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Lassila & Tikanoja plc Financial Statements Release 1 January-31 December 2008

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LASSILA & TIKANOJA PLC FINANCIAL STATEMENTS RELEASE 10 FEBRUARY 2009 8.00 AM    


LASSILA & TIKANOJA PLC FINANCIAL STATEMENTS RELEASE 1 JANUARY-31 DECEMBER 2008  

- Net sales for the final quarter EUR 153.1 million (EUR 148.2 million);        
operating profit EUR 4.9 million (EUR 12.1 million); operating profit excluding 
non-recurring and imputed items EUR 8.6 million (EUR 13.3 million); earnings per
share EUR 0.04 (EUR 0.20)                                                       
- Full-year net sales EUR 606.0 million (EUR 554.6 million); operating profit   
EUR 55.5 million (EUR 48.8 million); operating profit excluding non-recurring   
and imputed items EUR 45.0 million (EUR 54.3 million); earnings per share EUR   
1.03 (EUR 0.83)                                                                 
- In 2009, net sales and operating profit excluding non-recurring items are     
expected to reach the previous year's level.                                    
- A dividend of EUR 0.55 per share is proposed.                                 


GROUP NET SALES AND FINANCIAL PERFORMANCE                                       

October-December                                                                

Lassila & Tikanoja's net sales for the final quarter stood at EUR 153.1 million 
(EUR 148.2 million). This represented an increase of 3.3%, with corporate       
acquisitions accounting for 0.4 percentage points. The operating profit         
decreased to EUR 4.9 million (EUR 12.1 million), representing 3.2% (8.2%) of net
sales. The operating profit excluding non-recurring and imputed items was EUR   
8.6 million (EUR 13.3 million). Earnings per share were EUR 0.04 (EUR 0.20).    

Organic growth continued in Property and Office Support Services and Industrial 
Services, while the net sales of Environmental Services decreased. Market prices
of secondary raw materials sank and demand fell rapidly, which burdened the     
profitability of recycling services. L&T Biowatti's raw material supply was     
clearly below the targeted level due to production restrictions in the forest   
industry. Production efficiency enhancement measures were continued to improve  
profitability, and prices were revised. Exceptionally low social security costs 
boosted the operating profit for the comparison period.                         

The following non-recurring items were recorded for the final quarter: in       
Property and Office Support Services, the goodwill impairment in Swedish        
operations and a loss due to the divestment of the Norwegian business, a total  
of EUR -4.2 million, and in Industrial Services a profit of EUR 3.1 million from
oil derivatives (EUR -0.7 million) and EUR -2.6 million from the discontinuance 
of the loss-making soil washing services.                                       

Net sales and financial performance for 2008                                    
Full-year net sales increased by 9.3% to EUR 606.0 million (EUR 554.6 million), 
with corporate acquisitions accounting for 1.5 percentage points of this growth.
Operating profit amounted to EUR 55.5 million (EUR 48.8 million), representing  
9.2% (8.8%) of net sales. The operating profit excluding non-recurring and      
imputed items was EUR 45.0 million (EUR 54.3 million). Earnings per share were  
EUR 1.03 (EUR 0.83).                                                            

Organic growth outperformed market growth, and the company's market position    
strengthened. New service products were introduced to the market. The first half
of the year was affected by the sharp rise in general cost level while the      
second half was overshadowed by growing financial uncertainty.                  

Operating profit excluding non-recurring and imputed items fell due to rocketing
production costs and higher traffic fuel prices in the first half of the year.  
The market prices of secondary raw materials sank and demand fell rapidly, which
burdened profitability towards the year-end.                                    

Meanwhile, a capital gain of EUR 14.3 million from the sale of Ekokem shares in 
January and the EUR 3.0 million profits from oil derivatives raised the         
operating profit. On the other hand, operating profit was adversely affected by 
the goodwill impairment in Swedish operations and a loss from the divestment of 
the Norwegian business, totalling EUR -4.2 million, and a loss of EUR -2.6      
million due to the discontinuance of the loss-making soil washing services. A   
year earlier, non-recurring items totalled EUR -5.5 million.                    

