CEO Outlook

President and CEO Eero Hautaniemi in Interim Report Q3 2025

“Net sales for January–September of 2025 totalled EUR 571.4 million (576.5). Adjusted operating profit was EUR 37.7 million (32.7). Adjusted operating profit improved significantly in Facility Services Businesses. In the Circular Economy Business, adjusted operating profit declined slightly compared to the previous year.

In Circular Economy Business, relative profitability remained almost at the level of the comparison period, although the challenging economic cycle affected demand throughout the review period. Especially in the construction industry customer segment, the demand for recycling and waste management services decreased compared to the comparison period. In the hazardous waste business line, both net sales and profitability remained at a good level. In process cleaning, net sales increased slightly from the strong comparison period due to an especially active third quarter. The annual maintenance breaks in the industrial sector were carried out as planned, and project resourcing was mostly successful. In the environmental construction business, net sales grew driven by a strong project portfolio. The efficiency measures helped to adjust the costs of service production of the whole division to the current market situation.

In Facility Services businesses, profitability improved in both Finland and Sweden. In Facility Services Finland, the decrease in net sales was affected by planned optimisation of the customer portfolio as well as a mild winter. The demand for digital services, such as data-driven cleaning services and AI-assisted energy efficiency services, remained strong. Measures to streamline the cost structure and efficiency of the operations continued, leading to a clear improvement in the division's operating profit. Profitability improved compared to the comparison period especially in property maintenance business. In Facility Services Sweden, net sales increased due to new customer contracts and the strengthening of the Swedish krona. The division's operating loss decreased as expected. Measures to simplify operating models and adjust the cost level continued. The adjusted operating result for the division was positive in the third quarter.

L&T’s sustainability performance remained strong during the review period. The company’s carbon footprint (Scope 1–2) decreased by 19% compared to the reference period. The reduction in carbon footprint was driven by the expanded use of renewable fuels and investments in low-emission fleet. Customer satisfaction (NPS) reached an all-time high of 41. In addition, the total recordable incident frequency decreased compared to the comparison period.

In December 2024, the company initiated the planning of the possible separation of its circular economy businesses and facility services businesses into two independent listed companies. The plan is to separate the circular economy businesses into a newly listed company through a partial demerger of Lassila & Tikanoja plc. It is expected that the separation of the circular economy and facility services businesses could increase shareholder value by enabling both businesses to pursue their own strategies and growth opportunities more effectively. The preparation of the partial demerger progressed as planned during the review period, and on 7 August 2025, the Board of Directors of Lassila & Tikanoja plc approved the demerger plan to separate the circular economy business into a new publicly listed company. The demerger is subject to approval by an Extraordinary General Meeting of the company, which will be held on 4 December 2025. The planned effective date of the demerger is 31 December 2025.”

Information:

President and CEO Eero Hautaniemi in Half-Year Financial Report Q2 2025

“Net sales for the first half of 2025 totalled EUR 371.8 million (384.2). Adjusted operating profit was EUR 17.6 million (12.7). Adjusted operating profit improved significantly in Facility Services Businesses. In the Circular Economy Business, adjusted operating profit declined slightly compared to the previous year, but due to successful efficiency measures, relative profitability remained stable despite the challenging market environment. Net cash flow from operating activities after investments improved by EUR 6 million from the comparison period to EUR 2.4 million.

In Circular Economy Business, relative profitability remained at the level of the comparison period, although the challenging economic cycle affected demand in the first half of the year. Especially in the construction industry customer segment, the demand for recycling and waste management services decreased compared to the comparison period. In the hazardous waste business line, both net sales and profitability remained at a good level. In process cleaning, net sales were expectedly lower than in the strong comparison period. However, annual maintenance breaks in the industrial sector were carried out as planned, and project resourcing was mostly successful. In the environmental construction business, the weak economic situation in the Finnish construction market was reflected in a decrease in the volumes of material flows delivered to material treatment centres. The efficiency measures implemented in 2024 helped to adjust the costs of service production to the current market situation. At the end of the review period, the pallet repair and recycling business grew following the acquisition of Stena Recycling’s pallet business. The transaction strengthens L&T’s service offering and supports the growth of the Circular Economy Business in line with strategy.

