LEADER OF THE
REGENERATIVE
SOCIETY
Financial review 2022
Lassila & Tikanoja plc
Contents
Report by the Board of Directors . . . . . 3
Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Calculation of the key figures . . . . . . . . . . . . . . . . . . . . 21
Financial statements . . . . . . . . . . . . . . . 23
Consolidated income statement . . . . . . . . . . . . . . . . . 23
Consolidated statement of comprehensive income 23
Consolidated statement of financial position . . . . 24
Consolidated statement of cash flows . . . . . . . . . . 25
Consolidated statement of changes of equity . . . 26
Notes to the consolidated financial statements . 27
Financial statements of the parent company . . . . 57
Proposal by the Board of Directors for profit
distribution and the Auditor's Note . . . . . . . . . . . . . . . 64
Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Corporate Governance
Statement 2022 . . . . . . . . . . . . . . . . . . . . 70
Remuneration Report 2022 . . . . . . . . . 77
Corporate Governance
Statement 2022
p. 3
p. 23
p. 77
p. 70
Report by the Board of Directors
Financial statements
Remuneration Report 2022
Lassila & Tikanoja
Financial review 2022
2
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
3
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Business model ..............................................4
Business environment .......................................4
Strategy .....................................................4
Financial performance and a review of the divisions .......6
Sustainability and the statement of
non-financial information ....................................7
Changes in the company’s management ...................14
Changes in Group structure ................................14
Shares and shareholders ...................................15
Risk management and risks ................................16
Events after the balance sheet date .......................18
Future outlook ...............................................16
TCFD reporting ..............................................18
Report of the Board
of Directors
4
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Report by the Board of Directors
Business model
L&T is a service company that is making the circular economy
a reality. The Group operates in the circular economy and facil-
ity 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 in
circulation as efficiently as possible 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 process cleaning and sewer maintenance
services. The division operates in Finland and Sweden.
• Facility Services in Finland and Sweden improve the value
of our 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 eco-
nomy, L&T aims to create increasing value for all of its key stake-
holders.
L&T’s business environment
The sickness rate rose to a record-high level in the early part
of the year due to COVID-19, and sickness-related absences
increased again towards the end of the year.
COVID-19 and the general uncertainty it has created in the job
market led to unprecedented employee turnover, especially in
the cleaning business. Labour availability challenges increased
compared to the preceding years, and the competition for com-
petent employees intensified.
Russia’s unlawful invasion of Ukraine pushed the prices of
transport fuels to a new level. The higher prices of liquid fuels
and energy, paired with the tighter labour market situation,
sparked inflation that subsequently spread during the year to
other goods and services as well as the financial markets. The
acute energy crisis and widespread market disruptions caused
by the war shifted the focus of policymakers to the short-term
business environment. For example, the distribution obligation
for biocomponent in fuel was reduced following a brief legisla-
tive drafting process.
In spite of these challenges – and partly for these reasons
– the preparation of the European Green Deal continued, and
increased emphasis was placed on measures aimed at ending
the dependence on fossil energy.
The EU is committed to achieving climate neutrality by 2050,
and the EU’s Fit for 55 climate package aims to accomplish
emission reductions of at least 55 per cent by 2030. The legisla-
tive proposals in the package will have an extensive impact on
L&T’s business environment. They concern areas such as the
reform of emissions trading, effort-sharing between countries,
energy efficiency, renewable energy, the role of the land use
sector and carbon sinks, emissions limits for cars, energy taxes
and carbon border taxes.
The green transition relies heavily on low-carbon and biodi-
versity-promoting solutions, in which the circular economy plays
a central role. Slowing down biodiversity loss has emerged as an
important goal alongside the mitigation of climate impacts. Sus-
tainability principles, particularly the principle of due diligence,
are gradually becoming increasingly important factors in financ-
ing and investment decisions as well as procurement.
The EU is promoting the circular economy within the frame-
work of an updated action plan, the priorities of which include
preventing waste, designing sustainable products and strength-
ening the market for recycled raw materials. The new priorities
shift the focus of circular economy policy towards the sustaina-
ble use of natural resources.
Finland seeks to establish a leading position for itself in
Europe by setting ambitious climate and circular economy tar-
gets. The aim of the Finnish Government’s strategic circular
economy programme is to achieve a transition that makes the
circular economy the new foundation of the economy by 2035.
The programme aims to curb the use of natural resources by
doubling resource productivity and the circularity rate of mate-
rials by 2035. The reform of the Waste Act entered into effect in
Finland on 19 July 2021 and the implementation of the new leg-
islation has begun. The reform sets out the measures by which
Finland will achieve the even more ambitious targets set by the
EU regarding the recycling of municipal waste and packaging
waste.
New obligations relating to the separate collection of waste
fractions, considerably stricter than the current ones, will be
adopted in order to achieve the recycling objectives. The reform
of the Waste Act will see municipalities take on a larger role in
organising the collection of packaging materials and biowaste
from housing properties. As a consequence of the reform, L&T’s
direct customer agreements with housing properties on the
separate collection of packaging waste and biowaste will be
transferred to municipalities for competitive bidding. With regard
to mixed waste, the possibility of a dual waste transport system
for housing properties will remain in place, but its importance
will decrease with the increase in the separate collection of
packaging and biowaste. The amendments will enter into force
in stages between 1 July 2022 and 1 July 2024.
Initiatives and measures related to the green transition will
play a significant role in L&T’s business environment in the com-
ing years. On the one hand, they will lead to even more ambitious
targets for the sustainability of the Group’s own operations. On
the other hand, they will present many business opportunities
for a company whose operations are focused on circular econ-
omy solutions.
L&T broadly supports the reforms related to the green tran-
sition and puts them into practice through the solutions it pro-
vides. From the perspective of business impacts, the key issue is
how the reforms related to the green transition will be managed
and implemented in Finland.
Strategy
Lassila & Tikanoja’s mission is to make the circular economy a
reality, and the company helps its customers achieve their sus-
tainability goals.
Climate change and biodiversity loss are megatrends that
create business opportunities for L&T. Mitigating climate change
and biodiversity loss requires circular economy actions from
society, businesses and individuals. Businesses need responsi-
ble 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 environment
are increasing, which creates demand for L&T’s services. Prop-
erties are expected to have long life spans, and changes in the
needs and in the use of buildings over the years must be taken
into account in maintenance and new construction.
L&T’s strategy, “A leader of the regenerative society”, guides
the Group’s operations during the 2022–2026 strategy period.
L&T seeks growth in its core businesses by strengthening its
market share. The Group’s strong balance sheet and increased
contract portfolio in all business segments create 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 production.
Targets for the strategy period
L&T measures the success of its strategy by financial, sustaina-
bility and stakeholder targets.
Financial targets
Indicator Target 2022 2021
Annual growth
in net sales, % 5 3.9 8.1
Return on capital
employed, % 15 10.4 10.8
Gearing, % Less than 125 75.9 79.4
Sustainability and stakeholder targets
Indicator Target 2022 2021
Net Promoter Score,
NPS
>50 by 2026 26 40
Employee Net Promoter
Score, eNPS
>50 by 2026 24 28
Carbon handprint
intensity (tCO
2
-ekv./
MEUR)
Grows faster than
net sales
-633 -646
Carbon footprint
(Scope 1 and 2 per kilo-
metre driven)
-50% by 2030,
using 2018 as the
baseline
-32%* -19%
*The distribution obligation for renewable transport fuel was adjusted in July.
Read more about the impacts of this change on page 13.
5
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
L&T’S VALUE CREATION IN 2022
RESOURCES OUTPUTS IMPACTS
People and management
• 8,371 L&T employees in Finland and Sweden
• 15,7 million hours worked
• Investments in safety, work ability and
well-being
• Benefits paid from the sickness fund MEUR 1.9
• 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
• 728,000 tonnes of material collected from
customers
• 8,600 properties under maintenance (Finland)
• Climate targets throughout the chain
Finances and governance
• Promoting human rights and a responsible
supply chain
• 96% of purchases from Finnish and
Swedish suppliers
• Equity MEUR 220.4
• Net interest-bearing liabilities MEUR 167.3
• Capital expenditure MEUR 58.2
• 24,556 shareholders
Healthy personnel
• Employee Net Promoter Score (eNPS) 24
• Sickness-related absences 5.6%
• Retirement age 63.8 years
• Health rate 40%
• Accident frequency (TRIF) 23
• over 20,100 hours of training on
average per year
• Code of Conduct training for employees
Responsible products and services
• Reuse and recycling rate of customer
materials 59.4%.
• Containers emptied nearly 13 million
times
• More than 778,000 maintenance actions
and over 3,000 energy efficiency
proposals in Finland
• 41,000 tonnes of waste rendered non-
hazardous
• Over 210,000 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 646
gCO2e, -32% compared to the previous
year
• Water treated by the Industrial
Services division 128,000 m
Employment and prevention of
marginalisation
• Salaries, fees and social security
contributions paid MEUR 353.1
• Employees with a high level of well-
being and commitment as well as a
capable organisation
• Impacts of well-being, injuries and
illnesses
• Providing a first job for people
regardless of their background
• 37% of supervisors and managers
are women
Mitigating climate change and
biodiversity loss
• Carbon handprint of operations
-633 million tCO2e
• 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 450
• Taxes: MEUR 6.3
• Dividends MEUR 17.5
ACTIVITIES
WE MAKE THE CIRCULAR ECONOMY A REALITY
We are a
partner that
helps society
as a whole
advance towards
full circularity.
Builder and developer of
the circular economy
We help in developing business
operations and finding new solutions.
A performer of day-to-day services
We make effective day-to-day operations possible
and provide day-to-day services.
6
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
profit was EUR 0.9 million. The business is no longer reported
as part of the Environmental Services division after the second
quarter of 2022. The net profit of the joint venture is consoli-
dated in one line item under operating profit.
Industrial Services
The full-year net sales of the Industrial Services division grew
to EUR 132.0 million (105.1). Adjusted operating profit was EUR
13.6 million (9.2). Operating profit was EUR 12.7 million (9.2).
Operating profit was reduced by a change of EUR 0.8 million
in the fair value of the deferred consideration related to the
acquisition of Sand & Vattenbläst i Tyringe AB (“SVB”) recog-
nised in the final quarter of 2022, due to the positive develop-
ment of the acquired company’s business.
The Industrial Services division strengthened its position
in hazardous and non-hazardous waste recycling services
during the period under review by acquiring Fortum’s hazard-
ous waste SME business in Finland at the beginning of Febru-
ary 2022. The takeover of the business acquired from Fortum
went according to plan, and the demand for hazardous waste
services was strong.
In the environmental construction business line, several
demanding industrial soil decontamination projects were
carried out. At the beginning of the year, a new material treat-
ment centre started its operations in Pori, Finland. The treat-
ment centre focuses particularly on processing industrial
side streams.
In February, Industrial Services expanded into the Swed-
ish process cleaning services market by acquiring 70% of the
shares of Sand & Vattenbläst i Tyringe AB (“SVB”), a provider of
process cleaning services in Sweden. Operating in southern
Sweden, SVB had net sales of approximately EUR 10 million in
the previous financial year and has approximately 60 employ-
ees. The integration of the Swedish business progressed
according to plan, and several successful industrial water
treatment projects were carried out in the process cleaning
business in Sweden. In the process cleaning business in Fin-
land, resource allocation for annual maintenance breaks was
successful in spite of maintenance breaks originally scheduled
for the early part of the year being postponed to the autumn
due to the COVID-19 pandemic and labour action.
Fuel prices rose sharply at the end of February due to the war
in Ukraine. The higher fuel costs were passed on to customer
prices through cost increases carried out in February–April.
Facility Services Finland
The full-year net sales of Facility Services Finland grew to
EUR 256.3 million (243.1). Operating profit declined to EUR
-0.5 million (1.8).
Several significant new customer accounts were acquired
and started in the cleaning business, and the demand for data-
driven cleaning services increased. The demand for energy
efficiency services increased during the review period.
The COVID-19 pandemic and other respiratory infections
significantly increased sickness-related absences in the first
and fourth quarters, which increased production costs in all
service lines, especially in cleaning. Production costs were
increased by higher fuel prices and general cost inflation. The
increased production costs could not be fully passed on to
customer prices.
In the cleaning business, the availability of labour declined
and employee turnover increased significantly, which drove
costs higher. Several new projects were launched to improve
the availability of labour. Co-operation with municipal employ-
ment services and government organisations was intensi-
fied to ensure that jobs offered by L&T are better known by
job seekers. L&T joined forces with Staffpoint to offer jobs to
Ukrainian refugees. A group of workers from the Philippines
was recruited for full-time cleaning work under contracts
valid until further notice. The employees in question will start
work in the first quarter of 2023.
Measures were taken in Facility Services Finland to
improve operational efficiency and profitability throughout
the period under review. Local and business line-specific
change negotiations were conducted in the division in the
second half of the year, leading to the termination of employ-
ment for approximately 70 white-collar employees and
approximately 30 employees.
Facility Services Sweden
Facility Services Sweden’s full-year net sales decreased to EUR
140.4 million (149.8). Operating profit declined to EUR 0.4 million
(3.9). Operating profit before the amortisation of purchase price
allocations of acquisitions was EUR 2.2 million (6.0).
Production costs were increased by higher fuel prices and
general cost inflation from February onwards. The COVID-19
pandemic increased sickness-related absences, particularly in
the first quarter. Customer agreements in the Swedish business
are mostly fixed-price contracts, and the increased production
Financial performance
Group net sales and financial performance
Net sales for 2022 totalled EUR 844.1 million (812.5), an increase
of 3.9% year-on-year. Net sales growth excluding the effect
of the renewable energy sources business was 7.0%. Organic
growth was 3.7%. Adjusted operating profit was EUR 40.9 million
(42.4), representing 4.8% (5.2%) of net sales. Operating profit
was EUR 42.9 million (42.2), representing 5.1% (5.2%) of net
sales. Earnings per share were EUR 0.83 (0.90).
Net sales increased in Environmental Services, Industrial
Services and Facility Services Finland. Net sales decreased in
Facility Services Sweden. Operating profit improved in Environ-
mental Services and Industrial Services, and declined in Facility
Services in Finland and Sweden.
The Group’s adjusted operating profit was negatively
affected by increased fuel prices and the higher general cost
level. The sickness rate was exceptionally high during the
review period, which had a negative impact particularly on the
labour-intensive facility services business. The Group's operat-
ing profit was increased by a gain of EUR 4.3 million recognised
on the sale of the share of the renewable energy sources busi-
ness to a newly established joint venture.
Net financial expenses rose to EUR -5.8 million (-3.3) and the
effective tax rate increased to 16.7 per cent (11.8 per cent).
Division reviews
Environmental Services
The full-year net sales of the Environmental Services division
grew to EUR 321.2 million (320.5). Operating profit was EUR
30.3 million (29.8). Excluding the renewable energy sources
business, the net sales of the Environmental Services divi-
sion amounted to EUR 287.1 million (265.5) and operating
profit was EUR 30.0 million (28.9).
In Environmental Services, growth was derived particu-
larly from corporate customers and producer responsibil-
ity organisations. The producer responsibility organisation
Suomen Pakkaustuottajat Oy chose L&T as its recycling
partner for consumer plastic packaging in December. The
agreement covers approximately 20,000 tonnes of con-
sumer packaging plastic waste, which corresponds to
approximately half of the packaging plastic waste collected
in Finland each year. From the beginning of 2023, L&T will be
responsible for the intermediate storage of plastic packaging
waste as well as its collection and transport to Quantafuel
ASA’s mechanical and chemical recycling plants in Denmark.
During the period under review, the organisational struc-
ture and operating model were reformed by assigning more
commercial responsibility to the local organisation. The envi-
ronmental responsibility management and consulting organi-
sation grew and its competencies were expanded.
The ERP system and related information system renewal
programme continued in the division and progressed to the
implementation stage. The system is scheduled to enter the
deployment stage in the first half of 2024. The total invest-
ment in the system projects under the programme is esti-
mated at approximately EUR 16.9 million, of which approxi-
mately EUR 6.2 million was realised by the end of 2022, with
expenses of EUR 1.3 million recognised in 2022.
Due to the reform of the Waste Act in 2021, direct cus-
tomer agreements with housing properties were transferred
to municipal operators during the period under review, but
the impact of these changes on net sales was compensated
for by growth in the corporate customer segment.
The prices of recycled raw materials increased in the
first half of the year. The prices of recycled raw materials
subsequently stabilised and, in the case of certain fractions,
began to decrease in the latter half of the year. The market
prices of recycled cardboard and paperboard falling to less
than half of the level seen in the early part of the year was
particularly reflected in the net sales of the Environmental
Services division. The reduced level of activity in the con-
struction industry was also reflected in declining volumes
towards the end of the year.
Fuel prices rose sharply at the end of February due to
the war in Ukraine. The higher fuel costs were passed on to
customer prices through cost increases carried out in Feb-
ruary–April.
