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Report by the Board of Directors
and Financial statements 2023
Lassila & Tikanoja plc
LEADER OF THE
REGENERATIVE SOCIETY
Lassila & Tikanoja
Annual Report 2023
1
KEY FIGURES
REPORT BY THE BOARD OF DIRECTORS
CORPORATE GOVERNANCE
REMUNERATION REPORT
SUSTAINABILITY REPORT
FINANCIAL STATEMENTS
Contents
Report by the Board of Directors . . . . . . . . . . . . . . . . . . . 2
Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Calculation of key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Consolidated income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Consolidated statement of comprehensive income . . . . . . . . . 29
Consolidated statement of financial position . . . . . . . . . . . . . . . . 30
Consolidated statement of cash flows . . . . . . . . . . . . . . . . . . . . . . 31
Consolidated statement of changes in equity . . . . . . . . . . . . . . . 32
Notes to the consolidated financial statements . . . . . . . . . . . . 33
Financial statements of the parent company . . . . . . . . . . . . . . . . 67
Proposal by the Board of Directors for distribution
of profit and Auditor’s Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
2
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Business model ..........................................................................3
Business environment ...................................................................3
Strategy .................................................................................4
Financial performance and division review .............................................7
Outlook ...................................................................................8
Sustainable development and statement of non-financial information ................9
Risks and risk management ............................................................14
Shares and shareholders ...............................................................18
EU taxonomy ............................................................................20
Report by the
Board of Directors
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
3
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Business model
L&T is a service company that is making the circular economy a reality. The
Group operates in the circular economy and facility services businesses. All
of L&T’s business operations build future sustainable growth for the circular
economy and are based on the opportunities it creates.
• Environmental Services keeps its customers’ materials efficiently in circula-
tion and with the highest possible degree of processing.
• Industrial Services develops ways to effectively utilise the side streams of
industry and society according to the principles of the circular economy.
Industrial Services also includes soil remediation, process cleaning and
sewer maintenance services. The division operates in Finland and Sweden.
• Facility Services in Finland and Sweden improve the value of customers’
properties and aim for the continuous improvement of energy efficiency in
line with the goal of a circular economy.
By investing in the sustainable solutions of the circular economy, L&T aims to
create increasing value for all of its key stakeholders.
Business environment
The business environment remained challenging throughout the year and
became increasingly tough towards the end of the year as the general economic
outlook deteriorated.
In 2023, the general rise in costs levelled off as far as energy prices were con-
cerned. Nevertheless inflation was reflected in the wage decisions negotiated
in the labour market. Compared to their predecessors, the two-year wage deci-
sions in Finland were expensive and front-loaded, but L&T was able to pass their
cost impacts on to customer prices. The sickness rate was still at a high level in
the early part of the year due to various respiratory infections, but the situation
returned to normal towards the end of the year.
The 2021 reform of the Waste Act entered into effect in Finland with regard to
the separate collection of consumer packaging. Municipalities organised the
collection operations by dividing them into dozens of contracts that were put
out to tender.
L&T had good success in the tendering processes and strengthened its
market position in the segment in question. Nevertheless, this change caused
service disruptions, increased total logistics costs and weakened the operating
conditions for local and regional operators. In L&T’s assessment, the net impacts
of the reform are negative for the industry as a whole.
Finland’s new Government Programme strengthens the operating conditions
for the recycling industry and, on the whole, is aligned with L&T’s objectives.
The Government Programme will reduce the public sector’s role in waste man-
agement, restrict the activities public sector organisations in the waste man-
agement market and promote the development of the market for recycled raw
materials by means of various market-based instruments.
Finland is far behind the EU’s minimum target level with regard to the recycling
of municipal waste and the recycling rate of materials.
The current waste policy has created excess incineration capacity in Finland,
which jeopardises recycling and hinders innovation. There is a need for effec-
tive market-based instruments in Finland to ensure the primacy of recycling and
curb the incineration of waste.
The EU has continued the purposeful implementation of the European Green
Deal under challenging circumstances. It appears that all of the key reforms will
be completed during the term of the current European Commission. The exten-
sive legislative reforms included in the European Green Deal will have a sub-
stantial impact on L&T’s business environment, and they support L&T’s business
objectives in the medium and long term.
Climate and energy policy have been increasingly complemented by initiatives
to protect biodiversity, such as the Nature Restoration Law and the net zero
emissions plan. The circular economy plays a central and critical role in both
initiatives. Circular economy solutions promote the sustainable use of natural
resources and thereby contribute not only to the mitigation of climate emissions
but also the effort to curb biodiversity loss.
L&T broadly supports the reforms related to the green transition and puts
them into practice through the solutions it provides. From the perspective of
business impacts, the key issue is how the reforms related to the green transi-
tion will be managed and implemented in Finland. The predictability and consist-
ency of regulation has considerable significance for the industry as a whole.
The EU’s circular economy policy has also moved in the right direction as the
focus of regulation has shifted to sustainable product design in the early stages
of the value chain on the one hand, and strengthening the markets for recycled
raw materials on the other hand. At present, the use of recycled raw materials is
primarily voluntary, which means that recycled raw materials need to compete
with virgin raw materials while having a very different cost structure.
Green transition initiatives and measures set more ambitious targets for the
sustainability of business activities. The Corporate Sustainability Reporting
Directive will increase the significance and weight of sustainability efforts
for businesses. Sustainability requirements will be integrated into companies’
operating models, processes and reporting. Ensuring regulatory compliance will
become an increasingly important criterion in procurement in the future. L&T
takes a favourable stance towards these developments. They will improve the
quality of sustainability efforts and enhance the comparability of sustainability
between companies.
Report by the Board of Directors
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
4
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
4
Strategy
Lassila & Tikanoja’s mission is to make the circular economy a reality. The com-
pany helps its customers achieve their sustainability goals.
Climate change and biodiversity loss are megatrends and the mitigation of them
creates business opportunities for L&T. Mitigating climate change and biodi-
versity loss requires circular economy actions from society, businesses and
individuals. Businesses need responsible partners to support the transition to a
circular economy and to improve the energy efficiency of properties.
Cities continue to grow, and the expectations concerning the built environ-
ment are increasing, which creates demand for L&T’s services. Properties are
expected to have long life spans, and changes in needs and the use of buildings
over the years must be taken into account in maintenance and new construc-
tion.
L&T’s strategy, “A leader of the regenerative society”, is guiding the Group’s
operations during the 2022–2026 strategy period. In October 2023, the Board
of Directors of Lassila & Tikanoja completed a review of the company’s strategy.
According to the revised strategy, the Environmental Services and Industrial Ser-
vices divisions will seek growth especially by focusing on business opportuni-
ties related to the circular economy of materials. Growth will be sought through
organic development and potential selected acquisitions.
The Environmental Services division’s strong market position, broad customer
base and significant material volumes provide a good basis for growing the
materials business. As for material streams, the division will continue to focus on
plastic, wood waste and metals, but opportunities related to other streams are
also being explored.
In the Industrial Services division, new business opportunities are emerging
around the processing and value increase of industrial side streams, as well
as the restoration of the built environment. Growth is also being sought in the
Swedish market in industrial services and material value chains.
Facility Services Finland and Facility Services Sweden will focus on improving
profitability. The company’s Board of Directors has decided to evaluate the stra-
tegic alternatives for Facility Services Finland and Facility Services Sweden as
part of the company’s business portfolio development. All potential options are
being considered, including a potential sale of the divisions.
The Group’s strong balance sheet and the favourable development of the
contract portfolio in all business segments are creating excellent conditions for
organic and inorganic growth during the strategy period. L&T wants to be the
best sustainability partner for its customers and an excellent workplace for the
best experts in its field. During the strategy period, L&T will invest in the renewal
of operating models, which will enable even more cost-efficient service produc-
tion. The company is continuously developing its material processing capabili-
ties and the competence of its personnel in accordance with the principles of
the circular economy.
Targets for the strategy period
L&T measures the success of its strategy by financial, sustainability and stake-
holder targets.
Financial targets
Indicator Target 2023 2022
Annual growth in net sales, % 5 -5.0 3.9
Return on capital employed, %
(ROCE) 15 10.3 10.4
Gearing, % Less than 125% 69.3 75.9
Sustainability and stakeholder targets
Measure Target 2023 2022
Net Promoter Score,
NPS
>50 by 2026 35 26
Employee Net Promoter Score,
eNPS
>50 by 2026 21 24
Carbon footprint -50% by 2030,
using 2018 as
the baseline
-36 % -26 %
L&T updated its environmental sustainability target in October 2023. The target
is to halve the emissions of L&T’s own operations by 2030 from the level of 2018
and to reduce indirect (Scope 3) emissions by 18% by 2030 from the level of
2022. The company has set a target of net-zero emissions by 2045. The moni-
toring of the target will start from the beginning of 2024.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
5
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Outputs
Healthy personnel
• Employee Net Promoter Score (eNPS) 21
• Sickness-related absences 5.1%
• Retirement age 64.6 years
• Health rate 41%
• Accident frequency (TRIF) 23
• Over 42,000 hours of training on average per year
• Code of Conduct training for employees
Responsible products and services
• Reuse and recycling rate of customer materials 57.8%.
• Containers emptied nearly 13 million times
• More than 780,000 maintenance actions and over 3,000
energy efficiency proposals in Finland
• 55,700 tonnes of waste rendered nonhazardous
• Over 500,000 tonnes of soil and side streams delivered
for material recycling
• Promoting biodiversity in the built environment
Emissions
• Carbon footprint intensity of own operations per kilometre
driven 613 gCO
2
e, -36% compared to the previous year
• Water treated by the Industrial Services division 156,130 m

Impacts
Employment and prevention of marginalisation
• Salaries, fees and social security contributions paid
MEUR 352.8
• Employees with a high level of wellbeing and
commitment as well as a capable organisation
• Impacts of well-being, injuries and illnesses on the
health of personnel
• Providing a first job for people regardless of their
background
• 37% of supervisors, managers and leaders are women
Mitigating climate change and biodiversity loss
• Carbon handprint of operations 457.2 million tCO
2
e
• Conservation of virgin raw materials
• Promoting sustainability and the external recognition
of these efforts, e.g. EcoVadis Platinum, CDP, Financial
Times Diversity Leaders and Climate Leaders reports
Economic prosperity
• Added value created MEUR 448
• Taxes: MEUR 5.7
• Dividends MEUR 17.9
Resources
People and management
• 8,160 L&T employees in Finland and Sweden
• 13.6 million hours worked
• Investments in safety, work ability and well-being
• Benefits paid from the sickness fund MEUR 2.0
• Quality and management systems and certificates
(ISO 9001, ISO 14001 and ISO 45001)
• Comprehensive training opportunities
• Employment opportunities for special groups
Environment and production
• 52 recycling plants, terminals and transfer stations
• Development of methods and new recycling solutions
• 1.2 million tonnes of material collected from customers
• 10,500 properties under maintenance (Finland)
• Climate targets throughout the chain
Finances and governance
• Promoting human rights and a sustainable supply chain
• Over 700 suppliers, mostly small companies in different
parts of Finland and Sweden
• Equity MEUR 232.2
• Net interest-bearing liabilities MEUR 160.9
• Capital expenditure MEUR 61.1
• Over 24,900 shareholders
L&T’S VALUE CREATION IN 2023
Activities
We make circular economy a reality
5
A performer of day-to-day services
We help make day-to-day life run more effectively
Builder and developer
of the circular economy
We help to develop business operations
and find new circular economy solutions
Change
agent
We help
society as a whole to advance
towards full circularity
Lassila & Tikanoja
Annual Report 2023
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
6
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
WE MAKE
A REALITY
C
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A
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C
O
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O
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W
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C
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TO SOCIETY
We combat climate change, bring
forward new solutions for the circular
economy and promote social
responsibility through employment.
TO EMPLOYEES
We take care of our personnel and
provide them with meaningful work
and opportunities for development.
TO OWNERS
We aim for rapid growth in our business
operations promoting sustainable development
with our unique competence in the circular
economy. In addition to pursuing organic
growth, we invest in the markets of the future.
TO CUSTOMERS
We support our customers’ responsibility,
create excellent customer experiences and
develop the best services in our industry.
We increase our customers’ properties
value and user satisfaction
We recycle the
materials of society
We improve energy
eﬃciency
We utilize the side streams
of industry and society
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
7
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial performance and division review
Financial performance
Group net sales and financial performance
Net sales for 2023 amounted to EUR 802.1 million (844.1), a decrease of 5.0%
year-on-year. Excluding the effect of the renewable energy sources business,
net sales were on a par with the comparison period and the rate of organic
growth was -0.9%. Adjusted operating profit was EUR 39.0 million (40.9), repre-
senting 4.9% (4.8%) of net sales. Operating profit was EUR 38.4 million (42.9), or
4.8% (5.1%) of net sales. Earnings per share were EUR 0.79 (0.83).
Net sales increased in Industrial Services and decreased in the other divisions.
Operating profit improved in Industrial Services and Facility Services Finland, and
declined in Environmental Services and Facility Services Sweden.
The result for the financial year was affected positively by the fair value of EUR
1.3 million of an interest rate swap being recognised in financial items due to the
termination of the interest rate swap. The result for the period was also affected
positively by L&T’s EUR 3.6 million (0.7) share of the profit of the joint venture
Laania Oy. The operating profit for the comparison year was improved by a gain
of EUR 4.3 million from the sale of the renewable energy sources business.
Division reviews
Environmental Services
The full-year net sales of the Environmental Services division decreased to
EUR 283.7 million (321.2) in 2023. Operating profit was EUR 27.1 million (30.3).
Excluding the effect of the renewable energy sources business, net sales
decreased by 1.2%. The renewable energy sources business was reported as a
part of the Environmental Services division until the end of the second quarter of
2022.
The focus of the Environmental Services division is heavily on corporate cus-
tomers and producer responsibility organisation customers, and their number
grew in the beginning of the year and stabilised during the fourth quarter. In
the Environmental Services division, the decline in general economic activity
was reflected in lower waste volumes and the prices of recycled raw materials
throughout the year. The decrease in the prices and volumes of recycled raw
materials burdened the net sales of the division and had a negative effect of
EUR 4.5 million on the operating profit.
The Finnish Waste Act was amended in July 2021. Under the reform, municipali-
ties take on a larger role in organising the collection of packaging material waste
and biowaste from housing properties. As a consequence of the reform, L&T’s
direct customer agreements with residential properties on the separate collec-
tion of packaging waste and biowaste are being transferred to municipalities for
competitive bidding gradually between 1 July 2022 and 1 July 2025.
As a result of municipalisation, EUR 40 million of the Finnish waste management
market was moved out of the scope of free competition to municipal waste
companies during 2022–2023. L&T estimates that based on decisions made by
the end of year 2023, a further EUR 30 million will be moved out of the scope of
free competition to municipal waste companies between 2024 and 2026.
In the latter half of the year, the collection of packaging waste from residential
properties was transferred to municipal waste companies in several geograph-
ical areas that are significant to L&T. L&T participates in the competitive ten-
dering of municipal contracts. During 2023, the competitive tendering of munic-
ipal contracts is estimated to have amounted to EUR 15–20 million and the Group
won municipal contracts amounting to EUR 8 million. Nevertheless, the change
decreased additional sales and reduced the efficiency of L&T’s waste collection
logistics increasing production costs. The change had a total negative impact of
approximately EUR 2.5 million on operating profit in 2023.
L&T aims to compensate for the impacts of municipalisation by growing the
corporate customer business and continuing to improve the efficiency of opera-
tions during the next three years. In the division, measures to improve operating
efficiency and profitability were initiated during the latter half of the year. The
employment relationship of approximately 50 salaried employees are being ter-
minated as a result of change negotiations and other jointly agreed measures at
the latest by the end of the first quarter of 2024.
The division aims to shift its focus increasingly to the materials business in the
circular economy value chain. Related assessments were initiated in the latter
part of the year.
There is a significant systems renewal project under way in Environmental
Services, which will also include the deployment of a new ERP system. The sys-
tems renewal project increased the division’s fixed costs throughout the year.
The supplier of the ERP system was changed in 2022 and, during the period
under review, the previous supplier paid a one-off compensation relating to the
termination of the co-operation. Expenses capitalised during the co-operation
with the previous supplier were written down on the balance sheet during the
review period. The one-off compensation and the related costs and write-down
did not have a significant effect on the division’s operating profit. The system is
scheduled to enter the deployment stage in the second half of 2024. The total
investment in the system projects is estimated at approximately EUR 16.9 million,
approximately EUR 14.2 million of which was realised by the end of 2023.
Industrial Services
The Industrial Services division’s full-year net sales in 2023 grew to EUR 141.0
million (132.0). Adjusted operating profit was EUR 14.0 million (13.6). Operating
profit was EUR 13.8 million (12.7). Operating profit was reduced by a change of
EUR 0.2 million in the fair value of the deferred consideration related to the acqui-
sition of Sand & Vattenbläst i Tyringe AB (“SVB”) recognised in the fourth quarter
of 2023. The change in the fair value is due to SVB’s improved result which
increases the final acquisition price recognised as liability. In the comparison
period, the fair value change recognised in the deferred consideration related to
the acquisition reduced operating profit by EUR 0.8 million.
Demand was strong in all the Industrial Services division’s business lines. The
environmental construction business line was highlighted as a focus area in
L&T’s renewed strategy in the autumn, and several large customer projects were
carried out in the business line during the period under review. The business line
MEUR 2023 2022 Change %
Net sales
Environmental Services 283.7 321.2 -11.7
Industrial Services 141.0 132.0 6.8
Facility Services Finland 250.0 256.3 -2.5
Facility Services Sweden 133.2 140.4 -5.1
Interdivisional net sales -5.8 -6.0
The Group total 802.1 844.1 -5.0
Operating proﬁt
Environmental Services 27.1 30.3 -10.6
Industrial Services 13.8 12.7 8.2
Facility Services Finland 4.4 -0.5
Facility Services Sweden -3.7 0.4
Group administration and others -3.2 0.1
The Group total 38.4 42.9 -10.6
Adjusted operating proﬁt
Environmental Services 27.1 30.3 -10.6
Industrial Services 14.0 13.6 3.1
Facility Services Finland 4.4 -0.5
Facility Services Sweden -3.7 0.4
Group administration and others -2.8 -2.8
The Group total 39.0 40.9 -4.7
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
8
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
% 2023 2022
Operating margin
Environmental Services 9.5 9.4
Industrial Services 9.8 9.6
Facility Services Finland 1.8 -0.2
Facility Services Sweden -2.8 0.3
The Group total 4.8 5.1
Adjusted operating margin
Environmental Services 9.5 9.4
Industrial Services 9.9 10.3
Facility Services Finland 1.8 -0.2
Facility Services Sweden -2.8 0.3
The Group total
4.9 4.8
MEUR 2023 2022
Gross capital expenditure
Environmental Services 40.9 20.3
Industrial Services 17.5 34.6
Facility Services Finland 1.0 1.5
Facility Services Sweden 0.5 0.4
Group administration and others 1.2 1.3
The Group total 61.1 58.2
MEUR 2023 2022
Capital employed
Environmental Services 208.9 197.3
Industrial Services 92.2 95.2
Facility Services Finland 21.7 28.3
Facility Services Sweden 59.9 62.1
Group administration and others 43.2 54.4
The Group total 425.9 437.2
% 2023 2022
Return on capital employed (ROCE)
Environmental Services 13.5 14.4
Industrial Services 14.7 15.6
Facility Services Finland 19.4 -0.8
Facility Services Sweden -5.9 0.8
The Group total 10.3 10.4
has a strong position particularly in the market for demanding industrial soil
remediation projects. The customer volume increased in hazardous waste ser-
vices. In process cleaning in Finland, the demand related to annual maintenance
breaks was strong, and the resource allocation was successful. Business oper-
ations in Sweden developed favorably despite the challenging market environ-
ment.
Facility Services Finland
The full-year net sales of the Environmental Services division decreased to EUR
250.0 million (256.3) in 2023. Operating profit improved to EUR 4.4 million (-0.5).
In Facility Services Finland, the measures initiated in the second half of 2022
to streamline the cost structure and improve operational efficiency continued in
the division throughout the period under review.
In the division, the efficiency of production improved and personnel turnover
decreased in cleaning services. Good progress was achieved in digitalisation
with the number of sites within the scope of data-driven cleaning increasing in
2023. In building technology services, the demand for energy efficiency services
increased during the period under review. The rising costs caused by high infla-
tion were, for the most part, passed on to customer prices.
Facility Services Sweden
The net sales of Facility Services Sweden amounted to EUR 133.2 million (140.4)
in 2023. The decrease in net sales was due to the depreciation of the Swedish
krona. Net sales denominated in Swedish krona increased. Operating profit
declined to EUR -3.7 million (0.4). Operating profit before the amortisation of pur-
chase price allocations of acquisitions was EUR -2.5 million (2.2).
Customer agreements in the Swedish business are mostly fixed-price con-
tracts, and the division has not been able to pass the increased production
costs on to customer prices. In the fourth quarter, the uncertainty in the busi-
ness environment was reflected in customer demand, and fewer new projects
were started than in the comparison period. The division has a programme under
way to simplify operating models and adapt them to the changed business envi-
ronment. The results are expected to become visible by the end of 2024.
Financing and capital expenditure
In 2023, net cash flow from operating activities amounted to EUR 93.6 million
(71.8). Net cash flow after investments came to EUR 50.9 million (41.1). In the
comparison period, net cash flow after investments was reduced by acquisi-
tions, which had a total impact of approximately EUR 13 million. A total of EUR 5.1
million in working capital was released (EUR 6.2 million committed).
At the end of the financial year, interest-bearing liabilities amounted to EUR
193.7 million (216.8). Net interest-bearing liabilities totalled EUR 160.9 million
(167.3). The average interest rate on long-term loans, excluding lease liabilities,
with interest rate hedging, was 4.0% (2.5%). In the second quarter, the com-
pany refinanced a EUR 50 million bank loan that would have matured in the third
quarter of 2024. The new bank loan is in the amount of EUR 40 million and will
mature in the third quarter of 2026. In addition to the usual financial covenants,
the new bank loan is linked to sustainability targets, namely L&T’s carbon foot-
print and accident frequency. The interest rate swap used by the company to
convert part of the EUR 50 million bank loan into a fixed interest loan was ter-
minated in connection with the refinancing of the bank loan. The fair value of
the interest rate swap, EUR 1.3 million, was recognised in financial income in the
second quarter. The company had no interest rate swaps at the end of the finan-
cial year. In the third quarter, the company repaid the remaining amount of EUR
17.7 million of the bond issued in 2018.
The EUR 100.0 million commercial paper programme was unused at the end of
the financial year, as was the case in the comparison period. The account limit
totalling EUR 10.0 million and the committed credit limit totalling EUR 40.0 million
were not in use, as was the case in the comparison period.
Net financial expenses amounted to EUR -6.3 million (-5.8). Net financial
expenses were increased by the rise in the general interest rate level, which
was compensated by the fair value of EUR 1.3 million of an interest rate swap
being recognised due to the termination of the interest rate swap. The effect of
exchange rate changes on net financial expenses was EUR -0.0 million (-0.2).
Net financial expenses were 0.8% (0.7%) of net sales.
The equity ratio was 36.8% (34.3%) and the gearing ratio was 69.3% (75.9%).
The Group’s total equity was EUR 232.2 million (220.4). Cash and cash equiva-
lents amounted to EUR 32.9 million (49.5) at the end of the financial year.
Gross capital expenditure for 2023 came to EUR 61.1 million (58.2). The capital
expenditure consisted primarily of machine and equipment purchases, as well
as investments in information systems. Acquisitions accounted for approxi-
mately EUR 21 million of the gross capital expenditure in the comparison period.
Loans, liabilities and contingent liabilities to related parties
Related-party transactions are accounted for in Note 5.4 Related-party transac-
tions.
Outlook
Net sales in 2024 are estimated to be at the same level as in the previous year,
and operating profit is estimated to be at the same level or better compared to
the previous year.
KEY FIGURES
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Sustainability is an integral aspect of L&T’s strategy, decision-making and
day-to-day business. Through sustainable circular economy solutions, L&T
strengthens its competitiveness and creates diverse value for its key stake-
holders. For L&T, sustainability means supporting customers’ sustainability
efforts, reducing the environmental impacts of the Group’s own operations,
promoting employee well-being and diversity, and ensuring the sustainability of
L&T’s value chain.
L&T’s business model, value creation and strategy are described in more detail
on pages 3–4.
Commitment to national and international objectives
L&T is committed to supporting key declarations and agreements, such as:
• UN sustainable development principles since 2018
• Global Compact principles since 2018
• ILO Declaration on Fundamental Principles and Rights at Work
• Universal Declaration of Human Rights
• Commitments to sustainable development by societies
We have also set scientific climate targets approved by the Science Based Tar-
gets initiative and made a commitment to reducing the emissions generated by
our own operations by 2030 in line with the target. We also encourage our part-
ners to set their own emission reduction targets.
L&T updated its environmental sustainability target in October 2023. The target
is to halve the emissions of our own operations by 2030 from the level of 2018
and to reduce indirect (Scope 3) emissions by 18% by 2030 from the level of
2022. The company has set a target of net-zero emissions by 2045.
We are also committed to reporting on the climate impacts of our operations
in accordance with the Task Force on Climate-related Financial Disclosures
(TCFD) recommendations. Our report in accordance with the TCFD recommenda-
tions is provided on page 14 under “Risks and opportunities of climate change”.
Managing sustainability
At L&T, sustainability is integrated into the Group’s strategy. The Board of Direc-
tors monitors the progress of the Sustainability Programme annually through
the Personnel and Sustainability Committee of the Board of Directors. The Com-
mittee discusses sustainability issues at least three times per year. The Per-
sonnel and Sustainability Committee met four times in 2023.
In autumn 2023, the Board of Directors updated the charters of the Board’s
committees with regard to sustainability issues. In 2024, the monitoring and
evaluation of the development of sustainability in the Group and the results of
the Group’s ESG assessments and analyses are new items on the charter of the
Audit Committee. The Personnel and Sustainability Committee focuses on mon-
itoring and evaluating the development of the business environment and reg-
ulation, as well as stakeholder support. The committee monitors and evaluates
sustainability-related target setting in the short and long term and discusses
and prepares environmental, personnel-related and governance-related issues
in the sustainability programme.
The Group Executive Board steers the implementation of the Sustainability
Programme and monitors it quarterly. Development primarily takes place in busi-
ness-driven working groups, but the Senior Vice President of Corporate Rela-
tions and Sustainability and the communications and sustainability organisation
operating under his supervision are in charge of the practical coordination and
reporting of sustainability efforts. The businesses and other functions are in
charge of the responsibility and compliance of their operations in accordance
with the Group’s management system.
L&T’s management system has been certified in accordance with the ISO
9001, ISO 14001 and ISO 45001 standards. L&T’s policies and principles cover the
environmental, ethical and social perspectives that the Group observes in both
its own operations as well as in the services it produces for customers. The poli-
cies and principles are available to stakeholders on L&T’s website.
L&T takes an uncompromising approach to ensuring the compliance and sus-
tainability of its operations. L&T observes its obligations regarding the environ-
ment and as an employer, and minimises the negative environmental impacts
of its operations. L&T requires that its suppliers operate in accordance with the
laws, regulations and its sustainability principles.
Sustainability Programme
The development of L&T’s sustainability is driven by the Group’s sustainability
programme. Approved by the Board of Directors, the programme takes into
account the material aspects of L&T’s sustainability and sets measurable tar-
gets to be monitored. The focus areas of the programme have been determined
based on the impacts of L&T’s operations, the expectations of key stakeholders
and the Group’s strategic priorities.
L&T has also taken into account the special characteristics of the operations
and business environment of a service company in the environmental sector as
well as the UN’s Sustainable Development Goals and the objectives of the Global
Compact initiative.
The key sustainability targets laid out in the sustainability programme,
meaning the Group’s climate impacts, customer satisfaction and employee rec-
ommendation rate, have been incorporated into L&T’s long-term strategic goals.
Operating principles concerning sustainability
In its decision-making and administration, Lassila & Tikanoja complies with
the Finnish Companies Act, other regulations governing listed companies, the
Articles of Association of Lassila & Tikanoja plc, the charter of L&T’s Board of
Directors and its committees, and the rules and guidelines of Nasdaq Helsinki
Ltd. L&T’s operations are also guided by the policies and operating principles
approved by the Board of Directors or the Group Executive Board.
Sustainable development and statement
of non-financial information
Managing sustainability at L&T
Board of Directors
Confirms and approves the sustainability programme and long-term objectives
President and CEO + Group Executive Board
Manages the development of the sustainability of business operations,
sets targets and monitors
Group functions
Develop, coordinate and steer the Group’s approach to sustainability and
support its practical implementation.
Personnel and Sustainability Committee
monitors and evaluates the development
of sustainability with respect to the
sustainability programme.
Business operations
implement the sustainability programme and monitor its implementation with
the support of the Group functions.
Everyone at L&T
is responsible for ensuring that they work in line with our sustainability
commitments at all times.
Audit Committee
monitors the effectiveness of
risk management
systems and ensures compliance.
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To ensure compliance in its operations, L&T has documented its ethical princi-
ples in its Code of Conduct for the company’s personnel and contract suppliers.
People managers and supervisors are responsible for ensuring the personnel’s
familiarity with the Code of Conduct and monitoring compliance with the guide-
lines. Violations of the Code of Conduct are primarily reported to one’s immediate
supervisor, who assists in the interpretation of the code in ambiguous situations.
Employees, suppliers and subcontractors can also send a message to a con-
fidential whistleblowing channel. The channel is available in all of the Group’s
operating countries. L&T responds to all incidents of non-compliance without
delay, in accordance with a jointly agreed process.
Managing sustainability-related risks is part of L&T’s comprehensive risk man-
agement. The risk management process is described in the Corporate Govern-
ance Statement on pages 97–103, and the key risks are explained under “Risks
and risk management” on pages 15–17.
Sustainability reporting
L&T reports on its sustainability efforts and related progress quarterly in con-
nection with interim reports and more extensively on an annual basis in the sus-
tainability report published as part of the Annual Report. The sustainability report
for 2023 has been drawn up in accordance with GRI (Global Reporting Initiative)
standards.
The key performance indicators for environmental responsibility and respon-
sibility for personnel that are reported in the sustainability report are verified by
a third party. L&T’s sustainability report starts on page 81 and is also available at
vuosikertomus.lt.fi/en.
Activities in organisations
The focus of L&T’s public affairs activities is on ensuring the operating condi-
tions of the circular economy. L&T is a member of nearly a hundred local, regional,
national and EU-level interest organisations. More information on the organisa-
tions, programmes, projects and networks L&T participates in is provided on our
website at https://www.lt.fi/en/responsibility/managing-sustainability/activi-
ties-in-organisations.
Materiality guides our sustainability efforts and stakeholder
relations
A materiality analysis determines the focus areas of L&T’s sustainability pro-
gramme and sustainability efforts and guides the Group’s work and actions
related to sustainability. The assessment of materiality is an ongoing process.
The material aspects of L&T’s sustainability are based on the key impacts of the
Group’s operations and the expectations of stakeholders.
In 2022 and 2023, L&T assessed its key stakeholders’ – including employees,
customers and communities – expectations and views concerning the Group’s
sustainability efforts.
GOOD GOVERNANCE
We act responsibly and transparently
throughout the value chain.
TOGETHER TOWARDS
FULL CIRCULARITY
Together with our customers, we work to mitigate
climate change and the loss of biodiversity.
Our job is to keep the materials in circulation for
as long as possible and to introduce solutions for the
sustainable use of the built environment.
EMPLOYED BY TOMORROW
At L&T, everyone is free to be themselves.
We treat each other and our suppliers fairly.
We want our employees to enjoy good health and
well-being, which is why we invest in well-being at
work and occupational safety.
WE MAKE
CIRCULAR
ECONOMY A
REALITY
CUSTOMERS
OWN
OPERATIONS
SUPPLY
CHAIN
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Stakeholder Key areas of interest in 2023 Responding to expectations Interaction
Customers Customer service and satisfaction,
operating quality, the circular economy,
recycling, soil remediation, and sustainabil-
ity.
We developed new sustainability services
in collaboration with our customers. We
developed the eﬀectiveness of our digital
service channels. We took business-spe-
ciﬁc measures to improve services and the
customer experience.
A customer survey (NPS) to measure
how likely our corporate customers are
to recommend us, as well as several cus-
tomer-speciﬁc surveys. Customer service
(telephone, digital service channels) and
dialogue with key account managers and
sales. Marketing communications,
webcasts and events.
Personnel The employees’ physical and mental
well-being, workload, training and
competence development, as well as job
satisfaction and the employee experience.
L&T provided diverse physical and mental
well-being services to employees along
with learning-on-the-job opportunities,
career paths and training. We revised and
expanded our training oﬀering and took
business-speciﬁc measures to improve
the employee experience.
Feedback and development discussions,
Fiilinki personnel surveys, co-operation
and European Works Council activities,
workshops, digital events and other events
as well as internal communication channels
such as the intranet and Teams.
Potential employees Employer brand and the employee
experience.
We made extensive use of digital avenues
to reach potential job applicants and share
information working at L&T. We also partic-
ipated in various career and recruitment
events.
Co-operation with educational institutions,
recruitment and career events, develop-
ment of the employer brand and sharing
information through social media channels.
Investors and shareholders Financial performance and strategy
execution, sustainability and ESG ratings,
customer satisfaction and employee
satisfaction.
We participated in several ESG surveys and
expanded our sustainability reporting. We
engaged in active dialogue with investors
on ESG issues. We organised a Capital Mar-
kets Day. At the event, we discussed sus-
tainability from various perspectives.
Stock exchange releases, ﬁnancial reviews,
annual reporting, Group website, webcasts,
regular investor meetings, Capital Markets
Day and the Annual General Meeting.
Decision-makers and influ-
encers (including national and
regional decision-makers),
industry organisations and
employer organisations
Circular economy and climate change
mitigation, employment
We participated in the activities of industry
and labour market organisations. We promoted
initiatives aimed at promoting the green transi-
tion and developing the labour market.