Financial summary                                                               
--------------------------------------------------------------------------------
|                        | 10-12 | 10-12 | Change |   1-12/ |  1-12/ | Change  |
|                        |     / |     / |      % | 2008    |   2007 |      %  |
|                        |  2008 |  2007 |        |         |        |         |
--------------------------------------------------------------------------------
| Net sales, EUR million | 153.1 | 148.2 |    3.3 |   606.0 |  554.6 |     9.3 |
--------------------------------------------------------------------------------
| Operating profit       |   8.6 |  13.3 |  -35.3 |    45.0 |   54.3 |   -17.1 |
| excluding              |       |       |        |         |        |         |
| non-recurring and      |       |       |        |         |        |         |
| imputed items, EUR     |       |       |        |         |        |         |
| million*               |       |       |        |         |        |         |
--------------------------------------------------------------------------------
| Operating profit, EUR  |   4.9 |  12.1 |  -59.7 |    55.5 |   48.8 |    13.8 |
| million                |       |       |        |         |        |         |
--------------------------------------------------------------------------------
| Operating margin, %    |   3.2 |   8.2 |        |     9.2 |    8.8 |         |
--------------------------------------------------------------------------------
| Profit before tax, EUR |   3.5 |  10.9 |  -67.6 |    50.7 |   44.5 |    14.0 |
| million                |       |       |        |         |        |         |
--------------------------------------------------------------------------------
| Earnings per share,    |  0.04 |  0.20 |  -80.0 |    1.03 |   0.83 |    24.1 |
| EUR                    |       |       |        |         |        |         |
--------------------------------------------------------------------------------
| Dividend per share,    |       |       |        |  0.55** |   0.55 |         |
| EUR                    |       |       |        |         |        |         |
--------------------------------------------------------------------------------
| EVA, EUR million       |  -3.3 |   4.6 |        |    25.0 |   23.0 |     8.7 |
--------------------------------------------------------------------------------
* Breakdown of operating profit excluding non-recurring and imputed items is    
presented at the end of the explanatory statement.                              
** Proposal by the Board of Directors                                           


NET SALES AND FINANCIAL PERFORMANCE BY DIVISION                                 

Environmental Services                                                          

October-December                                                                

The net sales of Environmental Services (waste management, recycling services,  
L&T Biowatti, environmental products) in the final quarter amounted to EUR 74.2 
million (EUR 74.8 million), a decrease of 0.8%. The operating profit was EUR 6.0
million (EUR 8.4 million). Operating profit excluding non-recurring and imputed 
items was EUR 6.0 million (EUR 8.5 million).                                    

Waste management was able to meet its targets thanks to satisfactory new sales  
and production efficiency enhancement measures. Traffic fuel price pressures    
also eased off.                                                                 

Recycling services experienced a decline in net sales and profitability as the  
market prices of secondary raw materials (plastics, fibres, metals) plunged and 
demand shrank rapidly. Volumes of recyclable waste materials decreased, although
at the end of the year the sales volumes of recovered fuels and wood chips      
picked up again.                                                                

L&T Biowatti failed to meet its targets due to production restrictions in the   
forest industry. The start-up of the wood pellet plant in Luumäki, Finland, and 
the introduction of a new forest service organisation increased costs.          
                                                                                
International operations within Environmental Services expanded, and performance
developed favourably. Profitability development was good in Latvia thanks to    
production efficiency measures and decreased production costs.                  

Net sales of environmental products increased considerably and the financial    
performance improved.                                                           

Year 2008                                                                       

The full-year net sales of Environmental Services totalled EUR 300.1 million    
(EUR 279.8 million); an increase of 7.2%. Operating profit was EUR 32.3 million 
(EUR 35.0 million), while operating profit excluding non-recurring and imputed  
items totalled EUR 32.3 million (EUR 36.3 million).                             

Organic growth and customer loyalty remained good, although prices were revised 
following the steep rise in general cost level and transport fuel prices. The   
growing financial uncertainty and, in particular, the slowdown in construction  
lowered intake volumes at recycling plants. Furthermore, the market prices of   
secondary raw materials and demand for them sank in the second half.            

Construction of substantial added capacity began at the Kerava recycling plant. 
It is estimated that the first stage (wood shredding line) will be taken into   
use during the second quarter of 2009. Construction of the second stage         
(construction and demolition waste treatment plant; commercial and industrial   
waste treatment plant) is about to begin, and the plant is expected to be       
completed in about a year. This expansion will significantly increase the       
recovery rate of the waste processed at the plant.                              

The costs of the disposal of plant reject rose due to reduced landfill capacity 
at the Kerava plant, which was in turn due to technical reasons. A new          
industrial landfill site was opened in Kotka, Finland, at the end of the year.  

Demand for L&T Biowatti's biofuels fell clearly short of the expected level due 
to the exceptionally mild winter, which also hampered the collection of forest  
processed chips and raised procurement costs. To compensate for the impacts of  
production restrictions in the forest industry, the organisation was revised and
the service offering was expanded. In addition, investments were made in the    
company's own collecting, processing and transport equipment for forest         
processed chips. These measures help increase the company's own energy wood     
procurement considerably. The production of wood pellets was launched in Luumäki
at the beginning of the final quarter.                                          

Business in Russia and Latvia developed as planned. The uncertainty of the      
Latvian economy has posed challenges for business development while it has      
translated into high availability of labour and lower labour costs. L&T has     
waste management operations at two locations in Russia, Dubna and Sergiev Posad.
At the year-end, a waste management agreement was signed with the City of       
Noginsk near Moscow, where operations will begin in the first half of the year. 