In May 2025, a two-year environmental construction project was launched for Boliden Harjavalta. As part of the construction project, L&T is expanding Boliden Harjavalta’s current landfill site, which processes copper and nickel. The extensive expansion project involves building over 16 hectares of new landfill site.

In Facility Services businesses, profitability improved in both Finland and Sweden. In Facility Services Finland, net sales declined during the first half of the year due to a mild winter and the planned optimisation of the customer portfolio. The demand for digital services, such as data-driven cleaning services and AI-assisted energy efficiency services, remained strong. Measures to streamline the cost structure and efficiency of the operations continued, leading to a clear improvement in the division's operating profit. In Facility Services Sweden, operating loss decreased as expected during the first half of the year. Measures to simplify operating models and adjust the cost level continued. The new customer contracts won in late 2024, along with ongoing efforts to enhance profitability, provide a solid foundation for achieving a turnaround in Facility Services Sweden in 2025.

L&T’s sustainability performance remained strong during the first half of the year. The company’s carbon footprint (Scope 1–2) decreased by 22% compared to the reference period, and customer satisfaction (NPS) reached an all-time high of 41. The reduction in carbon footprint was driven by the expanded use of renewable fuels and investments in low-emission fleet.

In December 2024, the company initiated the planning of the possible separation of its circular economy businesses and facility services businesses into two independent listed companies. The plan is to separate the circular economy businesses into a newly listed company through a partial demerger of Lassila & Tikanoja plc. It is expected that the separation of the circular economy and facility services businesses could increase shareholder value by enabling both businesses to pursue their own strategies and growth opportunities more effectively. The preparation of the partial demerger progressed as planned during the review period, and on 7 August 2025, the Board of Directors of Lassila & Tikanoja plc approved the demerger plan to separate the circular economy business into a new publicly listed company. Further information on the demerger plan will be provided in a separate stock exchange release. The demerger is subject to approval by an Extraordinary General Meeting of the company, which is expected to be held on 4 December 2025. The planned effective date of the demerger is 31 December 2025.”

President and CEO Eero Hautaniemi in Interim Report Q1 2025

“Net sales for the first quarter of 2025 totalled EUR 175.5 million (185.0). Adjusted operating profit was EUR 2.7 million (0.0). Adjusted operating profit improved substantially in Facility Services Finland and Sweden and remained at the same level as the comparison period in Circular Economy Business. Net cash flow from operating activities after investments was strong and improved by EUR 16 million from the comparison period.

In Circular Economy business, profitability remained at the level of the comparison period, despite the challenging business environment affecting the demand for circular economy services in the first quarter. Especially in the construction industry customer segment, the demand for recycling and waste management services decreased compared to the comparison period. In the hazardous waste business line, demand remained stable. In the environmental construction business, the weak economic situation in the Finnish construction market was reflected in a decrease in the volumes of material flows delivered to material treatment centres. The efficiency measures implemented in 2024 helped to adjust the costs of service production to the current market situation.

In Facility Services businesses, profitability improved despite the decrease in net sales. In Facility Services Finland, the decrease in net sales was affected by a mild winter as well as planned optimisation of the customer portfolio. The demand for digital services, such as data-driven cleaning services and AI-assisted energy efficiency services, remained strong. Measures to streamline the cost structure and efficiency of the operations continued, leading to a clear improvement in the division's operating profit. In Facility Services Sweden, operating loss decreased as expected during the first quarter. Measures to simplify operating models and adjust the cost level continued. The new customer contracts won in late 2024, along with ongoing efforts to enhance profitability, provide a solid foundation for achieving a turnaround in Facility Services Sweden in 2025.

In December 2024, the company initiated the planning of the possible separation of its circular economy businesses and facility services businesses into two independent listed companies. The plan is to separate the circular economy businesses into a newly listed company through a partial demerger of Lassila & Tikanoja plc. It is expected that the separation of the circular economy and facility services businesses could increase shareholder value by enabling both businesses to pursue their own strategies and growth opportunities more effectively. The preparation for the partial demerger progressed as planned during the review period.