In Finland, we took new initiatives to accelerate
the circular economy, develop job opportunities
for people with reduced work ability and pro-
mote employment-based immigration.
Participation in associations, dialogue with
the public authorities and decision-makers,
co-operation projects, other projects,
responding to surveys, Group website and
annual reporting.
Media and non-governmental
organisations
Practical steps related to the circular
economy, actions to promote biodiversity.
We published numerous press releases
and participated in several interviews. We
engaged in dialogue and surveyed expecta-
tions in connection with updating the sus-
tainability programme.
Press releases, interviews, publications,
media events, Group website and social
media channels.
Suppliers and subcontractors The circular economy, quality, sustainability
in the supply chain.
We engaged in dialogue, conducted audits
and self-assessments.
Dialogue, responding to surveys, audits and
self-assessments.
During the process, L&T identified the key sustainability aspects of its opera-
tions and then focused the actual stakeholder dialogue on those topics. Meg-
atrends, a number of sustainability frameworks, regulatory changes and L&T’s
strategy were taken into account.
L&T assessed sustainability-related expectations by means of an extensive
online survey. We also interviewed key stakeholder representatives and special-
ists from our business areas to obtain in-depth information on expectations and
development areas concerning L&T’s sustainability efforts.
Based on the results of the assessment process, we identified our nine most
important sustainability topics. We will continue to work to reduce emissions
in our own operations and promote the circular economy of our customers. We
will also promote the diversity of our personnel and focus on occupational well-
being and occupational safety.
In the future, we will deepen our sustainability work in the supply chain to mit-
igate climate change and enhance human rights. We also identified the promo-
tion of biodiversity, including the responsibility of water use, as a new key theme.
The results of the materiality analysis have been assessed in relation to the
long-term targets and performance indicators of the sustainability programme,
taking into account our mission: “We make the circular economy a reality”. The
results of the materiality assessment and the targets and performance indica-
tors of the sustainability programme have been discussed by the Group Exec-
utive Board and the Personnel and Sustainability Committee of the Board of
Directors.
In 2023, L&T carried out a double materiality assessment, which was com-
pleted in the latter part of the year. The assessment will guide L&T’s sustaina-
bility efforts and reporting from the beginning of 2024 onwards.
Stakeholder expectations
L&T’s stakeholder engagement is focused on the stakeholders who are the most
affected by the impacts of our operations and whose actions have the greatest
influence on the achievement of our business objectives and sustainability tar-
gets. Stakeholder expectations are taken into account in L&T’s strategy develop-
ment and business choices.
Our key stakeholders include our customers, current and potential employees,
and investors, as well as national and regional policymakers and influencers,
non-governmental organisations, the media and suppliers and subcontractors.
We engage in active dialogue with our key stakeholders. We regularly measure
stakeholder support, as well as customer satisfaction and employee satisfac-
tion, for example. Through dialogue and measurements, we identify stakeholder
expectations and determine what development measures are necessary. We
have summarised our stakeholder expectations in three key perspectives.
• A leader in sustainability: As a leader in its field, L&T is expected to develop
the entire industry in the right direction for society and to conduct itself
correctly and sustainably in environmental matters.
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• A good employer: As a large employer and service company, we are
expected to be a responsible employer that looks after the well-being of its
personnel and treats them responsibly and fairly while exercising special
care with regard to the employment of people who are in vulnerable posi-
tions.
• A useful partner: L&T is expected to be a useful partner to its customers,
developing new services and supporting the customers in their work
towards their goals as well as keeping its promises.
Environmental responsibility
L&T’s environmental responsibility is realised particularly through the services it
produces for customers. The primary goal is always to direct materials collected
from customers towards reuse or recycling, guided by the order of priority as
stipulated by law and the circular economy approach.
L&T requires the sustainable management of environmental issues of its part-
ners and suppliers. This requirement is factored into the procurement process,
for example in the form of self-assessments. Waste is only handed over to oper-
ators that are authorised to receive or process it. Acquisitions are subject to
detailed due diligence processes.
L&T’s goal is to improve its customers’ energy and material efficiency and
to increase the carbon handprint of its operations. This is achieved when cus-
tomers replace primary raw materials with secondary raw materials as well as
fossil fuels with solid recovered fuels (SRF). As the carbon handprint of L&T’s
operations increases, the carbon footprint of its customers decreases. L&T
thereby supports its customers in reaching their environmental goals.
In 2023, the focus of L&T’s environmental efforts was on the climate impacts
of the supply chain and preparations for the EU’s Corporate Sustainability
Reporting Directive.
Good progress was made towards the Group’s climate targets for its own
operations in spite of the challenging business environment. During the year,
investments were made in low-emission vehicles, and route optimisation and
driving style training were continued. The use of renewable fuels was signifi-
cantly increased. Transport operations account for 97 per cent of the emissions
generated by L&T’s own operations.
Professional waste treatment operations are subject to environmental per-
mits and regulatory compliance. In 2023, L&T had 54 (53) environmental permits
that determined how the Group managed and monitored environmental matters.
Facilities subject to environmental permits have contingency plans and rescue
plans that specify how they are prepared for significant environmental incidents.
Environmental issues are also covered in regularly conducted internal audits.
L&T’s objective is that no serious incidents of environmental damage result from
the Group’s own operations. This target was achieved in 2023.
To reduce the environmental impact of the materials collected from cus-
tomers and to promote the circular economy, L&T strives to find new solutions
to recover materials at the highest possible refining rate and in accordance with
the order of priority in waste management.
L&T updated the climate targets for the supply chain and set separate emis-
sion reduction targets for subcontracted transport operations in spring 2022.
The Group continued to communicate these targets to the supply chain in 2023.
The target is to reduce the transport emissions of subcontracted operations
by 30 per cent by 2030, using 2020 as the baseline. At the same time, L&T con-
tinued to engage the supply chain in the pursuit of the science-based emission
reduction target.
The target is for 70 per cent of the largest suppliers and subcontractors
(based on spending) to set targets for reducing their emissions by 2025.
TCFD reporting is provided on page 14. Environmental risks and their manage-
ment are described in more detail under “Risks and risk management”. More
information on L&T’s environmental responsibility is provided in the sustaina-
bility report on page 81.
Personnel and other social responsibility issues
Full-time and part-time, total 2023 2022
Finland 6,891 7,020
Sweden 1,268 1,351
Total 8,159 8,371
As a major employer and service enterprise, the focus of L&T’s social responsi-
bility is on the Group’s employees. The material aspects of L&T’s responsibility
for its employees include increasing job satisfaction, strengthening the work
ability of the personnel, developing diversity and improving occupational safety.
The Group also wants to actively work to promote the employment of special
Non-financial performance indicators
Indicator Target 2023 2022
Environmental
matters
Carbon footprint (SBT) Scope 1 & 2 (gCO
2
-ekv/km) -50% by 2030, using 2018 as the base-
line
-36% -26%
Carbon handprint intensity (tCO
2
-ekv/MEUR) Grows faster than net sales -570 -633
Recycling rate (reporting covers municipal waste collected
from corporate customers, hazardous waste, industrial
waste and construction waste in Finland.)
60% by 2026 57.8% 59.4%
Social Employee Net Promoter Score, eNPS >50 by 2026 21 (October) 24 (October)
responsibility Sickness-related absences, % 4.5% by 2026 5.1 5.6
Total recordable incident frequency (TRIF) 20 by 2026 23 23
Governance Code of Conduct training for L&T employees All new L&T employees complete Code
of Conduct training during their trial
period
94% of salaried
employees (Fin-
land), 616 per-
sons (Sweden)
58% of salaried
employees (Fin-
landi), 675 per-
sons (Sweden)
groups, such as people with reduced work ability.
L&T does not tolerate any kind of discrimination, harassment, bullying, racism
or inappropriate treatment or the use of child labour, any form of forced labour or
any other practices in violation of basic human rights in its own operations or as
part of its supply chain.
L&T observes the Universal Declaration of Human Rights, workers’ rights as
defined by the International Labour Organisation, and international agreements.
National legislation, agreements and other obligations are applied in employ-
ment relationships. L&T respects its employees’ freedom to unionise. L&T mon-
itors compliance with collective agreements, environmental legislation, labour
law, occupational safety legislation and regulations pertaining to financial
management. L&T is also compliant with the applicable legislation governing
contractors’ obligations and liability, and requires the same of its suppliers. The
operations are guided by the Group’s personnel policy, the ISO 45001-certified
management system, the principles governing occupational safety manage-
ment and the Code of Conduct.
L&T’s strategic objective is to increase the Employee Net Promoter Score
(eNPS) to 50 by 2026. Employee satisfaction is measured by means of a per-
sonnel satisfaction survey which goes by the name Fiilinki in Finland and Pulsen
in Sweden.
As part of work ability management, L&T’s targets are to reduce sickness-re-
lated absences to 4.5 per cent and achieve an employee health rate of 45 per
cent. To achieve the target set for sickness-related absences, L&T will continue
the purposeful implementation of the action plan for promoting health.
In occupational safety, L&T pursues continuous improvement with an ultimate
goal of zero accidents. L&T will continue its purposeful development efforts to
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engage employees in the promotion of safety. There were no reported fatal acci-
dents and no occupational disease diagnoses at L&T in 2023.
Anti-corruption, anti-bribery and human rights
L&T aims to ensure that no violations occur in its activities, and the Group
emphasises the importance of regulatory compliance in its business operations.
L&T is committed to supporting the UN Global Compact initiative and its anti-cor-
ruption principles. The prevention of corruption and bribery is based on national
legislation and agreements.
Internally, operations are guided by L&T’s Code of Conduct, which include anti-
bribery and corruption guidelines related to, among other things, accepting and
offering gifts and hospitality, as well as the avoidance of conflicts of interest.
L&T’s goal is for all employees to complete Code of Conduct training within their
trial period.
An online course has been created to support the effective implementation
of the Code of Conduct for employees. All salaried employees complete the
course at two-year intervals, and new employees complete the course during
their trial period. The online course is available in Finnish, Swedish and English.
The Swedish-language online course is aimed at the Swedish market, and it has
been adapted where necessary to correspond to Swedish legislation and issues
relevant to our business operations in Sweden. A separate version of the Code of
Conduct course has been created for field employees, and was updated in 2023
to better suit mobile devices.
Completion of the Code of Conduct course is monitored particularly in pro-
curement, sales and business leaders, as having a good grasp of ethical busi-
ness principles is considered particularly important for those roles.
L&T regularly assesses the risks related to its operations, including risks
related to corruption. Bribery and corruption-related risks are assessed on a pro-
cess-specific basis, and the risk assessments cover most of our business lines.
The assessment of risks of Code of Conduct violations places special emphasis
on provisions whose violation may lead to significant negative consequences,
such as human rights violations and serious financial and reputational risks.
The notification form concerning secondary occupations and activities has
been updated and the related internal processing procedures have been devel-
oped. Our aim is to identify employee-related conflicts of interest as early as
possible.
Employees must report violations of the Code of Conduct primarily to their
immediate supervisor, who assists in the interpretation of the Code of Con-
duct in ambiguous situations. L&T employees are aware of L&T’s anti-corruption
guidelines, and they occasionally request more detailed information from the
Legal Affairs department regarding the receiving of gifts, for example.
L&T’s personnel and other stakeholders can also report suspected violations
of the Code of Conduct and other rules and regulations, as well as suspected
incidents of discrimination, via the Group’s independent whistleblowing channel.
The reports can be submitted via the intranet or website at any time. The
whistleblowing channel can be used to report incidents in various categories,
including corruption, bribery, competition law, data protection, environmental
issues, human rights, and conflicts of interest.
Reports received via the whistleblowing channel are handled confidentially by
a separately designated individual in the Legal Affairs department. The reports
are also discussed with L&T’s President and CEO and reported to the Audit Com-
mittee of the Board of Directors. The internal audit function supports the man-
agement in the development and monitoring of risk management, internal con-
trol and corporate governance.
Purchases made by L&T’s personnel are guided by a procurement policy. Man-
dates and the limits for decision-making in terms of procurement are defined in
L&T’s guidelines on authorisation on the basis of position.
In the case of potential conflicts of interests in procurement processes, the
persons concerned are disqualified from the decision-making. Supplier co-oper-
ation must not involve any bribery or the kind of hospitality or exchange of gifts
that could influence procurement decisions.
L&T’s procurement processes are transparent, and procurement decisions are
based on competitive supply contracts. L&T’s Code of Conduct for employees
is complemented by the Supplier Code of Conduct, which is available in Finnish,
Swedish and English.
The Supplier Code of Conduct sets out requirements for suppliers. Among
other topics, it covers legal compliance, ethical conduct, zero tolerance for
bribery and corruption, and requirements concerning work and human rights,
health and safety, and the environment.
If a supplier violates the Supplier Code of Conduct, L&T may terminate its
agreement with that supplier. L&T requires its suppliers to adhere to the Supplier
Code of Conduct in all of their operations with L&T, their own employees and sub-
contractors, and third parties. New contract suppliers are required to sign the
Supplier Code of Conduct. Service providers operating in Finland must be regis-
tered with the Vastuu Group service.
Compliance with the Supplier Code of Conduct is monitored by means of a
separate self-assessment survey. We revised the self-assessment model in
2023 and piloted it among our significant suppliers (over 100 suppliers in Finland
and 200 in Sweden). In L&T’s self-assessment model, the supplier assesses its
performance in terms of corporate ethics, occupational safety, the environment,
quality and supply chain sustainability practices, taking into account not only
policies and principles but also measures to promote progress in these areas.
The self-assessment survey also covers zero-tolerance issues pertaining to the
use of child labour and forced labour and commitment to the principles laid out
in L&T’s Code Of Conduct. Any deviations concerning the zero tolerance ques-
tions always require further action in co-operation with the supplier in question.
The self-assessment survey was completed by 76% of all suppliers in Finland
and 27% of all suppliers in Sweden. No violations were identified on the basis of
the survey. A discussion to obtain more detailed information was held with one
supplier.
L&T mainly operates with local partners in Finland and Sweden, which
improves visibility with respect to its partners’ sustainability. L&T’s purchases in
2023 were focused on domestic companies. In both Finland and Sweden, 96 per
cent of purchases were made from companies operating in the country in ques-
tion. Operations with significant suppliers are managed through regular supplier
co-operation and monitored according to separately agreed performance indi-
cators. We ensure the sustainability of our suppliers’ operating methods through
self-assessment surveys, supplier audits, analyses of suppliers’ financial circum-
stances and other appropriate means.
Our primary assurance measures are targeted at our most significant sup-
pliers. L&T’s whistleblowing channel is available on the Group website. The rep-
resentatives of suppliers and subcontractors can use it to submit reports either
anonymously or under their own name.
L&T adheres to a separately defined permit procedure to ensure that all cus-
tomer events are appropriate and that all sponsorships and supporting mar-
keting operations are transparent.
In 2023, a total of 9 (2022: 9) reports were received via the whistleblowing
channel. Of the reports, 78% concerned HR matters, 11% suppliers operating
models and 11% traffic behavior. The reports required further investigation but
did not lead to corrective action. Nevertheless, L&T’s operating models were fur-
ther specified as a result.
The reports received via the whistleblowing channel did not include observa-
tions or suspicions of violations against anti-bribery or anti-corruption guide-
lines at L&T.
There were no reported incidents of bribery or corruption at L&T in 2023. The
reports received via the whistleblowing channel have been discussed with L&T’s
President and CEO and reported to the Audit Committee of the Board of Directors.
Risks related to human rights have been assessed at L&T as part of the risk
management process that is described in more detail on page 14. L&T mainly
operates in Finland and Sweden with local partners. These countries are signa-
tories to the ILO conventions on human rights, including child labour and forced
labour, and the conventions have been transposed into national law. No signifi-
cant risks related to human rights have been identified in the L&T’s operations.
The Group does not tolerate any kind of discrimination, harassment, bullying,
racism or inappropriate treatment, or the use of child labour, any form of forced
labour, trafficking in human beings or any other practices in violation with basic
human rights, in its own operations or as part of its supply chain.
Human rights are included in the Code of Conduct and the Supplier Code of
Conduct attachment to agreements, which must be observed by all subcontrac-
tors and suppliers. Furthermore, human rights are assessed as a part of supplier
self-assessment.
We prevent the use of child labour by means of our centralised HR processes
and reporting. Forced labour is prevented by, for example, our centralised pay-
roll system, which ensures that we pay all employees in accordance with the
collective labour agreements applicable to us. The salary is always paid to the
employee’s personal bank account. There were no confirmed grievances related
to human rights at L&T in 2023.
KEY FIGURES
FINANCIAL STATEMENTS
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L&T has a defined risk management process that includes a review of finan-
cial, strategic, operational and damage-related risks. L&T has also assessed cli-
mate-related risks and opportunities as part of the risk management system in
accordance with TCFD reporting.
Key risk management principles
Risk management at L&T aims to identify significant risk factors, prepare for
them and manage them in an optimal way so that the Group’s strategic and
financial objectives are achieved. Comprehensive risk management endeavours
to manage the Group’s risk as a whole, not just individual risk factors. The risk
management process also aims to assess the opportunities associated with
risks.
Responsibilities
The principles of L&T’s risk management are approved by the company’s Board
of Directors. The Board monitors the implementation of risk management and
assesses the efficiency of the methods employed. The President and CEO is
responsible for the organisation and implementation of risk management. Risk
management at L&T Group is controlled by the risk management and insurance
policy confirmed by L&T’s Board of Directors. The policy specifies the objec-
tives and principles, organisation and responsibilities, and procedures of the
Group’s risk management. The Group’s financing policy confirmed by L&T’s Board
of Directors is followed in the management of financial risks. The principles for
insurance risk management are specified in the Risk Management and Insur-
ance Policy.
Identification, assessment and reporting of risks
Risks are surveyed regularly and systematically at both division and company
level and in central functions considered to be critical. The significance of risks
is assessed using a risk matrix. Measures for managing and minimising the iden-
tified risks are prepared, and responsibility for these measures is allocated to
specified individuals or units. The impact of risks is analysed in terms of their
effects on EBIT, among other things, and the assessment of the probability of the
realisation of the risks takes into account the nature of operations and the risk
mitigation measures taken by the Group. The most significant identified risks,
and the preparations for those risks, are regularly reported to the President and
CEO and the Board of Directors.
Risk analysis
The section Strategic and operative risks describes the most important stra-
tegic, operational and damage-related risks of L&T’s business which, if realised,
can endanger or prevent the achievement of business objectives. Financial risks
and their management are described in note 4.2 to the consolidated financial
statements.
Report of the risks and opportunities of climate change in
accordance with TCFD
L&T reports on the risks and opportunities related to climate change in accord-
ance with the TCFD (Task Force for Climate-related Financial Disclosures) rec-
ommendations. Due to the nature of our operations, L&T plays a significant role in
the mitigation of climate change and the transition towards a low-carbon cir-
cular economy. Our operations have a large carbon handprint, which means that
we generate significant emission reductions for our customers. TCFD reporting
has been taken into account in our review in accordance with the table provided
on this page.
Risks and risk management
TCFD information Report contents
Governance
Board of Directors’s duties related to managing risks and opportuni-
ties related to climate change
Risks and risk management, pp. 14–15
Scenario analysis is part of the strategy process, p. 15
The management’s duties related to managing risks and opportuni-
ties related to climate change
Sustainability management, p. 9
Risks and risk management, pp. 14–15
Strategy
Climate-related risks and opportunities in the short,
medium and long term
Climate-related risks and opportunities, pp. 14–15
The impacts of climate-related risks and opportunities on business
operations, strategy and financial planning
Strategy, p. 4
Climate-related risks and opportunities, pp. 14-15
The flexibility of the strategy with regard to different climate
scenarios
Scenario analysis is part of the strategy process, p. 15
Risk
management
Processes for the identification and assessment of
climate-related risks
Scenario analysis is part of the strategy process, p. 15
Climate risk management methods Scenario analysis is part of the strategy process, p. 15
How are the identification, assessment and management of cli-
mate-related risks connected to the organisation’s other risk man-
agement activities
Climate-related risks and opportunities, pp. 14–15
Indicators and
targets
Indicators used to assess climate risks and opportunities
Statement of non-financial information, p. 9 onwards
Sustainability report, pp. 81–86
KEY FIGURES
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Climate-related risks and opportunities
The mitigation of climate change is a strategic priority for L&T. Our businesses
produce solutions that facilitate the transition towards a low-carbon cir-
cular economy, promote the sustainable use of materials, energy and natural
resources as well as reduce the volume of waste generated and energy con-
sumed. We support our customers by enhancing the use of energy and materials
and by replacing fossil fuels with solid recovered fuels. Furthermore, we support
our customers in the mitigation of climate impacts by optimising the use of prop-
erties and their technical systems. L&T has the strong market position required
for the implementation of such changes in all of its business areas. In assessing
climate-related risks, L&T has evaluated its transition risks (regulatory, technolo-
gy-related and reputational risks) and physical risks, as well as their impacts on
the Group’s operations. The most significant transition risks concern changes
that affect carbon neutrality targets for transport or the promotion of the cir-
cular economy.
The assessment takes into account, for example, the development of prices
for emission rights and carbon emissions, different scenarios of the integration
of bioeconomy and low-carbon economy, the EU’s circular economy package,
changes in national waste legislation, national recycling and reuse goals by
industrial sector and waste fraction as well as the planned investments in the
energy sector.
The impacts of changes in weather on occupational safety, for example, have
been assessed in general as part of physical risks. L&T’s mission is to make the
circular economy a reality. Transitioning to a resource-efficient circular economy
is essential for the mitigation of global warming.
We support this transition by improving the material, energy and cost effi-
ciency of our customers and by ensuring that materials and the built environ-
ment retain their value.
Our solutions enable our customers to reduce their waste volumes, extend the
life-cycle of their properties, recycle and reuse materials, reduce the consump-
tion of natural resources, fossil fuels and energy and thereby reduce their emis-
sions.
We research new technologies and solutions that allow our customers to
reduce their climate impacts even more efficiently. New projects that increase
the processing rate of various material flows promote the circular economy and
improve the carbon handprint of L&T’s operations.
Scenario analysis is part of the strategy process
The monitoring of the outcomes of climate change related to our business oper-
ations is integrated in L&T’s strategy process. We have assessed the impacts of
climate change on L&T’s business operations both during the five-year strategy
period and in the long term until 2035. The assessment method is based on the
qualitative evaluation of uncertainties in our business environments and the
creation of qualitative scenarios about our business environment based on the
changes with the highest degree of uncertainty and the financial impact.
In addition, we have applied the IPCC scenarios of climate warming of 1.5°C,
less than 2°C and 4°C by the end of the century (RCP 2.6 and RCP 6.0), which
have been assessed in relation to the latest climate research data on changes in
weather in Finland. We have also applied the International Energy Agency’s (IEA)
background data (IEA 2DS, NZE2050 and STEPS).
L&T is able to change its business model flexibly according to the different
climate scenarios. The reference scenario was a business environment where
the status quo supports the 1.5°C climate path in the short term. In connection
with our strategy review, we increased the ambition of L&T’s climate targets in
autumn 2023. Our long-term climate target is net zero emissions by 2045.
The business effects of climate change were assessed in the different sce-
narios through aspects of change in the industry related to regulation, the busi-
ness model and technological development.
The assessment indicated that L&T’s updated climate targets, the actions
aimed at achieving the targets and the separate climate targets set for the
supply chain are in line with the observations made in the scenario analysis.
L&T manages transition risks by assessing market changes and responding to
them in a timely manner. In addition, we take a proactive approach to influencing
regulatory developments in their preparatory stages through the industry’s key
advocacy organisations, for example.
The alternative strategic scenarios were presented to the Board of Directors
as a part of the strategy process.
The mitigation of climate change provides L&T’s business operations with
strategic development opportunities.
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.
Higher costs, such as the rising prices of fuel and energy, and potential
changes in interest rates may have an impact on the company’s financial perfor-
mance.
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 waste materials and biowaste from residential properties. As a con-
sequence of the reform, L&T’s direct customer agreements with residential
properties on the separate collection of packaging waste and biowaste will be
transferred to municipalities for competitive bidding gradually between 1 July
2022 and 1 July 2025. As a result of municipalisation, approximately EUR 30 mil-
lion of the Finnish waste management market will be moved out of the scope of
free competition and to municipally owned companies between the years 2024-
2026. The Environmental Services division participates in competitive tendering
for municipal contracts and is a significant player in municipal contracts, but the
Group estimates that the overall impact of the change will be negative.
The company has several ERP system renewal projects under way. Temporary
additional costs arising from system deployments and establishing the oper-
ating model may weigh down the company’s result.
Production costs may be increased by challenges related to employee turn-
over and labour availability.
The geopolitical situation involves continued uncertainty due to Russia’s war
of aggression. The indirect impacts on overall economic activity in Finland and
Sweden may have a negative impact on net sales and profit.
The Group company Lassila & Tikanoja FM AB is a claimant and a defendant
in legal proceedings in Sweden concerning unpaid receivables invoiced from a
former customer of the Group. In June 2022, Lassila & Tikanoja FM AB took legal
action in the District Court of Solna against the former customer company of
L&T, demanding payment for unpaid receivables. At the balance sheet date, the
carrying amount of the receivables in the Company’s balance sheet was approx-
imately EUR 1.5 million. L&T’s former customer company in question has rejected
Lassila & Tikanoja FM AB’s claims and the payment obligation, and brought a
counterclaim demanding compensation totalling approximately SEK 116 million
from Lassila & Tikanoja FM AB. The dispute is still pending. Lassila & Tikanoja con-
siders the counterclaim to be without merit and has not recognised any provi-
sions in relation to it.
KEY FIGURES
FINANCIAL STATEMENTS
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Strategic, operative and sustainability risks
Strategic risks
Risk Risk description Risk management
Markets
• The general economic development of L&T’s operating countries, changes in the competitive landscape and the
functioning of the ﬁnancial markets have an impact on the Group’s business operations.
• Changes in markets and the market environment, such as market changes pertaining to secondary raw materials
may have an unfavourable eﬀect on the Group’s business operations and business growth.
• Geopolitical conﬂicts may cause uncertainty, which can have an eﬀect on the general level of economic activity
and industrial production capacity, thereby reducing the demand for L&T’s services.
• The development of the market prices of emission rights, secondary raw materials, electricity and oil products may
increase production costs.
• Creating and regularly updating scenarios, regular assessment, sharpening and updating of the strategy, taking industry
hanges into account and recognising the need for renewal as part of the continuous strategy process.
• Continuous monitoring and analysis of market development and the business environment.
• L&T is independent of large individual customers and has a diverse service oﬀering.
• Development of new service products.
Regulation • The political environment in L&T’s operating countries aﬀects the Group’s business operations, and changes in regulation,
such as the municipalisation of waste management for certain waste fractions in the residential segment, may have a nega-
tive impact on L&T’s businesses.
• Active monitoring of legislative developments, anticipating future changes in a timely manner, and dialogue with the
public authorities and legislators.
Technology • The competitiveness of L&T’s oﬀering inﬂuences the Group’s future growth. The Group’s proﬁtability may be adversely
aﬀected by errors in judgement when it comes to technology choices concerning service production and the ﬂeet.
• Continuous monitoring and analysis of the business environment pertaining to L&T’s operations and ﬂeet.
• Temporal diversiﬁcation of ﬂeet purchases.
Employees • Challenges related to the availability of labour and employee turnover may complicate service production.
• The potential reduction of employee satisfaction may aﬀect L&T’s competitive advantage, which is largely based on the
work of skilled and motivated personnel.
• A permanent increase in sickness rates and the personnel’s disability and accident pension costs may aﬀect L&T’s
competitiveness and proﬁtability.
• Improving the employee experience by developing induction training and supervisory work as well as by promoting job
rotation and career advancement opportunities for employees.
• Co-operation with municipal employment services, central government organisations and various educational
institutions to ensure the availability of labour.
• Promoting work-based immigration and the employment of special groups.
• Regularly conducted job-speciﬁc and site-speciﬁc risk assessments and workplace surveys, and supporting the
employees’ work ability and capacity to cope with the demands of work through activities that promote work ability.
• L&T’s own sickness fund, which supports L&T’s work ability management and complements occupational health care.
• The Suitable Work model, which supports the rehabilitation and employment of people at risk of disability pension.
Strategic
development
projects
• Strategic development projects are under way in L&T’s divisions to improve operational eﬃciency and operating models.
Some of the projects also involve the renewal of key IT systems. Slower-than-expected progress or other challenges
with the projects may weaken L&T’s competitiveness.
• Strategic development projects aimed at growth, if delayed, may lead to an inadequate renewal of business operations,
thereby slowing L&T’s future growth.
• Responsibilities have been assigned for the regular monitoring of the implementation of strategic projects, and corrective action
is taken as necessary. Alternative paths forward are assessed as part of the projects.
• L&T continuously evaluates and develops the capabilities required for the implementation of strategic development projects and,
where necessary, acquires the necessary capabilities from external partners.
KEY FIGURES
FINANCIAL STATEMENTS
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Operational risks
Risk Risk description Risk management
ICT systems,
data security
and data
protection
• Disruptions, delays and functional challenges related to information and communications systems and their deployment
may aﬀect L&T’s operations and customer service.
• The renewal of business-critical systems may cause disruptions in service production.
• Cyber-crime may pose risks to L&T’s data security and business continuity.
• Developing the systems environment and ensuring the reliability of the ICT environment by, for example, identifying
which systems are critical to operations and deﬁning the allocation of responsibilities between the system vendors
and L&T.
• Comprehensive planning of the deployment of new systems and related operating models.
• Data security guidelines and employee training.
Damage-
related risks
• A ﬁre at a recycling plant may result in a momentary or extended interruption of the plant’s operations. The signiﬁcance
of the risk of ﬁre is reduced by the fact that individual plants or production lines have no substantial impact on L&T’s
overall proﬁtability.
• Business continuity planning, developing ﬁrst-hand ﬁre extinguishing preparedness and training employees on how to
respond to a ﬁre or other hazardous situations.
• Continuous insurance cover that extends to all of the Group’s operating countries and subsidiaries and that includes
policies for injuries, property damage, business interruption, third-party liability, environmental damage and transport
damage, for example.
Procurement
risks
• Rising fuel, electricity and other procurement costs may have a negative impact on L&T’s proﬁtability. • Supply chain management, the diversiﬁcation of propulsion sources and the improvement of eﬃciency.
Acquisitions • The success of acquisitions may aﬀect the achievement of the Group’s growth and proﬁtability targets. Failures in acquisitions
may impact the Group’s competitiveness and proﬁtability and change the Group’s risk proﬁle.
• Acquisition agreements, the strategic and ﬁnancial analysis of potential acquirees’ business operations, comprehensive
due diligence.
• Eﬀectively executed business integration programmes.
Financing
risks
• Potential interest rate hikes may increase the company’s interest costs.
• More information can be found on note
4.2 to the consolidated financial statements.
Sustainability risks
Risk Risk description Risk management
Environmen-
tal risks
• Extreme weather phenomena, such as substantial increases in annual rainfall and snowfall, may lead to higher costs due
to complications in service production.
• Changes in regulations concerning environmental sustainability, such as changes to the carbon neutrality targets for
transport or the promotion of the circular economy, or changes in the interpretation of regulations, may increase produc-
tion costs or weaken customer demand.
• L&T’s business includes the collection and transport of non-hazardous and hazardous waste, as well as their processing
at the Group’s own plants. Incorrect handling of hazardous waste or damage to equipment may result in harmful sub-
stances being released into the environment. L&T may become liable for damages due to this.
• L&T’s own climate targets, the actions aimed at achieving the targets and the separate climate targets set for the supply
chain are in line with the observations made in the scenario analysis. L&T manages transition risks by assessing market
changes and responding to them in a timely manner. In addition, we take a proactive approach to inﬂuencing regulatory
developments in their preparatory stages through the industry’s key advocacy organisations, for example.
• Systematic environmental surveys of plants, preventive maintenance plans for equipment, audits and the long-term
training of personnel.
• Insurance.
Social risks • Safety is a key priority in work at L&T, and potential accidents are among the most signiﬁcant social risks.
• Possible cases of deﬁciences in respecting human rights, such as inappropriate behaviour, harassment, unequal operat-
ing practices, working conditions and all types of discrimination on L&T’s own operation may lead to court proceedings,
liability to damages and create a reputation risk.
• Comprehensive training, communication, safety management guidelines and principles, as well as regular safety surveys
and proactive safety eﬀorts.
• Diversity training and other training for supervisors, process and instructions related to the prevention of harassment
and discrimination.
• Compliance with legislation and collective agreements. Careful evaluation of risks and preventive measures that are
conducted based on risk assessment.
Ethical
business
• Possible deﬁciencies related to human rights, such as deﬁciencies in working conditions, harassment, racism, discrimi-
nation and other unethical conduct in L&T’s supply chain may create a reputation risk.
• Careful compliance with legislation and collective agreements.
• Whistleblowing channel available on the intranet and the Group website.
• L&T mainly operates in Finland and Sweden with local partners, and the risk of human rights violations is low in these
countries.
KEY FIGURES
FINANCIAL STATEMENTS
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Shares and
shareholders
Share capital and number of shares
There were no changes in Lassila & Tikanoja’s share capital and number of
shares in 2023. The registered share capital of the company is EUR 19,399,437.
The number of shares is 38,798,874. The average number of shares excluding
the shares held by the company was 38,126,791. Each share carries one vote.
The Articles of Association do not set an upper limit on the share capital and
number of shares. A share has neither a nominal value nor a book equivalent
value. The company’s shares are included in the book-entry system of securities
maintained by Euroclear Finland Ltd. Euroclear Finland maintains the company’s
official list of shareholders.
Shareholders
At the end of the review period, the company had 24,959 (24,956) shareholders.
Nominee-registered holdings accounted for 10.2% (7.0%) of the total number of
shares.
Holdings of the Board of Directors, the President and CEO and the Executive
Board
The members of the Board, the President and CEO and the Executive Board, and
organisations under their control held a total of 178,860 shares in the company
on 31 December 2023, representing 0.5 per cent of the total number of shares
and votes. Lassila & Tikanoja plc transferred 8,484 shares to the members of the
Board of Directors as a part of their annual fee based on a decision made by the
Annual General Meeting on March 23, 2023.