All units of Lassila & Tikanoja plc's Environmental Services received           
certificates for quality, environmental management, occupational health and     
safety.                                                                         

Net sales for environmental products increased and performance development was  
positive. Based on new customers, the Bajamaja rental operations became a       
year-round service, which clearly boosted net sales.                            

Property and Office Support Services                                            

October-December                                                                

The net sales of Property and Office Support Services (property maintenance and 
cleaning services) grew by 7.0% to EUR 58.6 million (EUR 54.8 million).         
Operating profit was adversely affected by the non-recurring items involving    
goodwill impairment in Swedish operations and the loss incurred due to the      
divestment of the Norwegian business, a total of EUR -4.2 million. Operating    
loss was EUR -2.0 million (EUR 4.0 million), and operating profit excluding     
non-recurring and imputed items came to EUR 2.1 million (EUR 4.0 million).      

Organic growth continued in Finland and additional services sold well. Finnish  
operations reached their target, although the result was weaker than a year     
earlier due to higher social security costs.                                    

The division's international operations continued to make a loss. Net sales of  
the Swedish operations declined and the loss increased due to lost customers and
weak new sales. Meanwhile, in Russia and Latvia, net sales increased and        
operating profit showed improvement.                                            

Year 2008                                                                       

Full-year net sales for Property and Office Support Services increased by 11.5% 
to EUR 227.6 million (EUR 204.1 million). Operating profit was EUR 5.5 million  
(EUR 11.0 million), and operating profit excluding non-recurring and imputed    
items totalled EUR 9.7 million (EUR 11.4 million).                              

Contract revenue increased, and sales of additional services in both product    
lines were successful. Organic growth was strong, particularly in property      
maintenance, while production costs rose and price competition remained intense.

New service products were introduced to the market. Such new products in        
cleaning services included the L&T® EcoCleaning concept, the first product in   
the industry in Finland to receive the Nordic environmental label, also known as
the Swan label. This concept provides customers with the opportunity to carry   
out concrete environment-friendly actions.                                      

The holding in Blue Service Partners was sold to L&T's joint venture partner at 
the beginning of February. Moreover, the Huomenta Toimitilapalvelut franchising 
chain expanded as targeted in the Helsinki region in Finland, and operations    
were also launched in Lahti and Tampere, Finland.                               

Loss from international operations declined. Operations in Russia and Latvia    
developed as planned while the Swedish operations fell markedly short of their  
targets. Action programme is underway in Sweden to improve profitability.       

Industrial Services                                                             

October-December                                                                

Net sales of Industrial Services (hazardous waste management, industrial        
solutions, damage repair services and wastewater services) were up by 12.3% to  
EUR 22.3 million in the final quarter (EUR 19.9 million). Operating profit was  
EUR 1.6 million (EUR 0.2 million), and operating profit excluding non-recurring 
and imputed items was EUR 1.2 million (EUR 1.3 million).                        

Net sales increased in all product lines; growth was primarily organic. Despite 
fluctuations in demand, sales work was fairly successful and new partner        
agreements were signed.                                                         

Furthermore, costs associated with the storage of raw materials for the joint   
venture L&T Recoil re-refinery and the start-up of operations burdened the      
financial performance.                                                          

L&T Recoil's oil derivatives were divested and a total profit of EUR 3.1 million
was recorded. A non-recurring cost of EUR -2.6 million was recorded for the     
divestment of the soil washing services.                                        

Year 2008                                                                       

Industrial Services' net sales for the full year totalled EUR 84.6 million (EUR 
75.5 million); an increase of 12.1%. The operating profit was EUR 5.6 million   
(EUR 4.8 million), and the operating profit excluding non-recurring and imputed 
items was EUR 5.2 million (EUR 8.6 million).                                    

Sales were successful despite the growing financial uncertainty towards the     
year-end. Net sales increased in all product lines, growth being primarily      
organic. Indeed, the division was also able to strengthen its market position.  

Demand fluctuated rapidly throughout the year, and it was difficult to adjust   
production to these fluctuations. In the first half of the year, performance was
also burdened by difficulties in delivering recycled fuels and the rise in      
hazardous waste disposal costs in the second half. As a result of the fire at   
the Tuusula plant in June, acceptance criteria for waste were revised.          

