME STATEMENT BY QUARTER
--------------------------------------------------------------------------------
| EUR 1000 | 7-9/ | 4-6/ | 1-3/ | 10-12 | 7-9/ | 4-6/ | 1-3/ | 10-12/ |
| | 2008 | 2008 | 2008 | / | 2007 | 2007 | 2007 | 2006 |
| | | | | 2007 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | | | | | | | | |
--------------------------------------------------------------------------------
| Environment | 73 | 76 | 75 | 74 | 67 | 71 | 65 | 53 765 |
| al Services | 740 | 639 | 480 | 788 | 915 | 744 | 398 | |
--------------------------------------------------------------------------------
| Property | 56 | 57 | 55 | 54 | 51 | 48 | 48 | 44 584 |
| and Office | 309 | 114 | 574 | 798 | 963 | 660 | 720 | |
| Support | | | | | | | | |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Industrial | 22 | 22 | 17 | 19 | 19 | 19 | 16 | 18 252 |
| Services | 906 | 052 | 375 | 867 | 890 | 572 | 150 | |
--------------------------------------------------------------------------------
| Group | | | | 1 | 3 | 3 | 3 | 3 |
| admin. and | | | | | | | | |
| other | | | | | | | | |
--------------------------------------------------------------------------------
| Inter-divis | -1 | -1 | -1 | -1 | -1 | -1 | -1 | -1 242 |
| ion net | 712 | 441 | 098 | 282 | 202 | 220 | 158 | |
| sales | | | | | | | | |
--------------------------------------------------------------------------------
| L&T total | 151 | 154 | 147 | 148 | 138 | 138 | 129 | 115 |
| | 243 | 364 | 331 | 172 | 569 | 759 | 113 | 362 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | | | | | | | | |
| profit | | | | | | | | |
--------------------------------------------------------------------------------
| Environment | 9 723 | 8 151 | 8 423 | 8 372 | 9 730 | 8 104 | 8 771 | 7 104 |
| al Services | | | | | | | | |
--------------------------------------------------------------------------------
| Property | 4 806 | 1 156 | 1 609 | 4 015 | 4 213 | 1 690 | 1 087 | 1 154 |
| and Office | | | | | | | | |
| Support | | | | | | | | |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Industrial | 3 707 | 1 162 | -878 | 180 | 2 133 | 2 595 | -139 | 3 025 |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Group | -653 | -271 | 13 | -468 | -601 | -349 | -558 | -971 |
| admin. and | | | 681 | | | | | |
| other | | | | | | | | |
--------------------------------------------------------------------------------
| L&T total | 17 | 10 | 22 | 12 | 15 | 12 | 9 161 | 10 312 |
| | 583 | 198 | 835 | 099 | 475 | 040 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | | | | | | | | |
| margin | | | | | | | | |
--------------------------------------------------------------------------------
| Environment | 13.2 | 10.6 | 11.2 | 11.2 | 14.3 | 11.3 | 13.4 | 13.2 |
| al Services | | | | | | | | |
--------------------------------------------------------------------------------
| Property | 8.5 | 2.0 | 2.9 | 7.3 | 8.1 | 3.5 | 2.2 | 2.6 |
| and Office | | | | | | | | |
| Support | | | | | | | | |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| Industrial | 16.2 | 5.3 | -5.1 | 0.9 | 10.7 | 13.3 | -0.9 | 16.6 |
| Services | | | | | | | | |
--------------------------------------------------------------------------------
| L&T total | 11.6 | 6.6 | 15.5 | 8.2 | 11.2 | 8.7 | 7.1 | 8.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance | -1 | -990 | -1 | -1 | -1 | -924 | -852 | -366 |
| costs. net | 346 | | 100 | 247 | 294 | | | |
--------------------------------------------------------------------------------
| Share of | | | | | | | | 18 |
| profits of | | | | | | | | |
| associates | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | 16 23 | 9 208 | 21 | 10 | 14 | 11 | 8 309 | 9 964 |
| before tax | 7 | | 735 | 852 | 181 | 116 | | |
--------------------------------------------------------------------------------
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
for the comparison period were adjusted accordingly.
BUSINESS ACQUISITIONS
Business combinations in aggregate
--------------------------------------------------------------------------------
| EUR 1000 | Fair values used | Carrying amounts |
| | in consolidation | before |
| | | consolidation |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Property, plant and equipment | 116 | 116 |
--------------------------------------------------------------------------------
| Customer contracts | 158 | |
--------------------------------------------------------------------------------
| Agreements on prohibition of | 81 | |
| competition | | |
--------------------------------------------------------------------------------
| Trade and other receivables | 10 | 10 |
--------------------------------------------------------------------------------
| Total assets | 366 | 126 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | 366 | 126 |
--------------------------------------------------------------------------------
| Goodwill arising from acquisitions | 55 | |
--------------------------------------------------------------------------------
| Acquisition cost | 420 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost | 420 | |
--------------------------------------------------------------------------------
| Cash flow effect of acquisitions | 420 | |
--------------------------------------------------------------------------------
The cleaning services business of Siivouspalvelu Siivoset Oy was acquired into
Property and Office Support Services on 1 January 2008, the cleaning services
business of Siivousliike Lainio Oy on 1 March 2008 and the property maintenance
services business of Rantakylän Talonhuolto Oy on 1 April 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 680 thousand. The
aggregate acquisition cost was EUR 420 thousand, of which EUR 55 thousand was
recognised in goodwill. All itemisations in accordance with IFRS 3 are not
presented because the figures are immaterial.