Share-based incentive plans
In December 2022, the Board of Directors of Lassila & Tikanoja Plc decided to
establish two new long-term share-based incentive plans for the Group’s key
employees. The aim of the new plans is to align the objectives of the company,
shareholders and key employees in order to increase the value of the company
in the long term, to retain the key employees at the company and to offer them
competitive reward plans that are based on earning and accumulating the com-
pany’s shares as well as on appreciation of the share price. The Performance
Share Plan 2023–2027 comprises three (3) three-year (3) performance periods
covering the calendar years 2023–2025, 2024–2026 and 2025–2027. During
the performance period 2023–2025, the earning of rewards is based on the
Number of
shareholders Percentage
Number of
shares
Percentage of
shares and votes
Breakdown of shareholding by sector on 31 December 2023
Corporations and housing associations 969 3.9 3,313,983 8.5
Financial and insurance corporations 52 0.2 8,038,704 20.7
General government 18 0.1 2,870,789 7.4
Households 23,616 94.6 16,373,171 42.2
Non-profit institutions serving households 228 0.9 6,536,627 16.9
Foreign shareholders 76 0.3 980,300 2.5
Shares not transferred to the book-entry securities system 0 40,528 0.1
Own shares 1 644,772 1.7
Total 24,960 100 38,798,874 100
Nominee-registered 10 3,955,057 10.2
Breakdown of shareholding by size of holding on 31 December 2023
Number of shares
1–1 000 22,419 89.8 4,863,609 12.5
1,001–5,000 2,081 8.3 4,435,768 11.4
5,001–10,000 241 1.0 1,732,461 4.5
10,001–100,000 183 0.7 5,127,604 13.2
100,001–500,000 21 0.1 4,243,534 10.9
over 500,000 13 0.1 17,710,598 45.7
Shares not transferred to the book-entry securities system 0 40,528 0.1
Own shares 1 644,772 1.7
Total 24,960 100 38,798,874 100
Nominee-registered 10 3,955,057 10.2
Major shareholders on 31 December 2023, excluding nominee-registered shares
Shareholder Number of shares Percentage of shares and votes
1 Evald ja Hilda Nissi’s Foundation 3,496,487 9.0
2 Nordea Funds Ltd 1,685,538 4.3
3 Mandatum Life Insurance Company Limited 1,547, 264 4.0
4 Maijala Juhani 1, 529,994 3.9
5 Stiftelsen för Åbo Akademi 1,066,282 2.8
6 Bergholm Heikki 875,000 2.3
7 Ilmarinen Mutual Pension Insurance Company 790,000 2.0
8 Varma Mutual Pension Insurance Company 729,791 1.9
9 Maijala Mikko 720,000 1.9
10 Lassila & Tikanoja plc 644,772 1.7
11 Elo Mutual Pension Insurance Company 538,000 1.4
12 The State Pension Fund 512,000 1.3
13 Turjanmaa Kristiina 505,310 1.3
14 Kaleva Mutual Pension Insurance Company 400,000 1.0
15 Seligson & Co. Investment Funds 382,783 1.0
16 Oy Chemec Ab 356,320 0.9
17 Maijala Eeva 346,000 0.9
18 Samfundet folkhälsan i Svenska Finland rf 336,800 0.9
19 Security Trading Oy 240,000 0.6
20 OP-Pohjola Group 196,933 0.5
20 largest owners total 16,899,274 43.6
KEY FIGURES
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following performance criteria: return on capital employed (ROCE), total share-
holder return (TSR) and reduction of the carbon footprint (ESG). The target group
of the Performance Share Plan during the performance period 2023–2025 con-
sists of approximately 38 key employees, including the Group’s President and
CEO and the Group Executive Board.
During the performance period 2024–2026, the earning of rewards is based
on the following performance criteria: return on capital employed (ROCE), total
shareholder return (TSR) and reduction of the carbon footprint (ESG). The target
group of the Performance Share Plan during the performance period 2024–2026
consists of approximately 50 key employees, including the Group’s President and
CEO and the Group Executive Board.
The transitional share-based incentive scheme 2023–2026 consists of two
(2) earnings periods of one (1) year each, corresponding to the calendar years
2023 and 2024. The earnings period is followed by a two-year commitment
period. The aim of the scheme is to support the transition from the old share-
based incentive scheme to the new share-based incentive scheme. The earning
of rewards for the 2023 and 2024 earnings periods is based the return on cap-
ital employed (ROCE) and the reduction of the carbon footprint (ESG). The target
group of the transitional share-based incentive scheme for the earnings periods
2023 and 2024 consists of approximately 10 key employees, including the
Group’s President and CEO and the Group Executive Board.
Trading in shares in 2023
The company’s shares are quoted on the mid-cap list of Nasdaq Helsinki
Oy in the Industrials sector. The trading code is LAT1V and the ISIN code is
FI0009010854.
The volume of trading in 2023 was 5.6 million shares, which is 14.8% (24.7%)
of the average number of outstanding shares. The value of trading was EUR
57.1 million (104.9). The highest share price was EUR 11.84 and the lowest EUR
9.00. The closing price was EUR 9.80. At the end of the financial year, the market
capitalisation excluding the shares held by the company was EUR 373.9 million
(405.9).
Own shares
At the end of the period, the company held 644,772 of its own shares, repre-
senting 1.7% of all shares and votes.
Flagging notifications
On 26 June 2023, Lassila & Tikanoja plc received a notification indicating that
Mandatum Life Insurance Company Limited’s shareholding in Lassila & Tikanoja
fell below the 5% threshold on 26 June 2023.
Resolutions by the Annual General Meeting
The Annual General Meeting of Lassila & Tikanoja plc, which was held on 23
March 2023, adopted the financial statements and consolidated financial state-
ments for the financial year 2022, discharged the members of the Board of
Directors and the President and CEO from liability and adopted the remuneration
report for the company’s governing bodies. The Annual General Meeting resolved
on the use of the profit shown on the balance sheet and the payment of divi-
dend, the composition and remuneration of the Board of Directors, the election
and remuneration of the auditor, amendment of Articles of Association, and
authorising the Board of Directors to decide on the repurchase of the company’s
own shares and on a share issue and the issuance of special rights entitling to
shares.
The Annual General Meeting resolved that a dividend of EUR 0.47 per share be
paid on the basis of the balance sheet to be adopted for the financial year 2022.
It was decided that the dividend be paid on 3 April 2023.
The Annual General Meeting confirmed the number of members of the Board
of Directors as six in accordance with the proposal of the Shareholders’ Nom-
ination Board. Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen
and Pasi Tolppanen were re-elected, and Anni Ronkainen was elected as a new
member, to the Board for a term ending at the conclusion of the next Annual
General Meeting. Jukka Leinonen was elected as the Chairman of the Board and
Sakari Lassila was elected as the Vice Chairman.
The Annual General Meeting elected PricewaterhouseCoopers Oy, Authorised
Public Accountants, as the company’s auditor. PricewaterhouseCoopers Oy has
announced that it will name Samuli Perälä, Authorised Public Accountant, as the
principal auditor.
The Annual General Meeting resolved to amend Article 10 of the Articles of
Association to enable the holding of a general meeting without a meeting venue,
as a remote meeting.
The resolutions of the Annual General Meeting were announced in more detail
in a stock exchange release on 23 March 2023.
Authorisations for the Board of Directors
The Annual General Meeting held on 23 March 2023 authorised Lassila &
Tikanoja plc’s Board of Directors to decide on the repurchase of the company’s
own shares using the company’s unrestricted equity. In addition, the Annual Gen-
eral Meeting authorised the Board of Directors to decide on a share issue and
the issuance of special rights entitling their holders to shares.
The Board of Directors is authorised to purchase a maximum of 2,000,000
company shares (5.2% of the total number of shares). The repurchase authori-
sation is effective for 18 months.
The Board of Directors is authorised to decide on the issuance of new shares
or shares that may be held by the company through a share issue and/or issu-
ance of option rights or other special rights conferring entitlement to shares,
referred to in Chapter 10, Section 1 of the Finnish Companies Act, so that under
the authorisation, a maximum of 2,000,000 shares (5.2% of the total number
of shares) may be issued and/or conveyed. The authorisation is effective for 18
months.
Events after the financial year
On 11 January 2024, the company announced that Lassila & Tikanoja’s Share-
holders’ Nomination Board proposes to the Annual General Meeting to be held on
21 March 2024 that the Board of Directors have seven (7) members. The Nom-
ination Board proposes that Teemu Kangas-Kärki, Laura Lares, Sakari Lassila,
Jukka Leinonen, Anni Ronkainen and Pasi Tolppanen be re-elected to the Board
of Directors and that Juuso Maijala be elected as a new member. A presentation
of Juuso Maijala is available on L&T’s website. In addition, the Nomination Board
proposes that Jukka Leinonen be elected as Chairman of the Board of Directors
and Sakari Lassila as Vice Chairman.
Changes in the Group Executive Board
On 31 March 2023, the company announced that Tina Hellstadius, the Senior
Vice President for Facility Services Sweden, would leave Lassila & Tikanoja on 31
March 2023.
On 18 April 2023, the company announced that Mikko Taipale (Master of Laws)
had been appointed Senior Vice President, Facility Services Sweden and a
member of the Group Executive Board effective from 19 April 2023.
Dividend policy
The amount of dividend is tied to the results for the financial year. Profits not
considered necessary for ensuring the healthy development of the company are
distributed to shareholders.
Proposal for profit distribution
In 2023, the Group’s earnings per share were EUR 0.79 (0.83) and net cash flow
from operating activities after investments per share amounted to EUR 1.33
(1.08). The Board of Directors will propose a dividend of EUR 0.49 per share to the
Annual General Meeting to be held on 21 March 2024. A dividend of EUR 0.47 per
share was paid for the financial year 2022.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
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Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
The EU taxonomy is a classification system for environmentally sustainable eco-
nomic activities. It is a framework for channelling investments into more sustain-
able activities through technical assessment criteria, environmental objectives,
Do No Significant Harm (DNSH) criteria and minimum safeguards.
In this section, Lassila & Tikanoja will publish information in accordance with
the following regulation; Regulation (EU) 2020/852 of the European Parliament
and of the Council of 18 June 2020 on the establishment of a framework to facil-
itate sustainable investment, and amending Regulation (EU) 2019/2088 (Tax-
onomy Regulation).
The implementation of the Taxonomy Regulation is taking place over several
stages. The first Delegated Act, namely the Climate Act, was implemented in
2021, and it sets out technical screening criteria for two environmental objec-
tives: climate change mitigation and climate change adaptation, which have
been described in the taxonomy. In their reporting on 2021, companies were
required to publish information on taxonomy-eligible economic activities’ share
of net sales, capital expenditure (investments) and operating expenditure. Tax-
onomy eligibility applies to activities that are within the scope of the Climate Act.
In the 2022 reporting, companies had to assess taxonomy alignment. Tax-
onomy alignment requires that taxonomy-eligible activities meet the detailed
technical screening criteria, DNSH criteria and meet the minimum safeguards
specified in the Taxonomy Regulation.
In 2023, the European Commission published new classification system activi-
ties for the four remaining environmental objectives. In this regard, L&T will report
on taxonomy eligibility and, on a voluntary basis, taxonomy alignment in 2023.
This compliant and voluntary data is presented in the same table.
According to the Taxonomy Regulation, the companies that are required to
report in accordance with the Non-Financial Reporting Directive (2014/95/EU)
must comply with the reporting requirements of the Taxonomy Regulation. This
requirement applies to L&T.
L&T and EU taxonomy
L&T has assessed the taxonomy eligibility and taxonomy alignment of its activi-
ties. The EU taxonomy assessment has been conducted for net sales generated
by business operations (note 1.2 to the financial statements), capital expendi-
ture and operating expenditure related to climate change mitigation, the tran-
sition to a circular economy, the sustainable use and protection of water and
marine resources, and pollution prevention and control.
The financial indicators concerning the taxonomy are based on figures
extracted from L&T’s financial management systems and ERP systems. For
capital expenditure and operating expenditure, data from 2023 was analysed
and compared to the screening criteria. Capital expenditure takes into account
L&T’s gross capital expenditure. Taxonomy eligibility and alignment assessments
have taken into account only those capital expenditures that meet the technical
requirements for the activity. Operating expenses include fixed and variable
costs, including depreciation, personnel and other business expenses. Taxonomy
eligibility and alignment assessments have taken into account only those oper-
ating and capital costs that meet the technical criteria for the activity.
In 2023, in addition to the previous objective of climate change mitigation,
the reporting has been extended to three new environmental objectives, which
has had a downward impact on the performance indicators related to climate
change mitigation, as some of the activities previously reported in these indica-
tors have been included under other environmental objectives.
L&T reports on taxonomy at the Group level. The assessment was carried out
in cooperation with the industry specialists and business representatives. The
assessment and its results are based on current knowledge and the available
interpretations of the legislation.
L&T’s taxonomy eligibility has been assessed on the basis of the descriptions
of economic activities and related NACE codes provided in the European Com-
mission’s Delegated Regulations. L&T does not have activities related to nuclear
energy or fossil gas.
The assessment of taxonomy alignment is based on the industry-specific
technical screening criteria described in the Taxonomy Regulation and the DNSH
criteria. At L&T, climate-related DNSH criteria are assessed as part of L&T’s risk
management process through the TCFD framework. In addition, the taxonomy
evaluation has taken into account activity-specific technical criteria for opera-
tions.
L&T’s operations are regulated and require separate environmental permits
that specify environmental requirements for water, soil contamination and
nature. The practices and procedures are described in more detail in the sus-
tainability report. The EHSQ management model ensures that L&T’s operations
comply with the permit conditions, and they are monitored and reported on reg-
ularly. L&T also strives to manage and reduce the environmental impacts of its
activities through training and technical solutions. The technical screening cri-
teria have been examined side by side in order to achieve the greatest possible
consistency in reporting and to avoid double accounting.
In addition to technical criteria, the Taxonomy Regulation provides for min-
imum safeguards that L&T has assessed at the Group level. L&T’s commitment to
respecting human rights and due diligence is included in L&T’s Code Of Conduct
and Supplier Code of Conduct. L&T has due diligence processes in place with
regard to taxation, anti-corruption, anti-bribery and fair competition. The Group-
EU taxonomy
level policies apply to all of L&T’s business operations in Finland and Sweden. L&T
does not have separate capital or operating expenditure plans for taxonomy.
For taxonomy-eligible and taxonomy-aligned activities, the business opera-
tions of the Environmental Services division include, for example, the collection
and transport of non-hazardous waste in waste fractions and the recovery and
processing of materials from non-hazardous waste. For taxonomy-eligible and
taxonomy-aligned activities, the business operations of the Industrial Services
division include, for example, the renewal of wastewater collection and treat-
ment, the collection, transport and processing and recycling of hazardous waste,
as well as environmental construction services with regard to new material
recycling solutions.
These circular economy activities include activities related to climate change
mitigation 5.5 (Collection and transport of non-hazardous waste in source seg-
regated fractions) and 5.9 (Material recovery from non-hazardous waste), the
circular economy activities 2.3 (Collection and transport of non-hazardous and
hazardous waste); 2.4 (Hazardous waste treatment) and 2.7 (Non-hazardous
waste sorting and material recovery), as well as activities for water 2.2 (Urban
waste water treatment ) and pollution prevention and control activities 2.1 (Col-
lection and transport of hazardous waste).
For taxonomy-eligible and taxonomy-aligned activities, the business opera-
tions of the Facility Services Finland and Sweden divisions include, for example,
the installation, maintenance and repair of energy efficiency equipment and
renewable energy technology, as well as the installation, maintenance and repair
of instruments and devices for measuring, regulating and controlling the energy
performance of buildings. The business operations also include expert services
related to improving the energy efficiency of buildings.
Taxonomy reporting has taken into account climate change related activities
4.16 (Installation and operation of electric heat pumps); 7.3 (Installation, mainte-
nance and repair of energy efficiency equipment); 7.4 (Installation, maintenance
and repair of charging stations for electric vehicles in buildings (and parking
spaces attached to buildings)); 7.5 (IInstallation, maintenance and repair of
instruments and devices for measuring, regulation and controlling energy per-
formance of buildings); 7.6 (IInstallation, maintenance and repair of renewable
energy technologies) and 9.3 (Professional services related to energy perfor-
mance of buildings).
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
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Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities
Financial year N
2023 Substantial Contribution Criteria DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
Code
Turnover
(MEUR)
Proportion
of
Turnover
(%)
Climate
Change
Mitigation
Y; N; N/A
Climate Change
Adaptation
Y; N; N/A
Water
Y; N; N/A
Pollution
Y; N; N/A
Circular
Economy
Y; N; N/A
Biodiversity and
ecosystems
Y; N; N/A
Climate
Change
Mitigation
Y/N
Climate Change
Adaptation
Y/N
Water
Y/N
Pollution
Y/N
Circular
Economy
Y/N
Biodiversity and
ecosystems
Y/N
Minimum
Safeguard
Y/N
Taxonomy
aligned (A.1.)
or eligible (A.2.)
proportion
of turnover,
year 2022
(%)
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Installation and operation of electric heat pumps CCM 4.16 0.7 0.1 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 0.1%
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5 11.3 1.4 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 5.9%
Material recovery from non-hazardous waste CCM 5.9 3.7 0.5 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 4.2%
Installation, maintenance and repair of energy efficiency
equipment
CCM 7.3 14.5 1.8 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 1.2% E
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces attached
to buildings)
CCM 7.4 0.5 0.1 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y E
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance
of buildings
CCM 7.5 2.9 0.4 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 0.5% E
Installation, maintenance and repair of renewable energy
technologies
CCM 7.6 2.3 0.3 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 0.6% E
Professional services related to energy performance of buildings CCM 9.3 6.4 0.8 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 0.4% E
Urban Waste Water Treatment WTR 2.2 0.9 0.1 % N/A N/A Y N/A N/A N/A Y Y Y Y Y Y Y
Collection and transport of hazardous waste PPC 2.1 16.7 2.1 % N/A N/A N/A Y N/A N/A Y Y Y Y Y Y Y
Collection and transport of non-hazardous and hazardous waste CE 2.3 50.7 6.3 % N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Treatment of hazardous waste CE 2.4 3.6 0.5 % N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Sorting and material recovery of non-hazardous waste CE 2.7 20.6 2.6 % N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
134.7 16.8% 5.3% 0.0% 0.1% 2.1% 9.3% 0.0% Y Y Y Y Y Y Y 12.9%
Of which Enabling 26.6 3.3% 3.3% 0.0% 0.0% 0.0% 0.0% 0.0% Y Y Y Y Y Y Y 2.7% E
Of which Transitional 0 % % Y Y Y Y Y Y Y 0%
A.2 Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
Material recovery from non-hazardous waste CCM 5.9 0.9 0.1 % EL N/EL N/EL N/EL N/EL N/EL 0.4%
Installation, maintenance and repair of energy efficiency
equipment
CCM 7.3 2.9 0.4 % EL N/EL N/EL N/EL N/EL N/EL 0.4%
Collection and transport of hazardous waste PPC 2.1 2.5 0.3 % N/EL N/EL N/EL EL N/EL N/EL 0.0%
Treatment of hazardous waste CE 2.4
0,01 0,5 % N/EL N/EL N/EL N/EL N/EL N/EL 0.0%
Renewal of waste water collection and treatment CCM 5.4 0.0 0.0 % N/EL N/EL N/EL N/EL N/EL N/EL 0.1%
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5 0.0 0.0 % N/EL N/EL N/EL N/EL N/EL N/EL 0.2%
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance of
buildings
CCM 7.5 0.0 0.0 % N/EL N/EL N/EL N/EL N/EL N/EL 0.4%
Turnover of Taxonomyeligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
6.4 1.2%
1
0.5% 0.0% 0.0% 0.3% 0.5% 0.0% 1.5%
A. Turnover of Taxonomy eligible activities (A.1 + A.2) 141.0 18.0% 5.7% 0.0% 0.1% 2.4%
1
9.8% 0.0% 14.4%
1
CCM = Climate Change Mitigation, WTR = Water, CE = Circular Economy, PPC = Pollution Prevention and Control, N/A - not applicable, Taxonomy non-eligible activity for the relevant objective, EL - Taxonomy eligible activity for the relevant objective, N/EL - Taxonomy non-eligible activity for the relevant objective
1
The sum of the individual figures does not add up to the total due to rounding.
B. TAXONOMY-NON ELIGIBLE ACTIVITIES
Turnover
Proportion of Turnover
Turnover of Taxonomy-non-eligible activities 661.1 82.0 %
TOTAL 802.1 100%
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
22
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities
Financial year N
2023 Substantial Contribution Criteria DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
Code
Turnover
(MEUR)
Proportion
of
Turnover
(%)
Climate
Change
Mitigation
Y; N; N/A
Climate
Change
Adaptation
Y; N; N/A
Water
Y; N; N/A
Pollution
Y; N; N/A
Circular
Economy
Y; N; N/A
Biodiversity and
ecosystems
Y; N; N/A
Climate
Change
Mitigation
Y/N
Climate Change
Adaptation
Y/N
Water
Y/N
Pollution
Y/N
Circular
Economy
Y/N
Biodiversity and
ecosystems
Y/N
Minimum
Safeguard
Y/N
Taxonomy
aligned (A.1.)
or eligible (A.2.)
proportion
of turnover,
year 2022
(%)
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5 0.8 1.3 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 6.0%
Material recovery from non-hazardous waste CCM 5.9 1.7 2.8 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 3.6%
Professional services related to energy performance of buildings CCM 9.3 0.03 0.1 % Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 0.1% E
Collection and transport of hazardous waste PPC 2.1 2.8 4.6 % N/A N/A N/A Y N/A N/A Y Y Y Y Y Y Y
Collection and transport of non-hazardous and hazardous waste CE 2.3 3.8 6.2 % N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Treatment of hazardous waste CE 2.4 0.4 0.6 % N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Sorting and material recovery of non-hazardous waste CE 2.7 1.5 2.5 % N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
11.0 18.0 %
1
4.1 % 0.0 % 0.0 % 4.6 % 9.2 % 0.0 % Y Y Y Y Y Y Y 9.7%
Of which Enabling 0.03 0.1 % 0.1 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Y Y Y Y Y Y Y 0.1% E
Of which Transitional 0 0.0% 0.0% Y Y Y Y Y Y Y 0.0%
A.2 Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
Collection and transport of non-hazardous waste in source seg-
regated fractions
CCM 5.5
0 0.0 % N/EL N/EL N/EL N/EL N/EL N/EL 2.1%
Material recovery from non-hazardous waste CCM 5.9 0 0.0 % N/EL N/EL N/EL N/EL N/EL N/EL 0.2%
Professional services related to energy performance of buildings CCM 9.3 0 0.0 % N/EL N/EL N/EL N/EL N/EL N/EL 0.3%
Turnover of Taxonomyeligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2.6%
A. Turnover of Taxonomy eligible activities (A.1 + A.2) 11.0 18.0%
1
4.1% 0.0% 0.0% 4.6% 9.2% 0.0% 12.3%
CCM = Climate Change Mitigation, WTR = Water, CE = Circular Economy, PPC = Pollution Prevention and Control, N/A - not applicable, Taxonomy non-eligible activity for the relevant objective, EL - Taxonomy eligible activity for the relevant objective, N/EL - Taxonomy non-eligible activity for the relevant objective
1
The sum of the individual figures does not add up to the total due to rounding.
B. TAXONOMY-NON ELIGIBLE ACTIVITIES
Turnover
Proportion of Turnover
Turnover of Taxonomy-non-eligible activities 50.1 82.0%
TOTAL 61.1 100%
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
23
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities
Financial year N
2023 Substantial Contribution Criteria DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
Code
Turnover
(MEUR)
Proportion
of
Turnover
(%)
Climate
Change
Mitigation
Y; N; N/A
Climate
Change
Adaptation
Y; N; N/A
Water
Y; N; N/A
Pollution
Y; N; N/A
Circular
Economy
Y; N; N/A
Biodiversity and
ecosystems
Y; N; N/A
Climate
Change
Mitigation
Y/N
Climate Change
Adaptation
Y/N
Water
Y/N
Pollution
Y/N
Circular
Economy
Y/N
Biodiversity and
ecosystems
Y/N
Minimum
Safeguard
Y/N
Taxonomy
aligned (A.1.)
or eligible (A.2.)
proportion
of turnover,
year 2022
(%)
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Installation and operation of electric heat pumps CCM 4.16 0.3 0.0% Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 0.1%
Collection and transport of non-hazardous waste in source
segregated fractions CCM 5.5 7.6 1.0%
Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y
5.9%
Material recovery from non-hazardous waste CCM 5.9 1.9 0.2% Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 4.2%
Installation, maintenance and repair of energy efficiency
equipment
CCM 7.3 14.1 1.8% Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 1.2% E
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces attached
to buildings) CCM 7.4 0.5 0.1%
Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y
0.0% E
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance
of buildings CCM 7.5 1.9 0.2%
Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y
0.5% E
Installation, maintenance and repair of renewable energy
technologies CCM 7.6 1.7 0.2%
Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y
0.6% E
Professional services related to energy performance of buildings CCM 9.3 4.8 0.6% Y N/A N/A N/A N/A N/A Y Y Y Y Y Y Y 0.4% E
Urban Waste Water Treatment WTR 2.2 0.5 0.1% N/A N/A Y N/A N/A N/A Y Y Y Y Y Y Y
Collection and transport of hazardous waste PPC 2.1 10.6 1.4% N/A N/A N/A Y N/A N/A Y Y Y Y Y Y Y
Collection and transport of non-hazardous and hazardous waste CE 2.3 33.5 4.3% N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Treatment of hazardous waste CE 2.4 2.0 0.3% N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Sorting and material recovery of non-hazardous waste CE 2.7 13.6 1.8% N/A N/A N/A N/A Y N/A Y Y Y Y Y Y Y
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1) 93.0 12.1%
1
4.3% 0.0% 0.1% 1.4% 6.4% 0.0% Y Y Y Y Y Y 12.9% 12.9%
1
Of which Enabling 23.0 3.0% 3.0% 0% 0% 0% 0% 0% Y Y Y Y Y Y 2.7% 2.7% E
Of which Transitional 0 0.0% 0.0% 0.0 %
A.2 Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL
Renewal of waste water collection and treatment CCM 5.4 0.0 0.0% EL N/EL N/EL N/EL N/EL N/EL 0.1%
Collection and transport of non-hazardous waste in source
segregated fractions
CCM 5.5 0.0 0.0% EL N/EL N/EL N/EL N/EL N/EL 0.2%
Material recovery from non-hazardous waste CCM 5.9 0.0 0.0% EL N/EL N/EL N/EL N/EL N/EL 0.4%
Installation, maintenance and repair of energy efficiency
equipment
CCM 7.3 0.0 0.0%
EL N/EL N/EL N/EL N/EL N/EL 0.4%
Installation, maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces attached
to buildings)
CCM 7.5 0.0 0.0% EL N/EL N/EL N/EL N/EL N/EL 0.4 %
Turnover of Taxonomyeligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
0.0 0.0%
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.5 %
A. Turnover of Taxonomy eligible activities (A.1 + A.2)
93.0 12.1%
1
4.3% 0.0% 0.1% 1.4% 6.4% 0.0% 14.5 %
CM = Climate Change Mitigation, WTR = Water , CE = Circular Economy, PPC = Pollution Prevention and Control, N/A - not applicable, Taxonomy non-eligible activity for the relevant objective, EL - Taxonomy eligible activity for the relevant objective, N/EL - Taxonomy non-eligible activity for the relevant objective
1
The sum of the individual figures does not add up to the total due to rounding.
B. TAXONOMY-NON ELIGIBLE ACTIVITIES
Turnover
Proportion of Turnover
Turnover of Taxonomy-non-eligible activities 676.9 87.9%
TOTAL 769.9 100%
24
Lassila & Tikanoja
Annual Report 2023
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
24
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Calculation of key figures . . . . . . . . . . . . . . . . . . . . . 27
Key figures
25
Lassila & Tikanoja
Annual Report 2023
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
25
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Key ﬁgures
Key figures on shares
2023 2022 2021 2020 2019
Earnings per share (EPS), EUR 0.79 0.83 0.90 0.50 0.90
Earnings per share (EPS), diluted, EUR 0.79 0.83 0.90 0.50 0.90
Equity per share, EUR 6.09 5.78 5.52 5.05 5.33
Dividend per share, EUR 0.49
1
0.47 0.46 0.40 0.92
Payout ratio, % 62.1
1
56.9 51.0 79.7 101.7
Effective dividend yield, % 5.0
1
4.4 3.4 2.7 5.8
P/E ratio 12.4 12.9 14.9 30.0 17.4
Net cash flow from operating activities after investments
per share, EUR 1.33 1.08 0.05 1.15 1.81
Share price adjusted for issues:
lowest, EUR 9.00 9.72 12.82 10.06 12.92
highest, EUR 11.84 13.62 16.10 16.76 16.40
average, EUR 10.11 11.16 14.31 13.55 14.41
closing, EUR 9.80 10.64 13.44 15.06 15.74
Market capitalisation 31 December, MEUR 373.9 405.9 512.2 573.9 610.7
Number of shares adjusted for issue, 1,000 pcs
average during the year 38,127 38,116 38,111 38,103 38,354
at year end 38,154 38,146 38,112 38,105 38,094
average during the year, diluted 38,232 38,128 38,127 38,118 38,368
Adjusted number of shares traded during the year, 1,000 pcs 5,649 9,397 9,615 12,266 8,172
As a percentage of the average 14.8 24.7 25.2 32.2 21.3
Volume of shares traded, MEUR 57.1 104.9 137.6 166.1 122.3
 2023 proposal by the Board of Directors
Key figures on financial performance
2023 2022 2021 2020 2019
Net sales, MEUR 802.1 844.1 812.5 751.9 784.3
Operating profit, MEUR 38.4 42.9 42.2 28.2 45.0
% of net sales 4.8 5.1 5.2 3.8 5.7
Adjusted operating profit, MEUR 39.0 40.9 42.4 39.7 40.5
% of net sales 4.9 4.8 5.2 5.3 5.2
EBITDA, MEUR 95.8 98.3 95.1 85.2 99.4
% of net sales 11.9 11.6 11.7 11.3 12.7
Result before taxes, MEUR 35.7 37.8 39.0 23.3 42.0
% of net sales 4.5 4.5 4.8 3.1 5.4
Result for the period, MEUR 30.1 31.5 34.4 19.0 34.7
% of net sales 3.8 3.7 4.2 2.5 4.4
Cash flow from operating activities, MEUR 93.6 71.8 65.6 83.0 94.5
Balance sheet total, MEUR 649.9 660.5 632.3 596.6 583.6
Return on equity, % (ROE) 13.3 14.6 17.1 9.6 16.8
Capital employed, MEUR 425.9 437.2 406.0 379.2 380.5
Return on capital employed, % (ROCE) 10.3 10.4 10.8 7.5 12.4
Equity ratio, % 36.8 34.3 34.2 33.0 35.6
Gearing, % 69.3 75.9 79.4 70.9 66.8
Net interest-bearing liabilities, MEUR 160.9 167.3 167.1 136.5 135.6
Gross capital expenditure, MEUR 61.1 58.2 72.3 48.2 46.1
% of net sales 7.6 6.9 8.9 6.4 5.9
Average number of employees in full-time equivalents 6,743 6,820 7,319 7,197 7,308
Total number of full-time and part-time employees at year end 8,159 8,371 8,171 8,139 8,207
 The calculation of the average number of employees in full-time equivalents was re-defined in 2023. The figure for 2022 has been adjusted accordingly.
26
Lassila & Tikanoja
Annual Report 2023
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
26
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Reconciliation of alternative performance
measures
The company discloses certain other widely used performance measures that
can for the most part be derived from the income statement and balance sheet.
The formulas for these performance measures are provided in the section
Calculation of key figures. In the company’s view, these measures clarify the
result of operations and financial position based on the income statement
and balance sheet.
Reconciliation of the adjusted operating proﬁt to the operating proﬁt
1 January - 31 December MEUR 2023 2022
Operating profit 38.4 42.9
Items affecting comparability:
- costs arising from the discontinuation of business - -0.2
- costs arising from business restructurings 0.3 -
- gains or losses arising from divestments
1
- -4.3
- costs arising from acquisitions 0.3 2.5
Adjusted operating profit 39.0 40.9
1
In 2022, Lassila & Tikanoja ja Neova merged their fuel wood businesses into a joint venture na-
med Laania. The transaction was finalised in the fourth quarter of year 2022 and L&T recognised a
gain totalling EUR 4.3 million from the transaction.
Reconciliation of gross capital expenditure
1 January - 31 December MEUR 2023 2022
Intangible and tangible assets from business
acquisitions - 22.9
- increases to right-of-use assets excl. heavy vehicles
from business acquisitions - -1.4
Other increases to intangible and tangible assets 81.1 55.2
- increases to right-of-use assets excl. heavy vehicles -18.1 -15.8
- other adjustments -2.0 -2.7
Gross capital expenditure 61.1 58.2
Return on capital employed (ROCE), %, by segment
1
1 January - 31 December 2023 2022
Environmental Services
Capital employed (MEUR), average of the beginning
and the end of the period 203.1 211.3
Operating profit 27.1 30.3
+ financial income 0.3 0.1
Return on capital employed, MEUR 27.4 30.4
Return on capital employed (ROCE), % 13.5 14.4
Industrial Services
Capital employed (MEUR), average of the beginning
and the end of the period 93.7 81.7
Operating profit 13.8 12.7
+ financial income 0.0 0.0
Return on capital employed, MEUR 13.8 12.8
Return on capital employed (ROCE), % 14.7 15.6
Facility Services Finland
Capital employed (MEUR), average of the beginning
and the end of the period 25.0 28.4
Operating profit 4.4 -0.5
+ financial income 0.4 0.3
Return on capital employed, MEUR 4.8 -0.2
Return on capital employed (ROCE), % 19.4 -0.8
Facility Services Sweden
Capital employed (MEUR), average of the beginning
and the end of the period 61.0 64.6
Operating profit -3.7 0.4
+ financial income 0.1 0.1
Return on capital employed, MEUR -3.6 0.5
Return on capital employed (ROCE), % -5.9 0.8
1
From 2023 onwards, the allocation of assets and liabilities to the reporting segments has been
adjusted. The comparative figures have been updated accordingly.
