Profit warning: Lassila & Tikanoja plc increases its guidance for 2020

Lassila & Tikanoja plc

Inside information

23 October 2020 at 13:30

Profit warning: Lassila & Tikanoja plc increases its guidance for 2020

Lassila & Tikanoja plc keeps its net sales forecast unchanged and increases the range for the operating profit forecast.

Lassila & Tikanoja’s preliminary net sales for January–September 2020 amounted to EUR 552 million, preliminary operating profit was EUR 18.3 million and the preliminary adjusted operating profit was EUR 29 million.

The new outlook is as follows:

Full-year net sales for 2020 are expected to decrease year-on-year and adjusted operating profit is estimated to be EUR 35–43 million (40.5).

The previous outlook, published in the Half-Year Report on 28 July 2020, was as follows:

Full-year net sales for 2020 are expected to decrease year-on-year and operating profit is estimated to be EUR 30–40 million (40.5) excluding loss related to the discontinuation of Russian operations.

Adjusted operating profit as a new alternative performance measure

In September 2020, Lassila & Tikanoja adopted adjusted operating profit as a new alternative performance measure. The reporting of adjusted operating profit is aimed at improving comparability between reporting periods. The calculation of adjusted operating profit excludes substantial costs arising from business restructuring, gains and losses from divestments and costs arising from the discontinuation of businesses.

The difference between operating profit and adjusted operating profit in January-September 2020 is attributable to the costs of EUR 10.4 million recognised in relation to the discontinuation of Russian operations and costs of EUR 0.3 million arising from preparations for the incorporation of the Group’s divisions. The costs arising from the incorporation of the Group’s divisions are related to the plan announced in connection with the financial statements release in January 2020 to incorporate Lassila & Tikanoja plc’s businesses as separate legal entities effective from 1 January 2021.

The difference between operating profit and adjusted operating profit compared to 2019 is attributable to the EUR 4.5 million positive profit effect of the sale of L&T Korjausrakentaminen Oy.

Lassila & Tikanoja has successfully adjusted its operations in response to the changed market conditions and customer needs

The COVID-19 pandemic has affected all of Lassila & Tikanoja’s divisions and the demand for services has been difficult to predict at times. The Group has successfully adjusted its service production and offering in response to changes in customer needs and markets. The annual maintenance breaks for industrial customers that were postponed earlier in the year were implemented as planned during the third quarter.

The new estimated outlook is based on the assumption that Lassila & Tikanoja’s service production continues at its current level in spite of the COVID-19 pandemic.

Lassila & Tikanoja will publish its Interim Report for January–September 2020 on Tuesday, 27 October 2020.

LASSILA & TIKANOJA PLC

Eero Hautaniemi

President and CEO

For additional information, please contact:

Eero Hautaniemi, President and CEO, tel. +358 (0)10 636 2810

Valtteri Palin, Vice President and CFO, tel. +358 (0)40 734 7749

Lassila & Tikanoja is a service company that is putting the circular economy into practice. Together with our customers, we keep materials and properties in productive use for as long as possible and we enhance the use of raw materials and energy. This is to create more value with the circular economy for our customers, personnel and society in a broader sense. Achieving this also means growth in value for our shareholders. Our objective is to continuously grow our actions’ carbon handprint, our positive effect on the climate. We assume our social responsibility by, for example, looking after the work ability of our personnel and also offering jobs to those who are struggling to find employment. L&T operates in Finland, Sweden and Russia. L&T employs 8,200 people. Net sales in 2019 amounted to EUR 784.3 million. L&T is listed on Nasdaq Helsinki.