The merger of the Environmental Services division’s renew-
able energy sources business with Neova Oy’s correspond-
ing business was approved by the Finnish Competition and
Consumer Authority, and the joint venture Laania Oy became
operational on 1 July 2022. In the first half of the year, the net
sales of the renewable energy sources business amounted to
EUR 35.4 million, and the operating profit was EUR 0.3 million. In
the financial year 2021, the net sales of the renewable energy
sources business totalled EUR 56.9 million, and the operating
7
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
MEUR 2022 2021 Change %
Net sales
Environmental Services 321.2 320.5 0.2
Industrial Services 132.0 105.1 25.6
Facility Services Finland 256.3 243.1 5.4
Facility Services Sweden 140.4 149.8 -6.2
Interdivisional net sales -6.0 -6.1
Total 844.1 812.5 3.9
Operating profit
Environmental Services 30.3 29.8 1.6
Industrial Services 12.7 9.2 38.8
Facility Services Finland -0.5 1.8 -129.0
Facility Services Sweden 0.4 3.9 -89.8
Group administration
and other 0.1 -2.4
Total 42.9 42.2 1.7
Adjusted operating
profit
Environmental Services 30.3 29.8 1.6
Industrial Services 13.6 9.2 48.0
Facility Services Finland -0.5 1.8 -129.0
Facility Services Sweden 0.4 3.9 -89.8
Group administration
and other -2.8 -2.2
Total 40.9 42.4 -3.5
% 2022 2021
Operating margin
Environmental Services 9.4 9.3
Industrial Services 9.6 8.7
Facility Services Finland -0.2 0.7
Facility Services Sweden 0.3 2.6
Total 5.1 5.2
Adjusted operating margin
Environmental Services 9.4 9.3
Industrial Services 10.3 8.7
Facility Services Finland -0.2 0.7
Facility Services Sweden 0.3 2.6
Total 4.8 5.2
MEUR 2022 2021
Gross capital expenditure
Environmental Services 20.3 41.7
Industrial Services 34.6 14.5
Facility Services Finland 1.5 13.6
Facility Services Sweden 0.4 1.8
Group administration and other 1.3 0.6
Total 58.2 72.3
MEUR 2022 2021
Capital employed
Environmental Services 172.3 225.3
Industrial Services 90.7 68.2
Facility Services Finland 34.3 28.4
Facility Services Sweden 62.1 67.1
Group administration and other 77.9 17.0
Total 437.2 406.0
% 2022 2021
Return on capital employed (ROCE)
Environmental Services 15.3 14.7
Industrial Services 16.1 14.0
Facility Services Finland
-0.8 6.6
Facility Services Sweden 0.8 6.5
Total 10.4 10.8
costs could not be passed on to customers in the form of price
increases. The profit performance of Facility Services Sweden
was lowered not only by inflation but also the weaker-than-ex-
pected sales of additional services. Adaptation measures were
initiated in the division in the second quarter. The effort to sim-
plify operating models and adapt them to the rapidly changing
business environment will continue in 2023.
Financing and capital expenditure
In 2022, cash flow from operating activities amounted to EUR
71.8 million (65.6). Net cash flow after investments came to
EUR 41.1 million (1.7). Net cash flow from operating activities
after investments was reduced by acquisitions, which had
a total impact of approximately EUR -13 million (approxi-
mately EUR -23 million). Net cash flow after investments was
increased by the repayment of a loan receivable of EUR 16.4
million by the joint venture in the final quarter of 2022. A total
of EUR 6.2 million in working capital was committed (EUR 15.1
million committed).
At the end of the financial year, interest-bearing liabilities
amounted to EUR 216.8 million (195.6). Net interest-bearing
liabilities totalled EUR 167.3 million (167.1). The average inter-
est rate of long-term loans, excluding lease liabilities, with
interest rate hedging, was 2.5% (1.1%). Of the company’s
floating rate loans totalling EUR 50 million, EUR 30 million
have been converted into fixed rate loans by means of an
interest rate swap.
The EUR 100.0 million commercial paper programme was
unused at the end of the financial year as in the comparison
period. The account limit totalling EUR 10.0 million as well as
the committed credit limit totalling EUR 40.0 million were not
in use, as was the case in the comparison period. The Group
signed a credit limit linked to responsibility targets in May
2022. The credit limit will mature in the first quarter of 2025.
The company issued senior unsecured sustainability-linked
notes in the amount of EUR 75 million in May. The new notes
will mature in the second quarter of 2028 and bear fixed
annual interest at the rate of 3.375 per cent.
Net financial expenses amounted to EUR -5.8 million (-3.3).
The increase in net financial expenses was attributable
to higher interest-bearing liabilities due to acquisitions, an
expense of EUR 0.3 million associated with the redemption of
a bond, and the higher general interest rate level. The effect of
exchange rate changes on net financial expenses was EUR
-0.2 million (0.3). Net financial expenses were 0.7% (0.4%) of
net sales.
The equity ratio was 34.3% (34.2%) and the gearing ratio
was 75.9% (79.4%). The Group’s total equity was EUR 220.4
million (210.4). Translation differences caused by the depreci-
ation of the Swedish krona affected equity by EUR -5.6 million
and changes in the fair value of hedging instruments by EUR
1.3 million. Cash and cash equivalents at the end of the period
amounted to EUR 49.5 million (28.6). Overdue trade receiva-
bles and credit losses have not increased as a result of the
COVID-19 pandemic or the war in Ukraine.
Loans, liabilities and contingent liabilities to related parties
Related-party transactions are accounted for in Note 5.4
Related-party transactions.
Sustainability and the statement of non-financial
information
Sustainability is an integral aspect of Lassila & Tikanoja’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.
Lassila & Tikanoja’s business model, value creation and
strategy are described in more detail on pages 4-5.
Managing sustainability
At L&T, sustainability is integrated into the Group’s strategy. The
Board of Directors monitors the progress of the sustainability
programme annually through the Personnel and Sustaina-
bility Committee of the Board of Directors. The Committee
discusses sustainability issues at least three times per year.
The Personnel and Sustainability Committee met four times
in 2022.
The Group Executive Board steers the implementation
of the sustainability programme and monitors it quarterly.
Development primarily takes place in business-driven work-
ing groups, but the Director of Corporate Relations and Sus-
tainability and the communications and sustainability organ-
8
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
isation operating under their 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 accord-
ance with the Group’s management system. L&T’s manage-
ment 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, eth-
ical and social perspectives that the Group observes in both
its own operations as well as in the services it produces for
customers. The policies and principles are available to stake-
holders on L&T’s website.
L&T takes an uncompromising approach to ensuring the
compliance and sustainability of its operations. L&T observes
its obligations regarding the environment and as an employer,
and minimises the negative environmental impacts of its oper-
ations. L&T requires that its suppliers operate in accordance
with 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 targets
to be monitored. The programme was updated in 2022 and
its focus areas were determined based on the impacts of
the Group’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 the
business environment of a service company in the environ-
mental sector as well as the UN’s sustainable development
principles 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 the employee recommendation rate, have
been incorporated into L&T’s long-term strategic goals. More
information on the sustainability programme and the key tar-
gets is provided in L&T’s annual report.
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.
To ensure compliance in its operations, L&T has docu-
mented its sustainable business principles in its Code of Con-
duct, which applies to all L&T employees as well as contract
suppliers. Supervisors are responsible for ensuring the per-
sonnel’s familiarity with the Code of Conduct and monitoring
compliance with the guidelines.
Violations of the Code of Conduct are primarily reported to
the immediate supervisor, who assists in the interpretation of
the Code in ambiguous situations. Employees can also use a
confidential whistleblowing channel by phone or e-mail. 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 com-
prehensive risk management. The risk management process
is described in the Corporate Governance Statement, and the
key risks are explained under “Risks and risk management”
on page 16-17.
Sustainability reporting
L&T reports on its sustainability efforts and related progress
quarterly in connection with interim reports and more exten-
sively on an annual basis in the sustainability report published
as part of the Annual Review.
The sustainability report for 2022 has been drawn up in
accordance with GRI (Global Reporting Initiative) standards. The
key performance indicators for environmental responsibility and
responsibility for personnel reported in the sustainability report
are verified by a third party. L&T’s sustainability report is availa-
ble at vuosikertomus.lt.fi/en.
EU taxonomy
BACKGROUND
In this section, Lassila & Tikanoja will publish information in
accordance with the following regulations: Regulation (EU)
2020/852 of the European Parliament and of the Council of
18 June 2020 on the establishment of a framework to facili-
tate sustainable investment, and amending Regulation (EU)
External recognition
Rating Compared to benchmarks
CDP B The rating was reduced in 2022 to the second-highest rating, “Management level”. From
2014 to 2021, L&T received a rating of Leadership “A-” .
CDP supplier
engagement
A The highest leadership rating for climate efforts in the supply chain.
Kiwa Excellent,
713 points
Our total score of 713 put us in 4th place among nearly 400 audits.
Ecovadis Platinum L&T was rated among the top 1% of all 90,000 companies assessed by EcoVadis in 2022.
2019/2088 (Taxonomy Regulation).
The EU Taxonomy Regulation sets out six environmental
objectives:
1. Climate change mitigation
2. Climate change adaptation
3. Sustainable use and protection of water and
marine resources
4. Transition to a circular economy,
prevention and recycling of waste
5. Pollution prevention and control
6. Protection and restoration of biodiversity and
ecosystems
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 tech-
nical screening criteria for two environmental objectives:
climate change mitigation and climate change adaptation,
which have been described in the taxonomy. In their report-
ing on 2021, companies were required to publish information
on taxonomy-eligible economic activities’ share of net sales,
capital expenditure (investments) and operating expenditure.
Taxonomy eligibility applies to activities that are within the
scope of the Climate Act.
In their reporting on 2022, companies are required to
assess the taxonomy alignment of their activities. Taxonomy
alignment requires that axonomy-eligible activities meet
detailed technical screening criteria, do not have adverse
impacts on other environmental objectives (Do No Significant
Harm criteria) and meet the minimum social safeguards set
out in the Taxonomy Regulation.
L&T AND THE EU TAXONOMY
According to the Taxonomy Regulation, the companies that
are required to report in accordance with the Non-Finan-
cial Reporting Directive (2014/95/EU) must comply with the
reporting requirements of the Taxonomy Regulation. This
requirement applies to L&T. L&T has assessed the taxonomy
eligibility and taxonomy alignment of its activities. The EU
taxonomy assessment has been conducted for net sales
generated by business operations (Note 1.2 to the financial
statements), capital expenditure and operating expenditure
related to climate change mitigation. L&T reports on taxon-
omy at the Group level. L&T’s Renewable Energy Sources
business operations are not included in the taxonomy calcu-
lation. L&T’s taxonomy eligibility has been assessed on the
basis of the descriptions of economic activities and related
NACE codes set out in Annex 1 (Climate change mitigation) of
the Taxonomy Regulation.
Taxonomy alignment assessment is based on the indus-
try-specific technical screening criteria described in the Tax-
onomy Regulation and the Do No Significant Harm require-
ments. The technical screening criteria have been examined
side by side in order to achieve the greatest possible consist-
ency in reporting and to avoid double accounting. In addition
to separate technical requirements, the Taxonomy Regulation
provides for minimum safeguards that L&T has assessed at
the Group level. L&T’s taxonomy alignment has been assessed
on the basis of the technical screening criteria and related
NACE codes set out in Annex 1 (Climate change mitigation) of
the Taxonomy Regulation. The assessment was carried out in
cooperation with environmental specialists of the divisions.
9
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
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 oper-
ating expenditure, data from 2022 was analysed and com-
pared to the screening criteria. Some of L&T’s measures, such
as installing solar panels in offices, could fall within the scope
of the taxonomy. However, this capital expenditure does not
represent a significant proportion of the total investment.
L&T does not have separate capital or operating expenditure
plans for the taxonomy.
The business operations of the Environmental Services
division include, for example, the collection and transport of
non-hazardous waste in waste fractions and the recovery of
materials from non-hazardous waste.
The business operations of the Industrial Services division
include, for example, the renewal of wastewater collection
and treatment as well as the transport of soil in connection
with environmental construction. The business operations of
the Facility Services division include, for example, the installa-
tion, maintenance and repair of energy efficiency equipment
and renewable energy technology, as well as the installa-
tion, maintenance and repair of instruments and devices
for measuring, regulating and controlling the energy perfor-
mance of buildings.
FUTURE OUTLOOK
The circular economy is a key way of mitigating climate
change. L&T’s mission is to make the circular economy a
reality. All of the Group’s businesses build future sustaina-
ble growth for the circular economy and are based on the
opportunities it creates. The Board of Directors has set L&T a
long-term goal of increasing the carbon handprint faster than
net sales. L&T also continues to invest in the achievement
of climate targets by purchasing zero-emission vehicles,
for example. The EU taxonomy is still a work in progress, and
L&T’s assessment may change when new parts of the taxon-
omy are completed. In particular, the criteria related to a cir-
cular economy are closely linked to L&T’s business.
10
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Taxonomy-aligned activities, share of net sales
Substantial contribution criteria DNSH criteria
Taxonomy-aligned
share of turnover
Economic activities Code(s)
Absolute
turnover
Share of
turnover
Climate
change
mitigation
Climate
change
adaptation
Water
and marine
resources
Circular
economy Pollution
Biodiversity
and
ecosystems
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy Pollution
Biodiversity
and
ecosystems
Minimum
safeguards 2022 2021 Category
TAXONOMY-ELIGIBLE ACTIVITIES MEUR % % % % % % % Y/ N Y/ N Y/ N Y/ N Y/ N Y/ N Y/ N % % E/T
Taxonomy-aligned activities
Installation and operation of electric heat pumps 4.16 0.50 0.1% 100.00% Y Y Y Y Y Y 0.1%
Collection and transport of non-hazardous waste in source
segregated fractions
5.5 49.81 5.9% 100.00% Y Y Y Y Y Y 5.9%
Material recovery from non-hazardous waste 5.9 35.65 4.2% 100.00% Y Y Y Y Y Y 4.2%
Installation, maintenance and repair of energy efficiency
equipment
7.3 10.27 1.2% 100.00% 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)
7.4 0.07 0.0% 100.00% 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
7.5 4.21 0.5% 100.00% Y Y Y Y Y Y 0.5% E
Installation, maintenance and repair of renewable energy
technologies
7.6 4.97 0.6% 100.00% Y Y Y Y Y Y 0.6% E
Professional services related to energy performance of buildings 9.3 3.43 0.4% 100.00% Y Y Y Y Y Y 0.4% E
Turnover of Taxonomy-aligned activities 108.91 12.9% 12.9%
Taxonomy-non-aligned activities
Renewal of waste water collection and treatment 5.4 0.65 0.1%
Collection and transport of non-hazardous waste in source
segregated fractions
5.5 1.75 0.2%
Material recovery from non-hazardous waste 5.9 3.34 0.4%
Installation, maintenance and repair of energy efficiency
equipment
7.3 3.57 0.4%
Installation, maintenance and repair of instruments and
devices for measuring, regulation and controlling energy
performance of buildings
7.5 3.57 0.4%
Turnover of Taxonomy-non-aligned activities 12.87 1.5% 1.5% N/A
Total Taxonomy-eligible activities 121.78 14.4 % 14.4% NA
TAXONOMY-NON-ELIGIBLE ACTIVITIES
Absolute
turnover,
MEUR
Share of
turnover
Turnover of Taxonomy-non-eligible activities 720.9 85.6%
Total Taxonomy-eligible and non-eligible turnover 844.1 100.0%
11
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Taxonomy-aligned activities, share of capital expenditure
Substantial contribution criteria DNSH criteria
Taxonomy-aligned
share of capital expen-
diture
Economic activities Code(s)
Capital
expendi-
ture
Share of
capital
expendi-
ture
Climate
change
mitigation
Climate
change
adaptation
Water
and marine
resources
Circular
economy Pollution
Biodiversity
and
ecosystems
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy Pollution
Biodiversity
and
ecosystems
Minimum
safeguards 2022 2021 Category
TAXONOMY-ELIGIBLE ACTIVITIES MEUR % % % % % % % Y/ N Y/ N Y/ N Y/ N Y/ N Y/ N Y/ N % % E/T
Taxonomy-aligned activities
Collection and transport of non-hazardous waste in source se-
gregated fractions
5.5 3.5 6.0% 100.00% Y Y Y Y Y Y 6.0%
Material recovery from non-hazardous waste 5.9 2.1 3.6% 100.00% Y Y Y Y Y Y 3.6%
Professional services related to energy performance of buildings 9.3 0.1 0.1% 100.00% Y Y Y Y Y Y 0.1% E
CapEx of Taxonomy-aligned activities 5.6 9.7% 9.7%
Taxonomy-non-aligned activities
Renewal of waste water collection and treatment 5.4 1.2 2.1%
Collection and transport of non-hazardous waste in source se-
gregated fractions
5.5 0.1 0.2%
Material recovery from non-hazardous waste 5.9 0.2 0.3%
CapEx of Taxonomy-non-aligned activities 1.5 2.6% 2.6% N/A
Total Taxonomy-eligible activities 7.1 12.3% 12.3% N/A
TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capital expen-
diture, MEUR
Share of
capital expendi-
ture
Turnover of Taxonomy-non-eligible activities 51.1 87.7%
Total Taxonomy-eligible and non-eligible capital expenditure 58.2 100.0%
12
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Taxonomy-aligned activities, share of operating expenditure
Substantial contribution criteria DNSH criteria
Taxonomy-aligned
share of operating
expenditure
Economic activities Code(s)
Operating
expendi-
ture
Share of
operating
expendi-
ture
Climate
change
mitigation
Climate
change
adaptation
Water
and marine
resources
Circular
economy Pollution
Biodiversity
and
ecosystems
Climate
change
mitigation
Climate
change
adaptation
Water and
marine
resources
Circular
economy Pollution
Biodiversity
and
ecosystems
Minimum
safeguards 2022 2021 Category
TAXONOMY-ELIGIBLE ACTIVITIES MEUR % % % % % % % Y/ N Y/ N Y/ N Y/ N Y/ N Y/ N Y/ N % % E/T
Taxonomy-aligned activities
Installation and operation of electric heat pumps 4.16 0.5 0.1% 100.00% Y Y Y Y Y Y 0.1%
Collection and transport of non-hazardous waste in source se-
gregated fractions
5.5 47.8 5.9% 100.00% Y Y Y Y Y Y 5.9%
Material recovery from non-hazardous waste 5.9 34.2 4.2% 100.00% Y Y Y Y Y Y 4.2%
Installation, maintenance and repair of energy efficiency
equipment
7.3 9.9 1.2% 100.00% 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)
7.4 0.1 0.0% 100.00% 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
7.5 4.0 0.5% 100.00% Y Y Y Y Y Y 0.5% E
Installation, maintenance and repair of renewable energy
technologies
7.6 4.8 0.6% 100.00% Y Y Y Y Y Y 0.6% E
Professional services related to energy performance of buildings 9.3 3.3 0.4% 100.00% Y Y Y Y Y Y 0.4% E
Turnover of Taxonomy-aligned activities 104.5 12.9% 12.9%
Taxonomy-non-aligned activities
Renewal of waste water collection and treatment 5.4 0.6 0.1%
Collection and transport of non-hazardous waste in source
segregated fractions
5.5 1.7 0.2%
Material recovery from non-hazardous waste 5.9 3.2 0.4%
Installation, maintenance and repair of energy efficiency
equipment
7.3 3.4 0.4%
Installation, maintenance and repair of instruments and
devices for measuring, regulation and controlling energy
performance of buildings
7.5 3.4 0.4%
OpEx of Taxonomy-non-aligned activities 12.9 1.6%* 1.6% N/A
Total Taxonomy-eligible activities 117.4 14.5%* 14.5% N/A
*The sum of the individual figures does not add up to the total due to rounding.