27
Lassila & Tikanoja
Annual Report 2023
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
27
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Calculation of key ﬁgures
Key figures on shares
Earnings per share (EPS) =
Result attributable to equity holders of the parent company
Adjusted average basic number of shares
Earnings per share (EPS), diluted =
Result attributable to equity holders of the parent company
Adjusted average diluted number of shares
Equity per share =
Equity attributable to equity holders of the parent company
Adjusted basic number of shares at the balance sheet date
Dividend per share
1
=
Dividend for the financial period
Adjusted basic number of shares at the balance sheet date
Payout ratio, %
1
=
Dividend per share
Earnings per share
Effective dividend yield, %
1
=
Dividend per share
Closing price of the financial period
P/E ratio =
Closing price of the financial period
Earnings per share
Cash flow from operating activities after
investments per share
=
Cash flows from operating activities after investments
as in the cash flow statement
Adjusted average basic number of shares
Market capitalization =
Basic number of shares at the balance sheet date excluding
treasury shares x
closing price of the financial period
1
The calculations are also applied with capital repayment.
Key figures on financial performance
Adjusted operating profit = Operating profit +/- items affecting comparability
Items affecting comparability =
Substantial costs arising from business restructurings or acquisitions,
gains and losses from divestments and costs arising from the discontinua-
tion of businesses
EBITDA = Operating profit + depreciation, amortisation and impairment
Return on equity, % (ROE) =
Result for the period
Equity (average of the end and of the beginning of the period)
Capital employed = Equity + Interest-bearing financial liabilities
Return on capital employed, %
(ROCE) =
Operating profit + financial income + share of results in associated
companies and joint ventures
Equity + Interest-bearing financial liabilities (average of the end and of the
beginning of the period)
Equity ratio, % =
Equity
Balance sheet total - advances received
Gearing, % =
Net interest-bearing liabilities
Equity
Net interest-bearing liabilities = Interest-bearing liabilities - cash and cash equivalents
Gross capital expenditure =
Investments in intangible and tangible assets excluding right-of-use as-
sets and other adjustments including leased heavy vehicles and assets
acquired through acquisitions
Organic growth, % =
Net sales for the reporting period - net sales from business acquisitions
during previous 12 months - net sales for the comparative period + net sa-
les from divestments during previous 12 months
Net sales for the comparative period - net sales from divestments during
previous 12 months
x 100
x 100
x 100
x 100
x 100
x 100
x 100
28
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Financial statements
Consolidated income statement .......................................29
Consolidated statement of comprehensive income ..................29
Consolidated statement of financial position .........................30
Consolidated statement of cash flows ................................ 31
Consolidated statement of changes in equity ........................32
Notes to the consolidated financial statements ......................33
Financial statements of the parent company .........................67
Proposal by the Board of Directors for distribution of
profit and Auditor’s Note ............................................... 75
1
Financial result
1.1 Segment reporting ...........................................................................35
1.2 Revenue from contracts with customers ........................36
1.3 Employee beneﬁt expenses .......................................................38
1.4 Other operating income and expenses ..............................38
1.5 Share-based payments ................................................................39
1.6 Expenses related to leases ....................................................... 40
1.7 Depreciation, amortisation and impairments ............... 40
1.8 Financial income and expenses ...............................................41
1.9 Income taxes ........................................................................................41
2
Operational assets and liabilities
2.1 Trade and other receivables .................................................44
2.2 Inventories .......................................................................................44
2.3 Trade and other current payables .....................................45
2.4 Other non-current liabilities ..................................................45
2.5 Provisions .........................................................................................45
2.6 Retirement beneﬁt obligations ............................................ 46
3
Intangible and tangible assets and other
non-current assets
3.1 Goodwill and other intangible assets ..............................49
3.2 Goodwill impairment testing .................................................50
3.3 Tangible assets ..............................................................................51
3.4 Right-of-use assets and lease liabilities ........................52
3.5 Other non-current assets .......................................................53
4
Financial risks and capital structure
4.1 Financial assets and liabilities .............................................55
4.2 Financial risk management .................................................... 57
4.3 Equity ..................................................................................................60
4.4 Earnings per share and dividend per share ..................61
4.5 Commitments and contingent liabilities .........................61
5
Consolidation and other notes
5.1 Consolidation .................................................................................63
5.2 Group companies .........................................................................63
5.3 Business acquisitions and disposals and
assets and liabilities classiﬁed as held for sale ........64
5.4 Related-party transactions ................................................... 65
5.5 Auditing costs ................................................................................ 66
5.6 Events after the balance sheet date ...............................66
29
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Consolidated income
statement

1 January - 31 December MEUR | 2023 | 2022 | Note
Net sales | 802.1 | 844.1 | 1.2
Other operating income | 6.2 | 8 .7 | 1.4
Materials and services | -2 46.5 | -286. 7 |
Employee benefit expenses | -352.8 | -353.1 | 1.3
Other operating expenses | -113.1 | -114. 7 | 1.4
Depreciation, amortisation and impairment | -57 .4 | -55.4 | 1.7
Operating profit | 38.4 | 42.9 |
Financial income | 2.5 | 0.4 |
Financial expenses | -8. 7 | -6.0 |
Exchange rate differences (net) | -0.0 | -0.2 |
Financial income and expenses | -6.3 | -5.8 | 1.8
Share of the result of associated companies and joint ventures | 3.6 | 0.7 |
Result before taxes | 35. 7 | 3 7. 8 |
Income taxes | -5. 7 | -6.3 | 1.9
Result for the period | 30.1 | 31.5 |
Attributable to: |  |  |
Equity holders of the company | 30.1 | 31.5 |
Earnings per share attributable to the equity holders |  |  |
of the parent company: |  |  |
Earnings per share, EUR | 0. 79 | 0.83 | 4.4
Diluted earnings per share, EUR | 0. 79 | 0.83 | 4.4

Consolidated statement
of comprehensive income

1 January - 31 December MEUR | 2023 | 2022 | Note
Result for the period | 30.1 | 31.5 |
Other comprehensive income, net of tax |  |  |
Items not to be recognised through profit or loss |  |  |
Items arising from re-measurement of defined benefit plans | -0.0 | 0.2 | 2.6
Items not to be recognised through profit or loss, total | -0.0 | 0.2 |
Items potentially to be recognised through profit or loss |  |  |
Hedging reserve, change in fair value | 0.1 | 1.3 | 4.2
Change in fair value of interest rate swap, reclassified to profit and loss | -1.0 | - | 4.2
Currency translation differences | 0.1 | -5. 7 |
Currency translation differences recognised through profit or loss | - | 0.1 |
Items potentially to be recognised through profit or loss, total | -0.9 | -4.3 |
Other comprehensive income, total | -0.9 | -4.1 |
Total comprehensive income, after tax | 29.2 | 27 .4 |
Attributable to: |  |  |
Equity holders of the company | 29.2 | 27 .4 |

More information on taxes in consolidated statement of comprehensive income is presented in note 1.9 Income taxes.
30
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Consolidated statement
of ﬁnancial position

31 December MEUR | 2023 | 2022 | Note
ASSETS |  |  |
Non-current assets |  |  |
Intangible assets |  |  | 3.1
Goodwill | 180.8 | 180. 7 |
Other intangible assets | 38.2 | 36.5 |
| 219.0 | 21 7 .2 |
Tangible assets | 166.0 | 155.3 | 3.3
Right-of-use assets | 76.0 | 71.2 | 3.4
| 2 42.0 | 226.6 |
Other non-current assets |  |  |
Shares in associated companies and joint ventures | 1 7. 6 | 14.0 | 3.5
Other shares and holdings | 0.2 | 0.2 | 3.5
Deferred tax assets | 3.1 | 1.9 | 1.9
Other receivables | 1.5 | 1.9 | 3.5
| 22.5 | 1 7. 9 |
Total non-current assets | 483.5 | 461. 7 |
Current assets |  |  |
Inventories | 7. 8 | 7. 8 | 2.2
Trade receivables | 85.9 | 91.0 | 2.1, 4.1
Contract assets | 30.8 | 30.8 | 1.2, 2.1, 4.1
Income tax receivables | 1.2 | 8 .7 | 2.1
Other receivables | 7. 9 | 11.0 | 2.1, 4.1
Cash and cash equivalents | 32.9 | 49.5 | 4.1
Total current assets | 166.5 | 198.8 |
TOTAL ASSETS | 649.9 | 660.5 |

31 December MEUR | 2023 | 2022 | Note
EQUITY AND LIABILITIES |  |  |
Equity |  |  |
Equity attributable to equity holders of the parent company |  |  | 4.3
Share capital | 19.4 | 19.4 |
Other reserves | -11.5 | -10.6 |
Invested unrestricted equity reserve | 0.6 | 0.6 |
Retained earnings | 223.6 | 211.0 |
Total equity | 232.2 | 220.4 |
Liabilities |  |  |
Non-current liabilities |  |  |
Deferred tax liabilities | 28.5 | 28.1 | 1.9
Retirement benefit obligations | 1.2 | 1.2 | 2.6
Provisions | 7. 2 | 7. 4 | 2.5
Financial liabilities | 17 1 . 7 | 17 7. 5 | 4.1
Other liabilities | 13.2 | 13.3 | 2.4
| 221. 7 | 227 .5 |
Current liabilities |  |  |
Financial liabilities | 22.1 | 39.3 | 4.1
Trade and other payables | 1 72.8 | 1 70.5 | 2.3, 4.1
Income tax liabilities | 0.3 | 1.0 | 2.3
Provisions | 0.9 | 1 .7 | 2.5
| 196.1 | 212.6 |
Total liabilities | 4 1 7. 7 | 440.1 |
TOTAL EQUITY AND LIABILITIES | 649.9 | 660.5 |

31
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Consolidated statement of cash ﬂows

1 January - 31 December MEUR | 2023 | 2022 | Note
Cash flows from operating activities |  |  |
Result for the period | 30.1 | 31.5 |
Adjustments |  |  |
Income taxes | 5 .7 | 6.3 | 1.9
Depreciation, amortisation and impairment | 57 .4 | 55.4 | 1.7
Financial income and expenses | 6.3 | 5.8 | 1.8
Gains and losses on sale of tangible and intangible assets | -1.6 | -1.2 |
Share of result of associated companies and joint ventures | -3.6 | -0. 7 | 3.5
Gain from sale of subsidiary's net assets to joint venture | - | -4.3 | 5.3
Impact of the discontinuation of Russian operations | - | -0.2 |
Other Net cash generated from operating activities before change | -0.5 | -0. 7 |
in working capital | 93.6 | 91.9 |
Change in working capital |  |  |
Change in trade and other receivables | 7. 2 | -7. 0 |
Change in inventories | 0.0 | -0.8 |
Change in trade and other payables | -2.1 | 1.7 |
Change in working capital | 5.1 | -6.2 |
Interest and other financial expenses paid | -8.2 | -4.8 |
Interest and other financial income received | 2.5 | 0.4 |
Income taxes paid | 0.5 | -9.6 |
Net cash from operating activities | 93.6 | 71.8 |

1 January - 31 December MEUR | 2023 | 2022 | Note
Cash flows from investing activities |  |  |
Acquisitions of subsidiaries and businesses, net of cash acquired | - | -13.2 | 5.3
Proceeds from sale of subsidiaries and businesses, net of sold cash | - | -2.0 | 5.3
Purchases of property, plant and equipment and intangible assets | -44.9 | -33.8 |
Proceeds from sale of property, plant and equipment and intangible assets | 2.2 | 2.0 |
Repayment of loan receivables from joint venture | - | 16.4 |
Change in other non-current investments | - | 0.0 |
Net cash from investing activities | -42. 7 | -30.6 |
Net cash from operating and investing activities | 50.9 | 41.1 |
Net cash from financing activities |  |  |
Proceeds from short-term borrowings | 10.0 | 35.0 | 4.1
Repayments of short-term borrowings | -10.0 | -35.0 | 4.1
Proceeds from long-term borrowings | 40.0 | 75.0 | 4.1
Repayments of long-term borrowings | -68.4 | -58.1 | 4.1
Repayments of lease liabilities | -21.2 | -19.4 |
Dividends paid | -1 7. 9 | -1 7. 5 |
Net cash from financing activities | -67 .5 | -20.1 |
Net change in cash and cash equivalents | -16.6 | 21.0 |
Cash and cash equivalents at the beginning of the period | 49.5 | 28.6 |
Effect of changes in foreign exchange rates | 0.0 | -0.1 |
Cash and cash equivalents at the end of the period | 3 2.9 | 49.5 | 4.1

32
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Consolidated statement of changes in equity
1
1

|  |  |  | Invested |  |
| Share | Currency translation | Hedging | unrestricted | Retained | Total
MEUR | capital | differences | reserve | equity reserve | earnings | equity | Note
Equity on 1 January 2022 | 19.4 | -5.9 | -0.4 | 0.6 | 196. 7 | 210.4 |
Total comprehensive income |  |  |  |  |  |  |
Result for the period |  |  |  |  | 31.5 | 31.5 |
Other comprehensive income items |  | -5.6 | 1.3 |  | 0.2 | -4.1 |
Total comprehensive income | - | -5.6 | 1.3 | - | 31. 7 | 27 .4 |
Transactions with shareholders |  |  |  |  |  |  |
Share-based benefits |  |  |  |  | 0.2 | 0.2 | 1.5
Dividends paid |  |  |  |  | -1 7. 5 | -1 7. 5 |
Returned dividends |  |  |  |  | 0.0 | 0.0 |
Transactions with shareholders, total | - | - | - | - | -1 7. 3 | -1 7. 3 |
Equity on 31 December 2022 | 19.4 | -11.5 | 0.9 | 0.6 | 211.0 | 220.4 |
Total comprehensive income |  |  |  |  |  |  |
Result for the period |  |  |  |  | 30.1 | 30.1 |
Other comprehensive income items |  | 0.1 | -0.9 |  | -0.0 | -0.9 |
Total comprehensive income | - | 0.1 | -0.9 | - | 30.1 | 29.2 |
Transactions with shareholders |  |  |  |  |  |  |
Share-based benefits |  |  |  |  | 0.5 | 0.5 | 1.5
Dividends paid |  |  |  |  | -1 7. 9 | -1 7. 9 |
Returned dividends |  |  |  |  | 0.0 | 0.0 |
Transactions with shareholders, total | - | - | - | - | -1 7. 4 | -1 7. 4 |
Equity on 31 December 2023 | 19.4 | -11.5 | - | 0.6 | 223.6 | 232.2 |

1
Included in other reserves of equity in the consolidated statement of financial position.
For more information on equity please refer to note 4.3 Equity, and on taxes recognised in equity to note 1.9 Income taxes.
Lassila & Tikanoja
Annual Report 2023
33
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
1.
Notes to the consolidated ﬁnancial statements
General information
The Lassila & Tikanoja Group specialises in environmental management and
property and plant support services. The Group has business operations in
Finland and Sweden.
The Group’s parent company is Lassila & Tikanoja plc (business identity code
1680140-0). Lassila & Tikanoja plc is a Finnish public limited liability company
domiciled in Helsinki, Finland. The registered address of the Company is Valimotie
27, 00380 Helsinki, Finland.
Lassila & Tikanoja plc is listed on the Nasdaq Helsinki.
The consolidated financial statements are available on the company website
at www.lt.fi/en or from the parent company’s head office, address Valimotie 27,
00380 Helsinki, Finland.
These consolidated financial statements have been approved for issue by the
Board of Directors of Lassila & Tikanoja plc on 20 February 2024.
Basis of preparation
The consolidated financial statements have been prepared in accordance with
the IFRS Accounting Standards as adopted by the EU. In the Finnish Accounting
Act and regulations enacted by virtue of it, International Financial Reporting
Standards refer to standards and related interpretations approved for adop-
tion within the EU according to the procedure described in regulation (EC)
1606/2002. The notes to the consolidated financial statements also comply with
the Finnish accounting and community legislation supplementing the IFRS regu-
lations.
Figures in these financial statements are presented in millions of euros, unless
otherwise stated.
Application of new or amended IFRS standards
New and amended standards adopted in 2023
The Group has applied the new standards and interpretations published by
IASB with the effective date 1 January 2023. These standards, amendments and
interpretations did not have material impact on the entity in the current period,
and they are not expected to have any material impact on the entity in the future
reporting periods and on foreseeable future transactions.
New or amended IFRS standards and interpretations to be applied
in future financial periods
The Group applies new standards and interpretations from the effective date. If
the effective date is other than the first day of a financial year, the Group applies
the standard or interpretation from the beginning of the following
financial year.
On 31 October 2022, IASB issued amendments ”Non-current liabilities with
covenants” to IAS 1 ”Presentation of financial statements”. The amendments
are effective for annual reporting periods beginning on or after 1 January 2024
and override the previous amendments. Early application of the amendments
is allowed. The new amendments clarify that covenants of loan arrangements
which an entity must comply with only after the reporting date would not affect
classification of a liability as current or non-current at the reporting date. How-
ever, those covenants that an entity is required to comply with on or before the
reporting date would affect classification as current or non-current, even if the
covenant is only assessed after the entity’s reporting date. The Group applies
the amendments from the effective date, i.e. for annual reporting periods begin-
ning on or after 1 January 2024.
The company does not expect the amendments to change its classification of
liabilities as current or non-current from the current guidance. However, the new
ammendments will increase the amount of disclosure information relating to the
covenants.
The impact from any other new and amended standards issued but not yet
effective is not considered to be material to the Group’s financial reporting.
Critical judgements by Management
When preparing IFRS financial statements, the Group management must make
estimates and assumptions concerning the future, the outcome of which may
differ from the estimates and assumptions made. The management also has
to use judgement when making decisions on the selection and application of
accounting principles.
Considerations based on discretion apply, in particular, to cases where the
applicable IFRS standards provide for alternative methods of recognition,
measurement or presentation.
The preparation of financial statements requires the management to make
estimates and assumptions that affect the carrying amounts of assets and lia-
bilities on the balance sheet date and the amounts of income and expenses. The
estimates and assumptions reflect the management’s best understanding on the
balance sheet date, based on previous experience and assumptions about the
future that are considered to have the highest probability on the balance sheet
date. The most significant area where management has used the judgement
described above relates to the measurement of assets and liabilities of acquired
business operations.
Key assumptions regarding the future and key uncertainty factors related to
estimates on the closing date that involve a significant risk of causing a material
adjustment to the carrying amounts of the Group’s assets and liabilities within
the next financial year are described in the following notes:
1.2 Revenue from contracts with customers
1.9 Income taxes
2.4 Other non-current liabilities
2.5 Provisions
3.2 Goodwill impairment testing
3.4 Right-of-use assets and lease liabilities
5.3 Business acquisitions and disposals and assets and liabilities classiﬁed
as held for sale
Lassila & Tikanoja
Annual Report 2023
34
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
1 Financial result
1.1 Segment reporting ................................................................................35
1.2 Revenue from contracts with customers ..............................36
1.3 Employee benefit expenses ............................................................38
1.4 Other operating income and expenses ..................................... 38
1.5 Share-based payments .....................................................................39
1.6 Expenses related to leases ............................................................. 40
1.7 Depreciation, amortisation and impairments ...................... 40
1.8 Financial income and expenses .....................................................41
1.9 Income taxes .............................................................................................41
Lassila & Tikanoja
Annual Report 2023
35
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
1.1 Segment reporting
Accounting policy
Segment information is reported to the highest operational decision-
maker, consistent with internal reporting. The highest operational
decision-maker is Lassila & Tikanoja plc’s President and CEO.
Segment assets are those operating assets that are employed by a
segment in its operating activities and that can be allocated to the
segment on a reasonable basis. Items reported under Group adminis-
tration and other include items related to Group level functions such
as expenses associated with Group management, as well as costs
incurred from operating as a public company and the corresponding
assets and liabilities. Lease liabilities and eliminations are also included
in Group Administration and other .
The Group’s operating segments
The Group has four reportable segments, which are the Group’s business
divisions - Environmental Services, Industrial Services, Facility Services Finland
and Facility Services Sweden.
Environmental Services division consists of the waste management and
recycling business, selling of waste containers and their maintenance, and new
circular economy solutions. The division operates only in Finland.
On December 17, 2021, Lassila & Tikanoja Plc and Neova Oy signed an agreement
to merge their fuel wood businesses. According to the agreement, Neova’s fuel
wood business will be transferred to L&T Biowatti Oy. On 1 July 2022, Neova’s
fuel wood business was transferred to L&T Biowatti Oy. With the merger the
company continued as an independent limited company called Laania Oy. L&T
Biowatti Oy was reported as part of Environmental Services segment until the
merger. For more information on the joint venture, please refer to note 3.5 Other
long-term assets.
Industrial Services division covers solutions for industrial material flows and
their utilisation, industrial process cleaning solutions, collection and disposal of
hazardous waste and sewer system maintenance and repair. The division has
operations both in Finland and in Sweden.
Facility Services Finland division provides cleaning and other support
services for facilities, property maintenance and technical maintenance,
including energy management.
Facility Services Sweden division provides cleaning and other support
services for cleaning facilities and technical maintenance.
2023 MEUR
Environmental
Services
Industrial
Services
Facility
Services
Finland
Facility
Services
Sweden
Group
administration
and other Group
External net sales 282.1 138.8 247.9 133.2 - 802.1
Inter-division net sales 1.5 2.2 2.1 0.0 -5.8 -
Total net sales 283.7 141.0 250.0 133.2 -5.8 802.1
Operating profit 27.1 13.8 4.4 -3.7 -3.2 38.4
Operating margin, % 9.5 9.8 1.8 -2.8 4.8
Adjusted operating profit
1
27.1 14.0 4.4 -3.7 -2.8 39.0
Adjusted operating margin, %
1
9.5 9.9 1.8 -2.8 4.9
Financial income and expenses -6.3
Share of result in associated companies and joint ventures 3.6
Profit before tax 35.7
Income taxes -5.7
Profit for the period 30.1
Assets 291.6 151.0 78.7 83.5 45.1 649.9
Liabilities 82.7 60.2 56.9 23.6 194.3 417.7
Capital expenditure 40.9 17.5 1.0 0.5 1.2 61.1
Depreciation, amortisation and impairments 30.4 12.8 8.1 5.0 1.0 57.4
2022 MEUR
Environmental
Services
Industrial
Services
Facility
Services
Finland
Facility
Services
Sweden
Group
administration
and other Group
External net sales 319.7 129.8 254.1 140.4 - 844.1
Inter-division net sales 1.5 2.2 2.2 0.0 -6.0 -
Total net sales 321.2 132.0 256.3 140.4 -6.0 844.1
Operating profit 30.3 12.7 -0.5 0.4 0.1 42.9
Operating margin, % 9.4 9.6 -0.2 0.3 5.1
Adjusted operating profit
1
30.3 13.6 -0.5 0.4 -2.8 40.9
Adjusted operating margin, %
1
9.4 10.3 -0.2 0.3 4.8
Financial income and expenses -5.8
Share of result in associated companies and joint ventures 0.7
Profit before tax 37.8
Income taxes -6.3
Profit for the period 31.5
Assets
2
278.6 145.3 84.5 88.4 63.7 660.5
Liabilities
2
81.3 52.2 56.2 26.4 224.0 440.1
Capital expenditure 20.3 34.6 1.5 0.4 1.3 58.2
Depreciation, amortisation and impairments 26.9 12.3 9.1 5.9 1.3 55.4
 Unaudited ¹ Unaudited
2
From 2023 onwards, the allocation of assets and liabilities to the reporting segments has been adjusted. The comparative figures have been updated accordingly.
Lassila & Tikanoja
Annual Report 2023
36
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Geographical segments
Accounting policy
The Group operates in Finland and Sweden. Net sales of geographical
areas are reported based on the geographical location of the customer,
and assets are reported by geographical location of the assets.
MEUR 2023 2022
Net sales
Finland 645.3 682.3
Sweden 150.1 156.6
Other countries 6.8 5.2
Total 802.1 844.1
Assets
Finland 602.0 604.4
Sweden 47.9 56.1
Total 649.9 660.5
Capital expenditure
Finland 58.4 41.6
Sweden 2.6 16.6
Total 61.1 58.2
1.2 Revenue from contracts with customers
Accounting policy
Revenue from contracts with customers is recognised when or as the
performance obligation is satisfied by transferring a promised good or
service to the customer. A good or a service is transferred when the cus-
tomer obtains control of the good or service. Revenue is recognised
based on the transaction price to which L&T expects to be entitled in
exchange for transferring the good or service.
The Group acts as a principal in all of its contracts with customers.
The Group applies the practical expedient and does not disclose the
aggregate amount of the transaction price allocated to the performance
obligations that are unsatisfied (or partially unsatisfied) at the end of the
reporting period. This is because the contract period in the Group’s cus-
tomer contracts for project deliveries, is typically short. However, in
long-term service agreements the contract period can be several years.
For these contracts the Group applies the practical exedient according
to which the Group is entitled to a consideration from the customer that
corresponds directly with the value to the customer from Groups per-
formance completed to date. In these contracts the Group recognises
revenue for the amount that it is entitled to invoice.
Services business
Services business comprises of long-term service agreements and separately
ordered services.
Long-term service agreements include for example waste management and
recycling services which is part of Environmental Services as well as cleaning
and property maintenance services included in Facility Services. Long-term
service agreements include one or more performance obligations depending
on the amount of distinct services provided to the customer. A typical charac-
teristic of long-term services is that services are delivered evenly throughout
the contract term. With one contract customer can order for example inside
cleaning services, outside cleaning and upkeep services and property main-
tenance services that are distinct performance obligations. Each service is a
distinct performance obligation as the customer can benefit from the services
on its own and could order the services from different service providers. If a
contract contains more than one distinct performance obligation, the transac-
tion price is allocated to each performance obligation based on the stand-alone
selling prices.
In addition to the long-term service agreements, L&T offers services which are
separately ordered as part of Industrial Services and Facility Services.
Compared to the long-term service agreements, services that are ordered sepa-
rately are typically short-term in nature and they are provided either occasionally
or on a non-recurring basis.
Revenue from services business is recognised over time, as the customer
simultaneously receives and consumes the benefits from the services provided.
Revenue from services that are invoiced with a fixed monthly fee is recognised
evenly over the contract term as also the work is performed evenly over the
term. Revenue from services that are invoiced based on hourly fees is recog-
nised based on the work performed. The management has identified that there
may be seasonal fluctuation especially in the long-term service agreements
of Facility Services as the work performed differs between seasons during the
year. Management has estimated that the costs for these services incur evenly
throughout the period and, thus, revenue is recognised evenly over the period.
Industrial Services receives contaminated soil from customers, for which the
performance obligation is the receipt and processing of soil. Measuring progress
towards complete satisfaction of the performance obligation is based on the
output method. Revenue is recognised based on the amount of processed soil.
Customer is invoiced when soil is received and the payment received from the
customer is treated as a contract liability.
Project business
Project business includes for example projects for industrial process cleaning
and closing of landfills which are part of Industrial Services business and renova-
tion and building technology projects as well as refrigeration and cooling service
projects for retailers and energy management projects included in Facility Ser-
vices. In project business the customer orders the entire project at once and the
project is considered as a single performance obligation. In some cases, a con-
tract can also consist of several different locations and each location creates a
distinct performance obligation. If the contract contains more than one distinct
performance obligation, the transaction price is allocated to each performance
obligation based on the stand-alone selling prices.
Revenue from project business is recognised over time as the projects mainly
relate to enhancing an asset that the customer controls. In project business
the input method based on costs incurred is used for measuring the progress
towards complete satisfaction of the performance obligation. The management
has estimated that the costs incurred for a project can be determined reliably.
Also, due to the contract structure in project business the management has
determined that L&T has an enforceable right to payment for performance com-
pleted to date. In project business invoicing is typically made based on a prede-
termined payment schedule.
Sale of equipment and materials
Sale of equipment consists of sale of compactors and balers to customers
included in Environmental Services business. Sale of materials consists of sale
Lassila & Tikanoja
Annual Report 2023
37
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
of wood-based fuels and recycled fuels as well as of sale of other recycled
raw materials in Environmental Services business. Each equipment or material
delivery creates a distinct performance obligation in the sale of equipment and
materials. The equipment delivered by the Group does not involve any additional
warranties that would be considered as a distinct performance obligation.
Control of the delivered product is transferred when the physical possession
of the product has been transferred to the customer, which typically occurs at
delivery. Environmental Services business delivers wood-based fuels and recy-
cled fuels to customers. The consideration received from a customer is based on
the amount of delivered fuel and the energy level of the fuel or on the amount of
the delivered material. In some cases, the final transaction price is determined
after the customer has measured the amount of fuel delivered, and, thus, there
is uncertainty relating to the amount of final transaction price. Management has
estimated that the level of uncertainty related to the transaction price is low and
any adjustments to be made to the transaction price when the uncertainty is
resolved are not considered to be material.
Lease income
In addition to the sale of compactors and balers, customers can also lease
the equipment through an external financing company. The agreement made
between the Group and the financing company includes a repurchase obliga-
tion at the end of the lease period with a predetermined residual value. Due to
the repurchase obligation management has determined that all the risks and
rewards incidental to ownership of the assets are not transferred substantially
to the customer and, thus, the leased equipment is treated as tangible assets.
At the inception of the lease, advances received from the financing company as
well as the residual value of the asset are recognised as a liability in the balance
sheet. Lease income is recognised monthly during the lease term. Management
has estimated that the amount of payment received from the financing com-
pany does not Include a significant financing component.
Estimating variable consideration
The contracts with customers may include components of variable consider-
ations, such as bonuses and penalties for delay. Management has determined
that the level of uncertainty relating to the variable consideration is typically low.
The estimate of the amount of variable considerations is reassessed at the end
of each reporting period.
Contract balances
Contract assets and trade receivables
A contract asset is a right to consideration in exchange for goods or services
that are transferred to a customer. If goods or services are transferred to a cus-
tomer before the invoice is sent to the customer, the amount is recognised as a
contract asset. If the company has an unconditional right to the consideration, a
trade receivable is recognised in the statement of financial position.
Contract assets and trade receivables are assessed for impairment in accord-
ance with IFRS 9. The general payment term for customers is 14 days, but it can
vary depending on the specific case.
Contract liabilities
A contract liability is an obligation to transfer goods or services to a customer
for which L&T has received consideration from the customer. If a customer pays
consideration before goods or services are transferred to the customer, a con-
tract liability is recognised in the statement of financial position when the pay-
ment is made by the customer.
Incremental costs of obtaining a contract
The company does not have material incremental costs to obtain a contract. The
company applies a practical expedient which allows the costs to obtain a con-
tract to be recognised when they occur.
Disaggregation of revenue
Net sales consist of services for which revenue is recognised over time, prod-
ucts for which revenue is recognised at a point in time as well as lease income.
Services for which revenue is recognised over time include sales revenue from
long-term service agreements, separately ordered services and the project busi-
ness. Services for which revenue is recognised at a point in time include revenue
from the sale of equipment and materials.
Critical judgements by Management
The amount and timing of revenue recognition involves management’s
judgement especially in the following areas:
• Identification of performance obligations for services business
• Timing of revenue recognition in services and project business
• Treatment of repurchase agreements relating to compactors and
balers in Environmental Services business including the assessment
of the materiality of the financing component
• Measurement of variable consideration
These judgements have been described in more detail in the description
relating to revenue recognition.
2023 MEUR
Long-term
service
agreements
Separately
ordered
services
Project
business
Sales of
equipment
and materials
Lease
income
Total
net sales
Environmental Services 229.6 50.5 3.5 283.7
Industrial Services 65.5 58.5 11.8 5.2 141.0
Facility Services Finland 181.5 64.2 4.3 250.0
Facility Services Sweden 56.1 74.0 3.1 133.2
Total 532.6 196.8 19.2 55.7 3.5 807.9
Interdivision -5.8
External net sales 802.1
2022 MEUR
Long-term
service
agreements
Separately
ordered
services
Project
business
Sales of
equipment
and materials
Lease
income
Total
net sales
Environmental Services 225.3 92.7 3.3 321.2
Industrial Services 57.7 59.0 9.7 5.6 132.0
Facility Services Finland 182.3 68.8 5.2 256.3
Facility Services Sweden 61.1 74.9 4.4 140.4
Total 526.4 202.7 19.4 98.3 3.3 850.0
Interdivision -6.0
External net sales 844.1
Lassila & Tikanoja
Annual Report 2023
38
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Contract balances
MEUR 2023 2022
Trade receivables 85.9 91.0
Contract assets 30.8 30.8
Contract liabilities 8.9 7.2
Contract assets consist of uninvoiced sales, which will be invoiced during the
following reporting period.
Contract liabilities are mainly related to the long-term service agreements
and are recognised as revenue entirely during the following period. Contract
liabilities are included in the balance sheet item Trade and other payables.
No revenue was recognised in the reporting period from performance
obligations satisfied (or partially satisfied) in previous periods.
1.3 Employee benefit expenses
Accounting policy
The Group’s employee benefits include wages, salaries and bonuses paid
to employees, post-employment benefits (defined contribution plans and
defined benefit plans), share-based payments and other personnel
expenses (statutory social security costs).
Details on share-based payments are disclosed in note 1.5 Share-based
payments. The employee benefits of the top management are disclosed
in note 5.4 Related-party transactions. Details on the items of defined
benefit pension plans in the consolidated statement of financial position
are shown in note 2.6 Retirement benefit obligations.
MEUR 2023 2022
Wages and salaries 282.8 282.4
Pension costs
Defined contribution plans 60.8 60.9
Defined benefit plans 0.0 0.0
Share-based payments 0.5 0.1
Other personnel expenses 8.7 9.7
Total 352.8 353.1
Average number of employees in full-time equiv alentsalents¹
2023 2022
Finland 5,608 5,655
Sweden 1,135 1,165
Total 6,743 6,820
1
The calculation of the average number of employees in full-time equivalents was re-defined in
2023. The figures for 2022 has been adjusted accordingly.
1.4 Other operating income and expenses
Accounting policy
Other operating income includes items that are not considered as being
directly related to the Group’s normal business, such as gains from sales
of assets and business activities and received compensations. Other
operating expenses include, for instance, fees for expert and consulting
services, losses from sales of assets and business activities, bad debts
and changes in allowances for credit losses, expenses related to the use
of vehicles and machinery, ICT costs, voluntary social security costs,
travel costs, real estate costs and implementation costs of cloud
computing arrangements.