On 1 October 2008, Jätehuolto Savolainen Oy group was acquired, a company
specialising in waste management and recycling services, with annual net sales
of EUR 2.5 million. The company also provides waste water, hazardous waste
management and industrial cleaning services. Oulun TOP-Huolto Oy, a company
specialising in property management, was acquired in October through a purchase
entering into force on 1 November 2008. The company's annual net sales for 2007
amounted to EUR 2.5 million.
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.
CHANGES IN INTANGIBLE ASSETS
--------------------------------------------------------------------------------
| EUR 1000 | 1-9/2008 | 1-9/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Carrying amount at beginning of | 162 117 | 124 407 | 124 407 |
| period | | | |
--------------------------------------------------------------------------------
| Business acquisitions | 294 | 42 115 | 41 885 |
--------------------------------------------------------------------------------
| Other capital expenditure | 2 937 | 3 243 | 5 403 |
--------------------------------------------------------------------------------
| Disposals | -122 | -2 100 | -1 546 |
--------------------------------------------------------------------------------
| Amortisation and impairment | -6 790 | -5 649 | -7 921 |
--------------------------------------------------------------------------------
| Transfers between items | | 121 | 228 |
--------------------------------------------------------------------------------
| Exchange differences | -587 | -221 | -339 |
--------------------------------------------------------------------------------
| Carrying amount at end of period | 157 849 | 161 916 | 162 117 |
--------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
--------------------------------------------------------------------------------
| EUR 1000 | 1-9/2008 | 1-9/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Carrying amount at beginning of | 151 870 | 134 038 | 134 038 |
| period | | | |
--------------------------------------------------------------------------------
| Business acquisitions | 116 | 5 510 | 5 574 |
--------------------------------------------------------------------------------
| Other capital expenditure | 48 782 | 27 384 | 40 147 |
--------------------------------------------------------------------------------
| Disposals | -1 009 | -1 814 | -2 096 |
--------------------------------------------------------------------------------
| Depreciation and impairment | -21 277 | -18 894 | -25 511 |
--------------------------------------------------------------------------------
| Transfers between items | | -121 | -228 |
--------------------------------------------------------------------------------
| Exchange differences | -185 | -93 | -54 |
--------------------------------------------------------------------------------
| Carrying amount at end of period | 178 297 | 146 010 | 151 870 |
--------------------------------------------------------------------------------
CAPITAL COMMITMENTS
--------------------------------------------------------------------------------
| EUR 1000 | 1-9/2008 | 1-9/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Intangible assets | 1 122 | 165 | 70 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 16 739 | 9 762 | 8 646 |
--------------------------------------------------------------------------------
| Total | 17 861 | 9 927 | 8 716 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The Group's share of capital | 4 093 | 4 396 | 5 090 |
| commitments | | | |
| of joint ventures | | | |
--------------------------------------------------------------------------------
RELATED-PARTY TRANSACTIONS
(Joint ventures)
--------------------------------------------------------------------------------
| EUR 1000 | 1-9/2008 | 1-9/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 766 | 1 520 | 1 851 |
--------------------------------------------------------------------------------
| Purchases | | 245 | 247 |
--------------------------------------------------------------------------------
| Non-current receivables | | | |
--------------------------------------------------------------------------------
| Capital loan receivable | 7 646 | 1 296 | 2 646 |
--------------------------------------------------------------------------------
| Current receivables | | | |
--------------------------------------------------------------------------------
| Trade receivables | 79 | 934 | 110 |
--------------------------------------------------------------------------------
| Current payables | | | |
--------------------------------------------------------------------------------
| Trade payables | | | |
--------------------------------------------------------------------------------
CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
| EUR 1000 | 9/2008 | 9/2007 | 12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Securities for own commitments | | | |
--------------------------------------------------------------------------------
| Real estate mortgages | 19 192 | 10 514 | 10 114 |
--------------------------------------------------------------------------------
| Corporate mortgages | 19 000 | 15 000 | 15 000 |
--------------------------------------------------------------------------------
| Other securities | 191 | 153 | 182 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bank guarantees required for | 4 163 | 3 888 | 4 309 |
| environmental permits | | | |
--------------------------------------------------------------------------------
Other securities are security deposits.
The Group has given no pledges, mortgages or guarantees on behalf of outsiders.