TAXONOMY-NON-ELIGIBLE ACTIVITIES
Operating
expenditure,
MEUR
Share of
operating
expenditure
Turnover of Taxonomy-non-eligible activities 692.5 85.5 %
Total Taxonomy-eligible and non-eligible operating expenditure 809.9 100.0 %
13
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
TCFD reporting is provided on page 18. Environmental
risks and their management are described in more detail
under “Risks and risk management”.
Personnel and other social responsibility issues
Full-time and part-time, total 2022 2021
Finland 7,020 7,003
Sweden 1,351 1,168
Total 8,371 8,171
As a major employer and service enterprise, the focus of
L&T’s social responsibility 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
Non-financial performance indicators
Indicator Target 2022 2021
Environmental
matters
Carbon footprint (SBt)
Scope 1&2
-50% by 2030, using 2018 as the baseline -32%* -19%
Carbon handprint intensity, tCO
2
-ekv/milj.€ Grows faster than net sales -633 -646
Recycling rate (reporting covers municipal waste
collected from corporate customers, hazardous
waste, industrial waste and construction waste
in Finland.
60% by 2026 59.4% 58.4%
Social
responsibility
Employee Net Promoter Score, eNPS >50 by 2026 24 (October 2022) 28 (October 2021)
Sickness-related absences, % 4.5% by 2026 5.6 5.0
Average retirement age (old-age pension and
disability pension)
65 years by 2026 63.8 (Finland) 63.9 years (Finland)
Total recordable incident frequency (TRIF) 20 by 2026 23 24
Governance Code of Conduct training for the Group’s personnel All new L&T employees complete Code of Conduct
training during their trial period or, at the latest, within
one year of the start of the employment relationship.
58% of salaried
employees (Fin-
land), 675 persons
(Sweden)
63% of salaried employees and 71% of
employees (Finland and Sweden).
*The distribution obligation for renewable transport fuel was reduced by 7.5 per cent in July. This change has not been taken into account in the emissions calculations in this report, as Statistics Finland has yet to update its fuel classifi-
cation data in accordance with the change. Statistics Finland is expected to publish updated fuel classification data during spring 2023, and L&T will subsequently calculate and report its carbon dioxide emissions for 2022 on its website
using the updated emission factors.
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 environ-
mental issues of its partners and suppliers. This require-
ment is factored into the procurement process, e.g. in the
form of self-assessments. Waste is only handed over to
operators that are authorised to receive or process it.
Acquisitions are subject to detailed due diligence pro-
cesses.
L&T’s strategic goal is to improve its customers’ energy
and material efficiency and to increase the carbon hand-
print of its operations. This is achieved when customers
replace primary raw materials with secondary raw materi-
als 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 2022, the focus of L&T’s environmental efforts was on
the climate impacts of the supply chain. The Group updated
the climate targets for the supply chain in spring 2022 and
set separate emission reduction targets for subcontracted
transport operations. 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
continued 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 emis-
sions by 2025.
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 significantly increased.
Transport operations account for 95 per cent of the
emissions generated by L&T’s own operations. The fuel dis-
tribution obligation was adjusted in 2022 by reducing the
biofuel component by 7.5 per cent in July. This change has
not been taken into account in the emissions calculations
in this report, as Statistics Finland has yet to update its fuel
classification data in accordance with the change. Statis-
tics Finland is expected to publish updated fuel classifica-
tion data during spring 2023. L&T will subsequently calcu-
late and report its carbon dioxide emissions for 2022 on its
website using the updated emission factors. The total emis-
sions of L&T’s own operations for 2022, calculated with the
updated emission factors, are likely to be higher than those
indicated in this report.
Professional waste treatment operations are subject to
environmental permits and regulatory compliance. In 2022,
L&T had 53 (65) environmental permits that determined
how the Group managed and monitored environmental mat-
ters. Environmental permits related to the renewable energy
sources business are no longer included in this figure fol-
lowing the merger of L&T’s renewable energy sources busi-
ness with Neova’s corresponding business into Laania Oy at
the beginning of July.
Facilities subject to environmental permits have con-
tingency plans and rescue plans that specify how they
are prepared for significant environmental incidents. Envi-
ronmental 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 oper-
ations. This target was achieved in 2022.
To reduce the environmental impact of the materials
collected from customers and to promote the circular
economy, L&T continuously strives to find new solutions
to recover materials at the highest possible refining rate
and in accordance with the order of priority in waste man-
agement.
14
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
promote the employment of special 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 with 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 Organ-
isation, and international agreements. National legislation,
agreements and other obligations are applied in employ-
ment relationships. L&T respects the employees’ freedom
to unionise. L&T monitors compliance with collective agree-
ments, 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-cer-
tified management system, and the principles governing
occupational safety management and sustainability (Code
of Conduct).
L&T’s strategic objective is to increase the Employee
Net Promoter Score (eNPS) to 50 by 2026. Employee sat-
isfaction is measured by means of a personnel satisfac-
tion 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-related absences to 4.5 per cent, achieve
an employee health rate of 45 per cent and increase the
average retirement age to 65 years in the long term. The
COVID-19 pandemic affected the Group’s health-related
indicators, particularly in the early part of the year and the
final months of the year. In order to turn the development
of sickness-related absences to a decrease, the purpose-
ful implementation of the action plan for promoting health
will continue.
In occupational safety, L&T pursues continuous
improvement with an ultimate goal of zero accidents.
L&T will continue its purposeful development efforts to
engage employees in the promotion of safety. There were
no reported fatal accidents at L&T in 2022. There was one
case of diagnosed occupational disease at L&T in 2022.
There have been no confirmed grievances related to
human rights or incidents of discrimination in the Group.
Risks related to human rights are assessed as part of
the risk management process. Risks and their manage-
ment are described in more detail under “Risks and risk
management” on pages 16-17.
Anti-corruption and bribery
L&T’s procurement processes are transparent, and pro-
curement decisions are based on competitive supply con-
tracts. Procurement is guided by the Group’s procurement
principles and the more detailed procurement guidelines.
Mandates and the limits for decision-making in terms of
procurement are defined in L&T’s guidelines on authorisa-
tion on the basis of position. In the case of potential con-
flicts of interests in procurement processes, the persons
concerned are disqualified from the decision-making. Sup-
plier co-operation must not involve any bribery or the kind
of hospitality or exchange of gifts that could influence pro-
curement decisions.
L&T is committed to supporting the UN Global Compact
initiative and its anti-corruption principles. The prevention
of corruption and bribery is based on national legislation
and agreements. Internally, operations are guided by L&T’s
sustainable business principles (Code of Conduct), which
include anti-bribery and corruption guidelines related to,
among other things, accepting and offering gifts and hos-
pitality, as well as the avoidance of conflicts of interest.
L&T also adheres to a separately defined permit procedure
to ensure that all customer events are appropriate and that
all sponsorships and supporting marketing operations are
transparent.
L&T mainly operates with local partners in Finland and
Sweden, which improves visibility with respect to its part-
ners’ sustainability. L&T’s purchases in 2022 were focused
on domestic companies. In Finland, 96 per cent of purchases
were made from companies operating in Finland. The corre-
sponding figure for Sweden was also 96 per cent.
Operations with significant suppliers are managed
through regular supplier co-operation and monitored accord-
ing to separately agreed performance indicators. Contract
suppliers are required to comply with L&T’s Code of Conduct.
We ensure the sustainability of our suppliers’ operating
methods through self-assessment surveys, supplier audits,
analyses of suppliers’ financial circumstances and other
appropriate means.
Our primary assurance measures are targeted at our most
significant suppliers. There were no reported incidents of
bribery or corruption at L&T in 2022.
Changes in the Group Executive Board
Tina Hellstadius, (M.Sc/Technology) was appointed Senior
Vice President, Facility Services Sweden and a member of
the Group Executive Board effective from 19 April 2022. Hell-
stadius succeeded Erik Sundström, who retired on 30 June
2022. In December 2022, L&T’s CIO Edward Skärström was
appointed as a member of the Group Executive Board effec-
tive from 1 January 2023. The members of L&T’s Group Execu-
tive Board are listed in the Corporate Governance section.
Changes in Group structure
The renewable energy sources businesses of Lassila &
Tikanoja and Neova were merged on 1 July 2022, forming an
independent limited company named Laania Oy. L&T owns 55
per cent of the joint venture and Neova Oy owns 45 per cent,
but the owners have joint control of the company pursuant to
the joint venture agreement.
In 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 clean-
ing services in Sweden.
L&T Relations Oy was merged with Lassila & Tikanoja plc
during the fourth quarter of 2022.
15
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Major shareholders on 31 December 2022, excluding nominee-registered shares
Shareholder Number of shares Percentage of shares and votes
1 Evald and Hilda Nissi Foundation 3,346,487 8.6
2 Mandatum Life Insurance Company Limited 3,028,547 7.8
3 Nordea investment funds 1,706,466 4.4
4 Maijala Juhani 1,529,994 3.9
5 Åbo Akademi University Foundation 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 653,256 1.7
11 Elo Mutual Pension Insurance Company 572,738 1.5
12 Turjanmaa Kristiina 521,465 1.3
13 The State Pension Fund 512,000 1.3
14 Kaleva Mutual Insurance Company 400,000 1.0
15 Oy Chemec Ab 356,320 0.9
16 Maijala Eeva 346,000 0.9
17 Seligson & Co. investment funds 341,995 0.9
18 Samfundet folkhälsan i Svenska Finland rf 336,800 0.9
19 Veritas Pension Insurance 289,396 0.8
20 Lassila Juha 196,461 0.5
Total 18,318,998 47.2
Shares and shareholders
Share capital and number of shares
There were no changes in Lassila & Tikanoja’s share capital
and number of shares in 2022. The registered share capi-
tal 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 38,116,180. Each share car-
ries 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 com-
pany’s shares are included in the book-entry system of secu-
rities maintained by Euroclear Finland Ltd. Euroclear Finland
maintains the company’s official list of shareholders.
Shareholders
At the end of the financial year, the company had 24,556
(23,087) shareholders. Nominee-registered holdings
accounted for 7.0% (9.6) 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 175,670 shares in the company on 31 December 2022,
representing 0.5 per cent of the total number of shares and
votes. Lassila & Tikanoja plc transferred 8,618 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 17, 2022.
Share-based incentive plans
Lassila & Tikanoja plc transferred 24,522 shares to 9 persons
in key roles as part of the Group’s share-based incentive plan.
The transferred shares form the share-based reward part of
the 2021 share-based incentive plan.
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 com-
pany, shareholders and key employees in order to increase
the value of the company in the long term, to retain the key
Number of
shareholders Percentage
Number of
shares
Percentage of
shares and votes
Breakdown of shareholding by sector on 31 December 2022
Non-financial corporations and housing
corporations 944 3.8 3,945,893 10.2
Financial and insurance corporations 51 0.2 6,088,709 15.7
General Government 19 0.1 3,109,862 8.0
Households 23,237 94.6 16,343,112 42.1
Non-profit institutions serving households 231 0.9 6,398,151 16.5
Foreign shareholders 75 0.3 150,016 0.4
Of which nominee-registered 10 2,722,603 7.0
Shares not transferred to the book-entry
securities system 40,528 0.1
Own shares 1 653,256 1.7
Total 24,557 100 38,798,874 100
Breakdown of shareholding by size of holding
Number of shares
1–1,000 22,081 89.9 4,811,281 12.4
1,001–5,000 2,010 8.2 4,273,425 11.0
5,001–10,000 240 1.0 1,713,051 4.4
10,001–100,000 189 0.8 5,125,068 13.2
100,001–500,000 22 0.1 4,313,321 11.1
over 500,000 14 0.1 17,868,944 46.1
of which nominee-registered 10 2,722,603 7.0
Shares not transferred to the book-entry
securities system 40,528 0.1
Own shares 1 653,256 1.7
Total 24,557 100 38,798,874 100
employees at the company and to offer them competitive
reward plans that are based on earning and accumulating
the company’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 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 2023–2025 consists of approxi-
mately 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 target group of the
transitional share-based incentive scheme for the earnings
period 2023 consists of approximately 10 key employees,
including the Group’s President and CEO and the Group Exec-
utive Board.
Trading in shares in 2022
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 dur-
ing the year 2022 was 9.4 million shares, which is 24.7% (25.2)
of the average number of outstanding shares. The value of
trading was EUR 104.9 million (137.3). The highest share price
was EUR 13.62 and the lowest EUR 9.72. The closing price was
EUR 10.64. At the end of the period, the market capitalisation
excluding the shares held by the company was EUR 405.9 mil-
lion (512.2).
Own shares
At the end of the financial year, the company held 653,256 of its
own shares, representing 1.7% of all shares and votes.
16
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
or other special rights entitling 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.
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 2022, the Group’s earnings per share were EUR 0.83 (0.90)
and net cash flow from operating activities after investments
per share amounted to EUR 1.08 (0.05). The Board of Directors
will propose a dividend of EUR 0.47 per share to the Annual
General Meeting to be held on 23 March 2023. A dividend of
EUR 0.46 per share was paid for the financial year 2021.
Risks and risk management
L&T has a defined risk management process that includes a
review of financial, strategic, operational and damage-related
risks. L&T has also assessed climate-related risks and oppor-
tunities 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 fac-
tors, 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 and not just individual risk factors. The
risk management process also aims to assess the opportuni-
ties 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 imple-
mentation 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 man-
agement policy confirmed by L&T’s Board of Directors. The pol-
icy specifies the objectives and principles, organisation and
responsibilities, and procedures of the Group’s risk manage-
ment. 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
Insurance Policy.
Identification, assessment and reporting of risks
Risks are surveyed regularly and systematically at both the
division and the company level and in central functions con-
sidered to be critical. The significance of risks is assessed
using a risk matrix. Measures for managing and minimising
the identified risks are prepared, and responsibility for these
measures is allocated to specified individuals or units. The
most significant risks identified and the preparations for
them 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 strategic, 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.
Near-term uncertainties
General economic uncertainty may affect the level of eco-
nomic activity among customers, which may reduce the
demand for L&T’s services.
Higher costs, such as fuel and energy, potential interest
rate hikes and wage-related decisions in the labour market,
may have a negative impact on the company’s financial per-
formance.