Government grants
Government grants or other grants relating to actual costs are recognised
in the income statement when the Group complies with the conditions
attached to them and there is reasonable assurance that the grants will
be received. They are presented in other operating income. Government
grants directly associated with the recruitment of personnel, such as
employment grants, apprenticeship grants and the like, are recognised
as reductions in personnel expenses.
Grants for acquisition of property, plant and equipment are recognised
as deductions of historical cost. The grant is recognised as income
over the economic life of a depreciable asset, by way of a reduced
depreciation charge.
Other operating income
MEUR 2023 2022
Gains on sales of property, plant and equipment 1.7 1.7
Gain from sale of subsidiary's net assets to joint venture - 4.3
Reimbursements and governmen t grantst grants¹ 2.0 0.6
Other 2.4 2.1
Total 6.2 8.7
 ¹ The figure in 2023 includes a compensation totalling EUR 1.6 million paid by the previous supplier
of a new ERP system relating to the termination of the co-operation.
Other operating expenses
MEUR 2023 2022
ICT costs 16.8 16.6
Travel costs 9.0 8.0
Bad debts and changes in allowances for impairment 1.0 0.4
Fuels for vehicles and machinery 27.8 29.6
Maintenance and repair of vehicles and machinery 29.6 26.7
Insurances 3.1 4.2
Property maintenance costs 5.0 5.0
Expert f eesees¹ 6.9 7.5
Voluntary social security costs 6.8 7.6
Marketing costs 1.6 2.1
Losses on sales of intangible and tangible assets 0.1 0.5
Discontinuation of Russian operations - -0.2
OtherOther² 5.1 6.7
Total 113.1 114.7
 ¹ The figure in 2023 includes a compensation totalling EUR 0.9 million paid by the previous supplier
of a new ERP system relating to the termination of the co-operation.
 ² The figure in 2023 includes a compensation totalling EUR 0.5 million paid by the previous supplier
of a new ERP system relating to the termination of the co-operation.
Lassila & Tikanoja
Annual Report 2023
39
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
1.5 Share-based payments
Accounting policy
The Group has several incentive arrangements for which payments
are made either as equity instruments or cash. The benefits granted
under the arrangements are measured at fair value on the grant date
and recognised as expense evenly over the vesting period. The effect
of the arrangement on profit and loss is recognised under employee
benefit expenses.
Share-based incentive programme 2021
Lassila & Tikanoja plc’s Board of Directors decided at a meeting held on 27
January 2021 on a new share-based incentive programme. Potential rewards
were based on the EVA result and the carbon handprint of the Group.
Based on the programme a maximum of 37,300 shares of the company could
be granted.
Based on the decision by the board of directors a total of 24,522 Lassila &
Tikanoja plc’s shares were granted in 2022 from the share-based incentive
programme of year 2021. The programme covered 9 persons.
Share-based incentive programme 2022
Lassila & Tikanoja plc’s Board of Directors decided at a meeting held on 26
January 2022 on a new share-based incentive programme. Potential rewards
are based on the EVA result and the carbon handprint of the Group.
Based on the programme a maximum of 37,300 shares of the company could
be granted.
The performance criteria for the share-based incentive programme 2022 were
not met, and no Lassila & Tikanoja plc’s shares were granted from the share-
based incentive programme. The programme covered 9 persons.
Performance Share Plan 2023–2027
Lassila & Tikanoja plc’s Board of Directors decided at a meeting held on 14
December 2022 on a new share-based incentive programme. The Performance
Share Plan 2023–2027 comprises three three-year performance periods cov-
ering the calendar years 2023–2025, 2024–2026 and 2025–2027. The Board of
Directors decides on the performance criteria of the plan and the performance
levels to be set for each performance criterion at the beginning of a perfor-
mance period.
The rewards to be paid based on the performance period 2023–2025 corre-
spond to the value of approximately 202,067 Lassila & Tikanoja plc shares in
maximum total, also including the portion to be paid in cash. The target group of
the Performance Share Plan during the performance period 2023–2025 con-
sists of approximately 38 key employees, including the Group’s President and
CEO and the Group Executive Board. Potential rewards of performance period
2023-2025 will be based on return on capital employed (ROCE), total share-
holder return (TSR) and reduction of the carbon footprint (ESG) during the period
2023-2025.
The rewards to be paid based on the performance period 2024–2026 corre-
spond to the value of approximately 249,900 Lassila & Tikanoja plc shares in
maximum total, also including the portion to be paid in cash. The target group of
the Performance Share Plan during the performance period 2024–2026 con-
sists of approximately 50 key employees, including the Group’s President and
CEO and the Group Executive Board. Potential rewards of performance period
2024-2026 will be based on return on capital employed (ROCE), total share-
holder return (TSR) and reduction of the carbon footprint (ESG) during the period
2024-2026.
Bridge Plan 2023–2026
Lassila & Tikanoja plc’s Board of Directors decided at a meeting held on 14
December 2022 on a new share-based incentive programme. The Bridge Plan
2023–2026 has two (2) one-year (1) performance periods covering the calendar
years 2023 and 2024. A performance period is followed by a two-year retention
period. The aim of the plan is to support the transition from the old Performance
Share Plan to the new Performance Share Plan.The Board of Directors decides
on the performance criteria of the plan and the performance levels to be set for
each performance criterion at the beginning of a performance period.
The rewards to be paid based on the performance period 2023 correspond
to the value of approximately 83,800 Lassila & Tikanoja plc shares in maximum
total, also including the portion to be paid in cash. The target group of the Bridge
Plan during the performance period 2023 consists of approximately 10 key
employees, including the Group’s President and CEO and the Group Executive
Board. Potential rewards of performance period 2023 will be based on return on
capital employed (ROCE) and reduction of the carbon footprint (ESG) in 2023.
The rewards to be paid based on the performance period 2024 correspond
to the value of approximately 83,800 Lassila & Tikanoja plc shares in maximum
total, also including the portion to be paid in cash. The target group of the Bridge
Plan during the performance period 2024 consists of approximately 10 key
employees, including the Group’s President and CEO and the Group Executive
Board. Potential rewards of performance period 2024 will be based on return on
capital employed (ROCE) and reduction of the carbon footprint (ESG) in 2024.
Expenses arising from share-based incentive
programmes, MEUR
2023 2022
Share component 0.5 0.1
Total 0.5 0.1
Information of the share-based incentive programmes
2023-2027 2023-2026
Share-based incentive programme
Performance
period
2024-2026
Performance
period
2023-2025
Performance
period 2024
Performance
period 2023 2022 2021
Grant date - 16 Jan 2023 - 16 Jan 2023 26 Jan 2022 27 Jan 2021
Start of the earnings period 1 Jan 2024 1 Jan 2023 1 Jan 2024 1 Jan 2023 1 Jan 2022 1 Jan 2021
End of the earnings period 31 Dec 2026 31 Dec 2025 31 Dec 2024 31 Dec 2023 31 Dec 2022 31 Dec 2021
Average share price at grant date - 11.48 - 11.48 13.06 15.40
Maximum number of shares 249,000 202,067 83,800 83,800 37,300 37,300
Realisation on closing date, shares - 24,522
Returned shares - -
Obligation to hold shares, years - - 2 2 2 2
Release date of shares - - 31 Mar 2027 31 Mar 2026 31 Mar 2025 31 Mar 2024
Number of persons included 50 38 10 10 9 9
Lassila & Tikanoja
Annual Report 2023
40
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
1.6 Expenses related to leases
Accounting policy
The Group leases production and office premises including related land
areas, vehicles and ICT equipment. At the commencement date of a lease
contract, a right-of-use asset and a lease liability, measured as the
present value of the remaining lease payments, is recognised in the
statement of financial position.
The right-of use asset is subsequently measured at cost less accu-
mulated depreciation and less any accumulated impairment losses and
adjusted for any remeasurements of the lease liability. Depreciation is
calculated using the straight-line method from the commencement date
to the earlier of the end of the lease term or the end of the useful life of
the right-of-use asset. The depreciations of right-of-use assets are
presented in depreciation, amortisation and impairments in the income
statement.
The lease liability is measured at amortised cost using the effective
interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or price level or if the Group
changes its assessment of whether it will exercise a purchase, extention
or termination option. The interest expense on the lease liability is included
in the financial income and expenses in the income statement. In the
statement of cash flows, the amortisation of lease liabilites is presented
in the cash flows from financing activities and the interest paid in the
cash flows from operating activities.
The Group applies the exemption for short-term leases to production
and office premises leases and the exemption for low-value assets
to leases of ICT equipment. For these leases, the right-of-use asset and
lease liability is not recognised. The lease payments of low-value assets
and short-term leases are included in Other operating expenses and
Materials and services in the income statement .
MEUR 2023 2022
Depreciation expense of right-of-use assets -21.6 -19.5
Interest expenses on lease liabilities -2.4 -1.5
Expenses related to leases of low-value assets -4.2 -4.3
Total -28.2 -25.3
In 2023, the cash flows related to leases totalled EUR -27.8 million (-25.3).
1.7 Depreciation, amortisation and
impairments
Accounting policy
Depreciation and amortisation
Depreciation and amortisation are recognised on a straight-line basis
over the ecomomic useful lives of the assets, or over the lease contract
periods, when applicable, if shorter.
Intangible assets: 5-10 years
Intangible assets from acquisitions: 3-13 years
Buildings and structures: 5-30 years
Vehicles: 6-15 years
Machinery and equipment: 4-15 years
Goodwill is not amortised, but is tested annually for impairment during
the last quarter. Goodwill is presented in the statement of financial
position at historical cost less impairment losses, if any. For completed
landfills the Group applies the units of production method, which involves
depreciation on the basis of the volume of waste received. Land is not
depreciated.
Impairments
On each balance sheet date, the Group assesses the carrying amounts
of its assets for any impairment. If any indication of impairment ex-
ists, an estimate of the asset’s recoverable amount is made.
The recoverable amount is the higher of an asset’s fair value less sell-
ing costs and its value-in-use. Value-in-use refers to the estimated future
net cash flows available from an asset, discounted to the present val-
ue. The discount rate used is the pre-tax rate, which reflects the market
view of the time value of money and the risks associated with the asset.
An impairment loss is recognised in the income statement when
an asset’s carrying amount exceeds its recoverable amount. Impair-
ment losses attributable to a cash-generating unit are used for de-
ducting first the goodwill allocated to the cash-generating unit
and, thereafter, the other assets of the unit on an equal basis.
Intangible assets under construction are software projects that cannot
be tested separately for impairment, as they do not generate separate
cash flows. There is no need for impairment if, at the end of the financial
period, it is clear that the projects will be completed and the software will
be introduced. Intangible assets under construction are, however, tested
for impairment as part of the cash generating unit to which they belong.
An impairment loss for an asset other than goodwill recognised in prior
periods is reversed if there is a change in circumstances and the recov-
erable amount has changed. An impairment loss recognised for goodwill
is not reversed. Goodwill impairment testing is described in note 3.2.
Gains and losses on sales of assets
Gains and losses on sales and disposal of assets are recognised through
profit or loss and are presented in other operating income or expenses.
MEUR 2023 2022
Depreciation and amortisation
Intangible assets -6.8 -7.8
Buildings -5.5 -6.2
Machinery and equipment -21.6 -21.8
Right-of-use assets -21.6 -19.5
Other tangible assets -0.0 -0.0
Total -55.5 -55.4
Impairments
Intangible assets
1
-1.9 -
Total -1.9 -
Gains / losses on sales of intangible and
tangible assets
Gain on sales of intangible and tangible assets 1.7 1.7
Loss on sales of intangible and tangible assets -0.1 -0.5
Total 1.6 1.2
 Impairment o ¹ Impairment of intangible assets consists of expenses of the previous supplier of the new ERP
system capitalised in prepayments and construction in progress.
Lassila & Tikanoja
Annual Report 2023
41
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
1.8 Financial income and expenses
Accounting policy
Exchange rate gains and losses arising from foreign-currency trans-
actions and the translation of monetary items are recognised in the
income statement. Foreign exchange gains and losses on business
transactions are included in the respective items above operating profit.
Foreign exchange gains and losses on financial assets and liabilities
are included in financial income and costs.
Borrowing costs are recognised as expenses in the period in which
they arise.
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset shall be included in the
acquisition cost of that asset. There were no such costs capitalised at
the end of the reporting period.
Transaction costs directly attributable to borrowing are includ-
ed in the historical cost of the liability and recognised as an
interest expense during the expected life of the liability applying the
effective interest method.
MEUR 2023 2022
Financial income
Interest income on loans and other receivables 1.2 0.2
Interest income from joint ventures - 0.2
Fair value of interest rate swap - transf er from OCIer from OCI¹ 1.3 -
Total financial income 2.5 0.4
Financial expenses
Interest expenses on borrowings measured at amortised
cost 5.7 3.7
Interest expenses on lease liabilitities 2.4 1.5
Other financial expenses 0.5 0.8
Losses on foreign exchange 0.0 0.2
Total financial expenses 8.7 6.2
Financial income and expenses -6.3 -5.8
 ¹ The interest rate swap that was used for hedging cash flows related to floating rate loans was
terminated in June 2023 in conjunction with the refinancing of the hedged loan. The fair value of the
interest rate swap totalling EUR 1.3 million was recognised as financial income in the consolidated
income statement.
1.9 Income taxes
Accounting policy
The Group’s income taxes consist of current tax and deferred tax. Tax
expenses are recognised in the income statement, with the exception
of items directly recognised in equity or comprehensive result, in which
case the tax effect is recognised in the corresponding item. Current tax
is determined for the taxable profit for the period according to prevailing
tax rates in each country. Taxes are adjusted by current taxes related
to previous periods, if any.
Deferred tax assets and liabilities are recognised for all temporary
differences between the tax bases of assets and liabilities and their
carrying amounts. The deferred taxes are determined using tax rates
enacted by the balance sheet date and that are expected to apply when
the deferred tax asset is realised or liability settled. No deferred tax is
recognised for impairment of goodwill that is not tax-deductible.
A deferred tax asset is recognised only to the extent that it is probable
that taxable profit will be available against which the deferred tax
asset can be utilised.
The most significant temporary differences arise from fair value
measurements related to acquisitions and new intangible assets.
Income tax in the income statement
MEUR 2023 2022
Income tax for the period -6.3 -5.7
Income tax for previous periods -0.0 -0.0
Change in deferred tax 0.7 -0.6
Total -5.7 -6.3
The reconciliation of income tax expense recognised in the income
statement and income tax calculated at the statutory tax rate in Finland
MEUR 2023 2022
Profit before tax 35.7 37.8
Income tax at Finnish tax rate 20% -7.1 -7.6
Difference between tax rate in Finland and in other
countries 0.0 -0.0
Non-deductible expenses -0.2 -0.3
Tax exempt income 1.2 1.6
Income tax for previous periods -0.1 0.0
Unrecognised deferred tax on loss for the period -0.1 -0.0
Utilisation of previously unrecognised tax losses - 0.1
Other items 0.6 -0.2
Total -5.7 -6.3
Tax effects of components of other comprehensive income
2023 2022
MEUR
Before
tax
Tax expense/
benefit
After
tax
Before
tax
Tax expense/
benefit
After
tax
Items arising from re-measurement of defined benefit plans -0.0 0.0 -0.0 0.2 -0.0 0.2
Hedging reserve, change in fair value -1.2 0.2 -0.9 1.7 -0.3 1.3
Currency translation differences 0.1 - 0.1 -5.7 - -5.7
Currency translation differences recognised through profit or loss - - - 0.1 - 0.1
Components of other comprehensive income -1.1 0.2 -0.9 -3.7 -0.4 -4.1
Lassila & Tikanoja
Annual Report 2023
42
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Deferred taxes in the statement of ﬁnancial position
MEUR 2023 2022
Deferred tax assets 3.1 1.9
Deferred tax liabilities -28.5 -28.1
Deferred taxes, net -25.4 -26.3
At the balance sheet date, the Group companies did not have tax losses, on
which no deferred tax asset has been recognised as the realisation of the tax
benefit is not considered probable (EUR 0.4 million at the end of 2022).
Deferred tax is recognised in the statement of financial position as tax assets
and tax liabilities. Deferred tax assets and deferred tax liabilities are set off when
there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred taxes relate to the same fiscal authority.
Critical judgements by Management
The recognition of deferred tax assets involves management’s judgement.
The appropriateness for recognising deferred tax assets is assessed at
each balance sheet date. For this purpose, the Group estimates the
probability of subsidiaries generating recoverable taxable income against
which unused tax losses and unused tax compensations can be utilised.
The factors used in the estimates may differ from the actuals, which may
lead to write-down of deferred tax assets.
Deferred tax assets and liabilities
MEUR
At 1 Jan
2023
Recognised
in income
statement
Recognised
in equity
Exchange
rate
differences
Business
acquisitions
At 31 Dec
2023
Deferred tax assets
Tax losses 1.6 -0.3 0.1 1.4
Pension benefits 0.2 0.0 0.2
Provisions 1.7 0.1 1.8
Unused depreciation 1.4 0.3 1.7
Other temporary differences 2.0 2.7 4.8
Netting of deferred taxes -5.1 -6.6
Total 1.9 2.7 0.0 0.1 - 3.1
Deferred tax liabilities
Acquisitions -24.4 -1.7 -0.1 -26.3
Appropriations -7.4 -0.2 -7.6
Fair value adjustments -0.2 0.2 -
Other temporary differences -1.1 -0.1 -1.2
Netting of deferred taxes 5.1 6.6
Total -28.1 -2.0 0.2 -0.1 - -28.5
MEUR
At 1 Jan
2022
Recognised
in income
statement
Recognised
in equity
Exchange
rate
differences
Business
acquisitions
At 31 Dec
2022
Deferred tax assets
Tax losses 1.8 -0.0 -0.2 1.6
Pension benefits 0.2 -0.0 0.2
Provisions 2.2 -0.4 1.7
Fair value adjustments 0.1 -0.1 -
Unused depreciation 1.3 0.1 1.4
Other temporary differences 0.1 2.0 2.0
Netting of deferred taxes -2.9 -5.1
Total 2.7 1.6 -0.2 -0.2 - 1.9
Deferred tax liabilities
Acquisitions -22.6 -1.2 0.3 -0.9 -24.4
Appropriations -6.9 -0.5 -7.4
Fair value adjustments - -0.2 -0.2
Other temporary differences -0.7 -0.4 0.0 -1.1
Netting of deferred taxes 2.9 5.1
Total -27.2 -2.2 -0.2 0.3 -0.9 -28.1
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Lassila & Tikanoja
Annual Report 2023
43
Financial statements of the parent company
1.
2. 3. 4. 5.
Proposal by the Board of Directors
2 Operational assets
and liabilities
2.1 Trade and other receivables............................44
2.2 Inventories .................................................................44
2.3 Trade and other current payables ...............45
2.4 Other non-current liabilities .............................45
2.5 Provisions ..................................................................45
2.6 Retirement benefit obligations ......................46
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Lassila & Tikanoja
Annual Report 2023
44
Financial statements of the parent company
1.
2. 3. 4. 5.
Proposal by the Board of Directors
2.1 Trade and other receivables
Accounting policy
Trade receivables are measured at historical cost less expected cred-
it losses. The receivables are non-interest bearing and the general
payment term for customers is 14 days. Trade receivables are classi-
fied as financial assets, that are explained in more detail in notes
4.1 Financial assets and liabilities and 4.2 Financial risk management.
A simplified impairment model allowed by IFRS 9 standard is ap-
plied to the recognition of expected credit losses. Expected credit loss-
es are calculated by dividing trade receivables into categories based on
maturity and by multiplying said categories with the credit loss
percentages, which are based on historical data on credit losses realised
from trade receivables and the outlook for the short-term future. This
impairment model covers the company’s trade receivables and contract
assets.
Based on historical data and the outlook for the short-term future,
an allowance for impairment is recognised as follows (credit loss per-
centage applied in the previous year in brackets): Trade receivables not
past due 0.1 per cent (0.1), past due 1-90 days 0.8 per cent (0.7), past
due 91-365 days 11.6-23.1 per cent (8.6-25.0 per cent). Trade receiva-
bles due over 360 days are written down completely. If the customer
has become insolvent, such as in the case of bankruptcy or debt re-
structuring, the trade receivable is written down as a final credit loss
when a payment can no longer be expected with reasonable certainty.
MEUR 2023 2022
Trade receivables 85.9 91.0
Contract assets
1
30.8 30.8
Accrued income 7.6 9.3
Prepayments 0.3 0.2
Tax receivables 1.2 8.7
Derivative receivables - 1.2
Other receivables 0.0 0.3
Total 125.8 141.6
Specification of accrued income
Employees' health care compensation 1.6 1.7
Licences 0.7 0.9
Other 5.4 6.8
Total 7.6 9.3
1
Contract assets consist of uninvoiced sales, which will be invoiced during the following reporting
period.
Change in allowance for impairment
MEUR 2023 2022
Allowance for impairment, 1 January 0.5 0.4
Change in the income statement 0.0 0.1
Allowance for impairment, 31 December 0.5 0.5
Impairment losses and changes in allowance for impairment are presented note
1.4 Other operating income and expenses.
Financial assets are not collateralised. No impairment was recognised on
other financial assets.
2.2 Inventories
Accounting policy
Inventories are measured at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course
of business, less the estimated costs of completion and selling
expenses. The inventories of Environmental Products in Environmental
Services are measured using the weighted average cost method. The
value of other inventories is determined using the FIFO method.
At its recycling plants, recyclable materials are processesed into
secondary raw materials for sale. The cost of the inventories of these
materials comprises raw materials, direct labour costs, other direct
costs of manufacturing and a proportion of variable and fixed production
overheads based on normal operating capacity.
MEUR 2023 2022
Raw materials and consumables 3.0 3.0
Finished goods 1.0 1.8
Other inventories 3.8 2.9
Total 7.8 7.8
The carrying value of the inventories was written down to the net realisable
value. The expense of EUR 0.0 million (0.0) is included in Materials and services
in the income statement.
Maturity of trade receivables, contract assests and allowance for impairment
2023 2022
MEUR
Trade
receivables and
contract assets
of which the
allowance for
impairment
Trade
receivables and
contract assets
of which the
allowance for
impairment
Trade receivables and contract assets not past due 100.0 0.1 106.5 0.1
Past due 1-90 days 16.3 0.1 14.4 0.1
Past due 91-365 days 0.8 0.1 1.4 0.2
Past due over 365 days 0.2 0.2 0.1 0.1
Total 117.2 0.5 122.4 0.5
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Lassila & Tikanoja
Annual Report 2023
45
Financial statements of the parent company
1.
2. 3. 4. 5.
Proposal by the Board of Directors
2.3 Trade and other current payables
Accounting policy
Trade and other current non-interest-bearing liabilities are recognised
in the balance sheet at historical cost. The impact of discounting is not
essential considering the maturity of the payables.
Trade payables are classified as financial liabilities that are presented
in notes 4.1 Financial assets and liabilities and 4.2 Financial risk
management.
MEUR 2023 2022
Advances received 11.2 9.5
Trade payables 63.7 60.1
Current tax liabilities 0.3 1.0
Other liabilities 21.8 25.7
Accrued expenses and deferred income 76.1 75.2
Total 173.1 171.5
Accrued expenses and deferred income
Liabilities related to personnel expenses
1
69.5 68.0
Other accrued expenses 6.6 7.2
Total 76.1 75.2
1
Liabilities related to personnel expenses include ordinary accruals for salaries, pensions and
other statutory personnel expenses.
The advances received include contract liabilities as well as advances received
for rental payments. The fair values of trade and other current payables equal
their book values.
2.4 Other non-current liabilities
MEUR 2023 2022
Advances received 7.2 7.6
Deferred consideration 5.9 5.7
Other liabilities 0.0 0.0
Total 13.2 13.3
Deferred consideration is related to the acquisition of 70 per cent share of
Sand & Vattenbläst i Tyringe AB (”SVB”) that offers process cleaning services
in Sweden. The acquisition took place on 1 February 2022. SVB is consolidated
with 100 per cent share in the Group and, in connection with the arrangement,
L&T has recognised in financial liabilities an estimate of the deferred considera-
tion for the acquisition. The deferred consideration relates to the acquisition of
non-controlling interest and is measured at fair value, which is reflected in the
present value of the estimated liability. It will mature on 1 February 2026 at the
earliest. In the last quarter of 2023, an increase of EUR 0.2 million was recog-
nised in the deferred consideration (increase of EUR 0.8 million).
Critical judgements by Management
The preparation of calculations used in valuation of the deferred
consideration requires the use of management judgement. The EBITDA
forecast used in the calculations is based on actual development and
management’s view on the growth outlook for the business. Though
the assumptions used are appropriate according to the management’s
judgement, the EBITDA forecast used in the calculation may
fundamentally differ from the actual figures realised in the future.
2.5 Provisions
Accounting policy
A provision is recognised when the Group has a legal or factual obligation
towards a third party resulting from an earlier event, fulfilment of the
payment obligation is probable, and its amount can be reliably estimated.
Provisions are measured at the current value of the expenditure
required to settle the obligation. Increase in provisions due to the passage
of time is recognised as interest expense. Changes in provisions are
recognised in the income statement in the same item in which the
provision is originally recognised.
Environmental provisions are recognised when the Group has an
existing obligation that is likely to result in a payment obligation, the
amount of which can be reliably estimated. Environmental provisions
related to the restoration of sites are made at the commencement of
each project. The costs recognised as a provision, as well as the original
acquisition cost of assets, are depreciated over the useful life of the
asset, and provisions are discounted to present value. The most
significant provisions recognised in the statement of financial position
are the site restoration provisions for landfills and the processing
sites for contaminated soil.
MEUR 2023 2022
Non-current provisions 7.2 7.4
Current provisions 0.9 1.7
Total 8.1 9.1
Critical judgements by Management
Recognition and measurement of provisions require management to
assess the best estimate of the expenditure needed to settle the present
obligation at the end of the reporting period. The actual amount and timing
of the expenditure might differ from the estimates made. The carrying
amounts of provisions are reviewed regularly and adjusted when needed
to consider changes in cost estimates, regulations, applied technologies
and conditions .
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Lassila & Tikanoja
Annual Report 2023
46
Financial statements of the parent company
1.
2. 3. 4. 5.
Proposal by the Board of Directors
Obligations covered by the environmental provisions
The Group has leased site that it uses as landfill from the city of Kotka. In
Varkaus the Group uses a site for intermediate storing, processing and final
disposal of contaminated soil. At the expiry of the leases or at the discontinua-
tion of operations, the Group is responsible for site restoration comprising land-
scaping and post-closure environmental monitoring called for in the terms and
conditions of environmental permits.
The Munaistenmetsä landfill site in Uusikaupunki serves as a final disposal
area for municipal waste, contaminated soil and industrial by-products. After the
receipt of a new environmental permit, a construction of a processing site for
hazardous waste has been started in the area. The utilisation of the new haz-
ardous waste landfill and treatment area will be started in the summer of 2024.
The material recycling centre in the landfill area in Oulu receives, processes
and recovers various types of waste and side streams, such as industrial waste,
contaminated soil, construction and demolition waste as well as municipal
waste.
The landfill area in Pori receives and processes gypsum, construction and
demolition waste as well as contaminated soil and other smaller items. The envi-
ronmental impact assessment process for the area has been completed and a
reasoned conclusion has been received from the contact authorities.The prepa-
ration of an application for a new environmental permit is currently ongoing.
With the permit the area will be lisenced for receipt and processing of both
normal and hazardous waste.
Other provisions
Other provisions consist mainly of provision for restructuring and accident
insurance contribution.
MEUR
Environmental
provisions
Other
provisions Total
Provisions at 1 Jan 2023 7.4 1.7 9.1
Additions 0.2 0.7 0.9
Used during the year -0.3 -0.7 -1.0
Reversals -0.2 -0.9 -1.1
Effect of discounting 0.1 - 0.1
Provisions at 31 Dec 2023 7.2 0.9 8.1
MEUR
Environmental
provisions
Other
provisions Total
Provisions at 1 Jan 2022 8.1 2.7 10.8
Additions 0.1 0.7 0.8
Used during the year -0.5 -1.3 -1.8
Reversals -0.4 -0.5 -0.8
Effect of discounting 0.1 - 0.1
Provisions at 31 Dec 2022 7.4 1.7 9.1
2.6 Retirement benefit obligations
Accounting policy
Pension plans are categorised as defined benefit and defined contribution
plans. Under defined contribution plans. the Group pays fixed contributions
for pensions. and it has no legal or factual obligation to pay further contri-
butions. All pension arrangements that do not fulfil these conditions are
considered defined benefit plans. The Group operates pension schemes in
accordance with local regulations and practices in the countries in which
it operates. and these pension schemes are mainly defined contribution
plans. Contributions to defined contribution plans are recognised in the
income statement in the financial period to which they relate.
The company operates a few defined benefit plans originating mainly from
business acquisitions. The Group is responsible for some of these defined
benefit pension plans. while others are covered by pension insurance. The
obligations have been calculated for each plan separately. using the
projected unit credit method. Pension costs are recognised in the income
statement over employees’ periods of service. in accordance with actuarial
calculations. When calculating the present value of pension obligations.
the discount rate is based on the market yield of the high-quality bonds
issued by companies. whose maturity materially corresponds to the
estimated maturity of the pension obligation. The risk premium is based on
bonds issued by companies with an AA credit rating. The pension plan
assets measured at fair value on the balance sheet date are deducted from
the present value of the pension obligation to be recognised in the statement
of financial position. The net liability (or asset) associated with a defined
benefit pension plan is recognised in the statement of financial position.
The current service cost (pension expense) and the net interest of the
defined benefit plan’s net debt are recognised in the income statement and
included in employee benefit expenses. Items (such as actuarial gains and
losses and return on funded defined benefit plan assets. except items related
to net interest) arising from the revaluation of the net liabilities (or assets)
associated with a defined benefit plan are recognised in other
comprehensive income in the period in which they arise.
Past service costs are recognised as expenses through profit or loss at
the earlier of the following: when the plan is rearranged or downsized
or when the entity recognises the related restructuring expenses or
benefits related to the termination of employment.
The Group has in Sweden pension deposits concerning a few people.
The Group has no legal or factual obligation to pay further contributions to
these arrangements. The value of the deposits is recognised in other
non-current receivables and a corresponding liability is recognised in
pension liabilities.
MEUR 2023 2022
Amounts recognised in the statement of
financial position
Present value of funded obligations 0.3 0.3
Fair value of plan assets -0.3 -0.3
0.0 0.0
Present value of unfunded obligations 0.5 0.5
Liability related to pension deposits 0.6 0.7
Closing net liability 1.2 1.2
Changes in present value of obligation
Opening defined benefit obligation 1.5 1.7
Current service cost 0.0 0.0
Interest cost 0.0 0.0
Actuarial gain (-) and loss (+) on obligation 0.0 -0.2
Benefits paid -0.1 -0.1
Change in liability related to pension deposits -0.1 0.0
Closing value of obligation 1.4 1.5
Changes in fair value of plan assets
Opening fair value of plan assets 0.3 0.3
Interest income 0.0 0.0
Employers' contributions 0.0 0.0
Actuarial gain (+) and loss (-) 0.0 -0.0
Benefits paid -0.0 -0.0
Closing fair value of plan assets 0.3 0.3
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
SUSTAINABILITY REPORT
Lassila & Tikanoja
Annual Report 2023
Lassila & Tikanoja
Annual Report 2023
47
Financial statements of the parent company
1.
2. 3. 4. 5.
Proposal by the Board of Directors
MEUR 2023 2022
Movements in the liability recognised in the
statement of financial position
Opening liability 1.2 1.4
Expense recognised in the income statement 0.0 0.0
Employers' contributions 0.0 0.0
Actuarial gain (-) and loss (+) 0.0 -0.2
Contributions paid -0.1 -0.0
Change in liability related to pension deposits -0.1 0.0
Closing liability 1.2 1.2
Amounts recognised in the statement
comprehensive income
Current service cost 0.0 0.0
Interest cost 0.0 0.0
Interest income -0.0 -0.0
Actuarial gain (-) and loss (+) 0.0 -0.2
Total 0.1 -0.2
The Group estimates that it will contribute EUR 60 thousand to defined
benefit plans in 2024.
MEUR 2023 2022
Present value of obligation 1.4 1.5
Fair value of plan assets -0.3 -0.3
Deficit 1.2 1.2
Principal actuarial assumptions used. %
Discount rate 4.0 3.8
Expected rate of return on plan assets 2.7 2.6
Expected rate of salary increase 3.7 4.9
Expected rate of inflation 2.5 2.4
Defined contribution maturity of the obligation
MEUR 2023 2022
Maturity of less than one year 0.1 0.1
1-5 years 0.3 0.2
5-10 years 0.3 0.3
10-15 years 0.2 0.2
15-20 years 0.2 0.2
20-25 years 0.1 0.1
25-30 years 0.1 0.1
over 30 years 0.1 0.1
Total 1.3 1.2
Lassila & Tikanoja
Annual Report 2023
48
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2.
3. 4. 5.
Proposal by the Board of Directors
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
3 Intangible and tangible assets
and other non-current assets
3.1 Goodwill and other intangible assets ....................... 49
3.2 Goodwill impairment testing ................................ 50
3.3 Tangible assets ...............................................51
3.4 Right-of-use assets and lease liabilities .................... 52
3.5 Other non-current assets ................................... 53
Lassila & Tikanoja
Annual Report 2023
49
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2.
3. 4. 5.
Proposal by the Board of Directors
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
3.1 Goodwill and other intangible assets
Accounting policy
Goodwill represents the portion of the acquisition cost by which the
aggregate of the consideration given, the share of non-controlling
owners in the acquired entity and the previously owned share exceed
the fair value of the acquired net assets at the time of acquisition.