Lassila & Tikanoja renewed its operating model in 2024. Continuing the operating model work, the company launched an efficiency programme aiming for improved performance at the beginning of 2025, encompassing both the circular economy and facility services businesses. The efficiency programme aims for an annual performance improvement of at least EUR 8 million by the end of 2026 compared to the 2023 level, including the impact on the annual cost level of having two separate listed companies. During the review period, the measures of the efficiency programme progressed as planned.”

President and CEO Eero Hautaniemi in Financial Statements Release 2024

“Net sales for year 2024 totalled EUR 770.7 million (802.1). Adjusted operating profit was EUR 43.2 million (37.9). Environmental Services, Industrial Services and Facility Services Finland improved both their relative and absolute profitability despite the challenging business cycle. The company’s balance sheet and financial position remained strong.

In circular economy businesses, solid performance continued in 2024. Both Environmental Services and Industrial Services improved their profitability, and net sales of the divisions in total grew compared to the previous year. In Environmental Services, net sales were on par with the comparison period. In Industrial Services, net sales increased by 2.9 per cent from the previous year.

In Environmental Services, the challenging business environment was reflected in the demand for recycling and waste management services throughout the financial period. Especially in the construction industry customer segment, the demand decreased compared to the comparison period. In addition, the municipalisation of collection of packaging material waste from housing properties continued in 2024. Through the efficiency improvement measures implemented in the first half of the year, the costs of service production were successfully adapted to the current market situation. The division's market position remained solid in corporate and producer responsibility organisation customers and the position in the municipal contracts strengthened.

In Industrial Services, the hazardous waste business line saw strong demand throughout the year. In the process cleaning business, the annual maintenance breaks were carried out as planned and resourcing was successful. In the environmental construction business, the weak economic situation in the Finnish construction market was reflected in a decrease in the volumes of material flows delivered to material treatment centres. In Sweden, Industrial Services expanded to the Gävleborg region through an acquisition.

In facility services businesses, the year 2024 was twofold. In Finland, the net sales of facility services decreased as planned due to the termination of unprofitable customer agreements, and the operating profit more than doubled compared to the previous year. In Sweden, the adjusted operating loss of facility services increased as net sales decreased by 16.0 per cent from the comparison period.

In Facility Services Finland, all business lines achieved a better result than in the comparison period. Performance of the cleaning business was particularly strong. Measures to streamline the cost structure and the efficiency of the operations continued. The number of employees in the division has decreased by more than 450 people compared to the comparison period.

In Facility Services Sweden, the decline in net sales and the increase in the adjusted operating loss were impacted by the discontinuation of a significant customer relationship in late 2023 as well as two public-sector customer agreements turning unprofitable during 2024. The measures to simplify operating models and adjust the cost level continued throughout 2024. The number of employees in the division decreased by 155 people from the comparison period. The turnaround in Facility Services Sweden progressed more slowly than expected, but the new customer accounts won towards the end of the year as well as the additional measures initiated to improve profitability create conditions for achieving a turnaround during 2025.

In December 2024, the company initiated the planning of the possible separation of its circular economy businesses Environmental and Industrial Services and facility services businesses into two independent listed companies. The plan is to separate the circular economy businesses into a newly listed company through a partial demerger of Lassila & Tikanoja plc. It is expected that the separation of the circular economy and facility services businesses could increase shareholder value by enabling both businesses to pursue their own strategies and growth opportunities more effectively.

Lassila & Tikanoja renewed its operating model in 2024. Continuing the operating model work, the company launched an efficiency programme aiming for improved performance at the beginning of 2025, encompassing both the circular economy and facility services businesses. The efficiency programme aims for an annual performance improvement of at least EUR 8 million by the end of 2026 compared to the 2023 level, including the impact on the annual cost level of having two separate listed companies. The efficiency programme focuses on, among other things, simplifying procedures and improving the efficiency of direct and indirect procurement and fleet usage.”