The company has several ERP system renewal projects
under way. Temporary additional costs arising from system
deployments and the establishment of the operating model
may weigh down the company’s result.
Production costs may be increased by challenges related
to employee turnover, labour availability and higher sick-
ness rates.
As the company has no operations or holdings in Rus-
sia, Belarus or Ukraine, and there are no significant Rus-
sian-owned companies in the customer base, the direct
impacts of the war in Ukraine are expected to be minor.
However, indirect impacts on overall economic activity in
Finland and Sweden may have a negative impact on net
sales and profit.
Events after the balance sheet date
On 11 January 2023, the company announced that Lassila &
Tikanoja’s Shareholders’ Nomination Board proposes to the
Annual General Meeting to be held on 23 March 2023 that the
Board of Directors have six (6) members. The Nomination Board
proposes that Teemu Kangas-Kärki, Laura Lares, Sakari Lassila,
Jukka Leinonen and Pasi Tolppanen be re-elected to the Board
of Directors and that Anni Ronkainen be elected as a new mem-
ber. Of the current members, Laura Tarkka has announced that
she is no longer available for the election of the members of the
Board of Directors. In addition, the Nomination Board proposes
that Jukka Leinonen is elected as Chairman of the Board of
Directors and Sakari Lassila as Vice Chairman.
Resolutions by the Annual General Meeting
The Annual General Meeting, which was held on 17 March
2022, adopted the financial statements and consolidated
financial statements for 2021, released the members of the
Board of Directors and the President and CEO from liability
as well as approved the Remuneration Report for the Gov-
erning Bodies. The Annual General Meeting resolved that
a dividend of EUR 0.46 per share, totalling EUR 17.5 million,
be paid on the basis of the balance sheet adopted for the
financial year 2021. It was decided that the dividend be paid
on 28 March 2022.
The Annual General Meeting confirmed the number
of members of the Board of Directors as six. Teemu Kan-
gas-Kärki, Laura Lares, Sakari Lassila, Jukka Leinonen, Laura
Tarkka and Pasi Tolppanen were re-elected to the Board until
the end of the following Annual General Meeting.
The Annual General Meeting elected Pricewaterhouse-
Coopers Oy, Authorised Public Accountants, as the auditor
until the close of the next Annual General Meeting. Price-
waterhouseCoopers Oy announced that it will name Samuli
Perälä, Authorised Public Accountant, as the principal auditor.
The Annual General Meeting resolved to amend the third
sentence of Section 4 of the Articles of Association so that
the General Meeting elects the Chairman and the Vice-Chair-
man of the Board.
The resolutions of the Annual General Meeting were
announced in more detail in a stock exchange release on 17
March 2022.
Authorisations for the Board of Directors
The Annual General Meeting held on 17 March 2022 author-
ised 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 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 max-
imum of 2,000,000 company shares (5.2% of the total number
of shares). The repurchase authorisation is valid for 18 months.
The Board of Directors is authorised to decide on the
issuance of new shares or shares possibly held by the com-
pany through a share issue and/or issuance of option rights
17
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Strategic and operative risks
Risk Risk description Risk management
Markets and
renewal
• The general economic development, functioning of the financial markets and the political environment of L&T’s
operating countries have an impact on the Group’s business operations.
• Geopolitical conflicts may cause uncertainty, which can have an effect on the general level of economic activity and
industrial production capacity.
• Changes in markets and the market environment, such as municipalisation and market changes pertaining to recy
-
cled raw materials may have an unfavourable effect on the Group’s business operations and business growth.
• The development of the market prices of emission rights, secondary raw materials, electricity and oil products may
increase production costs.
• New COVID-19 variants may lead to new orders or recommendations by the authorities, resulting in customer-spe
-
cific production restrictions and adjustment measures.
• Creating and regularly updating scenarios, regular assessment, sharpening and updating of the strategy, taking indus
-
try changes into account and recognising the need for renewal as part of the continuous strategy process.
• Active monitoring of the market situation and legislative developments, and dialogue with the public authorities and
legislators.
• L&T is independent of large individual customers and has a diverse service offering.
• Development of new service product.
Climate
change
• Extreme weather phenomena, such as substantial increases in annual rainfall and snowfall, may lead to higher
costs due to complications in service production.
• More information is provided in the TCFD report on page 18.
• A proactive approach and careful planning of production and operations.
• Development of new service products and processes.
• More details on the risks associated with climate change are provided in the TCFD report on page 18.
Human rights
• Risks related to human rights, such as deficiencies in working conditions, harassment, racism, discrimination
and other unethical conduct.
• Careful compliance with legislation and collective agreements.
• L&T mainly operates in Finland and Sweden with local partners, and the risk of human rights violations is low in these
countries.
• Exercising particular care with regard to employment relationships with employees who are in a vulnerable position.
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 sys-
tems 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.
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, comprehen-
sive due diligence.
• Effectively executed business integration programmes.
Reputation
• Topics discussed in mass media or social media concerning the industry or L&T’s operations may reduce trust in
the company and have a negative impact on its reputation.
• Continuous development of the company’s governance model, proactive risk management and monitoring practices.
• Quick, reliable and open communication with stakeholders.
• Crisis communication principles.
Personnel
• 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.
• COVID-19 and other highly contagious respiratory infections increase the number of sickness-related absences,
which causes disruptions in L&T’s service production.
• 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 institu
-
tions 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.
Damage-
related risks
• A fire at a recycling plant may result in a momentary or extended interruption of the plant’s operations. The sig-
nificance 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.
Risk of
environmental
damage
• L&T’s business includes the collection and transport of hazardous waste as well as processing at the Group’s
own plants. Incorrect handling of hazardous waste or damage to equipment may result in harmful substances
being released into the environment. L&T may become liable for damages due to this.
• The most significant environmental risks involved in L&T’s operations are related to waste storage and process
-
ing as well as chemical safety.
• Systematic environmental surveys of plants, preventive maintenance plans for equipment, audits and the long-term
training of personnel.
• Insurance.
Financing risks
• Potential interest rate hikes may increase the company’s interest costs. • More detailed information on the management of financing risks is provided in the notes to the consolidated state-
ments, on page 49.
18
Lassila & Tikanoja
Financial review 2022
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Outlook
Net sales and adjusted operating profit in 2023 are estimated
to be at the same level as in the previous year even though
the comparison period includes net sales from the renewable
energy sources business in the amount of EUR 35.4 million.
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 accordance with the TCFD (Task Force for Cli-
mate-related Financial Disclosures) recommendations. 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 circular 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 on this page. Climate-related
risks and opportunities
Climate-related risks and opportunities
The mitigation of climate change is a strategic priority for L&T.
Our businesses produce solutions that facilitate the tran-
sition towards a low-carbon circular economy, promote the
sustainable use of materials, energy and natural resources
as well as reduce the volume of waste generated and energy
consumed. We support our customers by enhancing the use
of energy and materials and by replacing fossil fuels with
renewable energy sources. Furthermore, we support our cus-
tomers in the mitigation of climate impacts by optimising the
use of properties 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, technology-related and reputa-
tional risks) and physical risks, as well as their impacts on the
Group’s operations. The most significant transition risks con-
cern changes that affect carbon neutrality targets for trans-
port or the promotion of the circular economy. The assess-
ment 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
efficiency of our customers and by ensuring that materials
and the built environment 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 consumption of natural resources, fossil fuels and
energy, and thereby reduce their emissions.
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 operations 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 strat-
egy period and in the long term until 2035. The assessment
method is based on the qualitative evaluation of uncertain-
ties in our business environments and the creation of quali-
tative 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 cen-
tury. The scenarios have been assessed in relation to the latest
climate research information on weather changes in Finland.
L&T is able to change its business model flexibly accord-
ing to the different climate scenarios. The reference sce-
nario was a business environment where the status quo
remains unchanged. The business effects of climate change
were assessed in the different scenarios through aspects
of change in the industry related to regulation, the business
model and technological development.
The assessment indicated that 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 respond-
ing to them in a timely manner. In addition, we take a proac-
tive 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 miti-
gation of climate change provides L&T’s business operations
with strategic development opportunities.
TCFD information Report contents
Governance The Board of Directors’ duties related to managing
risks and opportunities related to climate change.
Risks and risk management, p. 16-17
Scenario analysis is part of the strategy process, p.
18
The management’s duties related to assessing and
managing risks and opportunities related to climate
change.
Sustainability management, p. 8
Risks and risk management, p. 16-17
Strategy Climate-related risks and opportunities in the short,
medium and long term.
Climate-related risks and opportunities, p. 18
The impacts of climate-related risks and opportuni-
ties on business operations, strategy and financial
planning.
Strategy, p. 4
Climate-related risks and opportunities, p. 18
The flexibility of the strategy with regard to diffe-
rent climate scenarios.
Scenario analysis is part of the strategy process,
p. 18
Risk
management
Processes for the identification and assessment of
climate-related risks.
Scenario analysis is part of the strategy process,
p. 18
Climate risk management methods. Scenario analysis is part of the strategy process,
p. 18
How are the identification, assessment and mana-
gement of climate-related risks connected to the
organisation’s other risk management activities?
Climate-related risks and opportunities, p. 16-17
Indicators and
targets
Indicators used to assess climate risks and oppor-
tunities.
Report by the Board of Directors, p. 7
Separate Sustainability report
Key figures
Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Calculation of the key figures. . . . . . . . . . . . . . . . . .22
Lassila & Tikanoja
Taloudellinen katsaus 2022
19
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Lassila & Tikanoja
Taloudellinen katsaus 2022
20
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Key figures on shares Key figures on financial performance
Key figures
2022 2021 2020 2019 2018
Earnings per share (EPS), EUR 0.83 0.90 0.50 0.90 0.89
Earnings per share (EPS), diluted, EUR 0.83 0.90 0.50 0.90 0.89
Equity per share, EUR 5.78 5.52 5.05 5.33 5.44
Dividend per share, EUR 0.47 0.46 0.40 0.92 0.92
Payout ratio, % 56.9 51.0 79.7 101.7 103.7
Effective dividend yield, % 4.4 3.4 2.7 5.8 6.1
P/E ratio, % 12.9 14.9 30.0 17.4 16.9
Net cash flow from operating activities after
investments per share, EUR 1.08 0.05 1.15 1.81 1.70
Share price adjusted for issues:
lowest, EUR 9.72 12.82 10.06 12.92 14.34
highest, EUR 13.62 16.10 16.76 16.40 20.00
average, EUR 11.16 14.31 13.55 14.41 16.78
closing, EUR 10.64 13.44 15.06 15.74 14.96
Market capitalisation 31 December, MEUR 405.9 512.2 573.9 610.7 580.4
Number of shares adjusted for issue, 1,000 pcs
average during the year 38,116 38,111 38,103 38,354 38,405
at year end 38,146 38,112 38,105 38,094 38,406
average during the year, diluted 38,128 38,127 38,118 38,368 38,419
Adjusted number of shares traded during the year, 1,000 pcs 9,397 9,615 12,266 8,172 4,995
As a percentage of the average 24.7 25.2 32.2 21.3 13.0
Volume of shares traded, MEUR 104.9 137.6 166.1 122.3 83.8
2022 proposal by the Board of Directors
2022 2021 2020 2019 2018
Net sales, MEUR 844.1 812.5 751.9 784.3 802.2
Operating profit, MEUR 42.9 42.2 28.2 45.0 47.6
% of net sales 5.1 5.2 3.8 5.7 5.9
Adjusted operating profit, MEUR 40.9 42.4 39.7 40.5 -
% of net sales 4.8 5.2 5.3 5.2 -
EBITDA, MEUR 98.3 95.1 85.2 99.4 90.1
% of net sales 11.6 11.7 11.3 12.7 11.2
Result before taxes, MEUR 37.8 39.0 23.3 42.0 42.7
% of net sales 4.5 4.8 3.1 5.4 5.3
Result for the period, MEUR 31.5 34.4 19.0 34.7 34.1
% of net sales 3.7 4.2 2.5 4.4 4.2
EVA, MEUR 14.5 15.9 3.7 19.8 24.2
Cash flow from operating activities, MEUR 71.8 65.6 83.0 94.5 90.1
Balance sheet total, MEUR 660.5 632.3 596.6 583.6 561.3
Return on equity, % (ROE) 14.6 17.1 9.6 16.8 16.1
Capital employed, MEUR 437.2 406.0 379.2 380.5 361.1
Return on capital employed, % (ROCE) 10.4 10.8 7.5 12.4 12.8
Equity ratio, % 34.3 34.2 33.0 35.6 38.1
Gearing, % 75.9 79.4 70.9 66.8 46.8
Net interest-bearing liabilities, MEUR 167.3 167.1 136.5 135.6 97.8
Gross capital expenditure, MEUR 58.2 72.3 48.2 46.1 37.8
% of net sales 6.9 8.9 6.4 5.9 4.7
Average number of employees in full-time equivalents 7,364 7,319 7,197 7,308 7,566
Total number of full-time and part-time employees at year end 8,371 8,171 8,139 8,207 8,600
In 2022, the unrecognised rental income of compactors and bales in Environmental services was reclassified from accrued expenses to current and
non-current advances received. In addition, the process for netting the deferred tax assets and liabilities was re-defined. The figures for 2021 have been
adjusted accordingly.
Lassila & Tikanoja
Taloudellinen katsaus 2022
21
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Reconciliation of alternative
performance measures
Reconciliation of the adjusted operating profit
to the operating profit
1 January - 31 December MEUR 2022 2021
Operating profit 42.9 42.2
Items affecting comparability:
- costs arising from the
discontinuation of business -0.2 -2.1
- costs arising from business
restructurings - 0.6
- gains or losses arising from
divestments -4.3 -
- costs arising from acquisitions 2.5 1.7
Adjusted operating profit 40.9 42.4
In 2020, Lassila & Tikanoja decided on the discontinuation of its Russian
operations. In 2021, L&T sold its shares in Russian subsidiaries. The costs
related to the discontinuation were revised by EUR +2.1 million in 2021 and
by EUR +0.2 million in 2022.
In 2022, Lassila & Tikanoja ja Neova merged their fuel wood businesses
into a joint venture named 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 the EVA result to the operating profit
1 January - 31 December MEUR 2022 2021
Operating profit 42.9 42.2
Capital employed (rolling 12-month
quarterly average) 430.4 391.4
Cost calculated on capital employed -28.5 -26.3
EVA 14.5 15.9
Reconciliation of gross capital expenditure
1 January - 31 December MEUR 2022 2021
Intangible and tangible assets from
business acquisitions 22.9 31.4
- increases to right-of-use assets excl.
heavy vehicles from business
acquisitions -1.4 -0.3
Other increases to intangible and
tangible assets 55.4 64.4
- increases to right-of-use assets
excl. heavy vehicles -15.8 -19.1
- other adjustments -2.7 -3.9
Gross capital expenditure 58.2 72.3
Return on capital employed (ROCE), %, by segment
1 January - 31 December 2022 2021
Environmental Services
Capital employed (MEUR), average
of the beginning and the end
of the period 198.8 202.8
Operating profit 30.3 29.8
+ financial income 0.1 0.1
Return on capital employed, MEUR 30.4 29.9
Return on capital employed (ROCE), % 15.3 14.7
Industrial Services
Capital employed (MEUR), average
of the beginning and the end
of the period 79.4 65.7
Operating profit 12.7 9.2
+ financial income 0.0 0.0
Return on capital employed, MEUR 12.8 9.2
Return on capital employed (ROCE), % 16.1 14.0
Facility Services Finland
Capital employed (MEUR), average
of the beginning and the end
of the period 31.4 30.6
Operating profit -0.5 1.8
+ financial income 0.3 0.2
Return on capital employed, MEUR -0.2 2.0
Return on capital employed (ROCE), % -0.8 6.6
Facility Services Sweden
Capital employed (MEUR), average
of the beginning and the end
of the period 64.6 62.8
Operating profit 0.4 3.9
+ financial income 0.1 0.2
Return on capital employed, MEUR 0.5 4.1
Return on capital employed (ROCE), % 0.8 6.5
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 =
Dividend for the financial period
Adjusted basic number of shares at the balance sheet date
Payout ratio, % =
Dividend per share
Earnings per share
Effective dividend yield, % =
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, MEUR =
Basic number of shares at the balance sheet date x closing
price of the financial period
The calculations are also applied with capital repayment.
Key figures on financial performance
Adjusted operating profit, MEUR = 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 discontinuation
of businesses
EBITDA, MEUR = Operating profit + depreciation + impairment
EVA, MEUR =
Operating profit - cost calculated on capital employed (average of four
quarters) before taxes
The cost of capital emlpoyed is calculated using the Group's weighted average cost of capital (WACC 2022: 6.62%, WACC
2021: 6.72%, WACC 2020: 6.64%, WACC 2019: 6.55%, WACC 2018: 6.60%).