New partner agreements were forged in damage repair services, and the service   
network was expanded. The number of major damage repair assignments was         
exceptionally small last year. At the beginning of 2009, damage repair services 
were included in the Property and Office Support Services division.             

L&T Recoil's re-refinery is estimated to be completed in spring 2009. This      
year's objective for this joint venture is to produce one-third of the plant's  
60,000-ton annual capacity. L&T Recoil's raw material procurement was successful
but higher storage costs and operational start-up costs eroded the division's   
profitability.                                                                  
                                                                                
A total of EUR 3.0 million worth of imputed changes and sales gains from L&T    
Recoil's oil derivatives were recorded.                                         

FINANCING                                                                       

At the end of the period, interest-bearing liabilities amounted to EUR 29.9     
million more than a year earlier. Net interest-bearing liabilities, totalling   
EUR 120.5 million, increased by EUR 34.2 million. Net finance costs exceeded    
those for the comparison period by EUR 0.1 million in the final quarter and by  
EUR 0.5 million in January-December. Interest expenses increased by EUR 0.3     
million in the final quarter. The net finance costs increased as a result of the
growth in the interest-bearing liabilities.                                     

An expense of EUR 0.1 million (EUR 0.2 million) arising from changes in the fair
values of interest rate swaps was recognised in the finance costs in the final  
quarter. In January-December, an expense of EUR 0.3 million arising from the    
change in the fair value of interest rate swaps was recognised this year as well
as in the previous year. Net finance costs were 0.8% (0.8%) of net sales and    
8.7% (8.9%) of operating profit.                                                

A total of EUR 1.0 million arising from the interest rate swaps to which hedge  
accounting under IAS 39 is applied, was recognised as a decrease in equity.     

The equity ratio was 43.2% (46.6%) and the gearing rate 58.8 (42.7). Cash flows 
from operating activities amounted to EUR 70.4 million (EUR 55.4 million), and  
EUR 2.2 million were released from the working capital (EUR 13.2 million were   
tied up).                                                                       

At the end of the year, liquid assets amounted to EUR 26.5 million and binding  
loan offers EUR 24 million. Thereby, financing for 2009 is 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 84.2 million (EUR 93.2 million). Production    
plants were built and machinery and equipment were purchased. The largest       
construction projects were L&T Recoil re-refinery, extension of Kerava landfill 
and Kotka landfill. In addition, information systems were replaced.             

Business acquisitions amounted to EUR 5.1 million. The combined annual net sales
of the acquired businesses totalled EUR 6.5 million.                            

In the fourth quarter Jätehuolto Savolainen Oy, a company specialising in waste 
management and recycling services, was acquired into Environmental Services.    
Oulun TOP-Huolto Oy, a company specialising in property management, was acquired
into Property and Office Support Services and Kuljetusliike Eskolin Oy, a sewer 
maintenance service provider, was acquired into Industrial Services.            

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 Industrial Services.                           

In February the 50% holding in Blue Service Partners Oy was sold to the joint   
venture partner. Food hygiene business operations in Norway were disposed of at 
the end of December.                                                            

PERSONNEL                                                                       

In 2008, the average number of employees converted into full-time equivalents   
was 8,363 (7,819). At the end of the year, the total number of full-time and    
part-time employees was 9,490 (9,387). Of them 7,269 (6,986) people worked in   
Finland and 2,221 (2,401) people in other countries.                            

PROPOSAL FOR THE DISTRIBUTION OF PROFIT                                         
According to the financial statements, Lassila & Tikanoja plc's distributable   
assets amount to EUR 49,060, 145.05, of which EUR 26,070,501.66 constitutes     
profit for the financial period. There were no substantial changes in the       
financial standing of the company after the end of the financial period, and the
solvency test referred to in Chapter 13, Section 2 of the Companies Act does not
affect the amount of distributable assets. The Board of Directors proposes to   
the General Meeting of Shareholders that distributable assets be used as        
follows:                                                                        

--------------------------------------------------------------------------------
| A dividend of EUR 0.55 per share will be paid on      | EUR 21,339,380.70    |
| each of the 38,798,874 shares, totalling              |                      |
--------------------------------------------------------------------------------
| To be retained and carried forward                    | EUR 27,720,764.35    |
--------------------------------------------------------------------------------
| Total                                                 | EUR 49,060,145.05    |
--------------------------------------------------------------------------------

In accordance with the resolution of the Board of Directors, the record date is 
27 March 2009. The Board of Directors proposes to the Annual General Meeting to 
be held on 24 March 2009 that the dividend be paid on 3 April 2009.             