Goodwill is not amortised, but is tested annually for impairment during
the last quarter of the financial year. Goodwill is measured at historical
cost less impairment losses, if any.
Intangible assets acquired in a business combination are measured at
fair value. The useful lives of intangible assets are estimated to be either
finite or indefinite. In L&T, the intangible assets recognised in business
combinations include mainly customer relationships. The amorti-
sation period for customer relationships is on average 10 years.
Other intangible assets are recognised at historical cost less accumulated
amortisation and impairment losses. The costs of software projects
are recognised in other intangible assets starting from the time when
the projects move out of the research phase into the development
phase and the outcome of a project is an identifiable intangible asset.
Such an intangible asset must provide L&T with future economic benefit
that exceeds the costs of its development. The cost comprises all directly
attributable costs necessary for preparing the asset to be capable of
operating in the manner intended by the management. The largest cost
items are consultancy fees paid to third parties.
The depreciation period for computer software and software
licences is five to ten years.
Goodwill impairment testing is described in note 3.2 and amortisation
and impairment of other intangible assets is described in note 1.7.
MEUR Goodwill
Customer
relationships
arising from
acquisitions
Agreements on
prohibition of
competition
arising from
acquisitions
Other intan-
gible assets
arising from
acquisitions
Intangible
rights
Other
intangible
assets
Prepayments
and
construction
in progress Total
Acquisition cost, 1 Jan 2023 194.6 59.1 24.2 10.0 9.5 31.8 8.2 337.4
Additions 0.4 0.0 10.1 10.6
Disposals -22.7 -0.1 -15.2 -38.0
Impairments -1.9 -1.9
Transfers between items 1.6 -1.8 -0.1
Exchange differences 0.1 0.0 0.0 0.0 0.0 0.1 0.2
Acquisition cost, 31 Dec 2023 194.7 59.1 1.5 10.1 9.8 18.4 14.6 308.2
Accumulated depreciation, 1 Jan 2023 -13.9 -39.7 -24.0 -9.8 -6.6 -26.2 -120.2
Accumulated amortisation on disposals
and transfers 22.7 0.1 15.1 37.9
Amortisation charge -3.3 -0.1 -0.1 -0.7 -2.6 -6.8
Exchange differences 0.0 -0.1 -0.0 -0.0 -0.0 -0.1 -0.2
Accumulated depreciation, 31 Dec 2023 -13.9 -43.1 -1.4 -9.8 -7.2 -13.8 -89.2
Carrying amount at 31 Dec 2023 180.8 16.1 0.1 0.2 2.6 4.6 14.6 219.0
Other intangible assets arising from acquisitions include mainly environmental permits. Other intangible assets consist primarily of software and software licences.
Contractual commitments related to intangible assets totalled EUR 0.0 million (1.0).
MEUR Goodwill
Customer
relationships
arising from
acquisitions
Agreements on
prohibition of
competition
arising from
acquisitions
Other intan-
gible assets
arising from
acquisitions
Intangible
rights
Other
intangible
assets
Prepayments
and
construction
in progress Total
Acquisition cost, 1 Jan 2022 186.6 55.4 24.1 10.1 9.3 32.7 3.5 321.8
Additions 0.5 0.1 6.5 7.1
Business acquisitions 11.5 5.4 0.1 0.0 17.0
Disposals -0.1 -2.7 -2.8
Transfers between items 1.8 -1.8 -0.0
Exchange differences -3.6 -1.6 -0.1 -0.0 -0.3 -0.0 -5.7
Acquisition cost, 31 Dec 2022 194.6 59.1 24.2 10.0 9.5 31.8 8.2 337.4
Accumulated depreciation, 1 Jan 2022 -14.6 -37.2 -24.0 -9.8 -5.8 -25.7 -117.1
Accumulated amortisation on disposals
and transfers 0.0 2.7 2.7
Amortisation charge -3.5 -0.1 -0.1 -0.9 -3.2 -7.8
Exchange differences 0.6 1.1 0.1 0.0 0.2 0.0 2.0
Accumulated depreciation, 31 Dec 2022 -13.9 -39.7 -24.0 -9.8 -6.6 -26.2 -120.2
Carrying amount at 31 Dec 2022 180.7 19.4 0.2 0.3 2.9 5.6 8.2 217.2
Lassila & Tikanoja
Annual Report 2023
50
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2.
3. 4. 5.
Proposal by the Board of Directors
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
3.2 Goodwill impairment testing
Accounting policy
The goodwill impairment testing is conducted at least annually or more
frequently if there is any indication that goodwill maybe impaired.
Impairment testing is conducted according to the business structure
in force at the time of the impairment testing.
In impairment testing, recoverable amounts are estimated on the
basis of an asset’s value-in-use. Future cash flows are based on annual
estimates of income statements and maintenance investments made
by the management in connection with the strategy process for a four-
year period. The management bases its estimates on actual development
and views on the growth outlook for the industry (general market
development and unit profitability, pricing, municipalisation decisions,
personnel costs and raw material costs). Approved investment decisions
are taken into account in the growth estimates.
Cash flows extending beyond the four-year forecast period are
calculated using the so-called terminal value method. The growth rates
used in the calculations are based on the management’s estimates of
long-term growth and development of profitability .
Critical judgements by Management
The preparation of value-in-use based calculations used in goodwill
impairment testing requires the use of management judgement. The
future cash flows are based on forecasts for the strategy period
approved by the Board of Directors. These forecasts are based on
actual development and management’s view on the growth outlook
for the industry. The terminal growth rate is based on the management’s
view on the long-term growth outlook for the business. The discount rates
used reflect the best estimate of the weighted average cost of capital.
Though the assumptions used are appropriate according to the manage-
ment’s judgement, the estimated cash flows may fundamentally differ from
those realised in the future.
Goodwill allocation
The carrying amounts of goodwill are allocated to cash-generating units in
accordance with the table below:
MEUR 2023 2022
Environmental Services 87.6 87.6
Industrial Services 30.6 30.6
Facility Services, Finland 28.6 28.6
Facility Services, Sweden 34.0 33.9
Total 180.8 180.7
The goodwill generated from the acquisition of Sand & Vattenbläst i Tyringe AB
in the first quarter of 2022 is included in the goodwill allocated to Industrial
Services.
Goodwill Impairment testing in 2023
The goodwill impairment testing has been prepared based on value-in-use
calculations in which future cash flows are discounted to net present value.
The terminal growth rate used in the value-in-use calculations of cash-gen-
erating units is 2.0 per cent, which corresponds to the mid-term inflation goal
of the European Central Bank. The same terminal growth rate is used in all
cash-generating units based on similar business environment.
The discount rates used in calculations are based on the Group’s weighted
average cost of capital (WACC). Factors in WACC are risk-free interest rate,
market risk premium, company-specific beta, cost of capital as well as the ratio
between equity and liabilities. A discount rate has been defined for each cash
generating unit.
Discount rates used in the calculations (pre tax)
% 2023 2022
Environmental Services 9.4 8.5
Industrial Services 9.4 8.5
Facility Services, Finland 9.3 8.4
Facility Services, Sweden 9.3 8.5
According to the impairment testing, the value in use of all the cash generating
units in the Group exceeded the carrying amounts of the tested assets. Thus, no
impairments were recognised in 2023.
Sensitivity analyses of impairment testing
A sensitivity analysis of each cash-generating unit was performed, during which
the key calculation assumptions were tested. The key assumptions used in the
testing were discount rate and EBITDA per cent used in calculation of the
terminal value. The EBITDA per cent was based on the historical development
of the cash-generating unit. In the sensitivity analysis, a key assumption was
tested by changing the threshold values to a value at which the value-in-use
would equal the carrying amount.
In Facility Services Sweden, a decrease of EBITDA per cent by 0.9 percentage
points or an increase of discount rate by 1.8 percentage point would result in the
value-in-use of Facility Services Sweden equaling the carrying amount of the
tested assets. At the time of the testing, the difference between the value-in-use
and the carrying amount of Facility Services Sweden was EUR 16.3 million and
the EBITDA per cent in the forecast period was 5.5 per cent. Regarding the other
cash-generating units, any change in the key assumptions which would be
considered as somewhat likely could not result in the carrying amount of the
cash-generating unit exceeding the value-in-use.
Lassila & Tikanoja
Annual Report 2023
51
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2.
3. 4. 5.
Proposal by the Board of Directors
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
3.3 Tangible assets
Accounting policy
Tangible assets are recognised at historical cost less accumulated
depreciation and impairment losses. The historical cost includes
expenditure that is directly attributable to the acquisition of the asset.
Borrowing costs immediately arising from the acquisition, construction
or manufacture of tangible assets that meet the conditions are
capitalised as part of the asset’s acquisition cost. Possible restoration
costs are also included in the acquisition cost.
In business combinations, tangible assets are measured at fair value
on the acquisition date. In the statement of financial position, tangible
assets are shown less accumulated depreciation and impairment, if any.
Tangible assets are depreciated using the straight-line method over
their expected useful lives, excluding new landfills. For completed landfills
the Group applies the units of production method, which involves depre-
ciation on the basis of the volume of waste received. The expected useful
lives are reviewed on each balance sheet date, and, if expectations differ
materially from previous estimates, the depreciation periods are adjusted
to reflect the changes in expectations of future economic benefits.
Depreciation in the financial statements is based on the following
expected useful lives:
Buildings and structures 5–30 years
Vehicles 6–15 years
Machinery and equipment 4–15 years
Land is not depreciated.
When an asset included in tangible assets consists of several components
with different estimated useful lives, each component is treated as a
separate asset. Ordinary repair and maintenance costs are recognised in
the income statement during the period in which they are incurred.
Costs of significant modification and improvement projects are capitalised
if it is probable that the projects will result in future economic benefits
to the Group. Gains and losses on sales and disposal of tangible assets
are recognised through profit or loss and are presented in other
operating income or expenses.
Accounting policy for depreciations and impairments is presented
in note 1.7.
MEUR Land Buildings
Machinery and
equipment Other
Prepayments
and
construction
in progress Total
Acquisition cost, 1 Jan 2023 8.2 141.6 416.1 0.3 9.0 575.1
Additions 0.0 0.7 15.2 0.0 22.4 38.3
Disposals -0.5 -0.1 -26.4 -0.0 -27.0
Transfers between items 4.0 11.5 -15.4 0.1
Exchange differences 0.0 0.0 0.0 0.0 0.0
Acquisition cost, 31 Dec 2023 7.7 146.1 416.4 0.3 16.0 586.5
Accumulated depreciation, 1 Jan 2023 -0.5 -108.4 -310.8 -0.1 -419.8
Accumulated depreciation on disposals and transfers 0.5 0.1 25.8 26.4
Depreciation for the period -5.5 -21.6 -0.0 -27.1
Exchange differences -0.0 -0.0 -0.0 -0.0
Accumulated depreciation, 31 Dec 2023 - -113.8 -306.6 -0.1 -420.6
Carrying amount at 31 Dec 2023 7.7 32.3 109.8 0.2 16.0 166.0
The carrying amount of machinery and equipment includes EUR 13.0 million (12.6) of compactors and balers sold through an external financing company. Due to the
repurchase obligation the leased equipment is treated as tangible assets.
Contractual commitments related to property, plant and equipment totalled EUR 14.0 million (19.7).
MEUR Land Buildings
Machinery and
equipment Other
Prepayments
and
construction
in progress Total
Acquisition cost, 1 Jan 2022 7.4 138.9 408.9 0.1 10.1 565.4
Additions 0.8 0.6 12.8 0.1 12.4 26.7
Business acquisitions 0.2 4.3 0.1 4.6
Disposals -0.1 -1.7 -19.6 -0.0 -0.1 -21.5
Transfers between items 3.6 9.9 -13.5 0.0
Exchange differences -0.0 -0.1 -0.0 -0.2
Acquisition cost, 31 Dec 2022 8.2 141.6 416.1 0.3 9.0 575.1
Accumulated depreciation, 1 Jan 2022 -0.5 -103.8 -308.0 -0.1 -412.4
Accumulated depreciation on disposals and transfers 0.6 18.6 0.0 19.3
Depreciation for the period -6.2 -21.8 -0.0 -28.1
Exchange differences 1.1 0.4 0.0 1.5
Accumulated depreciation, 31 Dec 2022 -0.5 -108.4 -310.8 -0.1 -419.8
Carrying amount at 31 Dec 2022 7.7 33.2 105.3 0.2 9.0 155.3
Lassila & Tikanoja
Annual Report 2023
52
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2.
3. 4. 5.
Proposal by the Board of Directors
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
3.4 Right-of-use assets and lease liabilities
Accounting policy
A right-of-use asset is recognised from a lease contract at the
commencement date of the lease, which is the date that the
underlying asset is made available for use. Right-of-use assets are
measured at cost less any cumulated depreciation and impairment
losses and adjusted for any remeasurement of the lease liability. The
cost of the right-of-use asset includes the amount of lease liability
recognised, any initial direct costs incurred and lease payments made at
or before the commencement date less any lease incentives received.
Possible restoration obligations are also considered in the cost of the
right-of-use asset. At each balance sheet date, the carrying amounts
of right-of-use assets are assessed for any impairment, as described
in note 1.7.
The lessee recognises the lease liability at the inception of the
contract by discounting the future minimum lease payments to the
present value. Since the interest rate implicit in the lease is not readily
available in most of the Group’s lease contracts, the future minimum
lease payments are discounted using The Group’s incremental borrowing
rate. According to the standard, the incremental borrowing rate is the
interest rate that the lessee would have to pay to borrow over a similar
term, and with a similar security, the funds necessary to obtain an asset
of a similar value to the right-of-use asset in a similar economic situation.
The Group has determined the incremental borrowing rate taking into
consideration the lease term and the financial environment of the lease.
The Group’s lease liability covers the lease liabilities of commodities
leased through a financial company as well as the lease liabilities of
other lease agreements excluding the short-term leases or leases for
low-value assets, for which the right-of-use asset and lease liability is
not recognised.
MEUR Land
Buildings
and
constructions
Machinery
and
equipment Total
Acquisition cost, 1 Jan 2023 16.4 55.1 67.8 139.2
Additions 1.2 11.0 20.0 32.2
Disposals -2.4 -6.9 -6.1 -15.5
Exchange differences - 0.0 0.0 0.0
Acquisition cost, 31 Dec 2023 15.1 59.2 81.7 155.9
Accumulated depreciation,
1 Jan 2023 -3.7 -28.3 -36.0 -68.0
Accumulated depreciation on
disposals and transfers 0.2 4.4 5.2 9.8
Depreciation for the period -1.0 -9.6 -10.9 -21.6
Exchange differences -0.1 -0.1 -0.1
Accumulated depreciation,
31 Dec 2023 -4.5 -33.6 -41.8 -79.9
Carrying amount at 31 Dec 2023 10.6 25.6 39.9 76.0
MEUR Land
Buildings
and
constructions
Machinery
and
equipment Total
Acquisition cost, 1 Jan 2022 12.9 47.7 60.4 121.1
Additions 3.4 10.2 9.2 22.7
Disposals 0.1 -2.4 -1.1 -3.5
Exchange differences - -0.4 -0.7 -1.1
Acquisition cost, 31 Dec 2022 16.4 55.1 67.8 139.2
Accumulated depreciation,
1 Jan 2022 -2.6 -20.5 -28.1 -51.3
Accumulated depreciation on
disposals and transfers 1.4 0.7 2.2
Depreciation for the period -1.0 -9.4 -9.1 -19.5
Exchange differences - 0.2 0.5 0.6
Accumulated depreciation,
31 Dec 2022 -3.7 -28.3 -36.0 -68.0
Carrying amount at 31 Dec 2022 12.7 26.8 31.8 71.2
On the balance sheet date, no new lease agreements are known which will
become valid in the coming financial years that would have a significant impact
on the amount of debt resulting from a right-of-use asset or a lease agreement.
Lease liabilities and their maturity have been presented in notes 4.1 Financial
assets and liabilities and 4.2 Financial risk management.
For more information about the expenses related to leases, please refer to
note 1.6.
Critical judgements by Management
The Group has lease contracts relating mainly to real estate and land
areas which are valid until further notice. For such contracts, the
management evaluates the lease term on a lease-by-lease basis. In
evaluating the lease term the Group considers e.g. any significant
leasehold improvements undertaken over the lease term, costs relating
to the termination of the lease and the importance of the underlying
asset to the Group’s operations taking into account, for example, whether
the underlying asset is a specialised asset, the location of the underlying
asset and the availability of suitable alternatives. The lease term is
reassesed in future periods to ensure that the lease term reflects the
current circumstances.
Lassila & Tikanoja
Annual Report 2023
53
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2.
3. 4. 5.
Proposal by the Board of Directors
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
3.5 Other non-current assets
Accounting policy
The Group’s other non-current assets consist of shares in associated
companies and joint ventures as well as other shares and holdings.
The Group’s interests in associated companies and joint ventures are
accounted for using the equity method of accounting. The Group’s share
of its associated companies’ or joint ventures’ post-acquisition profits
or losses after tax are recognised in the income statement and as
adjustment to investment in associated companies or joint ventures in
the balance sheet accordingly. When the Group’s share of losses in
an associated company or a joint venture equals or exceeds its
interest in the associated company or joint venture, the Group does not
recognise further losses, unless it has incurred obligations or made
payments on behalf of the associated company or joint venture. Other
shares and holdings include shares in a few smaller companies as well as
golf shares, and they are measured at fair value through profit or loss.
Other receivables mainly include deposits related to pension obligations
in Sweden as well as non-current advance payments.
MEUR
Shares in
associated and
joint venture
companies
Other
shares and
holdings
Other
receivables
Acquisition cost, 1 Jan 2023 14.0 0.2 1.9
Additions - - 0.0
Disposals - - -0.3
Share of the result of associated
companies and joint ventures 3.6 - -
Exchange differences - - 0.0
Acquisition cost, 31 Dec 2023 17.6 0.2 1.5
MEUR
Shares in
associated and
joint venture
companies
Other
shares and
holdings
Other
receivables
Acquisition cost, 1 Jan 2022 0.0 0.2 2.0
Additions 13.3 0.0 0.5
Disposals - -0.0 -0.6
Share of the result of associated
companies and joint ventures 0.7 - -
Exchange differences - - -0.1
Acquisition cost, 31 Dec 2022 14.0 0.2 1.9
Information about the substantial joint venture company
Name Domicile
Direct ownership
(%)
2023 2022
Laania Oy Helsinki 55 55
Financial information about the substantial joint venture company
MEUR 2023 2022
Intangible and tangible assets 3.3 3.3
Right-of-use assets 2.4 2.4
Other non-current receivables 0.0 0.0
Inventories 40.7 51.4
Trade and other receivables 40.2 27.3
Assets total 86.7 84.4
Non-current interest bearing liabilities 22.4 32.5
Trade payables 14.4 11.6
Other current payables 17.9 15.1
Liabilities total 54.8 59.1
Net sales 153.4 89.7
Depreciation and amortisation -1.4 -0.8
Financial income and expenses -1.2 -0.5
Income taxes -1.6 -0.3
Result for the period 6.5 1.3
The reconciliation of the joint venture’s financial
information to the Group’s book value:
The Group's ownership, % 55.0 55.0
The Group's share of net assets 17.6 14.0
The value of the joint venture in the consolidated
statement of financial position 17.6 14.0
For more information on the joint venture please refer to note 5.3.
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3.
4. 5.
Proposal by the Board of Directors
54
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
4 Financial risks and
capital structure
4.1 Financial assets and liabilities ...............................................................55
4.2 Financial risk management ......................................................................57
4.3 Equity ....................................................................................................................60
4.4 Earnings per share and dividend per share ..................................... 61
4.5 Commitments and contingent liabilities ...........................................61
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3.
4. 5.
Proposal by the Board of Directors
55
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
4.1 Financial assets and liabilities
Accounting policy
The Group’s financial assets and liabilities include cash and cash equiva-
lents, trade and other receivables, trade and other payables, bank loans,
bonds, commercial papers, lease liabilities and derivatives. Financial as-
sets and liabilities are classified into following measurement categories:
Fair value through profit and loss
• Derivatives
• Deferred considerations relating to acquisitions
Amortised cost
• Cash and cash equivalents
• Trade and other receivables
• Interest-bearing liabilities, such as bank loans,
bonds, commercial papers, lease liabilities
• Trade and other payables
This classification is performed when the asset or liability is acquired.
The classification of financial assets into different measurement
categories depends on the business model for managing the financial
asset and the contractual cash flow characteristics of the financial
asset acquired. The classification of financial liabilities into different
measurement categories depends on the purpose for which the
financial liabilities were initially acquired.
A financial asset is derecognised when the rights to the cash flows
from the asset expire, or when all material risks and rewards of the
ownership of the asset have been transferred outside the Group.
A financial liability is derecognised when the obligation specified in
the contract is discharged or cancelled or expires.
Financial assets measured at amortised cost
Cash and cash equivalents consist of cash on hand, bank deposits
redeemable on demand and other short-term liquid investments. Their
maturity is no longer than three months from the acquisition date. They
are recognised as of the settlement date and measured at historical
cost. Foreign currency transactions are translated into euros using the
exchange rates prevailing on the balance sheet date. The used credit
limits are included in current interest-bearing liabilities.
Trade and other receivables are measured at amortised cost.
Receivables are classified as current financial assets unless their
maturity date is more than 12 months from the balance sheet date . Trade
and other receivables are recognised at historical cost less allowances
for impairment. A valuation allowance for impairment of trade receivables
is recognised when there is objective evidence that the Group will not
be able to collect all amounts due according to the original terms of the
receivables. The Group applies the simplified approach to providing for
expected credit losses, which permits the use of the lifetime expected
loss provision for all trade receivables. Impairments are recognised as an
expense in the income statement. Sold non-recourse trade receivables’
credit risk and contractual rights are transferred from the Group on the
selling date and related expenses are recognised as financial expenses.
More information about allowance for impairment of trade receivables
is presented in note 2.1 .
Financial liabilities measured at fair value through profit or loss
Derivatives which are not designated as hedges as well as deferred
considerations related to acquisitions are measured at fair value
through profit and loss. Derivatives within this category are short-term
liabilities with a maturity of less than 12 months and are measured at
fair value using the market price on the balance sheet date. Deferred
considerations are recognised in the balance sheet on group level
only. They are usually non-current liabilities with maturity more than
12 months. Measurement of fair value of the deferred considerations
depends on the sale and purchase agreement. Both realised and
unrealised gains and losses arising from the changes in fair value are
recognised in the income statement for the financial period during
which they incurred.
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost are recognised in the
statement of financial position on the settlement date at fair value, on
the basis of the consideration received. Transaction costs directly
attributable to the acquisition or issue of a loan are included in the
original carrying amount of financial liabilities. Financial liabilities are
subsequently measured at amortised cost using the effective inter-
est method. Interest expenses are recognised in the income state-
ment using the effective interest rate method. Financial liabilities that
expire within 12 months from the balance sheet date, including bank
overdrafts in use, are recognised within current interest-bearing
liabilities, and those expiring in a period exceeding 12 months, are
recognised within non-current interest-bearing liabilities.
Interest rate swaps
Fair values of interest rate swaps are valued using a technique based on present
value of future cash flows, which is supported by market interest rates at the
balance sheet date. Fair values describe the prices that the Group would gain or
should pay, if the derivative financial instruments were cancelled at the balance
sheet date. At the balance sheet date the company did not have any interest rate
swaps.
Lease liabilities
Fair value of lease liabilities is calculated by discounting future cash flows using
the incremental borrowing rate. More information on the accounting policies for
lease liabilities is presented in note 3.4.
Fair value hierarchy of financial assets and liabilities measured at fair value
Financial assets and liabilities recognised at fair value must be categorised by
using a three-level fair value hierarchy that reflects the significance of the input
data used in fair value measurement. Hierarchy level 1 includes such financial
instruments, whose fair value is directly based on quated prices in active mar-
kets. Financial instruments of hierarchy level 2 include over-the-counter (OTC)
derivatives as well as loan receivables and loans measured at amortised cost.
A financial instrument is categorised to level 3 if it’s fair value cannot be deter-
mined based on observable market information.
In the Group, derivatives and deferred consideration relating to acquisitions
are recognised at fair value. Derivatives, which comprise interest rate swaps
are categorised in hierarchy level 2. The fair values of financial instruments are
based on prices derived from prices quoted in an active market or generally
accepted valuation models that are, to a significant degree, based on verifiable
market data. The fair value of the deferred consideration is categorised in hier-
archy level 3. Its valuation is described in more detail on the following page.
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3.
4. 5.
Proposal by the Board of Directors
56
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Reconciliation of financial liabilities recognised at fair value
according to the level 3
MEUR 2023 2022
Carrying amount 1 Jan 5.7 -
Deferred consideration at the date of the acquisition - 5.1
Change in fair value 0.2 0.8
Exchange differences 0.0 -0.2
Carrying amount 31 Dec 5.9 5.7
Deferred consideration is related to the acquisition of 70 per cent share of
Sand & Vattenbläst i Tyringe AB (”SVB”) that offers process cleaning services
in Sweden. The acquisition took place on 1 February 2022. SVB is consolidated
with 100 per cent share in the Group and, in connection with the arrangement,
L&T has recognised in financial liabilities an estimate of the deferred considera-
tion for the acquisition. The deferred consideration relates to the acquisition of
non-controlling interest and is measured at fair value, which is reflected in the
present value of the estimated liability. It will mature on 1 February 2026 at the
earliest.
The valuation of the deferred consideration is based on the shareholder
agreement and is affected by the acquired company’s balance sheet structure
and EBITDA forecast for 2025. More information on the deferred consideration is
presented in note 2.4.
Net interest-bearing liabilities
MEUR 2023 2022
Loans from financial institutions 40.8 51.4
Bonds 74.7 74.6
Lease liabilities 56.1 51.5
Non-current interest-bearing liabilities 171.7 177.5
Bonds - 17.7
Lease liabilities 21.5 21.0
Current loans 0.6 0.7
Current interest-bearing liabilities 22.1 39.3
Total interest-bearing liabilities 193.7 216.8
Cash and cash equivalents 32.9 49.5
Net interest-bearing liabilities 160.9 167,3
2023 2022
MEUR
Amortised
cost
Derivatives
under hedge
accounting
Fair value
through
profit or loss
Carrying
amounts
by balance
sheet item
Amortised
cost
Derivatives
under hedge
accounting
Fair value
through
profit or loss
Carrying
amounts
by balance
sheet item
Fair value
hierarchy
level Note
Non-current financial assets
Other receivables 1.3 1.3 1.4 1.4
Current financial assets
Trade and other receivables 85.9 85.9 91.3 91.3 2.1
Derivative receivables - 1.2 1.2 2 4.2
Cash and cash equivalents 32.9 32.9 49.5 49.5
Total financial assets 120.1 - - 120.1 142.1 1.2 - 143.3
Non-current financial liabilities
Borrowings 115.5 115.5 126.0 126.0 2
Lease liabilities 56.1 56.1 51.5 51.5 4.2
Deferred consideration 5.9 5.9 5.7 5.7 3
Current financial liabilities
Borrowings 0.6 0.6 18.3 18.3 2
Lease liabilities 21.5 21.5 21.0 21.0 4.2
Trade and other payables 69.4 69.4 65.8 65.8 2.3
Total financial liabilities 263.1 - 5.9 269.1 282.6 - 5.7 288.3
Non-current other liabilities do not include advances received. Trade and other receivables do not include tax receivables and accruals, and trade and other payables do
not include statutory liabilities (e.g. tax liabilities), accrued expenses and deferred income. The fair values of balance sheet items do not differ significantly from the carrying
amounts of the balance sheet items.
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3.
4. 5.
Proposal by the Board of Directors
57
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
4.2 Financial risk management
The principles for L&T’s financial risk management are defined in the treasury
policy approved by the Board of Directors. The purpose of financial risk manage-
ment is to mitigate significant financial risks and strive to reduce the unfavour-
able effects of fluctuations in the financial market and other risk factors on the
Group’s result.
The Group’s financing and liquidity management are handled centrally by the
Group’s finance function, which is managed by the CFO. Transactions related to
financial risk management are carried out by the Group’s finance function.
Foreign exchange risk
The Group consists of a parent company operating in Finland and subsidiaries
operating in Finland and Sweden. The parent company’s and the Finnish sub-
sidiaries’ functional and reporting currency is the euro. The foreign subsidiaries’
functional and reporting currency is the currency of their country of location.
Thus, changes in foreign exchange rates have impact on the Group’s result and
equity.
Translation risk
The exposure to translation risk consists of net investments in foreign subsid-
iaries, which include equity investments and retained earnings. The position of
net investments in foreign subsidiaries is not hedged, as these holdings are con-
sidered long-term strategic investments.
In 2023, translation differences totalling EUR 0.1 million (-5.6) were accumu-
lated in the equity due to the fluctuations of currency rates. The translation dif-
ference is totally related to the Swedish business. At the balance sheet date, the
Swedish krona denominated translation position was EUR 67.3 million (69.8).
Transaction risk
The business operations of the Group’s foreign subsidiaries are carried out
almost completely in their functional currency and thus does not cause any
transaction risk. Group companies operating in Finland use euro as the invoicing
currency for sales almost exclusively. Financing for subsidiaries is mainly pro-
vided through intra-Group loans that are denominated in the functional currency
of each subsidiary. The amount of the internal loans within the Group is small,
and thus does not cause significant transaction risk.
The company has recognised in financial liabilities an estimate of a deferred
consideration related to the acquisition of Sand&Vattenbläst i Tyringe AB. The
Swedish krona denominated deferred consideration exposes the company to a
translation risk.
Change in net interest-bearing liabilities
2023 2022
MEUR
Loans from
financial
institutions Bonds
Lease
liabilities
Cash and
cash
equivalents Total
Loans from
financial
institutions Bonds
Lease
liabilities
Cash and
cash
equivalents Total
Carrying amount on 1 Jan -52.0 -92.3 -72.5 49.5 -167.3 -74.9 -49.9 -70.9 28.6 -167.1
Change in net interest-bearing liabilities,
cash:
Proceeds from non-current loans -40.0 -40.0 -75.0 -75.0
Repayments of non-current loans 50.7 17.7 68.4 25.9 32.3 58.1
Proceeds from current loans -10.0 -10.0 -35.0 -35.0
Repayments of current loans 10.0 10.0 35.0 35.0
Repayments of lease liabilities 21.2 21.2 19.4 19.4
Change in cash and cash equivalent -16.6 -16.6 21.0 21.0
Total cash flows 10.7 17.7 21.2 -16.6 33.0 25.9 -42.7 19.4 21.0 23.6
Change in net interest-bearing liabilities,
non-cash:
Change in lease liablities -26.4 -26.4 -21.1 -21.1
Other changes 0.0 -0.1 0.0 -0.1 -3.0 0.3 -0.1 -2.8
Total non-cash movements 0.0 -0.1 -26.4 0.0 -26.5 -3.0 0.3 -21.1 -0.1 -23.9
Carrying amount on 31 Dec -41.4 -74.7 -77.6 32.9 -160.9 -52.0 -92.3 -72.5 49.5 -167.3
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3.
4. 5.
Proposal by the Board of Directors
58
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Price risk of investments
The Group has not invested in listed securities, the value of which changes as
the market prices change, and is thus not exposed to securities price risk. The
Group has a 55% holding in Laania Oy, a joint venture established on 1 July 2022
with Neova. The investment in the joint venture is accounted for using the equity
method of accounting, and it’s carrying amount in the balance sheet was EUR
17.6 million (14.0) at the end of the reporting period. More information on the joint
venture and its measurement can be found in note 3.5. The Group’s other hold-
ings in unlisted shares are not material, and there is no substantial price risk
related to these shares.
Commodity price risk
The fluctuations of the world market price of crude oil are reflected in the price
of fuel used in production equipment as well as in the purchase prices of envi-
ronmental products through oil-based raw materials. In waste management,
some customer contracts specify such invoicing periods and contract terms
that the sales prices cannot be raised monthly. This means that the rise in fuel
prices is passed on to service prices with a delay.
The Group manages the raw material price risk for environmental products
through fixing sales prices for a period not exceeding the period for which the
suppliers’ purchase prices are valid.
Interest rate risk
The Group’s interest rate risk is primarily related to borrowings, which are tied
to variable interest rates and create cash flows that vary with the interest rate
level. The Group seeks to keep interest costs steady. As a result, the aim is to
tie over 50 per cent of the company’s borrowings to fixed interest rates. When
necessary, part of the cash flows associated with variable-rate borrowings is
hedged against interest rate risk with interest rate swaps. During the reporting
period, the interest rate swap used for hedging cash flows related to floating
rate loan was terminated. After this, the interest rate risk was still according to
the Company’s treasury policy. At the balance sheet date, the Group did not have
interest rate swaps.
At end of the financial period, 65 per cent (86) of the company’s borrowings
were either fixed interest rate borrowings or hedged with interest rate swaps.
Variable-rate borrowings accounted for 35 per cent (14). Therefore changes in
the interest rate level will not impact interest costs in full. The average interest
rate of long-term loans, excluding lease liabilities, with interest rate hedging, was
4.0 per cent (2.5).
Most of the Group’s net sales are generated by long-term service agreements.
Due to good cash flow predictability, the Group’s treasury policy specifies that
the company shall seek to ensure adequate level of liquid assets in proportion to
the current short-term financing requirements.
Credit and counterparty risk
Financial instruments involve the risk of the counterparty being unable to fulfil
its contractual commitments. Counterparty risk is managed by making financial
and derivative contracts with major Nordic banks only.
The Group has a wide customer base consisting of companies, industrial
plants, office and business properties, institutional property owners, housing
corporations, public sector organisations and households. Its accounts receiv-
able consist mostly of a high number of relatively small receivables and there
are no significant concentrations of credit risk.The Group has credit control
guidelines to ensure that services and products are sold only to customers with
an appropriate credit standing or, if a customer’s creditworthiness is inadequate,
prepayment is required. Most customer relationships are based on long-term
service contracts, and customers are not generally required to provide collateral.