Return on equity, % (ROE) =
Result for the period
Equity (average)
Capital employed, MEUR = Equity + Interest-bearing financial liabilities
Return on capital employed, % (ROCE) =
Operating profit + financial income + share of results in associated com-
panies and joint ventures
Equity + Interest-bearing financial liabilities (average of the end of the
period and at the end of comparison period)
Equity ratio, % =
Equity
Balance sheet total - advances received
Gearing, % =
Net interest-bearing liabilities
Equity
Net interest-bearing liabilities, MEUR = Interest-bearing liabilities - cash and cash equivalents
Gross capital expenditure, MEUR =
Investments in intangible and tangible assets excluding right-of-use as-
sets and other adjustments including leased heavy vehicles and assets
acquired through acquisitions
x 100
x 100
Lassila & Tikanoja
Taloudellinen katsaus 2022
22
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Calculation of the key figures
Lassila & Tikanoja
Taloudellinen katsaus 2022
23
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 STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
23
Financial
statements
Consolidated income statement . . . . . . . . . . . . . . .24
Consolidated statement
of comprehensive income . . . . . . . . . . . . . . . . . . . . .24
Consolidated statement of financial position 25
Consolidated statement of cash flows . . . . . . . .26
Consolidated statement
of changes of equity . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Notes to the consolidated
financial statements. . . . . . . . . . . . . . . . . . . . . . . . . . .28
Financial statements of the parent company 58
Proposal by the Board of Directors for
the use of the profit shown on the balance
sheet and the Auditor's Note . . . . . . . . . . . . . . . . . .65
1
Financial result
1.1 Segment reporting . . . . . . . . . . . . . . . . . . . . . . . .30
1.2 Revenue from contracts with customers. . 31
1.3 Employee benefit expenses. . . . . . . . . . . . . . . 32
1.4 Other operating income and expenses. . .32
1.5 Share-based payments . . . . . . . . . . . . . . . . . .33
1.6 Lease expenses. . . . . . . . . . . . . . . . . . . . . . . . . . .33
1.7 Financial income and expenses. . . . . . . . . . .34
1.8 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
1.9 Earnings per share. . . . . . . . . . . . . . . . . . . . . . . .35
2
Operational assets and liabilities
2.1 Trade and other receivables. . . . . . . . . . . . . . 37
2.2 Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.3 Trade and other current payables . . . . . . .38
2.4 Other non-current liabilities . . . . . . . . . . . . . .38
2.5 Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
2.6 Retirement benefit obligations . . . . . . . . . .39
3
Intangible and tangible assets and
other non-current assets
3.1 Goodwill and other intangible assets . . . . . .41
3.2 Goodwill impairment testing . . . . . . . . . . . . . . 42
3.3 Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.4 Right-of-use assets. . . . . . . . . . . . . . . . . . . . . . . . 44
3.5 Other non-current assets. . . . . . . . . . . . . . . . . 44
4
Financial risks and capital structure
4.1 Financial assets and liabilities. . . . . . . . . . . . . 47
4.2 Financial risk management. . . . . . . . . . . . . . . . 49
4.3 Equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.4 Dividend per share. . . . . . . . . . . . . . . . . . . . . . . . . 52
4.5 Contingent liabilities . . . . . . . . . . . . . . . . . . . . . . 52
5
Consolidation and other notes
5.1 Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.2 Group companies. . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.3 Business acquisitions and disposals and
assets and liabilities classified as held for sale 55
5.4 Related-party transactions. . . . . . . . . . . . . . . 56
5.5 Auditing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.6 Disputes and litigation. . . . . . . . . . . . . . . . . . . . . 57
5.7 Events after the balance sheet date. . . . . . 57
Lassila & Tikanoja
Financial review 2022
24
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Consolidated income statement Consolidated statement
of comprehensive income
1 January - 31 December MEUR | 2022 | 2021 | Note |
Net sales | 1.2 | ||
Other operating income | 1.4 | ||
Materials and services | - | - | |
Employee benefit expenses | - | - | 1.3 |
Other operating expenses | - | - | 1.4 |
Depreciation, amortisation and impairment | - | - | 3.1, 3.3, 3.4 |
Operating profit | |||
Financial income | |||
Financial expenses | - | - | |
Exchange rate differences (net) | - | ||
Financial income and expenses | - | - | 1.7 |
Share of the result of associated companies and joint ventures | |||
Result before taxes | |||
Income taxes | - | - | 1.8 |
Result for the period | |||
| Attributable to: | |||
Equity holders of the company | |||
| Earnings per share attributable to the equity holders | |||
| of the parent company: | |||
Earnings per share, EUR | 1.9 | ||
Diluted earnings per share, EUR |
1 January - 31 December MEUR | 2022 | 2021 | Note |
Result for the period | |||
| Items not to be recognised through profit or loss | |||
Items arising from re-measurement of defined benefit plans | - | 2.6 | |
Items not to be recognised through profit or loss, total | - | ||
| Items potentially to be recognised through profit or loss | |||
Hedging reserve, change in fair value | 4.2 | ||
Currency translation differences | - | - | |
Currency translation differences recognised through profit or loss | |||
Items potentially to be recognised through profit or loss, total | - | - | |
Other comprehensive income, total | - | - | |
Total comprehensive income, after tax | |||
| Attributable to: | |||
Equity holders of the company |
More information on taxes in consolidated statement of comprehensive income is presented in Note 1.8.
Lassila & Tikanoja
Financial review 2022
25
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Consolidated statement of financial position
31 December MEUR | 2022 | 2021 | Note |
| ASSETS | |||
| Non-current assets | |||
Intangible assets | 3.1 | ||
Goodwill | |||
Other intangible assets | |||
Tangible assets | 3.3 | ||
Right-of-use assets | 3.4 | ||
| Other non-current assets | |||
Shares in associated companies and joint ventures | 3.5 | ||
Other shares and holdings | 3.5 | ||
Deferred tax assets | 1.8 | ||
Other receivables | 3.5 | ||
Total non-current assets | |||
| Current assets | |||
Inventories | 2.2 | ||
Trade receivables | 2.1, 4.1 | ||
Contract assets | 1.2, 2.1, 4.1 | ||
Income tax receivables | 2.1 | ||
Other receivables | 2.1, 4.1 | ||
Cash and cash equivalents | 4.1 | ||
Assets classified as held for sale | 5.3 | ||
Total current assets | |||
TOTAL ASSETS |
31 December MEUR | 2022 | 2021 | Note |
| EQUITY AND LIABILITIES | |||
| Equity | |||
Equity attributable to equity holders of the parent company | 4.3 | ||
Share capital | |||
Other reserves | - | - | |
Invested unrestricted equity reserve | |||
Retained earnings | |||
Total equity | |||
| Liabilities | |||
| Non-current liabilities | |||
Deferred tax liabilities | 1.8 | ||
Retirement benefit obligations | 2.6 | ||
Provisions | 2.5 | ||
Financial liabilities | 4.1 | ||
Other liabilities | 2.4 | ||
| Current liabilities | |||
Financial liabilities | 4.1 | ||
Trade and other payables | 2.3, 4.1 | ||
Income tax liabilities | 2.3 | ||
Provisions | 2.5 | ||
Liabilities related to assets classified as held for sale | 5.3 | ||
Total liabilities | |||
TOTAL EQUITY AND LIABILITIES |
Lassila & Tikanoja
Financial review 2022
26
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Consolidated statement of cash flows
1 January - 31 December MEUR | 2022 | 2021 | Note |
| Cash flows from operating activities | |||
Result for the period | |||
| Adjustments | |||
Income taxes | 1.8 | ||
Depreciation, amortisation and impairment | 3.1, 3.3, 3.4 | ||
Financial income and expenses | 1.7 | ||
Gains and losses on sale of tangible and intangible assets | - | - | |
Share of the result of associated companies and joint ventures | - | - | 3.5 |
Gain from sale of subsidiary's net assets to joint venture | - | 5.3 | |
Impact of the discontinuation of Russian operations | - | - | |
Other Net cash generated from operating activities before | - | - | |
change in working capital | |||
| Change in working capital | |||
Change in trade and other receivables | - | - | |
Change in inventories | - | - | |
Change in trade and other payables | - | ||
Change in working capital | - | - | |
Interest and other financial expenses paid | - | - | |
Interest and other financial income eceived | |||
Income taxes paid | - | - | |
Net cash from operating activities |
1 January - 31 December MEUR | 2022 | 2021 | Note |
| Cash flows from investing activities | |||
Acquisitions of subsidiaries and businesses, net of cash acquired | - | - | 5.3 |
Proceeds from sale of subsidiaries and businesses, net of sold cash | - | 5.3 | |
Purchases of property, plant and equipment and intangible assets | - | - | |
Proceeds from sale of property, plant and equipment and intangible assets | |||
Repayment of loan receivables from joint venture | |||
Change in other non-current investments | - | ||
Net cash from investing activities | - | - | |
Net cash from operating and investing activities | |||
| Cash flows from financing activities | |||
Proceeds from short-term borrowings | 4.1 | ||
Repayments of short-term borrowings | - | - | 4.1 |
Proceeds from long-term borrowings | 4.1 | ||
Repayments of long-term borrowings | - | 4.1 | |
Repayments of lease liabilities | - | - | |
Dividends paid | - | - | |
Net cash from financing activities | - | - | |
Net change in cash and cash equivalents | - | ||
Cash and cash equivalents at the beginning of the period | |||
Effect of changes in foreign exchange rates | - | - | |
Cash and cash equivalents at the end of the period | 4.1 |
Lassila & Tikanoja
Financial review 2022
27
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Consolidated statement of changes in equity
| Currency translation | Invested unrestricted | ||||||
MEUR | Share capital | differences | Hedging reserve | equity reserve | Retained earnings | Total equity | Note |
Equity on 1 January 2021 | - | - | |||||
| Total comprehensive income | |||||||
Result for the period | |||||||
Other comprehensive income items | - | - | - | ||||
Total comprehensive income | - | - | - | ||||
| Transactions with shareholders | |||||||
Share-based benefits | 1.5 | ||||||
Dividends paid | - | - | |||||
Returned dividends | |||||||
Transactions with shareholders, total | - | - | - | - | - | - | |
Equity on 31 December 2021 | - | - | |||||
| Total comprehensive income | |||||||
Result for the period | |||||||
Other comprehensive income items | - | - | |||||
Total comprehensive income | - | - | - | ||||
| Transactions with shareholders | |||||||
Share-based benefits | 1.5 | ||||||
Dividends paid | - | - | |||||
Returned dividends | |||||||
Transactions with shareholders, total | - | - | - | - | - | - | |
Equity on 31 December 2022 | - | ||||||
| For more information on equity please refer to Note 4.3 Equity, and on taxes recognised in equity to Note 1.8 Income taxes. |
28
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
29
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
1.1 Segment reporting. . . . . . . . . . . . . . . . . . . . . . . . . .30
1.2 Revenue from contracts with customers. . 31
1.3 Employee benefit expenses. . . . . . . . . . . . . . . .32
1.4 Other operating income and expenses. . . . .32
1.5 Share-based payments . . . . . . . . . . . . . . . . . . . .33
1.6 Lease expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
1.7 Financial income and expenses. . . . . . . . . . . . .34
1.8 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
1.9 Earnings per share. . . . . . . . . . . . . . . . . . . . . . . . . .35
1
Financial result
30
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
31
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
1.3 Employee benefit expenses
1.4 Other operating income
and expenses
32
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
1.5 Share-based payments
1.6 Lease expenses
33
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
34
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
35
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
36
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
2.1 Trade and other receivables. . . . . . . . . . . . . . . . 37
2.2 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
2.3 Trade and other current payables . . . . . . . . .38
2.4 Other non-current liabilities. . . . . . . . . . . . . . . .38
2.5 Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
2.6 Retirement benefit obligations. . . . . . . . . . . . .39
2
Operational assets and liabilities
37
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
38
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
39
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
40
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
3.1 Goodwill and other intangible assets. . . . . . . 41
3.2 Goodwill impairment testing. . . . . . . . . . . . . . . .42
3.3 Tangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
3.4 Right-of-use assets. . . . . . . . . . . . . . . . . . . . . . . . .44
3.5 Other non-current assets. . . . . . . . . . . . . . . . . .45
3
Intangible and tangible assets and other
non-current assets
41
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
42
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
43
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
44
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
45
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
46
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
4.1 Financial assets and liabilities . . . . . . . . . . . . . . 47
4.2 Financial risk management. . . . . . . . . . . . . . . . .49
4.3 Equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
4.4 Dividend per share. . . . . . . . . . . . . . . . . . . . . . . . . .52
4.5 Contingent liabilities. . . . . . . . . . . . . . . . . . . . . . . .52
4
Financial risks and capital structure
47
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
48
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
49
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
50
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
51
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
52
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
53
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
5.1 Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.2 Group companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.3 Business acquisitions and disposals and
assets and liabilities classified as held for sale 55
5.4 Related-party transactions . . . . . . . . . . . . . . . . . .56
5.5 Auditing costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
5.6 Disputes and litigation. . . . . . . . . . . . . . . . . . . . . . . .57
5.7 Events after the balance sheet date. . . . . . . . .57
5
Consolidation and other notes
54
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
55
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
56
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
57
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Income statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Balance sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Cash flow statement. . . . . . . . . . . . . . . . . . . . . . . . . . .59
Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Notes to the financial statements. . . . . . . . . . . . .60
Financial statements
of the parent company
58
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
59
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Income
statement of the
parent company
EUR thousand 2022 2021 Note
Net sales 23,281.0 22,781.0 1
Other operating income 141.6 252.7 4
Employee benefit expenses -9,698.4 -9,315.3 2
Other operating expenses -18,658.9 -16,205.5 3, 4
Depreciation, amortisation
and impairment -902.7 -878.9
Operating result -5,837.3 -3,366.1
Financial income
and expenses -2,541.6 -1,124.9 5
Result before appropria-
tions and taxes -8,378.9 -4,490.9
Appropriations
Increase/decrease
in accumulated
depreciation difference 209.5 257.5
Group contribution 23,550.0 20,540.0 6
Income taxes -3,434.1 -3,053.6 7
Result for the period 11,946.6 13,253.0
Balance sheet of the parent company
EUR thousand 2022 2021 Note
ASSETS
Non-current assets
Intangible assets 8
Intangible rights 36.4 62.2
Other intangible assets 1,738.6 1,595.2
Advance payments and
construction in progress 832.4 527.1
2,607.4 2,184.5
Tangible assets 9
Buildings and constructions 165.2 185.8
Machinery and equipment 117.2 125.1
Other tangible assets 42.2 22.2
Advance payments and
construction in progress - 12.0
324.6 345.1
Investments 10
Shares in group companies 181,590.5 126,129.4
Shares in joint venture 9,946.8 -
Other shares and holdings 170.8 170.8
191,708.1 126,300.2
Total non-current assets 194,640.0 128,829.9
Current assets
Non-current receivables
Loan receivables from group
companies - 69,687.8
Prepaid expenses and
accrued income 378.8 -
Other non-current receivables 299.9 302.3
Deferred tax assets 480.2 344.6 12
1,158.8 70,334.7
Current receivables
Receivables from group companies 40,400.8 63,431.0 11
Trade receivables from joint
venture 6.6 -
Other receivables 114.4 139.2
Prepaid expenses and accrued
income 1,827.1 2,581.3 11
42,349.0 66,151.4
Cash and cash equivalents 46,921.0 25,985.4
Total current assets 90,428.8 162,471.6
Total assets 285,068.8 291,301.5
EUR thousand 2022 2021 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 49,045.9 53,210.7
Profit for the period 11,946.6 13,253.0
81,119.0 86,590.2
Accumulated appropriations
Depreciation difference 450.1 659.6
Obligatory provisions 14
Non-current 273.4 304.5
Current 609.0 1,229.2
882.4 1,533.7
Liabilities 15
Non-current
Loans from financial intitutions 50,000.0 75,000.0
Bonds 75,000.0 49,853.1
125,000.0 124,853.1
Current
Bonds 17,730.0 -
Trade payables 2,313.5 2,545.8
Liabilities to group companies 53,069.6 68,787.4
Other liabilities 693.0 596.8
Accrued expenses and
deferred income 3,811.1 5,734.7
77,617.3 77,664.8
Total liabilities 202,617.3 202,517.9
Total shareholders' equity
and liabilities 285,068.8 291,301.5
60
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Cash flow statement of the parent
company
EUR thousand 2022 2021
Operating activities
Profit (+) / loss (-) before appro-
priations and taxes -8,378.9 -4,490.9
Adjustments:
Depreciation, amortisation and
impairments 902.7 878.9
Gains and losses on sales of
non-current assets - -16.9
Financial income and expenses 2,541.6 1,124.9
Provisions -651.3 -182.6
Other adjustments 2,069.1 247.3
Cash flow before change in work-
ing capital and change in cash pool
account balance -3,516.9 -2,439.4
Change in working capital
Increase/decrease in current
non-interest-bearing receivables 1,298.1 -238.6
Increase/decrease in current
non-interest-bearing liabilities -478.2 -14,208.5
Cash flow from operations before
financial income/expenses and tax -2,697.0 -16,886.6
Change in cash pool account
balance -3,777.6 22,350.1
Interest expenses and other
financial expenses paid -3,100.5 -1,990.7
Interest received from operations 1,060.1 863.5
Direct taxes paid -6,363.9 419.8
Cash flow from operating activities -14,878.8 4,756.2
Includes an adjustment for merger loss totalling EUR 1,942.5 thousand.