Earnings per share amounted to EUR 1.03. The proposed dividend is 53.4% of the  
earnings per share.                                                             

SHARE AND SHARE CAPITAL                                                         

Traded volume and price                                                         
The volume of trading in Lassila & Tikanoja plc shares on NASDAQ OMX Helsinki in
2008 was 17,452,448 which is 45.0% (51.2%) of the average number of shares. The 
value of trading was EUR 287.9 million (EUR 467.2 million). The trading price   
varied between EUR 10.26 and EUR 23.00. The closing price was EUR 11.00. The    
market capitalisation was EUR 426.8 million (EUR 880.4 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 and 32 key persons   
held 176,000 2005B options.  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 and 
2005B options since 2 January 2009.                                             

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 2008, the company had 6,135 (4,985) shareholders.                 
Nominee-registered holdings accounted for 9.9% (14.3%) 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. 

On 3 November 2008, Board of Directors appointed Ville Rantala as CFO as of 1   
March 2009, as the current Vice President and CFO Sirkka Tuomola is retiring. As
of 3 November 2008, Laura Aarnio, Kimmo Huhtimo and Inkeri Puputti were         
appointed as new Group Executives.                                              

On 12 December 2008, the company announced that operating profit excluding      
non-recurring and imputed items for the final quarter is estimated to be lower  
than in the previous year.                                                      

On 15 January 2009, the company announced that it recognises an impairment loss 
of EUR 2.7 million for the goodwill of business operations in Sweden due to     
weaker market outlook. The earnings guidance for 2008 remained unchanged.       

MARKET CYCLICALITY                                                              

Although the markets in which L&T primarily operates can be considered          
low-cyclical, the company is not immune to changes in the economy. About three  
quarters of L&T's net sales are generated in markets that could be considered   
low-cyclical. Furthermore, almost all of the products and services the company  
offers are still required and ordered, even in weak general economic conditions.

The majority of the net sales of waste management, cleaning services, property  
management and wastewater services are based on long-term service contracts.    
Although the slowdown in trade, industry and particularly in construction will  
reduce waste volumes and the number of individual orders, the services provided 
by these product lines are necessary in order to comply with environmental      
legislation and hygiene requirements.                                           

L&T Biowatti offers power plants a CO2 emission-free alternative to fossil      
fuels. Demand for wood-based fuels is strong, and is expected to increase       
considerably in the future. However, forest industry production restrictions and
tightening competition in procurement of energy wood may hamper the procurement 
of raw material.                                                                

The oil re-refinery of the joint venture L&T Recoil, which is currently under   
construction, will produce high-quality base oil for the lubricant industry.    
There is steady demand for base oil but the market price instability of the     
final product renders the preparation of business forecasts difficult.          

Recycling services depend on the volumes and market prices of recyclable waste  
materials (such as plastic, fibres and metals). To a certain extent, hazardous  
waste and cleaning services offered to heavy industry depend on the industrial  
utilisation rate, although changes in this rate affect demand for these services
only after a certain delay.                                                     

NEAR-TERM UNCERTAINTIES                                                         

Escalating and continuing financial uncertainty may reduce transport and        
recycling volumes of waste materials and the number of commissioned assignments.
Indeed, the slowdown in the construction business has already translated into   
lower construction waste volumes. If the market price instability of secondary  
raw materials persists and demand remains low, this may have a negative effect  
on the profitability of recycling services. Planning and implementation work is 
more difficult due to the rapid fluctuation in demand for industrial services.  

The potential additional delay in the start-up of L&T Recoil's operations would 
affect the operating profit of Industrial Services. The base oil price level    
follows the crude oil price development with a delay causing a negative effect  
should the crude oil price remain at the current low level.  Demand for the     
fuels supplied by L&T Biowatti is strong. The forest industry production        
restrictions will hamper L&T Biowatti's procurement of by-products as raw       
materials. The uncertainty of the Latvian economy and more intense competition  
may prove detrimental to the profitability of Riga's waste management business. 

PROSPECTS FOR THE YEAR 2009                                                     

A recession is expected in the national economies of all countries in which L&T 
operates. The company primarily operates in low-cyclical markets.               