A simplified credit loss model is used for trade receivables and contract
assets. The amount of expected credit losses is based on the lifetime expected
credit losses of receivables. The model is based on historical observed default
amounts over the expected life of the trade receivables and is adjusted for
forward-looking estimates depending on the overdue of the receivables. More
information on allowance for expected credit losses can be found in note 2.1.
With regard to Finnish trade receivables, collection operations are managed
centrally by the finance function. The foreign subsidiaries manage the collection
of their trade receivables locally.
Financial assets and related credit risk
MEUR 2023 2022
Other non-current receivables 1.3 1.4
Trade receivables 85.9 91.0
Other current receivables 0.0 0.2
Derivative receivables - 1.2
Cash and cash equivalents 32.9 49.5
Liquidity and refinancing risk
Liquidity risk management ensures that the Group continuously will be able to
answer for its financial obligations associated with operations at the lowest
possible cost. The Group seeks to maintain good liquidity through efficient cash
management. The liquidity situation is monitored in real time and predicted using
cash flow forecasts. The Group uses a group bank account system which facili-
tates the management of cash funds. To ascertain the availability of funding, the
Group uses several banks in its financial operations. Refinancing risk is managed
by a broad-based maturity profile of loans and by maintaining the level of the
average duration of the loan portfolio for at least two years.
The Group seeks to keep its cash assets fairly small, while ensuring sufficient
credit limits for liquidity management purposes. To meet any temporary need
for cash arising from cash flow fluctuations, the Group has an EUR 10 million
account limit and a committed credit limit totalling EUR 40 million. The account
limit as well as the committed credit limit were not in use, as was the case in
the comparison period. In addition the Group has commercial paper programme
totalling EUR 100 million which was all unused (comparison period: all unused).
At the end of the financial period, the Group’s liquid assets amounted to EUR 32.9
million (49.5).
In the second quarter of 2023, the company refinanced a EUR 50 million bank
loan that would have matured in the third quarter of 2024. The new bank loan
totalling EUR 40 million will mature in the third quarter of 2026. The interest rate
swap used by the company to convert part of the EUR 50 million bank loan into
a fixed interest loan was terminated in conjunction with the refinancing of the
bank loan. The fair value of the interest rate swap, EUR 1.3 million, was recog-
nised as financial income in the consolidated income statement.
During the third quarter of 2023, the Company repaid the the remaining EUR
17.7 million of the bond issued in 2018.
The new bank loan totalling EUR 40 million includes following financial cove-
nants: equity ratio and net debt to EBITDA ratio. These covenants restrict giving
of collaterals to other financiers and discontinuance or disposal of present busi-
ness. A breach of the covenants may lead to the early termination of the loan.
At the end of the reporting period, the financial covenants were fulfilled. The
company excepts them to be fulfilled also after the following 12 months. In addi-
tion to financial covenants, the expenses of the committed credit limit and the
senior unsecured sustainability-linked notes issued in May 2022 as well as the
new bank loan totalling EUR 40 million are linked to sustainability targets, namely
carbon footprint and accident frequency.
The following table shows the Group’s financial liabilities classified according
to contractual maturity dates at the balance sheet date. The figures shown are
undiscounted contractual cash flows.
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3.
4. 5.
Proposal by the Board of Directors
59
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Sensitivity to interest rate risks arising from financial
instruments
The following sensitivity analysis illustrates the sensitivity of the Group’s profit
for the period and equity to changes in the interest rate level with regard to
financial instruments in the statement of financial position, including financial
assets and liabilities as well as derivative contracts. Changes in the fair value
of derivative contracts under hedge accounting are assumed to be allocated
entirely to equity.
The following assumptions have been used in calculating sensitivity to
changes in the interest rate level:
• The change in the interest rate level is assumed to be a rise of
+1.0 percentage point and a decrease of -1.0 percentage point.
• The exposure underlying the calculation includes interest-bearing financial
liabilities and interest rate swaps.
Sensitivity analysis of interest rate risk arising from financial instruments
2023 2022
MEUR
Profit
after
tax Equity
Profit
after
tax Equity
Floating rate loans:
+ 1.0% change in market interest rates -0.3 -0.4
- 1.0% change in market interest rates 0.3 0.4
Hedging instruments:
+ 1.0% change in market interest rates - 0.3
- 1.0% change in market interest rates - -0.3
Derivative financial instruments and hedge accounting
Accounting policy
In accordance with L&T’s financing policy, derivative agreements are
used for the reduction of financial risks related to changes in market
interest rates. At the beginning of the financial period, the Group had one
interest rate swap, which had been implemented to protect the cashflows
of floating rate loans from the interest rate risk. This interest rate swap
was prematurely terminated in June 2023.
Derivatives are recognised in the balance sheet initially at fair value.
After the acquisition they will, however, be recognised at the fair value
applicable on the balance sheet date. The fair values are based on market
prices on the balance sheet date. Any profits and losses from the meas -
Maturity of financial liabilities
MEUR 2023
Carrying
amount
Contractual
cash flows 2024 2025 2026 2027 2028
2029 and
later
Loans from credit institutions 41.4 46.7 2.6 2.1 42.0 - - -
Bonds 74.7 87.7 2.5 2.5 2.5 2.5 77.5 -
Lease liabilities 77.6 81.6 22.4 18.8 8.5 6.2 5.3 20.4
Trade and other payables 69.4 69.4 69.4 - - - - -
Total 263.1 285.4 96.9 23.4 53.1 8.7 82.9 20.4
MEUR 2022
Carrying
amount
Contractual
cash flows 2023 2024 2025 2026 2027
2028 and
later
Loans from credit institutions 52.0 52.5 1.6 50.9 - - - -
Bonds 92.3 108.2 20.5 2.5 2.5 2.5 2.5 77.5
Lease liabilities 72.5 80.0 21.4 17.9 11.8 4.9 3.0 21.0
Trade and other payables 65.8 65.8 65.8 - - - - -
Total 282.6 306.5 109.3 71.4 14.3 7.4 5.6 98.5
Breakdown of borrowings and facilites
2023 2022
MEUR In use Undrawn Total In use Undrawn Total
Loans from financial institutions and pension loans 41.4 - 41.4 52.0 - 52.0
Bonds 74.7 - 74.7 92.3 - 92.3
Account limit - 10.0 10.0 - 10.0 10.0
Committed credit facility - 40.0 40.0 - 40.0 40.0
Commercial paper programme - 100.0 100.0 - 100.0 100.0
Lease liabilities from financial institutions 32.8 17.2 50.0 26.0 24.0 50.0
Other lease liabilities 44.9 - 44.9 46.5 - 46.5
Total 193.7 167.2 360.9 216.8 174.0 390.8
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3.
4. 5.
Proposal by the Board of Directors
60
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
urement at fair value are processed in the accounting according to the
purpose of use of the derivative agreement.
All interest hedges meet the requirements of effective hedging stated
in the L&T’s risk management. Any profits and losses resulting from
derivatives under hedge accounting are recognised in line with the under-
lying asset. Hedge accounting is applied to all interest swap agreements.
The efficiency of hedging relationships is registered initially and
in conjunction with each interim report by evaluating the hedging
instrument’s ability to reverse the changes in the cashflow of the hedged
item. If the hedging is effective, the changes in the fair value of hedging
instruments are recognised in the hedging reserve under capital and
reserves. When a hedging instrument matures, it is sold or when the
criteria for hedge accounting no longer meet the Group’s risk management
requirements, the profit or loss generated from the hedging instrument
remains in equity until the hedged cash flow is realised. If the hedged
cash flow is no longer expected to become realised, the profit or loss
generated from the hedging instrument is immediately recognised in the
income statement. Any ineffective part of a hedging relationship is also
immediately recognised in the income statement.
The positive fair values of all derivatives are recognised in the balance
sheet as derivative receivables. Correspondingly, the negative fair values
of derivatives are recognised as derivative liabilities. All fair values of
derivatives are included in short-term assets or liabilities.
At the balance sheet date the company did not have any interest
rate swaps.
Interest rate swaps
2023 2022
MEUR
Nominal
value
Fair
value
Nominal
value
Fair
value
Maturity of interest rate swaps under
hedge accounting
Not later than one year - - - -
Later than one year and not later than
two years - - 30.0 1.2
Yhteensä - - 30.0 1.2
The interest rate swap that was used for hedging cash flows related to floating
rate loans was terminated in June 2023 in conjunction with the refinancing of
the hedged loan. The fair value of the interest rate swap totalling EUR 1.3 mil-
lion was recognised as financial income in the consolidated income statement.
In the comparison period, the hedge was effective, and the changes in the fair
value of interest rate swap were presented in other comprehensive income for
the period. The fair value of the swap contract was based on the market data on
the balance sheet date.
The fixed interest rate of the interest rate swap at 31 December 2022 was 0.8
per cent. The floating interest rate was 6-month Euribor.
4.3 Equity
Accounting policy
Ordinary shares are presented as share capital. Any expenses arising
from the issue or acquisition of treasury shares are presented as a
valuation allowance within equity. If the Group repurchases any equity
instruments, the acquisition cost of such instruments is deducted
from equity.
Lassila & Tikanoja plc has one share series. There is no maximum to the number
of the shares and the share capital in the Articles of Association. A share has
neither a nominal value nor a book equivalent value. All issued shares have been
paid for in full.
The Annual General Meeting held on 23 March 2023 authorised Lassila &
Tikanoja plc’s Board of Directors to make decisions on the repurchase of the
company’s own shares using the company’s unrestricted equity. In addition, the
Annual General Meeting authorised the Board of Directors to decide on a share
issue and the issuance of special rights entitling their holders to shares.
The Board of Directors is authorised to purchase a maximum of 2,000,000
company shares (5.2 per cent of the total number of shares). The repurchase
authorisation is effective for 18 months. During the reporting period, the authori-
sation was not used.
At the end of the financial year 2023, the company held 644,772 treasury
shares (653,256) representing 1.7 per cent (1.7) of all shares and votes.
Invested non-restricted equity reserve includes other equity type investments
and share subscription prices to the extent that they are not expressly desig-
nated to be included in the share capital.
Other reserves
Translation reserve
Translation differences arise from the translation of the equity and earnings of
foreign subsidiaries into euros.
Hedging reserves
Hedging reserve includes effective changes in the fair values of derivative
instruments used for hedging of cash flows.
MEUR
Number of
outstanding
shares, 1,000
shares
Share
capital
Invested
non-restricted
equity
reserve
Own
shares Total
At 1 Jan 2023 38,146 19.4 0.6 -10.1 9.9
8 May 2023 Transfer of
own shares 8 0.1 0.1
At 31 Dec 2023 38,154 19.4 0.6 -10.0 10.1
MEUR
Number of
outstanding
shares, 1,000
shares
Share
capital
Invested
non-restricted
equity
reserve
Own
shares Total
At 1 Jan 2022 38,112 19.4 0.6 -10.6 9.4
25 February 2022 Transfer
of own shares 25 0.4 0.4
2 May 2022 Transfer of
own shares 9 0.1 0.1
At 31 Dec 2022 38,146 19.4 0.6 -10.1 9.9
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3.
4. 5.
Proposal by the Board of Directors
61
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Capital management
The objective of the Group’s capital management is to secure the continuity of
operations and maintain an optimal capital structure to enable investments,
taking the cost of capital into account. The capital includes equity and liabilities
less advances received.
The amount of annual dividend is linked to earnings. Profits not considered
necessary for ensuring the healthy development of the company are distributed
to shareholders.
The development of the capital structure is monitored quarterly using the
equity ratio and gearing.
MEUR 2023 2022
Equity in the consolidated statement of financial position 232.2 220.4
Equity and liabilities total 649.9 660.5
Current advances received -11.2 -9.5
Non-current advances received -7.2 -7.6
Total 631.5 643.4
Equity ratio, % 36.8 34.3
MEUR 2023 2022
Equity in the consolidated statement of financial position 232.2 220.4
Non-current financial liabilities 171.7 177.5
Current financial liabilities 22.1 39.3
Cash and cash equivalents -32.9 -49.5
Net interest-bearing liabilities 160.9 167.3
Gearing, % 69.3 75.9
4.4 Earnings per share and dividend
per share
Accounting policy
Basic earnings per share is calculated by dividing the result for the
period attributable to equity holders of the parent company by the
adjusted weighted average number of ordinary shares outstanding
during the period excluding ordinary shares purchased by the company
and held as treasury shares. Diluted earnings per share is calculated by
adjusting the weighted average number of ordinary shares outstanding
to asume conversion of all dilutative potential ordinary shares.
2023 2022
Result attributable to equity holders of the company,
MEUR 30.1 31,5
Adjusted weighted average number of ordinary shares
outstanding during the year, million shares 38.1 38,1
Earnings per share, EUR 0.79 0,83
Dilutive effect of the share-based incentive programme,
million shares 0.1 0,0
Adjusted average number of shares during the period,
diluted, million shares 38.2 38,1
Earnings per share, diluted, EUR 0.79 0,83
At the Annual General Meeting on 21 March 2024, the Board of Directors will
propose that a dividend of EUR 0.49 per share be paid for the 2023 financial year.
On the basis of a decision taken by the Annual General Meeting, the company
paid a dividend of EUR 0.4 7 per share for 2022.
4.5 Commitments and contingent liabilities
MEUR 2023 2022
Collaterals for own commitments
Mortgages on rights of tenancy 0.1 0.1
Company mortgages 0.5 2.0
Other securities 0.0 0.0
Bank guarantees required for environmental permits 26.6 17.4
Other bank guarantees 6.5 5.8
Mortgages under own control
Company mortgages 0.2 0.3
Liabilities on behalf of the joint venture
Account limit 2.8 2.8
Bank guarantees 16.5 16.5
Term loan facility guarantee 11.0 16.5
Revolving credit facility 5.5 -
Future lease payments
Within one year 0.9 0.9
Over one year 0.7 0.9
Other securities are guarantee deposits.
The Group has a 55% holding in Laania Oy, a joint venture established on 1 July
2022 together with Neova. The amount of the liabilities on behalf of the joint
venture is disclosed as the Group’s share of the maximum amount of liability,
in relation to the Group’s holding.
Future lease payments consist of minimum leasing commitments related to
lease agreements for low-value assets, to which the Group has elected to apply
recognition exemption permitted by IFRS 16. For more information on leases
please refer to notes 1.6 and 3.4.
The Group company Lassila & Tikanoja FM AB is a claimant and a defendant
in legal proceedings in Sweden concerning unpaid receivables invoiced from a
former customer of the Group. In June 2022, Lassila & Tikanoja FM AB took legal
action in the District Court of Solna against the former customer company of L&T,
demanding payment for unpaid receivables. At the balance sheet date, the carrying
amount of the receivables in the Company’s balance sheet was approximately EUR
1.5 million. The former L&T customer company in question has rejected Lassila &
Tikanoja FM AB’s claims and the payment obligation, and brought a counterclaim
demanding compensation totalling approximately SEK 116 million from Lassila &
Tikanoja FM AB. The dispute is still pending. L&T considers the counterclaim to be
without merit and has not recognised any provisions relating to it.
In addition to the above mentioned dispute, Lassila & Tikanoja plc is party to a
few disputes related to the Group’s ordinary business operations. The outcome
of these disputes are not expected to have a material effect on the Group’s
financial position.
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4.
5.
Proposal by the Board of Directors
62
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
5 Consolidation
and other notes
5.1 Consolidation ......................................................................................... 63
5.2 Group companies ................................................................................ 63
5.3 Business acquisitions and disposals and
assets and liabilities classified as held for sale ............... 64
5.4 Related-party transactions .......................................................... 65
5.5 Auditing costs ....................................................................................... 66
5.6 Events after the balance sheet date ...................................... 66
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4.
5.
Proposal by the Board of Directors
63
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
5.1 Consolidation
Subsidiaries
The consolidated financial statements include the parent company Lassila &
Tikanoja plc and all subsidiaries in which the Group exercises control. The cri-
teria for control are fulfilled when the Group is exposed, or has rights, to variable
returns from its involvement with an entity and has the ability to affect those
returns through its power over the entity.
Intra-Group shareholdings have been eliminated using the acquisition method.
Consideration given and the identifiable assets and liabilities of an acquired
company are recognised at fair value on the date of acquisition. Any costs asso-
ciated with the acquisition, with the exception of costs arising from the issuance
of debt securities or equity instruments, have been recognised as expenses.
Any conditional additional sale price has been measured at fair value on the
date of the acquisition and classified as a liability or as equity. Additional sales
price classified as a liability is measured at fair value on the closing day of each
reporting period, and the resulting gains or losses are recognised through profit
or loss. Additional sales price classified as equity will not be re-measured. Any
non-controlling interests in the acquired entity are recognised either at fair
value or at the proportionate share of non-controlling interests in the acquired
entity’s net identifiable assets. The principle applied in measurement is speci-
fied separately for each acquisition. The treatment of goodwill from acquisition
of subsidiaries is explained in note 3.1 Goodwill and other intangible assets. The
subsidiaries are fully consolidated from the date on which control is transferred
to the Group until the date that control ceases.
The profit or loss for the period and the comprehensive income are attributed
to the parent company’s shareholders and non-controlling interests, even if this
would result in the non-controlling interest being negative. Equity attributable
to non-controlling interests is presented as a separate item in the statement of
financial position, as an equity component. Changes in the parent company’s
holdings in the subsidiary not resulting in loss of controlling interest are recog-
nised as equity transactions. The Group has no non-controlling interests.
In an acquisition achieved in stages, the previous holdings are measured at
fair value and the resulting gains or losses are recognised through profit or loss.
If the Group loses its controlling interest in the subsidiary, its remaining holdings
are measured at fair value on the date when control ceases, and the difference
is recognised through profit or loss.
All intra-Group transactions, receivables, liabilities and unrealised gains, as
well as distribution of profits within the Group, are eliminated in the consoli-
dated financial statements. Unrealised losses due to impairment of assets are
not eliminated. The distribution of profit or loss for the period between equity
holders of the parent company and the non-controlling interest is presented in
a separate income statement and the statement of comprehensive income, and
the share of equity belonging to the non-controlling interest is presented as a
separate item in the consolidated statement of financial position under equity.
Associated companies and joint ventures
Associates companies are entities over which the Group has significant influ-
ence but no control. L&T has significant influence when it holds more than 20%
of the voting rights or otherwise has significant influence but a non-controlling
interest. Joint ventures are arrangements in which the Group has joint control.
The Group’s interests in associated companies and joint ventures are
accounted for using the equity method of accounting. Investments in associated
companies and joint ventures are initially measured at fair value. The Group’s
share of its associated companies’ or joint ventures’ post-acquisition profits
or losses after tax are recognised in the income statement. When the Group’s
share of losses in an associated company or a joint venture equals or exceeds
its interest in the associated company or joint venture, the Group does not rec-
ognise further losses, unless it has incurred obligations or made payments on
behalf of the associated company or joint venture.
Foreign currency translation
Figures indicating the performance and financial position of the Group entities
are specified in the currency of the economic operating environment in which
the entity primarily operates (functional currency). The consolidated financial
statements are presented in euros, which is the parent company’s functional
and presentation currency.
Any transactions in foreign currencies have been recognised in the functional
currency using the exchange rate in effect on the transaction date. In practice, it
is customary to use a rate that is close enough to the transaction day rate. Mon-
etary assets denominated in foreign currency are translated into euros using
the exchange rates in effect on the balance sheet date. Non-monetary assets
are translated using the exchange rate in effect on the transaction date. The
Group has no non-monetary assets denominated in foreign currency that are
measured at fair value. Exchange rate gains and losses arising from foreign-cur-
rency transactions and the translation of monetary items are recognised in the
income statement. Foreign exchange gains and losses on business transactions
are included in the respective items above operating profit. Foreign exchange
gains and losses on financial assets and liabilities are included in financial
income and costs.
The income statements of the Group entities whose functional currency is not
the euro are translated into euros at average exchange rates for the period, and
the statements of financial position at the exchange rates in effect on the bal-
ance sheet date. The difference in exchange rates applicable to the translation
of profit in the income statement and statement of comprehensive income result
in a translation difference recognised in the translation reserve within equity.
Translation differences arising from the elimination of the acquisition cost of for-
eign subsidiaries, as well as translation differences in equity items accumulating
after the acquisition, are recognised in the translation difference reserve.
Goodwill and fair value adjustments to the carrying amounts of the assets and
liabilities arising on the acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated into euros at the closing rate.
5.2 Group companies
The Group’s holding of shares and votes, %
The Group’s parent company
Lassila & Tikanoja plc
Finnish subsidiaries
L&T Toimi Oy, Helsinki 100.0
L&T Kiinteistöhuolto Oy, Helsinki 100.0
L&T Kiinteistötekniikka Oy, Helsinki 100.0
L&T Siivous Oy, Helsinki 100.0
L&T Ympäristöpalvelut Oy, Helsinki 100.0
L&T Teollisuuspalvelut Oy, Helsinki 100.0
Foreign subsidiaries
Lassila & Tikanoja FM AB, Stockholm, Sweden 100.0
Lassila & Tikanoja Service AB, Stockholm, Sweden 100.0
Sand & Vattenbläst i Tyringe AB, Hässleholm, Sweden 70.0
Cisternservice i Hässleholm AB, Hässleholm, Sweden 70.0
Joint ventures
Laania Oy, Helsinki
1
55.0
Associated companies
Suomen Keräystuote Oy, Helsinki 40.0
1
Information on the joint venture is disclosed in note 3.5 Other non-current assets
During the reporting period, Turun Seudun Hyötykuljetus Oy was merged to
L&T Ympäristöpalvelut Oy and L&T Työllistämispalvelut Oy was merged to
Lassila & Tikanoja plc and L&T Hankinta Ky, Sihvari Oy and Spectra Yhtiöt Oy
were liquidated.
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4.
5.
Proposal by the Board of Directors
64
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
5.3 Business acquisitions and disposals and
assets and liabilities classified as held for sale
Accounting policy
In business combinations, all property, plant and equipment acquired
is measured at fair value on the basis of the market prices of similar
assets, taking into account the age of the assets, wear and tear and
similar factors. Tangible assets will be depreciated over their useful life
according to the management’s estimate, taking into account the
depreciation principles followed within the Group.
Intangible assets arising from business combinations are recognised
separately from goodwill at fair value at the time of acquisition if they are
identifiable. In connection with acquired business operations, the Group
mostly has acquired agreements on prohibition of competition and cus-
tomer relationships as well as environmental permits. The fair value
of customer agreements and customer relationships associated with
them has been determined on the basis of estimated duration of
customer relationships and discounted net cash flows arising from
current customer relationships. The value of agreements on prohibition
of competition is calculated in a similar manner through cash flows over
the duration of the agreement. Intangible assets are amortised over their
useful life according to the agreement or the management’s estimate.
Assets and liabilities held for sale are measured at lower of the carrying
amount and fair value less costs to sell, if their carrying amount will be
recovered principally through a sale transaction rather than through
continuing use and their sale is highly probable. The non-current
assets classified as held for sale are not depreciated.
Critical judgements by Management
Assets and liabilities acquired in business combinations as well as assets
and liabilities classified as held for sale are measured at fair value.
Whenever possible, the management uses available market values
when determining the fair values. When this is not possible, the
measurement is based on the historical income from the asset. In
particular, the measurement of intangible assets is based on discounted
cash flows and requires the management to make estimates on future
cash flows. Although these estimates are based on the management’s
best knowledge, actual results may differ from the estimates. The car-
rying amounts of assets are reviewed continuously for impairment.
More information on this is provided in note 1.7.
Business acquisitions 2023
There were no business acquisitions in 2023.
Business acquisitions 2022
On 1 February 2022, Lassila & Tikanoja’s Industrial Services division acquired 70
per cent of the shares of Sand & Vattenbläst i Tyringe AB (“SVB”), a company that
provides process cleaning services in Sweden. The transaction also includes
Cisternservice i Hässleholm AB, owned by SVB. Through the acquisition, L&T’s
Industrial Services division entered the Swedish process cleaning market. In the
fair value measurement, intangible assets based on customer relationships with
a value of EUR 2.8 million, agreements on prohibition of competition with a value
of EUR 0.1 million, as well as goodwill with a value of EUR 8.3 million were identi-
fied. The goodwill is mainly based on the strong regional position of the acquired
business and its future development prospects. 100 per cent share of SVB is
consolidated in the L&T Group and, in connection with the arrangement, L&T has
recognised in the financial liabilities an estimate of the deferred consideration
related to the acquisition of the non-controlling interest. The deferred considera-
tion is measured at fair value through profit or loss. An increase of EUR 0.2 million
(increase of EUR 0.8 million) was recognised in the deferred consideration in the
final quarter of 2023.
L&T acquired the business operations of Fortum Waste Solutions Oy’s small
and medium-sized business segment for hazardous and non-hazardous waste
on 1 February 2022. Through the acquisition, L&T received new customers across
Finland.
In 2022 business acquisitions had an EUR 19.9 million million impact on the
Group’s net sales for the financial period and EUR 2.5 million on operating profit.
If the acquisitions in 2022 had been completed on 1 January 2022, the Groups
net sales would be approximately EUR 844.9 million and operating profit approxi-
mately EUR 43.0 million.
In 2022, expenses totalling EUR 0.4 million related to the acquisitions were
recognised in the income statement.
The initial accounting of the businesses acquired in 2022 is final. The figures
for such acquired businesses, that are not material to the Group when consid-
ered separately, are stated in aggregate.
Business acquisitions
Fair value, MEUR 2023
2022
Intangible assets - 5.6
Property, plant and equipment - 4.9
Right-of-use assets - 1.4
Inventories - 0.1
Receivables - 1.8
Cash and cash equivalents - 1.2
Total assets - 15.0
Other liabilities - 6.4
Deferred tax liabilities - 1.0
Total liabilities - 7.4
Net assets acquired - 7.6
Total consideration - 19.6
Goodwill - 11.9
Impact on cash flow
Total consideration - -19.6
Deferred consideration - 5.1
Consideration paid in cash - -14.4
Cash and cash equivalents of the acquired company - 1.2
Total impact on cash flow - -13.2
Divested businesses and assets and liabilities classified
as held for sale
In 2023, L&T did not have any business disposals or assets or liabilities classified
as held for sale.
On December 17, 2021, Lassila & Tikanoja plc and Neova Oy signed an agree-
ment to merge their fuel wood businesses. According to the agreement, Neo-
va’s fuel wood business was transferred to L&T Biowatti Oy on 1 July 2022. After
the merger, the company continued as an independent limited company called
Laania Oy. L&T’s share of the joint venture is 55 per cent and Neova’s 45 per cent,
but based on the agreement both parties have joint control over the joint ven-
ture. In the first half of 2022, the business was reported as part of Environmental
Services. After this, the Group’s share of the joint venture’s net result is recog-
nised in the income statement on a separate line.
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4.
5.
Proposal by the Board of Directors
65
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Investment in joint venture
At the acquisition date, Lassila & Tikanoja’s investment in joint venture totalled
EUR 13.3 million. It is recognised on line Shares in associated companies and
joint ventures in the consolidated statement of financial position. The transac-
tions is valued according to the IAS 28. In the last quarter of 2022, the trans-
action was finalised and L&T recognised a gain totalling EUR 4.3 million on the
transaction. The gain on sale was included in other operating income in the con-
solidated income statement. In 2022, expenses totalling EUR 0.5 million related
to the transaction were recognised in the income statement. More information
on the joint venture is presented in note 3.5.
Net assets disposed of
MEUR 2022
Intangible and tangible assets 0.4
Right-of-use assets 0.7
Other non-current receivables 0.3
Inventories 24.7
Trade and other receivables 6.1
Cash and cash equivalents 2.0
Assets Total 34.0
Non-current financial liabilities 14.8
Current financial liabilities 0.1
Trade and other payables 10.1
Liabilities Total 25.0
Net assets disposed of 9.0
Gain on sale
MEUR 2022
Fair value of the shares in joint venture received 13.3
Net assets disposed of -9.0
Total 4.3
Cash flow impact
MEUR 2022
Consideration received in cash -
Cash and cash equivalents of the business sold -2.0
Total -2.0
5.4 Related-party transactions
The related parties of the Lassila & Tikanoja Group are the senior management
(members of the Board of Directors, President and CEO of the Lassila & Tikanoja
plc and the other members of the Group Executive Board) and the immediate
family of the senior management and companies controlled by the aforemen-
tioned persons, the Group’s subsidiaries, the associated company (Suomen
Keräystuote Oy), the joint venture (Laania Oy) and the L&T sickness fund.
Lists of the Group’s parent and subsidiary relationships, associated companies
and joint ventures are presented in note 5.2. Group companies.
The contributions paid by the group companies to the L&T sickness fund
during the financial year amounted to EUR 1.0 million (1.0).
Transactions with the joint venture
The Group’s business transactions with Laania Oy are presented in the following
table. In addition to the ordinary business transactions, Laania paid loans total-
ling EUR 16.4 million to L&T in the final quarter of 2022. The Group has also pro-
vided guarantees for Laania’s financing arrangements, which are specified in
note 4.5.
MEUR 2023 2022
Net sales 2.2 0.6
Other operating income - 0.3
Purchases of materials and services -1.3 -0.7
Trade and other receivables 0.0 0.0
Employee beneﬁts to the President and CEO
TEUR 2023 2022
Salaries and other short-term employee benefits 466.8 458.6
Bonuses 63.9 157.2
Share-based payments - 265.1
Pension expenses, statutory 45.9 53.3
Total 576.6 934.3
Employee beneﬁts to other members of the Group Executive Board
TEUR 2023 2022
Salaries and other short-term employee benefits 1,697.8 1,570.8
Bonuses 136.5 225.0
Share-based payments - 304.9
Pension expenses, statutory 198.9 198.8
Total 2,033.3 2,299.6
Salaries and remunerations paid to members of the Board of Directors
TEUR 2023 2022
Jukka Leinonen, Chairman of the Board 76 73
Sakari Lassila, Deputy Chairman of the Board 52 53
Teemu Kangas-Kärki 39 39
Laura Lares 38 39
Pasi Tolppanen 39 39
Anni Ronkainen
1
37 -
Heikki Bergholm
2
- 20
Laura Tarkka
3
3 38
1
Board member since 23 March 2023
2
Board member and the Chairman of the Board until 17 March 2022
3
Board member until 23 March 2023
In 2023, no shares were transferred to the President and CEO and the
members of the Group Executive Board from the share-based incentive
programmes (in 2022, 24,522 shares were transferred).
On 8 May 2023, 8,484 shares were transferred to the members of the Board
of Directors as part of the remuneration of the Board (2 May 2022: 8,618).
The members of the Board of Directors, the President and CEO or other
members of the Group Executive Board have no pension contracts with the
company.
In 2023, the company sold services included in normal business operations
at market price to parties related to the key personnel for a total amount of
EUR 7 thousand (25).
The members of the Board are not included in the share-based incentive
programmes.
No loans were granted and no guarantees nor other securities given to
persons belonging to the related parties.
Lassila & Tikanoja
Annual Report 2023
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4.
5.
Proposal by the Board of Directors
66
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
5.5 Auditing costs
MEUR 2023 2022
PwC
Auditing 0.3 0.3
Other assignments in accordance with the auditing act 0.0 0.0
Tax consulting services 0.0 0.0
Other services 0.0 0.2
Total 0.4 0.4
KPMG
Auditing - 0.1
Other assignments in accordance with the auditing act - 0.0
Tax consulting services - 0.0
Total - 0.1
Non-audit services performed by the statury auditor PricewaterhouseCoopers
Oy in the financial year 2023 totalled EUR 71.1 thousand (EUR 166.6 thousand
in 2022).
5.6 Events after the balance sheet date
On 11 January 2024, the company announced that Lassila & Tikanoja’s Share-
holders’ Nomination Board proposes to the Annual General Meeting to be held on
21 March 2024 that the Board of Directors have seven (7) members. The Nomi-
nation Board proposes that all of the current members of the Board of Directors
– Teemu Kangas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen, Anni Ronka-
inen and Pasi Tolppanen – be re-elected to the Board of Directors and that Juuso
Maijala be elected as a new member. A presentation of Juuso Maijala is available
on Lassila & Tikanoja’s website. In addition, the Nomination Board proposes that
Jukka Leinonen be elected as Chairman of the Board of Directors and Sakari Las-
sila as Vice Chairman.