In 2022, the item was reclassified from cash flow from investing activi-
ties to cash flow from operating activities. The figures of the comparative
period have been adjusted accordingly.
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 cen-
tralised 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 meas-
ured 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 con-
solidated financial statements. Those accounting policies, in
which the financial statements of Lassila & Tikanoja plc dif-
fer from the accounting policies of the consolidated finan-
cial statements, are described below.
Subsidiary shares
Subsidiary shares in the balance sheet are measured at historical
cost less impairment losses. The carrying amounts of the sub-
sidiary shares are assessed as part of the Group’s impairment
testing, where cash flow forecasts based on value-in-use cal-
culations 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 impair-
ment loss is recognised, if the carrying amount of the subsidiary
shares and the amount of net loan receivables from the subsidi-
ary 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 par-
ent 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 pen-
sions to insurance companies. These payments are recognised to
the income statement in the financial period to which they relate.
The def
ined benefit plans operated by the company are
small and concern only a few persons.
EUR thousand 2022 2021
Investing activities
Investments in tangible and in-
tangible assets -1,306.3 -894.2
Repayment of loan receivables
from joint venture 16,391.3 -
Proceeds from sale of tangible
and intangible assets - 46.3
Change in other non-current re-
ceivables 2.4 -302.3
Cash flow from investing activities 15,087.4 -1,150.2
Financing activities
Paid Group contributions -4,300.0 -3,050.0
Received Group contributions 24,840.0 320.0
Proceeds from short-term bor-
rowings 35,000.0 40,000.0
Repayments of short-term bor-
rowings -35,000.0 -55,000.0
Proceeds from long-term borrowings 75,000.0 25,000.0
Repayments of long-term bor-
rowings -57,270.0 -
Dividends paid -17,543.0 -15,242.1
Cash flow from financing activities 20,727.0 -7,972.1
Change in cash and cash
equivalents 20,935.5 -4,366.2
Cash and cash equivalents at 1
January 25,985.4 30,351.6
Cash and cash equivalents at 31
December 46,921.0 25,985.4
Cash and cash equivalents at 31
December
Cash and cash equivalents 46,921.0 25,985.4
61
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Notes to the financial statements of the parent company
1. Net sales
EUR thousand 2022 % 2021 %
Net sales
Administrative Ser-
vices, Group Com-
panies 23,281.0 100.0 22,781.0 100.0
Total 23,281.0 100.0 22,781.0 100.0
Net sales by market
area
Finland 23,281.0 100.0 22,781.0 100.0
Total 23,281.0 100.0 22,781.0 100.0
3. Auditor's fees
EUR thousand 2022 2021
PwC
Auditing 53.9 -
Other assignments in accordance
with the auditing act 2.0 -
Tax consulting services 6.5 -
Other services 154.4 -
Total 216.8 -
KPMG
Auditing 11.0 66.1
Other assignments in accordance
with the auditing act
25.7 26.7
Tax consulting services 2.0 5.5
Other services - 17.0
Total 38.7 115.4
4. Other operating income
and expenses
EUR thousand 2022 2021
Other operating income
From joint ventures 71.1 -
From others
Government grants 37.0 60.3
Other operating income 33.5 192.4
Total 141.6 252.7
Other operating expenses
Merger losses 1,942.5 -
ICT costs 9,975.6 10,400.1
Travel costs 226.9 60.5
Vehicles and machinery 24.8 34.1
Rents and real estate costs 1,487.5 1,694.9
Expert fees 3,129.0 2,554.3
Voluntary social security costs 924.4 821.9
Other 948.1 639.7
Total 18,658.9 16,205.5
5. Financial income and expenses
EUR thousand 2022 2021
Interest and other financial income 1,836.7 856.7
Interest and other financial expenses -4,378.3 -1,981.5
Total financial income and expenses -2,541.6 -1,124.9
Financial income and expenses
include:
Interest income
from group companies 727.3 489.7
from joint ventures 150.8 -
from others 185.0 45.9
Foreign exchange gains
from others 773.6 321.1
Interest expenses
to group companies -869.5 -345.7
to others -2,745.9 -1,433.8
Other financial expenses
to others -762.9 -202.0
Total -2,541.6 -1,124.9
6. Appropriations
EUR thousand 2022 2021
Increase/decrease in accumulated
depreciation difference
Intangible assets 209.5 273.1
Tangible assets - -15.6
209.5 257.5
Group contribution
Group contribution received 23,550.0 24,840.0
Group contribution paid - -4,300.0
Total group contributions 23,550.0 20,540.0
Total Appropriations 23,759.5 20,797.5
2. Personnel and
administrative bodies
2022 2021
Average personnel
Salaried employees 117 107
Total 117 107
EUR thousand 2022 2021
Personnel expenses
Salaries and bonuses 7,991.0 7 283.3
Pension expenditure 1,439.5 1 743.9
Other salary-related expenses 267.9 288.1
Total 9,698.4 9 315.3
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.
7. Income taxes
EUR thousand 2022 2021
Income taxes on operations for the
financial year
3,303.1 3,188.9
Income taxes from previous
financial years
-2.0 -172.3
Change in deferred taxes 133.0 37.0
Total 3,434.1 3,053.6
62
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
8. Intangible assets
EUR thousand
Intangible
rights Goodwill
Other
intangible assets
Prepayments and
construction in
progress Total
2022
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 dis-
posals 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
Other intangible assets includes several ICT projects.
EUR thousand
Intangible
rights Goodwill
Other
intangible assets
Prepayments and
construction in
progress Total
2021
Acquisition cost, 1 Jan 2,015.9 114,454.6 35,880.3 2,607.1 154,957.9
Transfer between acquisition cost
and accumulated amortisation - - 82.3 - 82.3
Transfers in connection with
incorporation -1,668.1 -29,059.9 -14,434.8 -1,981.2 -47,144.0
Additions - - 18.3 752.3 770.6
Disposals -3.2 - -1,275.4 - -1,278.6
Transfers between items - - 851.0 -851.0 -
Acquisition cost, 31 Dec 344.6 85,394.7 21,121.7 527.1 107,388.2
Accumulated amortisation, 1 Jan -1,163.5 -113,156.9 -27,910.4 -142,230.8
Transfer between acquisition cost
and accumulated amortisation 0.0 - -82.3 -82.3
Transfers in connection with incor-
poration, accumulated amortisation 923.2 27,762.2 8,483.9 37,169.3
Accumulated amortisation on
disposals and transfers 3.2 - 684.5 687.7
Amortisation during the period -45.3 - -702.2 -747.6
Accumulated amortisation, 31 Dec -282.4 -85,394.7 -19,526.5 -105,203.6
Total carrying amount, 31 Dec 62.2 - 1,595.2 527.1 2,184.5
9. Tangible assets
EUR thousand
Buildings and
constructions
Machinery
and
equipment
Other
tangible assets
Advance payments
and construction
in progress
Total
2022
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
EUR thousand Land
Buildings and
constructions
Machinery
and
equipment
Other
tangible assets
Advance payments
and construction
in progress Total
2021
Acquisition cost, 1 Jan 5,191.9 107,509.7 361,566.8 26.4 8,914.3 483,209.0
Transfer between acquisition cost
and accumulated depreciation - 997.9 21.4 - - 1,019.3
Transfers in connection with
incorporation -5,191.9 -108,080.8 -360,638.7 -4.2 -8,857.3 -482,772.8
Additions - 6.4 26.9 - 92.8 126.0
Disposals - -212.1 -296.0 - - -508.2
Transfers between items - 137.7 - - -137.7 -
Acquisition cost, 31 Dec - 358.7 680.5 22.2 12.0 1,073.4
Accumulated depreciation, 1 Jan -74,628.2 -261,387.5 -336,015.7
Transfer between acquisition
cost and accumulated deprecia-
tions -997.9 -21.4 -1,019.3
Transfers in connection with
incorporation, accumulated de-
preciation 75,261.0 260,672.1 335,933.1
Accumulated depreciation on
disposals and transfers 208.9 296.0 504.9
Depreciation during the period -16.8 -114.5 -131.3
Accumulated depreciation, 31 Dec -172.9 -555.4 -728.3
Total carrying amount, 31 Dec - 185.8 125.1 22.2 12.0 345.1
63
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
10. Investments
EUR thousand
Shares in Group
companies
Shares in joint
ventures
Other shares
and holdings Yhteensä
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
2021
Acquisition cost, 1 Jan 31,089.0 - 334.7 31,423.7
Transfers in connection with in-
corporation
- - -163.9 -163.9
Additions
95,040.4 - 0.0 95,040.4
Disposals
- - -0.0 -0.0
Acquisition cost, 31 Dec
126,129.4 - 170.8 126,300.2
Total carrying amount, 31 Dec 126,129.4 - 170.8 126,300.2
Holding of
shares and
votes, %
Holdings in group companies
L&T Toimi Oy, Helsinki 100.0
L&T Työllistämispalvelut 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 FM AB 100.0
Lassila & Tikanoja Service AB 100.0
Sand & Vattenbläst i Tyringe AB 70.0
Joint ventures
Laania Oy, Helsinki 55,0
11. Short-term receivables
EUR thousand 2022 2021
From Group Companies
Loan receivables 16,844.4 38,038.0
Trade receivables 3.4 552.9
Group contribution receivable 23,550.0 24,840.0
Prepaid expenses and accrued in-
come 3.0 -
Total 40,400.8 63,431.0
Receivables from joint venture
Trade receivables 6.6 -
Total 6.6 -
Prepaid expenses and accrued
income
Employees' health care compensation 30.5 48.3
Annual discounts 5.2 -
Licences 896.3 1,769.1
Other 895.1 763.9
Total 1,827.1 2,581.3
13. Shareholders' equity
EUR thousand 2022 2021
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 66,463.7 68,318.4
Dividend distribution -17,543.0 -15,242.1
Expired dividends 37.3 34.5
Transfer of treasury shares 87.9 99.9
Retained earnings at 31 Dec 49,045.9 53,210.7
Profit for the period 11,946.6 13,253.0
Non-restricted equity total 61,719.6 67,190.8
Shareholders' equity at 31 Dec 81,119.0 86,590.2
Distributable funds
Retained earnings 49,045.9 53,210.7
Profit for the period 11,946.6 13,253.0
Invested non-restricted equity
reserve 727.1 727.1
Total distributable funds 61,719.6 67,190.8
12. Deferred tax assets
EUR thousand 2022 2021
Unused depreciation 8.1 10.8
Obligatory provisions 176.5 306.7
Impairment of non-current assets 27.0 27.0
Merger of L&T Relations Oy 268.6 -
Total 480.2 344.6
64
Lassila & Tikanoja
Financial review 2022
Financial statements of the parent companyNotes to the consolidated financial statements
1. 2. 3. 4. 5.
Proposal by the Board of DirectorsPrimary financial statements of the Group
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
14. Obligatory provisions
EUR thousand 2022 2021
Pension liabilities 273.4 304.5
Provision for accident insurance
contribution 609.0 1,229.2
Total 882.4 1,533.7
17. Derivatives
Interest rate swaps
EUR thousand 2022 2021
Nominal value 30,000.0 30,000.0
Fair value 1,210.8 -549.7
Interest rate swaps are used for hedging purposes. Their
fair values are based on the market prices at the balance
sheet date.
16. Contingent liabilities
EUR thousand 2022 2021
For own commitments
Mortgages on rights of tenancy 121.6 121.6
Liabilities related to leasing and
leases (incl. VAT)
Maturity within 1 year 694.3 1,535.2
Maturity in subsequent years 745.8 3,363.2
Total 1,440.1 4,898.5
Guarantees for group companies 44,000.0 29,500.0
Guarantees for joint ventures 35,750.0 -
Other bank guarantees 264.7 684.7
Mortgages under own control
Company mortgages 210.2 210.2
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 earli-
est. The estimated value of the commitment at the end of the
reporting period totalled EUR 5,700.6 thousand.
15. Liabilities
Repayments of non-current liabilities in coming years
EUR thousand 2023 2024
2025-
2027
After
2027
Loans from credit
institutions - 50,000.0 - -
Bonds 17,730.0 - - 75,000.0
EUR thousand 2022 2021
Short term liabilities to
Group Companies
Trade payables 3.8 -0.1
Interest-bearing liabilities 53,065.1 68,787.6
Accrued expenses and deferred
income 0.7 -
Total 53,069.6 68,787.4
Accrued expenses and deferred
income
Personnel expenses 1,772.1 2,141.7
Interest expenses 1,912.3 403.2
Taxes 126.1 3,188.9
Other expenses 0.7 0.9
Total 3,811.1 5,734.7
Lassila & Tikanoja
Taloudellinen katsaus 2022
65
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 STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Proposal by the Board of Directors
for profit distribution
The Auditor’s Note
According to the financial statements, Lassila & Tikanoja
plc’s unrestricted equity amounts to EUR 61,719,573.87, with
the result for the period representing EUR 11,946,564.10 of
this total. There were no substantial changes in the finan-
cial 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
assets.
The Board of Directors proposes to the Annual General
Meeting that a dividend of EUR 0.47 per share be paid for
the financial year 2022.
The dividend is to be paid to shareholders included in the
company shareholder register maintained by Euroclear Fin-
Signatures to the Report of the Board of Directors and the Financial Statements for the year 2022:
Helsinki on 8 February 2023
Jukka Leinonen Sakari Lassila Teemu Kangas-Kärki
Laura Lares Laura Tarkka Pasi Tolppanen
Eero Hautaniemi
President and CEO
We have today submitted our report on the audit conducted by us.
Helsinki on 23 February 2023
PricewaterhouseCoopers Oy
Samuli Perälä
KHT
land Oy on the record date, 27 March 2023. The Board pro-
poses to the Annual General Meeting that the dividend be
paid on 3 April 2023.
No dividend shall be paid on shares held by the company
on the record date of dividend payment, 27 March 2023.
On the day the proposal for the distribution of assets
was made, the number of shares entitling to dividend was
38,145,618, which means
the total amount of the dividend would be EUR 17,928,440.46
To be retained and carried forward EUR 43,791,133.41
Total EUR 61,719,573.87
Lassila & Tikanoja
Financial Review 2022
66
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Auditor’s 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 and finan-
cial performance and cash flows in accordance with
International Financial Reporting Standards (IFRS) 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 the finan-
cial 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 & Tika-
noja Plc (business identity code 1680140-0) for the year
ended 31 December 2022. The financial statements comp-
rise:
• the consolidated statement of financial position,
income statement, statement of comprehensive
income, statement of changes in equity, state-
ment of cash flows and notes, including significant
accounting policies
• the parent company’s balance sheet, income state-
ment, cash flows statement, accounting policies and
notes.
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 Responsibili-
ties for the Audit of the Financial Statements section of our
report.
We believe that the audit evidence we have obtained is
sufficient and appropriate 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
to the group companies are in accordance with the appli-
cable law and regulations in Finland and we have not provi-
ded 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
• We have applied an overall group materiality of 5,000,000 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
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we considered where management
made subjective judgements; for example, in respect of signi-
ficant accounting estimates that involved making assumpti-
ons and considering future events that are inherently uncer-
tain.
Materiality
The scope of our audit was influenced by our application of
materiality. An audit is designed to obtain reasonable assu-
rance whether the financial statements are free from mate-
rial misstatement. Misstatements may arise due to fraud or
error. They are considered material if individually or in aggre-
gate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the finan-
cial statements.
Based on our professional judgement, we determined
certain quantitative thresholds for materiality, including
the overall group materiality for the consolidated 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 misstate-
ments on the financial statements as a whole.
Materiality
Audit Scope
Key Audit
Matters
Lassila & Tikanoja
Financial Review 2022
67
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
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 cont-
rols, and the industry in which the group operates. The Group
has four reportable segments: Environmental Services,
Industrial Services, Facility Services Finland and Facility Ser-
vices 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 state-
ments.
Overall group materiality 5,000,000 euros
How we determined it We used a combination of revenue and profit before taxes
as benchmarks to determine overall group materiality.
Rationale for the materiality benchmark applied We consider that revenue and profit before taxes provide
a suitable representation of the volume and profitability of
Lassila & Tikanoja’s operations.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the finan-
cial 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.
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 844 million.
Revenue from contracts with customers is generated from multi-
ple 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 judgement involved in selecting the appropriate rev-
enue 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 state-
ments)
The Group operates in a highly labor-intensive business. Wages,
salaries, and other employee benefit expenses form a significant
part of the Group’s operating expenses. In 2022 employee benefit
expenses were EUR 353 million.
Employee benefit expenses is considered a key audit matter due
to its significance 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 state-
ments)
As of 31.12.2022, Goodwill in the consolidated balance sheet
amounted to EUR 181 million.