Operating lease liabilities
--------------------------------------------------------------------------------
| EUR 1000 | 9/2008 | 9/2007 | 12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Maturity not later than one year | 6 917 | 6 521 | 7 424 |
--------------------------------------------------------------------------------
| Maturity later than one year and not | 15 316 | 13 976 | 15 611 |
| later than five years | | | |
--------------------------------------------------------------------------------
| Maturity later than five years | 7 188 | 3 703 | 3 905 |
--------------------------------------------------------------------------------
| Total | 29 421 | 24 200 | 26 940 |
--------------------------------------------------------------------------------
Derivative financial instruments
Interest rate swaps
--------------------------------------------------------------------------------
| EUR 1000 | 9/2008 | 9/2007 | 12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nominal values of interest rate | | | |
| swaps* | | | |
--------------------------------------------------------------------------------
| Maturity not later than one year | 15 000 | 15 500 | 7 500 |
--------------------------------------------------------------------------------
| Maturity later than one year and not | | 15 000 | 15 000 |
| later than five years | | | |
--------------------------------------------------------------------------------
| Total | 15 000 | 30 500 | 22 500 |
--------------------------------------------------------------------------------
| Fair value | 220 | 563 | 394 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nominal values of interest rate | | | |
| swaps** | | | |
--------------------------------------------------------------------------------
| Maturity not later than one year | 4 629 | 1 429 | 3 029 |
--------------------------------------------------------------------------------
| Maturity later than one year and not | 18 514 | 5 714 | 18 514 |
| later than five years | | | |
--------------------------------------------------------------------------------
| Maturity later than five years | 9 000 | 6 428 | 12 028 |
--------------------------------------------------------------------------------
| Total | 32 143 | 13 571 | 33 571 |
--------------------------------------------------------------------------------
| Fair value | 641 | 644 | 703 |
--------------------------------------------------------------------------------
* Hedge accounting under IAS 39 has not been applied to these interest rate
swaps. Changes in fair values have been recognised in finance income and costs.
** The interest rate swaps are used to hedge cash flow related to a floating
rate loan, and hedge accounting under IAS 39 has been applied to it. The hedges
have been effective, and the total change in the fair values has been recognised
in the hedging fund under equity.
Currency derivatives
--------------------------------------------------------------------------------
| EUR 1000 | 9/2008 | 9/2007 | 12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nominal values of forward contracts* | | | |
--------------------------------------------------------------------------------
| Maturity not later than one year | 2 160 | 2 019 | 2 184 |
--------------------------------------------------------------------------------
| Fair value | 24 | 21 | 7 |
--------------------------------------------------------------------------------
* Hedge accounting under IAS 39 has not been applied to the currency
derivatives. Changes in fair values have been recognised in finance income and
costs.
Oil derivatives
--------------------------------------------------------------------------------
| 1000 bbl | 9/2008 | 9/2007 | 12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Volume of crude oil put options | | | |
--------------------------------------------------------------------------------
| Maturity not later than one year | 226 | 125 | 182 |
--------------------------------------------------------------------------------
| Maturity later than one year and not | 57 | 283 | 226 |
| later than five years | | | |
--------------------------------------------------------------------------------
| Total | 283 | 408 | 408 |
--------------------------------------------------------------------------------
| Fair value, EUR 1000 | 184 | 424 | 83 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Volume of sold crude oil futures | | | |
--------------------------------------------------------------------------------
| Maturity not later than one year | 42 | 42 | 42 |
--------------------------------------------------------------------------------
| Fair value, EUR 1000 | -1 078 | -506 | -897 |
--------------------------------------------------------------------------------
Hedge accounting under IAS 39 has not been applied to oil derivatives. Changes
in fair values have been recognised in other operating expenses.
The fair values of the oil options have been determined on the basis of a
generally used valuation model. The fair values of other derivative contracts
are based on market prices at the balance sheet date.
CALCULATION OF KEY FIGURES
Earnings per share:
profit attributable to equity holders of the parent company /adjusted average
number of shares
Cash flows from operating activities/share:
cash flow from operating activities as in the cash flow statement / adjusted
average number of shares
EVA:
operating profit - cost calculated on invested capital (average of four
quarters) before taxes
WACC 2007: 8.75%
WACC 2008: 9.3%
Equity/share:
profit attributable to equity holders of the parent company / adjusted number of
shares at end of period
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
Equity ratio, %:
shareholders' equity / (balance sheet total - advances received) x 100
Gearing, %:
net interest-bearing liabilities / shareholders' equity x 100
Net interest-bearing liabilities:
Interest-bearing liabilities - liquid assets
Helsinki 27 October 2008
LASSILA & TIKANOJA PLC
Board of Directors
Jari Sarjo
President and CEO
For further information, please contact Jari Sarjo,
President and CEO, tel. +358 10 636 2810.
Lassila & Tikanoja specialises in environmental management and property and
plant support services and is a leading supplier of wood-based biofuels,
recovered fuels and recycled raw materials. With operations in Finland, Sweden,
Latvia, Russia and Norway, L&T employs 9,500 persons. Net sales in 2007 amounted
to EUR 555 million. L&T is listed on NASDAQ OMX Helsinki.
Distribution:
NASDAQ OMX Helsinki
Major media
www.lassila-tikanoja.com