Lassila & Tikanoja
Vuosikertomus 2023
67
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
Financial statements
of the parent company
Income statement ..........................................................68
Balance sheet ...................................................................68
Cash flow statement ....................................................69
Accounting policies ...................................................... 69
Notes to the financial statements ....................... 70
Lassila & Tikanoja
Vuosikertomus 2023
68
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
Income statement of
the parent company
EUR Thousand 2023 2022 Note
Net sales 24,741.6 23,281.0 1
Other operating income 375.6 141.6 4
Employee benefit expenses -10,377.5 -9,698.4 2
Other operating expenses -16,458.1 -18,658.9 3,4
Depreciation, amortisation and impairment -904.3 -902.7
Operating result -2,622.8 -5,837.3
Financial income and expenses -13,729.0 -2,541.6 5
Result before appropriations and taxes -16,351.8 -8,378.9
Appropriations 6
Increase/decrease in accumulated
depreciation difference 270.2 209.5
Group contribution 28,168.0 23,550.0
28,438.2 23 759,5
Income taxes -4,666.3 -3,434.1 7
Result for the period 7,420.0 11,946.6
Balance sheet of the parent company
EUR Thousand 2023 2022 Note
ASSETS
Non-current assets
Intangible assets 8
Intangible rights 15.6 36.4
Other intangible assets 1,576.6 1,738.6
Advance payments and construction in
progress 1,364.7 832.4
2,957.0 2,607.4
Tangible assets 9
Buildings and constructions 144.6 165.2
Machinery and equipment 59.1 117.2
Other tangible assets 42.2 42.2
Advance payments and construction in
progress - -
245.9 324.6
Investments 10
Shares in group companies 159,081.9 181,590.5
Shares in joint venture 9,946.8 9,946.8
Other shares and holdings 170.8 170.8
169,199.5 191,708.1
Total non-current assets 172,402.4 194,640.0
Current assets
Non-current receivables
Loan receivables from group companies 766.0 -
Prepaid expenses and accrued income 307.7 378.8
Other non-current receivables 139.5 299.9
Deferred tax assets 96.5 480.2 12
1,309.7 1,158.8
Current receivables
Receivables from group companies 33,380.4 40,400.8 11
Trade receivables from joint venture - 6.6
Trade receivables 7.1 -
Other receivables 111.9 114.4
Prepaid expenses and accrued income 1,042.5 1,827.1 11
34,542.0 42,349.0
Cash and cash equivalents 30,437.3 46,921.0
Total current assets 66,289.1 90,428.8
Total assets 238,691.4 285,068.8
EUR Thousand 2023 2022 Note
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity 13
Share capital 19,399.4 19,399.4
Invested non-restricted equity reserve 727.1 727.1
Retained earnings 43,188.0 49,045.9
Profit for the period 7,420.0 11,946.6
70,734.6 81,119.0
Accumulated appropriations
Depreciation difference 179.9 450.1
Obligatory provisions 14
Non-current 261.4 273.4
Current 50.1 609.0
311.5 882.4
Liabilities 15
Non-current
Loans from credit intitutions 40,000.0 50,000.0
Bonds 75,000.0 75,000.0
115,000.0 125,000.0
Current
Bonds - 17,730.0
Trade payables 2,187.9 2,313.5
Liabilities to group companies 45,438.3 53,069.6
Other liabilities 424.4 693.0
Accrued expenses and deferred income 4,414.8 3,811.1
52,465.4 77,617.3
Total liabilities 167,465.4 202,617.3
Total shareholders’ equity and liabilities 238,691.4 285,068.8
Lassila & Tikanoja
Vuosikertomus 2023
69
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
Cash flow statement
of the parent
company
EUR Thousand 2023 2022
Operating activities
Profit (+) / loss (-) before appropriations and taxes -16,351.8 -8,378.9
Adjustments:
Depreciation, amortisation and impairments 904.3 902.7
Financial income and expenses 2,280.4 2,541.6
Impairment of investments held as non-current assets 11,448.6 -
Provisions -558.9 -651.3
Other adjustments
1
-18.0 2,069.1
Cash flow before change in working capital and
change in cash pool account balance -2,295.3 -3,516.9
Change in working capital
Increase/decrease in current non-interest-bearing re-
ceivables 1,010.8 1,298.1
Increase/decrease in current non-interest-bearing lia-
bilities 174.9 -478.2
Cash flow from operations before financial income/expen-
ses and tax -1,109.6 -2,697.0
Change in cash pool account balance 3,934.4 -3,777.6
Interest expenses and other financial
expenses paid -5,349.3 -3,100.5
Interest received from operations 3,426.9 1,060.1
Direct taxes paid -4,359.9 -6,363.9
Cash flow from operating activities -3,457.5 -14,878.8
Investing activities
Increase in loan receivables from subsidiaries -719.3 -
Capital repayment 11,000.0 -
Investments in tangible and intangible assets -1,234.0 -1,306.3
Repayment of loan receivables from joint venture - 16,391.3
Proceeds from sale of tangible and intangible assets 16.5 -
Change in other non-current receivables - 2.4
Cash flow from investing activities 9,063.3 15,087.4
EUR Thousand 2023 2022
Financing activities
Paid Group contributions - -4,300.0
Received Group contributions 23,550.0 24,840.0
Proceeds from short-term borrowings 10,000.0 35,000.0
Repayments of short-term borrowings -10,000.0 -35,000.0
Proceeds from long-term borrowings 40,000.0 75,000.0
Repayments of long-term borrowings -67,730.0 -57,270.0
Dividends paid -17,909.4 -17,543.0
Cash flow from financing activities -22,089.4 20,727.0
Change in cash and cash equivalents -16,483.6 20,935.5
Cash and cash equivalents at 1 January 46,921.0 25,985.4
Cash and cash equivalents at 31 December 30,437.3 46,921.0
Cash and cash equivalents at 31 December
Cash and cash equivalents 30,437.3 46,921.0
1
The figure in 2022 includes an adjustment for merger loss totalling EUR 1,942.5 thousand.
Accounting
policies of the
parent company
Basis of preparation
Lassila & Tikanoja plc is the parent company of the Lassila & Tikanoja Group,
domiciled in Helsinki. The Company provides to other group companies
administrative services, which are centralised to the parent company.
The financial statements of Lassila & Tikanoja plc have been prepared in
accordance with the Finnish Accounting Standards (FAS). The financial
statements are prepared in euros and the items in the financial statements
are measured at historical cost.
When appropriate, the financial statements of Lassila & Tikanoja plc comply
with the Group’s accounting policies based on IFRS. The accounting policies of
the consolidated financial statements are presented in the notes to the
consolidated financial statements. The accounting policies of Lassila & Tikanoja
plc described in the following chapters differ from the accounting policies of the
consolidated financial statements.
Subsidiary shares
Subsidiary shares in the balance sheet are measured at historical cost less
impairment losses. The carrying amounts of the subsidiary shares are assessed
as part of the Group’s impairment testing, where cash flow forecasts based on
value-in-use calculations are prepared for the Group’s cash-generating units.
In the impairment testing of subsidiary shares, the cash flows are further
allocated to subsidiaries’ recoverable amounts. An impairment loss is recognised,
if the carrying amount of the subsidiary shares and the amount of net loan
receivables from the subsidiary exceed the recoverable amount of the
corresponding assets.
Leases
The lease payments of the lease contracts are expensed over the rental period,
and they are included in other operating expenses. Assets leased and related
liabilities are not recognised in the parent company’s balance sheet.
Research and development expenditure
Research and development expenditure is recognised as an expense.
Obligatory provisions
Obligatory provisions in the balance sheet are based on legal or contractual
obligations towards third parties, that have not been realised, are related to the
past or current financial period and at the balance sheet date it is certain or
probable, that the obligation will be realised, but the exact amount and timing are
uncertain and the corresponding income from the obligation is neither certain
nor probable. The changes in obligatory provisions are included in the income
statement.
Pensions
Most of the company’s pension plans are defined contribution plans, under
which the company pays fixed contributions for pensions to insurance
companies. These payments are recognised to the income statement in the
financial period to which they relate.
The defined benefit plans operated by the company are small and concern
only a few persons.
Lassila & Tikanoja
Vuosikertomus 2023
70
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
Notes to the ﬁnancial statements of the parent company
1. Net sales
EUR Thousand 2023 % 2022 %
Net sales
Administrative services, Group
Companies 24,741.6 100.0 23,281.0 100.0
Total 24,741.6 100.0 23,281.0 100.0
Net sales by market area
Finland 24,741.6 100.0 23,281.0 100.0
Total 24,741.6 100.0 23,281.0 100.0
2. Personnel and administrative bodies
2023 2022
Average personnel
Salaried employees 102 106
Total 102 106
1
The calculation of the average number of employees in full-time equivalents was re-defined in
2023. The figure for 2022 has been adjusted accordingly.
EUR Thousand 2023 2022
Personnel expenses
Salaries and bonuses 8,599.7 7,991.0
Pension expenditure 1,461.3 1,439.5
Other salary-related expenses 316.5 267.9
Total 10,377.5 9,698.4
Salaries, bonuses and pension benefits of the management are described in the
note 5.4 Related-party transactions of the consolidated financial statements.
No loans were granted to the related parties of the Group Companies.
3. Auditor’s fees
EUR Thousand 2023 2022
PwC
Auditing 57.3 53.9
Other assignments in accordance with the
auditing act 1.4 2.0
Tax consulting services 8.3 6.5
Other services 38.1 154.4
Total 105.1 216.8
KPMG
Auditing - 11.0
Other assignments in accordance with the
auditing act
- 25.7
Tax consulting services - 2.0
Total - 38.7
4. Other operating income and expenses
EUR Thousand 2023 2022
Other operating income
From joint ventures - 71.1
From others
Government grants 20.1 37.0
Merger gains 105.9 -
VAT refund 232.9 -
Other operating income 16.6 33.5
Total 375.6 141.6
Other operating expenses
Merger losses - 1,942.5
ICT costs 10,350.6 9,975.6
Travel costs 272.6 226.9
Vehicles and machinery 38.5 24.8
Rents and real estate costs 1,549.7 1,487.5
Expert fees 3,271.3 3,129.0
Voluntary social security costs 444.9 924.4
Other 530.5 948.1
Total 16,458.1 18,658.9
5. Financial income and expenses
EUR Thousand 2023 2022
Interest and other financial income 3,426.9 1,836.7
Interest and other financial expenses -5,707.3 -4,378.3
Impairment of investments held a non-current assets -11,448.6 -
Total financial income and expenses -13,729.0 -2,541.6
Financial income and expenses include:
Interest income
from group companies 951.2 727.3
from joint ventures - 150.8
from others 1,202.0 185.0
Other financial income
1
from others 1,273.7 -
Foreign exchange gains
from others - 773.6
Interest expenses
to group companies -687.9 -869.5
to others -4,640.3 -2,745.9
Other financial expenses
to others -379.0 -762.9
Impairment of investments held a non-current assets -11,448.6 -
Total -13,729.0 -2,541.6
1
Other financial income consists of the fair value of an interest rate swap, that was recognised in
the income statement in June 2023 due to the termination of the swap contract.
Lassila & Tikanoja
Vuosikertomus 2023
71
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
6. Appropriations
EUR Thousand 2023 2022
Increase/decrease in accumulated depreciation
difference
Intangible assets 270.2 209.5
270.2 209.5
Group contribution
Group contribution received 31,526.0 23,550.0
Group contribution paid -3,358.0 -
Total group contributions 28,168.0 23,550.0
Total appropriations 28,438.2 23,759.5
7. Income taxes
EUR Thousand 2023 2022
Income taxes on operations for the financial year 4,516.6 3,303.1
Income taxes from previous financial years -234.8 -2.0
Change in deferred taxes 384.5 133.0
Total 4,666.3 3,434.1
8. Intangible assets
2023
EUR Thousand
Intangible
rights Goodwill
Other
intangible
assets
Prepayments
and construction
in progress Total
Acquisition cost, 1 Jan 344.6 - 22,052.9 832.4 23,229.9
Additions - - - 1,191.8 1,191.8
Disposals -37.7 - -15,098.0 - -15,135.6
Transfers between items - - 659.5 -659.5 -
Acquisition cost, 31 Dec 307.0 - 7,614.4 1,364.7 9,286.1
Accumulated amortisation, 1 Jan -308.2 - -20,314.4 -20,622.6
Accumulated amortisation on disposals and transfers 37.7 - 15,098.0 15,135.6
Amortisation during the period -20.8 - -821.4 -842.2
Accumulated amortisation, 31 Dec -291.3 - -6,037.8 -6,329.1
Total carrying amount, 31 Dec 15.6 - 1,576.6 1,364.7 2,957.0
Other intangible assets includes several ICT projects.
2022
EUR Thousand
Intangible
rights Goodwill
Other
intangible
assets
Prepayments
and construction
in progress Total
Acquisition cost, 1 Jan 344.6 85,394.7 21,121.7 527.1 107,388.2
Additions - - 16.6 1,233.7 1 250.4
Disposals -0.0 -85,394.7 -13.9 - -85,408.6
Transfers between items - - 928.5 -928.5 -
Acquisition cost, 31 Dec 344.6 - 22,052.9 832.4 23,229.9
Accumulated amortisation, 1 Jan -282.4 -85,394.7 -19,526.5 -105,203.6
Accumulated amortisation on disposals and transfers 0.0 85,394.7 12.5 85,407.2
Amortisation during the period -25.8 - -800.3 -826.2
Accumulated amortisation, 31 Dec -308.2 - -20,314.4 -20,622.6
Total carrying amount, 31 Dec 36.4 - 1,738.6 832.4 2,607.4
Lassila & Tikanoja
Vuosikertomus 2023
72
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
9. Tangible assets
2023
EUR Thousand
Buildings and
constructions
Machinery
and
equipment
Other
tangible assets
Advance payments
and construction
in progress
Total
Acquisition cost, 1 Jan 358.7 424.2 42.2 - 825.1
Disposals - -135.2 - - -135.2
Acquisition cost, 31 Dec 358.7 289.0 42.2 - 689.9
Accumulated depreciation, 1 Jan -193.5 -307.0 -500.6
Accumulated depreciation on disposals and transfers - 118.7 118.7
Depreciation during the period -20.6 -41.6 -62.1
Accumulated depreciation, 31 Dec -214.1 -229.9 -444.0
Total carrying amount, 31 Dec 144.6 59.1 42.2 - 245.9
2022
EUR Thousand
Buildings and
constructions
Machinery
and
equipment
Other
tangible assets
Advance payments
and construction
in progress
Total
Acquisition cost, 1 Jan 358.7 680.5 22.2 12.0 1 073.4
Additions - 35.2 20.0 0.7 56.0
Disposals - -304.2 - - -304.2
Transfers between items - 12.8 - -12.8 -
Acquisition cost, 31 Dec 358.7 424.2 42.2 - 825.1
Accumulated depreciation 1 Jan -172.9 -555.4 -728.3
Accumulated depreciation on disposals and transfers - 304.2 304.2
Depreciation during the period -20.6 -55.9 -76.5
Accumulated depreciation, 31 Dec -193.5 -307.0 -500.6
Total carrying amount, 31 Dec 165.2 117.2 42.2 - 324.6
Lassila & Tikanoja
Vuosikertomus 2023
73
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
10. Investments
EUR Thousand
Shares in Group
companies
Shares in joint
ventures
Other shares
and holdings Total
2023
Acquisition cost, 1 Jan 181,590.5 9,946.8 170.8 191,708.1
Impairments -11,448.6 - - -11,448.6
Disposals -11,060.0 - - -11,060.0
Acquisition cost, 31 Dec 159,081.9 9,946.8 170.8 169,199.5
Total carrying amount, 31 Dec 159,081.9 9,946.8 170.8 169,199.5
2022
Acquisition cost, 1 Jan 126,129.4 - 170.8 126,300.2
Additions 75,315.1 9,946.8 - 85,261.9
Disposals -19,854.0 - - -19,854.0
Acquisition cost, 31 Dec 181,590.5 9,946.8 170.8 191,708.1
Total carrying amount, 31 Dec 181,590.5 9,946.8 170.8 191,708.1
 The figure includes a capital repayment totalling EUR 11 million from L&T Hankinta Ky, that was liquidated in December 2023.
11. Short-term receivables
EUR Thousand 2023 2022
From Group Companies
Loan receivables 1,840.7 16,844.4
Trade receivables 13.6 3.4
Group contribution receivable 31,526.0 23,550.0
Prepaid expenses and accrued income 0.0 3.0
Total 33,380.4 40,400.8
Receivables from joint venture
Trade receivables - 6.6
Total - 6.6
Prepaid expenses and accrued income
Employees' health care compensation 25.6 30.5
Annual discounts - 5.2
Licences 653.9 896.3
Other 363.0 895.1
Total 1,042.5 1,827.1
12. Deferred tax assets
EUR Thousand 2023 2022
Unused depreciation 6.4 8.1
Obligatory provisions 62.3 176.5
Impairment of non-current assets 27.0 27.0
From mergers 0.8 268.6
Total 96.5 480.2
Holding of
shares and votes, %
Holdings in group companies
L&T Toimi Oy, Helsinki
100.0
L&T Kiinteistöhuolto Oy, Helsinki
100.0
L&T Kiinteistötekniikka Oy, Helsinki
100.0
L&T Siivous Oy, Helsinki
100.0
L&T Ympäristöpalvelut Oy, Helsinki
100.0
L&T Teollisuuspalvelut Oy, Helsinki
100.0
Lassila & Tikanoja Service Ab, Stockholm, Sweden
100.0
Lassila & Tikanoja FM AB, Stockholm, Sweden
100.0
Sand & Vattenbläst i Tyringe AB, Hässleholm, Sweden
70.0
Joint ventures
Laania Oy, Helsinki
55.0
Lassila & Tikanoja
Vuosikertomus 2023
74
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
13. Shareholders’ equity
EUR Thousand 2023 2022
Restricted equity
Share capital at 1 Jan / 31 Dec 19,399.4 19,399.4
Restricted equity, total 19,399.4 19,399.4
Non-restricted equity
Invested non-restricted equity reserve 1 Jan 727.1 727.1
Invested non-restricted equity reserve 31 Dec 727.1 727.1
Retained earnings at 1 Jan 60,992.5 66,463.7
Dividend distribution -17,928.4 -17,543.0
Expired dividends 36.0 37.3
Transfer of treasury shares 88.0 87.9
Retained earnings at 31 Dec 43,188.0 49,045.9
Profit for the period 7,420.0 11,946.6
Non-restricted equity total 51,335.2 61,719.6
Shareholders’ equity at 31 Dec 70,734.6 81,119.0
Distributable funds
Retained earnings 43,188.0 49,045.9
Profit for the period 7,420.0 11,946.6
Invested non-restricted equity reserve 727.1 727.1
Total distributable funds 51,335.2 61,719.6
14. Obligatory provisions
EUR Thousand 2023 2022
Pension liabilities 261.4 273.4
Provision for accident insurance contribution - 609.0
Restructuring provisions 50.1 -
Total 311.5 882.4
15. Liabilities
Prepayments of non-current liabilities in coming years
EUR Thousand 2026 2028
Loans from credit institutions 40,000,0 -
Bonds - 75,000,0
EUR Thousand 2023 2022
Short term liabilities to Group Companies
Trade payables 13.4 3.8
Interest-bearing liabilities 41,995.8 53,065.1
Group contribution liabilities 3,358.0 -
Accrued expenses and deferred income 71.1 0.7
Total 45,438.3 53,069.6
Accrued expenses and deferred income
Personnel expenses 2,098.8 1,772.1
Interest expenses 2,264.2 1,912.3
Taxes 48.1 126.1
Other expenses 3.7 0.7
Total 4,414.8 3,811.1
16. Contingent liabilities
EUR Thousand 2023 2022
For own commitments
Mortgages on rights of tenancy 121.6 121.6
Liabilities related to leasing and leases
Maturity within 1 year 1,770.0 1,679.7
Maturity in subsequent years 1,728.4 2,677.9
Total 3,498.4 4,357.6
For Group Companies Guarantees 44,000.0 44,000.0
For Joint Ventures Guarantees 35,750.0 35,750.0
Other bank guarantees 264.7 264.7
Mortgages under own control
Company mortgages 210.2 210.2
 TThe figures for the comparative period have been restated.
According to the shareholders’ agreement, the Company is committed to acquire
the remaining 30 per cent share of Sand & Vattenbläst i Tyringe AB in February
2026 at the earliest. The estimated value of the commitment at the end of the
reporting period totalled EUR 5,941.7 thousand.
17. Derivatives
Interest rate swaps
EUR Thousand 2023 2022
Nominal value - 30,000.0
Fair value - 1,210.8
The interest rate swap that was used for hedging cash flows related to floating
rate loans was terminated in June 2023 in conjunction with the refinancing of the
hedged loan. The fair value of the interest rate swap totalling EUR 1,273.7 thousand
was recognised as finance income in the income statement. The fair value of the
swap contract was based on the market data on the balance sheet date.
75
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
Financial statements of the parent companyPrimary financial statements of the Group Notes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of Directors
Lassila & Tikanoja
Annual Report 2023
Auditor’s Note
We have today submitted our report on the audit conducted by us.
Helsinki on 26 February 2024
PricewaterhouseCoopers Oy
Samuli Perälä
APA
Proposal by the Board of Directors
for distribution of proﬁt
According to the financial statements, Lassila & Tikanoja plc’s unrestricted equity
amounts to EUR 51,335,173.21, with the result for the period representing EUR
7,420,038.45 of this total. There were no substantial changes in the financial
standing of the company after the end of the period, and the solvency test
referred to in Chapter 13, Section 2 of the Companies Act does not affect the
amount of distributable profits.
The Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.49 per share be paid for the financial year 2023.
The dividend is to be paid to shareholders included in the company
shareholder register maintained by Euroclear Finland Oy on the record date,
25 March 2024. The Board proposes to the Annual General Meeting that the
dividend be paid on 3 April 2024.
No dividend shall be paid on shares held by the company on the record date
of dividend payment, 25 March 2024.
On the day the proposal for the distribution of profit was made, the number
of shares entitling to dividend was 38,154,102, which means
the total amount of the dividend would be EUR 18,695,509.98
To be retained and carried forward EUR 32,639,663.23
Total EUR 51,335,173.21
Signatures to the Report of the Board of Directors and the Financial Statements for the year 2023
Helsinki on 20 February 2024
Jukka Leinonen Sakari Lassila Teemu Kangas-Kärki
Laura Lares Anni Ronkainen Pasi Tolppanen
Eero Hautaniemi
President and CEO
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
76
Lassila & Tikanoja
Annual Report 2023
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REMUNERATION REPORTSUSTAINABILITY REPORT
To the Annual General Meeting of Lassila & Tikanoja plc
Report on the Audit of the Financial Statements
Opinion
In our opinion
• the consolidated financial statements give a true and fair view of the
group’s financial position, financial performance and cash flows in accord-
ance with IFRS Accounting Standards as adopted by the EU
• the financial statements give a true and fair view of the parent company’s
financial performance and financial position in accordance with the laws
and regulations governing the preparation of financial statements in Finland
and comply with statutory requirements.
Our opinion is consistent with the additional report to the Audit Committee.
What we have audited
We have audited the financial statements of Lassila & Tikanoja plc (business
identity code 1680140-0) for the year ended 31 December 2023. The financial
statements comprise:
• the consolidated statement of financial position, consolidated income state-
ment, consolidated statement of comprehensive income, consolidated state-
ment of changes in equity, consolidated statement of cash flows and notes
to the consolidated financial statements, which include material accounting
policy information and other explanatory information, the balance sheet of
the parent company, income statement of the parent company, cash flow
statement of the parent company, accounting policies of the parent com-
pany and notes to the financial statements of the parent company.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland.
Our responsibilities under good auditing practice are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report.
We believe that the audit evidence we have obtained is sufficient and appro-
priate to provide a basis for our opinion.
Independence
We are independent of the parent company and of the group companies in
accordance with the ethical requirements that are applicable in Finland and are
relevant to our audit, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, the non-audit services that we have
provided to the parent company and group companies are in accordance
with the applicable law and regulations in Finland and we have not provided
non-audit services that are prohibited under Article 5(1) of Regulation (EU) No
537/2014. The non-audit services that we have provided are disclosed in note
5.5 to the Financial Statements.
Our Audit Approach
Overview
As part of designing our audit, we determined materiality and assessed the risks
of material misstatement in the financial statements. In particular, we consid-
ered where management made subjective judgements; for example, in respect
of significant accounting estimates that involved making assumptions and con-
sidering future events that are inherently uncertain.
Materiality
The scope of our audit was influenced by our application of materiality. An audit
is designed to obtain reasonable assurance whether the financial statements
are free from material misstatement. Misstatements may arise due to fraud or
error. They are considered material if individually or in aggregate, they could rea-
sonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.
Based on our professional judgement, we determined certain quantitative
thresholds for materiality, including the overall group materiality for the consol-
idated financial statements as set out in the table below. These, together with
qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements on the financial statements as a whole.
Overall group materiality 5,200,000 euros
How we determined it
We used a combination of net sales and profit
before taxes as benchmarks to determine overall
group materiality.
Rationale for the
materiality benchmark
applied
We consider that net sales and profit before
taxes provide a suitable representation of the
volume and profitability of Lassila & Tikanoja’s
operations.
How we tailored our group audit scope
We tailored the scope of our audit, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the
Group operates. The Group has four reportable segments: Environmental Ser-
vices, Industrial Services, Facility Services Finland and Facility Services Sweden,
its main markets being Finland and Sweden. We have scoped our audit to obtain
sufficient audit coverage of Lassila & Tikanoja Group’s consolidated financial
statements.
Auditor’s Report
Materiality
Audit
Scope
Key Audit
Matters
• We have applied an overall group materiality
of 5,200,000 euros.
• The group audit scope included the most
significant group companies and covered a
sufficient share of group’s revenues, assets,
and liabilities.
• Revenue recognition
• Employee beneﬁt expenses
• Valuation of goodwill
• Valuation of shares in group companies and
receivables from group companies in the
parent company ﬁnancial statements
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Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of
most significance in our audit of the financial statements of the current period.
These matters were addressed in the context of our audit of the financial state-
ments as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
As in all of our audits, we also addressed the risk of management override of
internal controls, including among other matters consideration of whether there
was evidence of bias that represented a risk of material misstatement due to
fraud.
Responsibilities of the Board of Directors and the Managing
Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for the
preparation of consolidated financial statements that give a true and fair view
in accordance with IFRS Accounting Standards as adopted by the EU, and of
financial statements that give a true and fair view in accordance with the laws
and regulations governing the preparation of financial statements in Finland
and comply with statutory requirements. The Board of Directors and the Man-
aging Director are also responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing
Director are responsible for assessing the parent company’s and the group’s
ability to continue as a going concern, disclosing, as applicable, matters relating
to going concern and using the going concern basis of accounting. The financial
statements are prepared using the going concern basis of accounting unless
there is an intention to liquidate the parent company or the Group or to cease
operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion. Reason-
able assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with good auditing practice will always detect a mate-
rial misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could rea-
sonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
Key audit matter in the audit of the consolidated financial statements How our audit addressed the key audit matter
Revenue recognition
Refer to note 1.1 and 1.2 in the consolidated financial statements)
The Group’s total net sales amounted to EUR 802 million.
Revenue from contracts with customers is generated from multiple revenue
streams as described in note 1.2. Revenue recognition principles vary depending
on the nature of the revenue stream.
Revenue recognition is considered a key audit matter due to the significance of
revenue to the financial statements and due to management judgment involved
in selecting the appropriate revenue recognition method for the different revenue
streams.
Our audit procedures included, for example, the following:
• We obtained an understanding of the company’s revenue recognition policies
and compared these to the respective IFRS standards
• We obtained an understanding of the internal controls that the company uses
to assess the completeness, accuracy, and timing of revenues
• We tested revenue transactions on a sample basis
• We tested, on a sample basis, revenue related balance sheet items such as
contract assets and liabilities.
Employee benefit expenses
(Refer to note 1.3 and 5.4 in the consolidated financial statements)
The Group operates in a highly labor-intensive business. Wages, salaries, and oth-
er employee benefit expenses form a significant part of the Group’s operating
expenses. In 2023 employee benefit expenses were EUR 353 million.
Employee benefit expenses is considered a key audit matter due to its signifi-
cance to the consolidated financial statements.
Our audit procedures included, for example, the following:
• We obtained an understanding of the company’s payroll process
• We evaluated and tested the internal controls that the company uses to assess
the accuracy of employee benefit expenses
• We performed analytical audit procedures in relation to employee benefit
expenses
• We tested on a sample basis employee benefit expenses related accruals.
Valuation of goodwill
Refer to note 3.1 and 3.2 in the consolidated financial statements
As of 31.12.2023, Goodwill in the consolidated balance sheet amounted to EUR 181
million.
Goodwill is not amortised, but is tested at least annually for impairment. Good-
will impairment testing has been prepared based on value-in-use calculations in
which future cash flows are discounted to current value. Value-in-use calcula-
tions include significant management judgment in respect of profitability levels,
long-term growth rates and discount rates.
The valuation of goodwill is considered a key audit matter due to its significance
as well as due to the management judgment involved in the impairment testing.
Our audit procedures included, for example, the following:
• We obtained an understanding of the methodology and assumptions used in
the goodwill impairment testing
• We tested the mathematical accuracy of the calculations
• We assessed the reasonableness of the estimated future profitability levels
and their consistency with the budgets and forecasts made by the manage-
ment in connection with the strategy process
• We assessed the reasonableness of the discount rates, long-term growth
rates and certain other assumptions by e.g., comparing the inputs to
observable market data
• We assessed management’s sensitivity analysis to ascertain the extent of
change in key assumptions that either individually or collectively could result
in an impairment of goodwill
• We assessed the adequacy of the disclosures.
KEY FIGURES
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Key audit matter in the audit of the parent company financial statements How our audit addressed the key audit matter
Valuation of shares in group companies and receivables from group
companies in the parent company financial statements
(Refer to the accounting policies of the parent company and note 10 and 11)
The investments in shares in group companies amounted to EUR 159 million and
current receivables from group companies to EUR 33 million.
The valuation of shares in group companies and receivables from group
companies is assessed annually and tested for impairment when necessary.
Impairment testing is performed using the discounted cash flow model.
Valuation of shares in group companies and receivables from group companies
is considered a key audit matter in the audit of the parent company due to the
significance of these investments to the financial statements and due to
management judgment involved in the impairment testing of these investments.
Our audit procedures included, for example, the following:
• We assessed the reasonableness of the management estimates by e.g.,
checking their consistency with the approved budgets and forecasts
• We assessed the methodology used in determining the discount rates and
long-term growth rates by e.g., comparing the inputs to observable market data.
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated financial state-
ments or the parent company financial statements.
As part of an audit in accordance with good auditing practice, we exercise pro-
fessional judgment and maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit proce-
dures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the parent
company’s or the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasona-
bleness of accounting estimates and related disclosures made by manage-
ment.
• Conclude on the appropriateness of the Board of Directors’ and the Man-
aging Director’s use of the going concern basis of accounting and based on
the audit evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the parent com-
pany’s or the Group’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the parent company or the
Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial state-
ments represent the underlying transactions and events so that the finan-
cial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial infor-
mation of the entities or business activities within the Group to express an
opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a statement that we
have complied with relevant ethical requirements regarding independence, and
to communicate with them all relationships and other matters that may rea-
sonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we
determine those matters that were of most significance in the audit of the finan-
cial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
Other Reporting Requirements
Appointment
We were first appointed as auditors by the annual general meeting on
17 March 2022.
Other Information
The Board of Directors and the Managing Director are responsible for the other
information. The other information comprises the report of the Board of Direc-
tors and the information included in the Annual Report, but does not include the
financial statements and our auditor’s report thereon. We have obtained the
report of the Board of Directors prior to the date of this auditor’s report and the
Annual Report is expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information.
KEY FIGURES
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In connection with our audit of the financial statements, our responsibility is
to read the other information identified above and, in doing so, consider whether
the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. With respect to the report of the Board of Directors, our responsibility
also includes considering whether the report of the Board of Directors has been
prepared in accordance with the applicable laws and regulations.
In our opinion
• the information in the report of the Board of Directors is consistent with
the information in the financial statements
• the report of the Board of Directors has been prepared in accordance
with the applicable laws and regulations.
If, based on the work we have performed on the other information that we
obtained prior to the date of this auditor’s report, we conclude that there is a
material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Other Opinions
We support the adoption of the financial statements. The proposal by the Board
of Directors regarding the treatment of distributable funds is in compliance with
the Limited Liability Companies Act. We support that the members of the Board
of Directors of the parent company and the President and CEO should be dis-
charged from liability for the financial period audited by us.
Helsinki 26 February 2024
PricewaterhouseCoopers Oy
Authorised Public Accountants
Samuli Perälä
Authorised Public Accountant (KHT)
To the Management of Lassila & Tikanoja Oyj
We have been engaged by the Management of Lassila & Tikanoja Oyj (busi-
ness identity code 1680140-0) (hereinafter also “the Company”) to per-
form a reasonable assurance engagement on the Company’s consolidated
IFRS financial statements for the financial year 1 January – 31 December
2023 in European Single Electronic Format (“ESEF financial statements”)
743700Z9Z54VGHZA0028-2023-12-31-fi.zip.
Management’s Responsibility for the ESEF
Financial Statements
The Management of Lassila & Tikanoja Oyj is responsible for preparing the ESEF
financial statements so that they comply with the requirements as specified
in the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018
(“ESEF requirements”). This responsibility includes the design, implementation
and maintenance of internal control relevant to the preparation of ESEF financial
statements that are free from material noncompliance with the ESEF require-
ments, whether due to fraud or error.
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the
International Code of Ethics for Professional Accountants (including Interna-
tional Independence Standards) issued by the International Ethics Standards
Board for Accountants (IESBA Code), which is founded on fundamental princi-
ples of integrity, objectivity, professional competence and due care, confidenti-
ality and professional behaviour.
Our firm applies International Standard on Quality Management 1, which
requires the firm to design, implement and operate a system of quality manage-
ment including policies or procedures regarding compliance with ethical require-
ments, professional standards and applicable legal and regulatory requirements.
.
Our Responsibility
Our responsibility is to express an opinion on the ESEF financial statements
based on the procedures we have performed and the evidence we have
obtained.
We conducted our reasonable assurance engagement in accordance with
the International Standard on Assurance Engagements (ISAE) 3000 (Revised)
Assurance Engagements Other than Audits or Reviews of Historical Financial
Information
. That standard requires that we plan and perform this engagement
to obtain reasonable assurance about whether the ESEF financial statements
are free from material noncompliance with the ESEF requirements.
A reasonable assurance engagement in accordance with ISAE 3000 (Revised)
involves performing procedures to obtain evidence about the ESEF financial
statements compliance with the ESEF requirements. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of
material noncompliance of the ESEF financial statements with the ESEF require-
ments, whether due to fraud or error. In making those risk assessments, we con-
sidered internal control relevant to the Company’s preparation of the ESEF finan-
cial statements.
We believe that the evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Independent Auditor’s Reasonable Assurance Report on
Lassila & Tikanoja Oyj’s ESEF Financial Statements
Opinion
In our opinion, Lassila & Tikanoja Oyj’s ESEF financial statements for the financial
year ended 31 December 2023 comply, in all material respects, with the minimum
requirements as set out in the ESEF requirements.
Our reasonable assurance report has been prepared in accordance with the
terms of our engagement. We do not accept, or assume responsibility to anyone
else, except for Lassila & Tikanoja Oyj for our work, for this report, or for the
opinion that we have formed.
Helsinki 26 February 2024
PricewaterhouseCoopers Oy
Authorised Public Accountants
Samuli Perälä
Authorised Public Accountant (KHT)
KEY FIGURES
FINANCIAL STATEMENTS
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Annual Report 2023
80
LEADER OF THE
REGENERATIVE SOCIETY
Lassila & Tikanoja plc
Valimotie 27, 00380 Helsinki
puh. 010 636 111
www.lt.ﬁ