In 2009, L&T will focus on improving profitability. In addition to the launched 
measures, a productivity enhancement programme is being planned to adapt        
operations and cost development to the market conditions. Investments will be   
much lower than last year.                                                      

Full-year net sales and operating profit excluding non-recurring items are      
expected to reach the previous year's level. This requires success in the       
adaptation of operations and costs.                                             

BREAKDOWN OF OPERATING PROFIT EXCLUDING NON-RECURRING AND IMPUTED ITEMS         

--------------------------------------------------------------------------------
| EUR million                           | 10-12/ |  10-12/ |   1-12/ |   1-12/ |
|                                       |   2008 |    2007 |   2008  |   2007  |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit                      |    4.9 |    12.1 |    55.5 |    48.8 |
--------------------------------------------------------------------------------
| Non-recurring items                   |        |         |         |         |
--------------------------------------------------------------------------------
| Impairment loss on goodwill of        |    3.1 |         |     3.1 |         |
| business in Sweden                    |        |         |         |         |
--------------------------------------------------------------------------------
| Discontinuation of soil washing       |    2.6 |         |     2.6 |         |
| services                              |        |         |         |         |
--------------------------------------------------------------------------------
| Loss on sale of business in Norway    |    1.1 |         |     1.1 |         |
--------------------------------------------------------------------------------
| Gain on sale of the shares of Ekokem  |        |         |   -14.3 |         |
--------------------------------------------------------------------------------
| Oil derivatives                       |   -3.1 |     0.7 |    -3.0 |    2.8  |
--------------------------------------------------------------------------------
| Loss on sale of landfill operations   |        |     0.5 |         |    2.3  |
| of Salvor and integration of the      |        |         |         |         |
| remaining Salvor's operations         |        |         |         |         |
--------------------------------------------------------------------------------
| Reorganisation of Property and Office |        |         |         |    0.4  |
| Support Services operations in Russia |        |         |         |         |
--------------------------------------------------------------------------------
| Operating profit excluding            |    8.6 |    13.3 |    45.0 |   54.3  |
| non-recurring and imputed items       |        |         |         |         |
--------------------------------------------------------------------------------


CONDENSED FINANCIAL STATEMENTS 1 JANUARY-31 DECEMBER 2008                       
                                                                                
ACCOUNTING POLICIES                                                             

This financial statements release has been prepared in compliance with IAS 34,  
Interim Financial Reporting Standard. The same accounting policies as in the    
annual financial statements of 31 December 2008 have been applied. This         
financial statements release has been prepared in accordance with the IFRS      
standards and interpretations as adopted by the EU. The amended standards and   
interpretations that became effective in 2008 did not affect the consolidated   
financial statements.                                                           

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 financial statements release has not been audited.                          


INCOME STATEMENT                                                                
--------------------------------------------------------------------------------
| EUR 1000                    | 10-12/200 | 10-12/2007 | 1-12/2008 | 1-12/2007 |
|                             |         8 |            |           |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales                   |   153 058 |    148 172 |   605 996 |   554 613 |
--------------------------------------------------------------------------------
| Cost of goods sold          |  -136 925 |   -129 432 |  -533 681 |  -478 151 |
--------------------------------------------------------------------------------
| Gross profit                |    16 133 |     18 740 |    72 315 |    76 462 |
--------------------------------------------------------------------------------
| Other operating income      |     3 820 |      1 162 |    21 708 |     3 834 |
--------------------------------------------------------------------------------
| Selling and marketing costs |    -4 517 |     -3 750 |   -16 228 |   -14 616 |
--------------------------------------------------------------------------------
| Administrative expenses     |    -2 873 |     -2 928 |   -12 105 |   -11 614 |
--------------------------------------------------------------------------------
| Other operating expenses    |    -4 592 |     -1 125 |    -7 102 |    -5 291 |
--------------------------------------------------------------------------------
| Goodwill impairment         |    -3 090 |            |    -3 090 |           |
--------------------------------------------------------------------------------
| Operating profit            |     4 881 |     12 099 |    55 498 |    48 775 |
--------------------------------------------------------------------------------
| Finance income              |       742 |        624 |     1 931 |     1 661 |
--------------------------------------------------------------------------------
| Finance costs               |    -2 112 |     -1 871 |    -6 737 |    -5 978 |
--------------------------------------------------------------------------------
| Profit before tax           |     3 511 |     10 852 |    50 692 |    44 458 |
--------------------------------------------------------------------------------
| Income tax expense          |    -1 979 |     -3 217 |   -10 724 |   -12 291 |
--------------------------------------------------------------------------------
| Profit for the period       |     1 532 |      7 635 |    39 968 |    32 167 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to:            |           |            |           |           |
--------------------------------------------------------------------------------
| Equity holders of the       |     1 537 |      7 631 |    39 969 |    31 909 |
| company                     |           |            |           |           |
--------------------------------------------------------------------------------
| Minority interest           |        -5 |          4 |        -1 |       258 |
--------------------------------------------------------------------------------

Earnings per share for profit attributable to the equity holders of the company:
--------------------------------------------------------------------------------
| Earnings per share, EUR     |      0.04 |       0.20 |      1.03 |     0.83  |
--------------------------------------------------------------------------------
| Earnings per share,         |      0.04 |       0.19 |      1.03 |      0.82 |
| EUR-diluted                 |           |            |           |           |
--------------------------------------------------------------------------------

