Near-term risks and uncertainties
General economic uncertainty may affect the level of economic activity among customers, which may reduce the demand for L&T’s services.
Lassila & Tikanoja’s business is susceptible to economic fluctuations and changing market conditions and variations in the industries of L&T’s customers may affect the demand for L&T’s services and solutions.
Lassila & Tikanoja’s business lines are competitive, and increased competition or failure in reacting to competitive situations may result in L&T losing market position.
Lassila & Tikanoja’s business is sensitive to fluctuations in the pricing and supply of materials, raw materials, and capital goods.
The Finnish Waste Act was amended in July 2021. Under the reforms to the Waste Act, municipalities take on a larger role in organising the collection of packaging materials and biowaste from housing properties. As a consequence of the reform, L&T’s direct customer
agreements with housing properties on the separate collection of packaging waste and biowaste were transferred to municipalities for competitive bidding gradually between 1 July 2022 and 1 July 2025. L&T estimates that, as a result of municipalisation, approximately EUR 100 million of the Finnish waste management market will be moved out of the scope of free competition between 2024 and 2028. L&T participates in the competitive tendering of municipal contracts and is a significant operator in municipal contracts. Nevertheless, L&T estimates that the overall impact of the change will be negative for the company.
Lassila & Tikanoja may become liable for environmental damages, which could result in significant costs and reputational harm.
The company has several ERP system roll-outs under way. Temporary additional costs arising from system deployments and establishing the operating model may weigh down the company’s result.
Lassila & Tikanoja’s merger and acquisition activities expose L&T to various risks that may have a material adverse effect on its business operations.
Lassila & Tikanoja operates in a labour-intensive industry and failures in recruiting skilled personnel, losing senior managers or key employees or other disruptions in the availability or work capacity of personnel may adversely affect L&T’s business, and it may fail in recruiting and retaining people with the required skill set.
Lassila & Tikanoja’s operations and services rely largely on data networks and digital solutions, and any malfunctions in and breaches or attacks targeting such networks and solutions as well as potential failures in information system development projects as well as lack of adequate data processing agreements may adversely affect the business and financial position of L&T and lead to reputational damage.
The geopolitical situation involves continued uncertainty due to Russia’s war of aggression and the U.S. customs policy. The indirect impacts on overall economic activity in Finland and Sweden may have a negative impact on net sales and profit.