Goodwill is not amortised but is tested at least annually for impair-
ment. Goodwill impairment testing has been prepared based on
value-in-use calculations in which future cash flows are discount-
ed to current value. Value-in-use calculations 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 judgement
involved in the impairment testing.
Our audit procedures included, for example, the following:
• We obtained an understanding of the methodology and as-
sumptions 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 management 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 ascer-
tain 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.
Lassila & Tikanoja
Financial Review 2022
68
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
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 parent company’s accounting policies and Note
10)
The investments in shares in group companies amounted to
EUR 182 million and current receivables from group compa-
nies to EUR 40 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 au-
dit of the parent company due to the significance of these
investments to the financial statements and due to manage-
ment judgement 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 ap-
proved budgets and forecasts
• We assessed the methodology used in determining the dis-
count 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 statements or the parent company financial statements.
Responsibilities of the Board of Directors and the
Managing Director for the Financial Statements
The Board of Directors and the Managing Director are res-
ponsible for the preparation of consolidated financial state-
ments that give a true and fair view in accordance with Inter-
national Financial Reporting Standards (IFRS) 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
Managing Director are also responsible for such internal
control as they determine is necessary to enable the pre-
paration of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Dire-
ctors and the Managing Director are responsible for asses-
sing the parent company’s and the group’s ability to conti-
nue 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. Rea-
sonable 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 material misstatement
when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the econo-
mic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with good auditing
practice, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstate-
ment of the financial statements, whether due to
fraud or error, design and perform audit procedures
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 collu-
sion, forgery, intentional omissions, misrepresenta-
tions, 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 effective-
ness of the parent company’s or the group’s internal
control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estima-
tes and related disclosures made by management.
• Conclude on the appropriateness of the Board of
Directors’ and the Managing Director’s use of the
going concern basis of accounting and based on the
audit evidence obtained, whether a material uncer-
tainty exists related to events or conditions that may
cast significant doubt on the parent company’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 opi-
nion. 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 con-
tent of the financial statements, including the disclos-
ures, and whether the financial statements represent
the underlying transactions and events so that the
financial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regar-
ding the financial information of the entities or busi-
ness activities within the group to express an opinion
on the consolidated financial statements. We are
responsible for the direction, supervision and perfor-
mance of the group audit. We remain solely respon-
sible 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 iden-
tify 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 financial 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 mat-
ter 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 rea-
sonably be expected to outweigh the public interest bene-
fits of such communication.
Lassila & Tikanoja
Financial Review 2022
69
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
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 res-
ponsible for the other information. The other information
comprises the report of the Board of Directors and the infor-
mation included in the financial review, but does not include
the financial statements and our auditor’s report thereon. We
have obtained the report of the Board of Directors and the
financial review prior to the date of this auditor’s report.
Our opinion on the financial statements does not cover the
other information.
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 infor-
mation is materially inconsistent with the financial state-
ments 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 appli-
cable laws and regulations.
In our opinion
• the information in the report of the Board of Directors
is consistent with the information in the financial sta-
tements
• the report of the Board of Directors has been prepa-
red in accordance with the applicable laws and regu-
lations.
If, based on the work we have performed on the other infor-
mation 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 Lia-
bility Companies Act. We support that the members of the
Board of Directors of the parent company and the President
and CEO should be discharged from liability for the financial
period audited by us.
Helsinki 23 February 2023
PricewaterhouseCoopers Oy
Authorised Public Accountants
Samuli Perälä
Authorised Public Accountant (KHT)
LEADER OF THE
REGENERATIVE SOCIETY
Corporate Governance
Statement 2022
Lassila & Tikanoja plc
Lassila & Tikanoja
Financial Review 2022
70
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Corporate Governance
Statement 2022
This Corporate Governance Statement complies with the
Securities Market Association’s Finnish Corporate Govern-
ance Code, which entered into force on 1 January 2020. Las-
sila & Tikanoja plc (“L&T” or “the company”) presents this
Corporate Governance Statement separately from the Report
by the Board of Directors. This statement and other informa-
tion disclosed in accordance with the Corporate Governance
Code are available on L&T’s website at www.lt.fi/en/inves-
tors/corporate-governance.
This statement has been reviewed by the Audit Commit-
tee of L&T’s Board of Directors and approved by the Board.
The company’s auditor has verified that the descriptions of
the main features of the internal control and risk manage-
ment systems relating to the financial reporting process
included in the statement are consistent with the descrip-
tions included in the financial statements.
Descriptions concerning
corporate governance
General Meeting of Shareholders
The Annual General Meeting is the supreme decision-mak-
ing body of L&T. The Annual General Meeting decides on the
matters stipulated in the Companies Act, such as the accept-
ance of the financial statements and proposed dividend, the
release from liability of members of the Board of Directors
and the President and CEO, the election of the members of
the Board of Directors and the auditors, and the compensa-
tion paid to them. The Annual General Meeting is held by the
end of April as determined by the Board of Directors. Each
share of Lassila & Tikanoja plc entitles the holder to one vote.
The notice to the meeting and other Annual General Meet-
ing documents, including the Board of Directors’ proposals
to the Annual General Meeting are disclosed to the share-
holders at the latest three weeks before the meeting on the
company’s website at www.lt.fi/en/investors/corporate-gov-
ernance/general-meeting. The notice to the meeting is also
disclosed in a stock exchange release. The members of the
Board of Directors, President and CEO, principal auditor and
prospective directors attend the Annual General Meeting,
unless there are well-founded reasons for their absence.
The minutes of the Annual General Meeting will be avail-
able on the company’s website within two weeks of the
Annual General Meeting. The resolutions by the Annual Gen-
eral Meeting will be published in a stock exchange release
immediately after the meeting.
Shareholders’ Nomination Board
The Nomination Board is responsible for preparing and pre-
senting proposals covering the remuneration and number
of members of the Company’s Board of Directors, as well as
proposals on the members, Chairman and Vice Chairman of
the Board of Directors to the Annual General Meeting and,
where needed, to an Extraordinary General Meeting. The
Nomination Board shall also be responsible for identifying
successors to existing Board members.
The Nomination Board consist of four (4) members, three
(3) of whom are appointed by the Company’s three largest
shareholders, who appoint one (1) member each. The Chair-
man of the Company’s Board of Directors serves as the
fourth member of the Nomination Board. The Nomination
Board was established to operate until further notice. Its
members are elected annually and their term of office ends
when new members are elected to replace them.
The Shareholders’ Nomination Board’s selection pro-
cess, composition and duties are described in detail in the
charter, which is available at www.lt.fi/en/investors/corpo-
rate-governance/shareholders-nomination-board.
Composition of the Nomination Board tasked with prepa-
rations for the Annual General Meeting 2023
The following members were appointed to the Shareholders’
Nomination Board of Lassila & Tikanoja on 9 September 2022:
Patrick Lapveteläinen (Chairman), representing Mandatum
Life Insurance Company Limited, Miikka Maijala, represent-
ing a group of shareholders, Juhani Lassila, representing the
Evald and Hilda Nissi Foundation, and Jukka Leinonen as the
Chairman of the Board of Directors of Lassila & Tikanoja plc.
The Nomination Board met four times during its term.
It submitted its proposals to the Annual General Meet-
ing on 11 January 2023. The proposals were published in the
form of a stock exchange release.
Board of Directors
Composition and election of the Board of Directors
In accordance with the Articles of Association, the Board
of Directors of Lassila & Tikanoja plc comprises a minimum
of three members and a maximum of seven. The members
of the Board of Directors are elected by the Annual General
Meeting. The term of each member of the Board of Directors
expires at the end of the next Annual General Meeting of
Shareholders following their election.
Board members
The following six members were elected to the Board of
Directors by the Annual General Meeting of 2022.
Jukka Leinonen, Chairman (born 1962)
Independent of the company and major shareholders
Board member: since 2021
Board committees: Chairman of the Personnel and
Sustainability Committee
Education: M.Sc. (Eng.)
Key work experience: Telenor ASA, EVP and Head of Nor-
dics, member of Telenor’s Group Executive Management
2019–2022, DNA Oyj, CEO 2013–2021, Vice President, Corpo-
rate Business 2010–2013, TeliaSonera, various management
positions in corporate business sales, marketing and product
management 2002–2009, Sonera Oyj, management positions
2000–2002, Sonera Solutions Oy (Yritysverkot Oy), President
and CEO 1996–1999
Membership on other Boards: DNA Oyj, Chairman of the
Board 2021–2022, Representative Council of the Confeder-
ation of Finnish Industries 2020–2021, Altia Oyj 2020–2021,
FiCom ry, Chairman of the Board 2019–2021 and Member of
the board 2013–2018, Service Sector Employers PALTA ry
2013–2017
Sakari Lassila, Vice Chairman (born 1955)
Independent of the company and major shareholders
Board member: since 2011
Board committees: Chairman of the Audit Committee
Education: M.Sc. (Econ.)
Key work experience: Indcrea Oy, Managing Director
2008–2018, Cupori Group Oy, member of the Management
Board 2008–2014, Managing Director of Cupori AB 2012–
2014, Carnegie Investment Bank AB, Finland Branch, exec-
utive positions 2002–2005, Alfred Berg Finland Oyj, execu-
tive positions within investment banking 1994–2002
Citibank Oy, head of corporate bank 1991–1994,
Union Bank of Finland: supervisory and executive positions
1983–1991
Membership on other Boards: Evald and Hilda Nissi
Foundation, Vice Chairman of the Board, member 1987–,
Aplagon Oy, Chairman of the Board 2009–
Lassila & Tikanoja
Financial Review 2022
71
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Teemu Kangas-Kärki (born 1966)
Independent of the company and major shareholders
Board member: since 2016
Board committees: Member of the Audit Committee
Primary occupation: Nokian Tyres Oyj, CFO
Education: M.Sc. (Econ.)
Key work experience: Fiskars Oyj, Chief Operating Officer
and Deputy to the CEO 2017–2018, Interim President 2017,
Chief Operating Officer and Chief Financial Officer, deputy to
the CEO 2014–2017, President, Home Business Area 2012–
2014 and Chief Financial Officer 2008–2012, Alma Media
Corporation, CFO 2003–2008, Kesko Oyj, Vice President,
Corporate Controller 2002–2003, Corporate Business Con-
troller 2000–2001, Nestlé Finland Oy, Finance Director 1999–
2000, Smith & Nephew Oy, Finance Manager 1996–1998,
Unilever Oy & Gmbh, Marketing Controller & Internal Auditor
1992–1996
Membership on other Boards: Marimekko Oyj, Vice Chair of
the Board, Chair of the Audit and Remuneration Committee
2022–
Laura Lares (born 1966)
Independent of the company and major shareholders
Board member: since 2014
Board committees: Member of the Audit Committee
Primary occupation: Ablers Oy, Managing Director and
Board member
Education: Ph.D. (Tech.)
Key work experience: Woimistamo Oy, Managing Director
2012–2018, Kalevala Koru Oy & Lapponia Jewelry Oy, Man-
aging Director 2007–2012, UPM Kymmene Corporation,
Director of Wood Products Division, Director of Business
Development & Human Resources 2004–2006
Membership on other Boards:
Ablers Oy 2018–, Lappeenranta University of Technology
2009–2017, Woikoski Oy 2012–2016
Laura Tarkka (born 1970)
Independent of the company and major shareholders
Board member: since 2017
Board committees: Member of the Personnel and
Sustainability Committee
Primary occupation: Gigantti Oy, CEO
Education: M.Sc. (Eng.), CEFA degree
Key work experience: Kämp Group Oy/Kämp Collection
Hotels Oy, CEO 2014–2020, Diacor Terveyspalvelut Oy,
CFO and deputy CEO 2013–2014, Fazer Group, Director
2007–2012, Icecapital Securities Ltd, investment banker
2001–2007, Mandatum Stockbrokers Ltd, investment banker
1997–2001
Membership on other Boards: Oy Karl Fazer Ab 2021–,
Caruna Oy 2019–, Central Chamber of Commerce 2021–,
the Finnish Fair Corporation 2019–2021, Viking Line Oyj
2020–2021, Docrates Oy 2016–2021
Pasi Tolppanen (born 1967)
Independent of the company and major shareholders
Board member: since 2020
Board committees: Member of the Personnel and
Sustainability Committee
Primary occupation: YIT Corporation, Executive Vice Pres-
ident, Infrastructure segment and member of the Group
Management Team
Education: Ph.D. (Tech.)
Key work experience: DEN Group Oy, CEO 2020–2021,
Maintpartner Group Oy, CEO 2017–2019, Pöyry Oyj, President
Regional Operations Northern Europe, Managing Director
of Pöyry Finland Oy and member of the Management Board
2013–2016 and various managerial positions 2007–2012
Membership on other Boards: Forcit Oy 2019–; Terrawise
Oy 2019–2021; Maintpartner Ab, Chairman 2017–2022
In 2022, the Board of Directors also had Heikki Bergholm
as a member. His membership ended at the Annual General
Meeting 2022.
Diversity of the Board of Directors
The company considers diversity essential to achieving
its strategic targets. Diversity is also viewed from several
perspectives when planning the composition of the Board
of Directors. In the election of Board members, the aim is to
ensure that the Board of Directors as a whole supports the
company’s business and its development. It is important from
the point of view of the effective operation of the Board of
Directors that the Board of Directors is sufficiently diverse
and comprises of an adequate number of members, and that
the members have diverse expertise and experience to com-
plement each other.
In assessing the composition of the Board of Directors,
it is, for example, considered whether the professional and
educational background, and gender and age distribution
of the Board is adequately diverse and whether it includes
suitable decision-making ability, skills and experience to be
able to meet the requirements set by the company’s busi-
ness operations and strategic targets. The company’s aim is
that both genders are represented in the Board of Directors.
The principles regarding the diversity of the Board of Direc-
tors are taken into consideration in the successor planning
of Board members. Both genders have been represented in
the Board of Directors for a long time. In 2022, four of the
Board members were male and two were female. The age
range of the Board members was 52–67 years. The less rep-
resented gender accounted for 33 per cent of the Board of
Directors.
Independence of the members
of the highest governance body
None of the members of the Board of Directors are in an
employment relationship with the company. The Board of
Directors has assessed that all of its members are inde-
pendent of the company. In the assessment, it was taken
into consideration that Sakari Lassila has been a member of
the Board of Directors for more than 10 years consecutively.
The Board of Directors has not identified any reasons why
Sakari Lassila should not be considered independent of the
company. All of the members of the Board of Directors are
also independent of the company’s major shareholders.
Lassila & Tikanoja
Financial Review 2022
72
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
The areas of expertise of the Board of Directors
Independent Committee memberships
Name Board member since Primary areas of expertise
of the
company
of signifi-
cant sha-
reholders Audit Committee
Personnel and
Sustainability Committee
Concurrent Board
memberships in
listed companies
Jukka Leinonen* 2021 Customer experience, ICT and data analytics, operational management, strategy and M&A
Chairman
Sakari Lassila 2011 Internal control and risk management, strategy and M&A, finance
Chairman
Teemu Kangas-Kärki 2016 Governance, internal control and risk management, strategy and M&A, finance
Member 1
Laura Lares 2014 ESG and sustainability, strategy and M&A, industry expertise and technologies
Member
Laura Tarkka 2017 Customer experience, ESG and sustainability, human resources management, operational
management
Member
Pasi Tolppanen 2020 Customer experience, international market insight, operational management, industry
expertise
Member
Yes No The table presents the key areas of expertise of the members of the Board of Directors on 31 December 2022. A particular area of expertise not being specifically mentioned for a Board member does not mean that the member in question lacks expertise in that area.
* Chairman of the Board from 17 March 2022 onwards, member of the Board prior to that date.
Duration of Board membership in years
(number of persons)
1–2 years
3–5 years
6–9 years
>10 years
Gender distribution (number of persons)
Men
Women
0 1 2 3 4
Customer experience
ESG and sustainability
Human resources management
Governance
ICT and data analytics
Group administration
International market insight
Operational management
Internal control and risk management
Strategy and M&A
Finance
Industry expertise
Technologies
Main areas of expertise
Duration of Board membership in years
(number of persons)
Gender distribution (number of persons) Main areas of expertise
Lassila & Tikanoja
Financial Review 2022
73
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Board members’ shareholding 31 December 2022
Shares in the company held by the Board members and any
corporations over which they exercise control have been
taken into account in terms of shareholding. Board members
do not hold shares in any group companies other than Las-
sila & Tikanoja plc. Information about the Board members’
remuneration is disclosed in the Remuneration report of the
governing bodies, which is published in connection with the
Report of the Board of Directors and is available at lt.fi/en/
investors.