BALANCE SHEET                                                                   
--------------------------------------------------------------------------------
| EUR 1000                                          |    12/2008 |     12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS                                            |            |             |
--------------------------------------------------------------------------------
| Non-current assets                                |            |             |
--------------------------------------------------------------------------------
| Intangible assets                                 |            |             |
--------------------------------------------------------------------------------
| Goodwill                                          |    115 451 |     119 946 |
--------------------------------------------------------------------------------
| Intangible assets arising from business           |     25 774 |      30 600 |
| combinations                                      |            |             |
--------------------------------------------------------------------------------
| Other intangible assets                           |     11 402 |      11 571 |
--------------------------------------------------------------------------------
| Total                                             |    152 627 |     162 117 |
--------------------------------------------------------------------------------
| Property, plant and equipment                     |            |             |
--------------------------------------------------------------------------------
| Land                                              |      3 832 |       3 532 |
--------------------------------------------------------------------------------
| Buildings and constructions                       |     43 958 |      39 594 |
--------------------------------------------------------------------------------
| Machinery and equipment                           |    113 851 |     103 832 |
--------------------------------------------------------------------------------
| Other                                             |         78 |          82 |
--------------------------------------------------------------------------------
| Advance payments and construction in progress     |     35 433 |       4 830 |
--------------------------------------------------------------------------------
| Total                                             |    197 152 |     151 870 |
--------------------------------------------------------------------------------
| Other non-current assets                          |            |             |
--------------------------------------------------------------------------------
| Available-for-sale investments                    |        502 |         410 |
--------------------------------------------------------------------------------
| Finance lease receivables                         |      4 694 |       3 823 |
--------------------------------------------------------------------------------
| Deferred income tax assets                        |        945 |         924 |
--------------------------------------------------------------------------------
| Other receivables                                 |        689 |         236 |
--------------------------------------------------------------------------------
| Total                                             |      6 830 |       5 393 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total non-current assets                          |    356 609 |     319 380 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets                                    |            |             |
--------------------------------------------------------------------------------
| Inventories                                       |     18 827 |      14 350 |
--------------------------------------------------------------------------------
| Trade and other receivables                       |     74 634 |      71 824 |
--------------------------------------------------------------------------------
| Derivative receivables                            |        112 |       1 189 |
--------------------------------------------------------------------------------
| Advance payments                                  |        986 |         774 |
--------------------------------------------------------------------------------
| Available-for-sale investments                    |     20 368 |      21 287 |
--------------------------------------------------------------------------------
| Cash and cash equivalents                         |      6 149 |       9 521 |
--------------------------------------------------------------------------------
| Total current assets                              |    121 076 |     118 945 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS                                      |    477 685 |     438 325 |
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
| EUR 1000                                          |    12/2008 |     12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES                            |            |             |
--------------------------------------------------------------------------------
| Equity                                            |            |             |
--------------------------------------------------------------------------------
| Equity attributable to equity holders of the      |            |             |
| company                                           |            |             |
--------------------------------------------------------------------------------
| Share capital                                     |     19 399 |      19 392 |
--------------------------------------------------------------------------------
| Share premium reserve                             |     50 673 |      50 474 |
--------------------------------------------------------------------------------
| Other reserves                                    |     -2 964 |      14 055 |
--------------------------------------------------------------------------------
| Retained earnings                                 |     97 799 |      86 327 |
--------------------------------------------------------------------------------
| Profit for the period                             |     39 969 |      31 909 |
--------------------------------------------------------------------------------
| Total                                             |    204 876 |     202 157 |
--------------------------------------------------------------------------------
| Minority interest                                 |        162 |         187 |
--------------------------------------------------------------------------------
| Total equity                                      |    205 038 |     202 344 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities                                       |            |             |
--------------------------------------------------------------------------------
| Non-current liabilities                           |            |             |
--------------------------------------------------------------------------------
| Deferred income tax liabilities                   |     32 898 |      29 842 |
--------------------------------------------------------------------------------
| Pension obligations                               |        674 |         542 |
--------------------------------------------------------------------------------
| Provisions                                        |      1 741 |         953 |
--------------------------------------------------------------------------------
| Borrowings                                        |    102 487 |      81 411 |
--------------------------------------------------------------------------------
| Other liabilities                                 |      1 083 |         500 |
--------------------------------------------------------------------------------
| Total                                             |    138 883 |     113 248 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities                               |            |             |
--------------------------------------------------------------------------------
| Borrowings                                        |     44 569 |      35 757 |
--------------------------------------------------------------------------------
| Trade and other payables                          |     88 298 |      85 183 |
--------------------------------------------------------------------------------
| Derivative liabilities                            |        610 |         897 |
--------------------------------------------------------------------------------
| Tax liabilities                                   |        273 |         794 |
--------------------------------------------------------------------------------
| Provisions                                        |         14 |         102 |
--------------------------------------------------------------------------------
| Total                                             |    133 764 |     122 733 |
--------------------------------------------------------------------------------
| Total liabilities                                 |    272 647 |     235 981 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES                      |    477 685 |     438 325 |
--------------------------------------------------------------------------------

CASH FLOW STATEMENT                                                             
--------------------------------------------------------------------------------
| EUR 1000                                          |    12/2008 |     12/2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from operating activities              |            |             |
--------------------------------------------------------------------------------
| Profit for the period                             |     39 968 |     32 167  |
--------------------------------------------------------------------------------
| Adjustments                                       |            |             |
--------------------------------------------------------------------------------
| Income tax expense                                |     10 724 |     12 291  |
--------------------------------------------------------------------------------
| Depreciation, amortisation and impairment         |     40 985 |     33 432  |
--------------------------------------------------------------------------------
| Finance income and costs                          |      4 806 |      4 317  |
--------------------------------------------------------------------------------
| Oil derivatives                                   |     -2 221 |      2 947  |
--------------------------------------------------------------------------------
| Gain on sale of shares                            |    -14 258 |             |
--------------------------------------------------------------------------------
| Discontinued operations                           |      2 616 |             |
--------------------------------------------------------------------------------
| Other                                             |        444 |       -859  |
--------------------------------------------------------------------------------
| Net cash generated from operating activities      |     83 064 |     84 295  |
| before change in working capital                  |            |             |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in working capital                         |            |             |
--------------------------------------------------------------------------------
| Change in trade and other receivables             |      3 502 |     -4 903  |
--------------------------------------------------------------------------------
| Change in inventories                             |     -4 492 |     -6 824  |
--------------------------------------------------------------------------------
| Change in trade and other payables                |      3 152 |     -1 450  |
--------------------------------------------------------------------------------
| Change in working capital                         |      2 162 |    -13 177  |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest paid                                     |     -5 953 |     -5 104  |
--------------------------------------------------------------------------------
| Interest received                                 |      1 867 |      1 460  |
--------------------------------------------------------------------------------
| Income tax paid                                   |    -10 716 |    -12 041  |
--------------------------------------------------------------------------------
| Net cash from operating activities                |     70 424 |     55 433  |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from investing activities              |            |             |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries and businesses, net   |     -4 298 |    -37 050  |
| of cash acquired                                  |            |             |
--------------------------------------------------------------------------------
| Proceeds from sale of subsidiaries and            |         23 |      1 878  |
| businesses, net of sold cash                      |            |             |
--------------------------------------------------------------------------------
| Purchases of property, plant and equipment and    |    -77 542 |    -49 109  |
| intangible assets                                 |            |             |
--------------------------------------------------------------------------------
| Proceeds from sale of property, plant and         |        789 |      2 261  |
| equipment and intangible assets                   |            |             |
--------------------------------------------------------------------------------
| Purchases of available-for-sale investments       |       -200 |       -147  |
--------------------------------------------------------------------------------
| Change in other non-current receivables           |        -11 |          1  |
--------------------------------------------------------------------------------
| Proceeds from sale of available-for-sale          |     16 867 |      1 098  |
| investments                                       |            |             |
--------------------------------------------------------------------------------
| Dividends received                                |          4 |          4  |
--------------------------------------------------------------------------------
| Net cash used in investment activities            |    -64 368 |    -81 064  |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flows from financing activities              |            |             |
--------------------------------------------------------------------------------
| Proceeds from share issue                         |        206 |      2 936  |
--------------------------------------------------------------------------------
| Change in short-term borrowings                   |     -4 593 |     23 011  |
--------------------------------------------------------------------------------
| Proceeds from long-term borrowings                |     47 000 |     50 302  |
--------------------------------------------------------------------------------
| Repayments of long-term borrowings                |    -14 546 |    -39 909  |
--------------------------------------------------------------------------------
| Dividends paid                                    |    -21 315 |    -21 360  |
--------------------------------------------------------------------------------
| Net cash generated from financing activities      |      6 752 |     14 980  |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net change in liquid assets                       |     12 808 |    -10 651  |
--------------------------------------------------------------------------------
| Liquid assets at beginning of period              |     14 008 |     24 790  |
--------------------------------------------------------------------------------
| Effect of changes in foreign exchange rates       |       -339 |       -131  |
---------------------------------------