Board members’ shareholding
31.12.2022
Jukka Leinonen 37,351
Sakari Lassila 21,427
Teemu Kangas-Kärki 5,943
Laura Lares 7,266
Laura Tarkka 5,294
Pasi Tolppanen 3,325
Total 80,606
Duties of the Board of Directors
The Board of Directors is responsible for the management
of the company, the proper arrangement of the company’s
operations, and the proper arrangement and supervision of
the company’s accounting and financial management. The
Board of Directors decides upon matters that are of major
importance, in view of the scope and size of the operations
of the company. The Board of Directors is also responsible for
the duties specified in the Companies Act and the Articles of
Association, and in other regulations. The Board of Directors
has drawn up a written charter for its work. It governs the
Board’s work in addition to the company’s Articles of Associa-
tion and Finnish laws and regulations.
According to the charter, the duties of the Board of Direc-
tors include, for example:
• being responsible for the development of shareholder
value
• confirming the company’s goals
• deciding on the corporate strategy and confirming
divisional strategies
• deciding on the Group structure and organisation
• ensuring the operation of the management system
• handling and adopting interim reports, half-year
financial reports, financial statements and annual
reports
• confirming the Group’s operating plan, budget and
investment plan
• deciding on strategically or financially significant
investments, corporate acquisitions, disposals or
other arrangements, as well as financing arrange-
ments and contingent liabilities
• drawing up the dividend policy
• confirming treasury, investment, disclosure, risk man-
agement and insurance policies, as well as the princi-
ples of internal control
• approving the sustainability programme
• nominating and dismissing the President and CEO and
monitoring and evaluating their work
• deciding on the nomination, remuneration and other
financial benefits of the President and CEO’s immedi-
ate subordinates
The evaluation of the performance and working methods of
the Board is conducted annually as an internal self-evalua-
tion.
Meetings of the Board of Directors
Board meetings are held at the company’s head office in Hel-
sinki, other group locations or other places decided on by the
Board of Directors. If necessary, the Board of Directors may
also hold meetings virtually and make decisions without con-
vening.
The Board of Directors convenes as often as its tasks
require. It confirms its annual, regular meetings. Meetings
held annually prior to the publication of the financial state-
ments and each interim report, as well as strategy, budget
and other meetings confirmed in the annual programme of
the Board, are considered regular meetings. In addition to
regular meetings, the Board can hold extraordinary meet-
ings.
The company’s President and CEO and CFO usually par-
ticipate in Board meetings. Where necessary, such as in
conjunction with discussing the strategy or budget, the
meetings are also attended by other members of Lassila &
Tikanoja plc’s Group Executive Board. The company’s Gen-
eral Counsel acts as the secretary of the Board of Directors.
Minutes are prepared of Board meetings, subject to the
signature of members of the Board of Directors participat-
ing in the meeting, as well as the President and CEO of the
company and secretary to the Board. These minutes are
kept at the company’s headquarters.
The President and CEO is responsible for ensuring that
the Board is provided with sufficient information for assess-
ing the operations and the financial situation of the com-
pany. He also supervises and reports to the Board on the
implementation of the Board’s decisions.
Activities of the Board of Directors in 2022
The Board of Directors met 14 times during 2022. The aver-
age attendance rate of the members at the meetings was
98 per cent. Key themes in Board work included strategy
and directing and supporting its implementation, monitoring
strategic projects, developing the corporate structure and
business portfolio and directing risk management.
Committees of the Board of Directors
The Board has an Audit Committee and a Personnel and Sus-
tainability Committee. The Audit Committee consists of three
(3) Board members, and the Personnel and Sustainability
Committee consists of three (3) Board members. At its organ-
isational meeting after the Annual General Meeting, the Board
of Directors elects chairmen and members of the Commit-
tees from among its number for a term of one year at a time.
The committee members must have the expertise and expe-
rience required by the duties of the committee. The Board
of Directors confirms the charters of the committees annu-
ally. The committees have no independent decision-making
authority; the Board of Directors makes the decisions based
on the preparation work by the committees.
The chairman of the committee reports on the work of
the committee at the Board meeting following the commit-
tee meeting. Minutes of the committees’ meetings are pro-
vided to the Board members for information.
Audit Committee
At its organisational meeting after the Annual General Meet-
ing on 17 March 2022, the Board of Directors appointed
Sakari Lassila (Chairman), Laura Lares and Teemu Kan-
gas-Kärki as members of the Audit Committee. All of the
members of the Audit Committee are independent of the
company and its major shareholders. The Audit Committee
will convene at least four times a year.
The duties of the Audit Committee pursuant to the char-
ter include:
• monitoring the financial position and financing of the
Group.
• monitoring the reporting process of financial state-
ments.
• supervising the financial reporting process.
• monitoring the efficiency of the company’s internal
control, internal audit and risk management systems.
• reviewing the operating principles of the company’s
internal control.
• reviewing the plans and reports of the company’s
internal audit.
• reviewing the company’s corporate governance
statement.
• monitoring related-party transactions.
• monitoring the statutory audit of the financial state-
ments and consolidated financial statements.
• evaluating the independence of the auditing company
• evaluating the provision of non-audit services to the
company by the auditing firm.
• preparing the proposal and/or recommendation con-
cerning the auditor of the company.
Lassila & Tikanoja
Financial Review 2022
74
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
• maintaining contact with the company’s auditor and
reviewing the reports prepared for the committee by
the auditor.
• assessing compliance with laws and provisions.
The Audit Committee met five times in 2022. The attendance
rate of the members at the meetings was 100 per cent.
Personnel and Sustainability Committee
At its organisational meeting after the Annual General Meet-
ing of 17 March 2022, the Board of Directors appointed Jukka
Leinonen (Chairman), Laura Tarkka and Pasi Tolppanen as
members of the Personnel and Sustainability Committee. All
of the members of the Committee are independent of the
company and its major shareholders. The Personnel and Sus-
tainability Committee meets at least four times a year.
The duties of the Personnel and Sustainability Commit-
tee pursuant to the charter include:
• handling, evaluating and making statements on
the salary structure of the Group management and
personnel as well as remuneration and incentive
schemes.
• monitoring the functionality of the remuneration
systems to ensure that the management’s incentive
schemes promote the achievement of the company's
targets and are based on personal performance.
• handling and preparing executive appointment issues
for consideration by the Board of Directors.
• discussing and preparing matters related to the
organisational structure and the development of
management and human resources.
• dealing with management succession plans.
• prepare the remuneration policy of the company’s
governing bodies and the remuneration report.
• presenting the governing bodies’ remuneration pol-
icy and reporting to the Annual General Meeting and
answering related questions.
• monitoring and evaluating the development of sus-
tainability in the Group.
• monitoring developments in the business environ-
ment and regulation
• monitoring and evaluating the development of
occupational safety and work ability issues in the
Group.
• monitoring the development of stakeholder sup-
port (employee and customer experience as well
as other external stakeholders).
• monitoring the results of the Group’s ESG assess-
ments and analyses.
• reviewing the statement of non-financial informa-
tion as part of the Board’s report.
• processing the Annual Report.
• monitoring and evaluating the development of
diversity in the workplace community.
The Committee met four times in 2022. The attend-
ance rate of the members at the meetings was 100 per
cent.
President and CEO
Lassila & Tikanoja plc’s President and CEO is appointed by
the Board of Directors. The President and CEO is responsi-
ble for day-to-day operations in keeping with the instruc-
tions of the Board of Directors. They are also responsible
for the strategy process. Eero Hautaniemi, M.Sc. (Econ.),
has served as the President and CEO since 1 January 2019.
The more detailed personal and shareholding information
of the President and CEO is disclosed below in connection
with the personal and shareholding information of the
members of the Group Executive Board.
Group Executive Board
The Group Executive Board assists the President and CEO
in the management of the company. The Group Executive
Board has no authority based on legislation or the Articles
of Association. The Group Executive Board comprises of
the President and CEO as the chairman and Group exec-
utives confirmed by the Board of Directors. The members
of the Group Executive Board report to the President and
CEO. The Group Executive Board convenes at least once a
month.
On the date of this statement, the Group Executive Board
comprised the following persons:
Eero Hautaniemi (born 1965)
President and CEO
Member of the Group Executive Board since: 1 January 2019
Education: M.Sc. (Econ.)
Key work experience: Oriola-KD Oyj, CEO 2006–2017, GE
Healthcare Finland Oy, President 2004–2005, GE Healthcare
IT, General Manager, Oximetry, Supplies and Accessories busi-
ness area 2003–2004, Instrumentarium Corporation, special-
ist and executive positions 1990–2003
Membership on other Boards:, Ilmarinen Mutual Pension
Insurance Company, member of the Supervisory Board 2019–
Tina Hellstadius (born 1973)
Senior Vice President, Facility Services Sweden
Member of the Group Executive Board since: 19 April 2022
Education: M.Sc. (Technology)
Key work experience: SOL Sweden, CEO 2017–2022, Telia
Group, Director, Supply Chain Excellence 2014–2017, LRF
Samköp, CEO 2010–2014, Euromaint Rail AB, Head of Con-
tracts 2008–2010, Bid Manager 2007–2008, Scania CV, Vice
Commodity Manager 2006–2007, Sourcing Manager 2005–
2006, Team Leader 2004–2005
Sirpa Huopalainen (born 1965)
General Counsel
Member of the Group Executive Board since: 26 February
2019
Education: OTK, Master of Laws (Aus.)
Key work experience: Lassila & Tikanoja plc, General Counsel
2012–, Atria Plc, General Counsel 2007–2012, Metso Auto-
mation Oy, Legal Counsel 2004–2007, Metso Corporation,
Legal Counsel 1999–2004, Rauma Corporation, Legal Counsel
1996–1999
Jorma Mikkonen (born 1963)
Senior Vice President, Public Affairs and Sustainability
Member of the Group Executive Board since: 1 June 2015
Education: Master of Laws
Key work experience: Lassila & Tikanoja plc: Vice President,
Environmental Services 2009–2012, Vice President, Industrial
Services 2000–2009, Säkkiväline Oy, Administrative Director
1999–2000, Corporate Lawyer 1992–1999, Helsinki Finnish
Saving Bank, Corporate Lawyer 1991–1992
Antti Niitynpää (born 1972)
Senior Vice President, Facility Services Finland
Member of the Group Executive Board since: 30 July 2021
Education: eMBA
Key work experience: Lassila & Tikanoja plc, Business Direc-
tor, Cleaning Services 2019–2021, Lassila & Tikanoja plc,
Business Director, Property Maintenance 2014–2018, Lassila
& Tikanoja plc, Regional Director, Helsinki metropolitan area
2013–2016, ISS Finland, Regional Director, Service Director,
Customer Accounts Director 2006–2013, Suomen Laatutakuu
Palvelut Oy, Project Director 1999–2006, Purkat Oy, CEO 1995–
1999
Membership on other Boards: Kiinteistötyönantajat ry
(Employers’ association of property management) 2022–
Valtteri Palin (born 1973)
CFO
Member of the Group Executive Board since: 1 August 2019
Education: M.Sc. (Econ.)
Key work experience: Lassila & Tikanoja plc, CFO, responsible
for controller operations, 2019, SRV Yhtiöt Oyj, CFO, 2008–
2019, SRV Toimitilat Oy, business controller 2005–2008, Skan-
ska Oy, Finance Manager, business controller and controller,
1998–2005
Hilppa Rautpalo (born 1974)
Senior Vice President, Human Resources
Member of the Group Executive Board since: 1 January 2020
Education: Master of Laws (trained at the bench)
Key work experience: Arctia Ltd, SVP, Legal Affairs and HR
2018–2019, Unisport-Saltex Oy, General Counsel, Group HR
Director 2017–2018, Ekokem Oyj, SVP, Legal Affairs and HR
2013–2017, Amer Sports Oyj, Senior Legal Counsel 2007–
2009, Metsä Group, Group Legal Counsel 2000–2007
Membership on other Boards Finnpilot Pilotage Oy, 2020–
Lassila & Tikanoja
Financial Review 2022
75
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Petri Salermo (born 1970)
Senior Vice President, Environmental Services
Member of the Group Executive Board since: 1 January 2013
Education: eMBA, CBM
Key work experience: Lassila & Tikanoja plc: Business
Director, Environmental Services 2009–2012; Sales Director,
Environmental Services 2003–2009; Sales Manager, Envi-
ronmental Services 2001–2003, Europress Oy: Sales Director
1998–2001, managerial positions in sales 1995–1998
Antti Tervo (born 1978)
Senior Vice President, Industrial Services
Member of the Group Executive Board since: 14 February
2012
Education: M.Sc. (Econ.)
Key work experience: Lassila & Tikanoja plc: Chief Officer
responsible for procurement and supply chain, 2012–2014,
Siemens North West Europe: Head of Commodity Manage-
ment 2009–2012; Project Manager, Procurement and Supply
Chain Management 2008–2009, Siemens Oy: Director, Pro-
curement 2005–2009; Procurement Manager 2003–2005;
Supply Chain Consultant 2001–2003
Group Executive Board members’ shareholding
31 December 2022
Eero Hautaniemi 46,827
Tina Hellstadius 0
Sirpa Huopalainen 6,744
Jorma Mikkonen 7,107
Antti Niitynpää 1,107
Valtteri Palin 1,560
Hilppa Rautpalo 1,758
Petri Salermo 19,105
Antti Tervo 10,856
Total 95,064
The Audit Committee meets at least four times a year
before the publication of interim reports and the financial
statements release. In its meetings, the Audit Committee
reviews the financial information presented by the Chief
Financial Officer, as well as interim and half-year financial
reports and financial statements releases. The auditor is
also invited to attend the meetings. The Audit Committee is
presented in more detail in the Committees section.
L&T’s financial reporting process
L&T conducts a significant proportion of its business in Fin-
land. Functions related to accounting, accounts payable and
receivable, payments, taxation and financing in the financial
reporting process in Finland are centralised. Organisation of
these functions into different teams allows the separation of
various finance-related tasks. To support the consistent pro-
cess in Finland, L&T also runs a centralised accounting sys-
tem and common operational practices.
L&T’s foreign subsidiaries each have independent finan-
cial management departments operating in compliance with
the accounting principles and reporting instructions issued
by the Group’s financial management. L&T’s domestic busi-
ness segments and foreign subsidiaries submit a monthly
reporting package to the Group according to the Group's
instructions. Controllers supervise the financial reports of
domestic business segments and foreign subsidiaries. L&T’s
Group financial management is responsible for preparing and
updating the Group accounting policies and instructions, and
for preparing reporting schedules.
The financial management department consolidates sub-
sidiaries’ financial statements into consolidated financial
statements, which include notes to the financial statements,
and prepares interim and half-year financial reports, financial
statements releases and the annual financial statements.
Public financial reporting is realised with the same principles,
and it is subject to the same control methods as monthly
internal financial reporting. The Audit Committee reviews the
interim report, half-yearly report and financial statements
and proposes its recommendation on their processing to
the Board of Directors. The Board of Directors approves the
interim report, half-yearly report, financial statements release
and financial statements prior to their publication.
Internal control
Internal control is a material part of the Group’s administra-
tion and management. The purpose of internal control is to
ensure the reliability of the Group’s financial reporting, effi-
ciency and profitability of operations, and compliance with
legislation and other regulations. Tools of internal control
include policies and principles, guidelines, manual and IT sys-
tem-based automatic controls, follow-up reports and inspec-
tions or audits.
The company’s Board of Directors has ratified L&T’s internal
control policy. The Board of Directors and the President and
CEO are responsible for the organisation of internal control.
The Audit Committee of the Board of Directors monitors
the efficiency and performance of internal control and cor-
rectness of financial reporting. The financial development of
the company is monitored monthly by an operational report-
ing system covering the whole Group.
In addition to actual data, the system provides budg-
ets, forecasts and investment reports. L&T's operations
and financial reports are monitored and compared against
budgets and forecasts at different organisational levels.
Group management, divisional management and area man-
agement, as well as business unit management, analyse
the results and any nonconformities. Those responsible for
finances at the divisions also analyse the financial reports
and prepare reports for management use. Their duties also
include supervision of the accuracy of financial reports and
analysis of results.
Risk management
L&T has a defined a risk management process that includes
a review of financial, strategic and operational risks. Risk
management at L&T aims to identify significant risk factors,
prepare for them, and manage them in an optimal way so
that the achievement of the company’s strategic and finan-
cial objectives is not compromised. Comprehensive risk
management endeavours to manage the Group’s risk as a
whole and not just individual risk factors.
Responsibilities
The principles of L&T’s risk management are approved by
the company’s Board of Directors. The Board monitors the
Shares in the company held by the Group Executive Board
members and any corporations over which they exercise
control have been taken into account in terms of share-
holding. Group Executive Board members do not hold shares
in any group companies other than Lassila & Tikanoja plc.
Information on the President and CEO’s remuneration is pro-
vided in the remuneration report, which has been published
in connection with the Report of the Board of Directors. The
remuneration report and information on the Group Executive
Board’s remuneration is available online at
www.lt.fi/en/investors.
Descriptions of internal
control procedures and main
features of risk management
system
The Group’s financial reporting
The financial reporting principles represent an essential ele-
ment of L&T's Integrated Management System. The financial
information of the Group and its divisions is reported and
analysed internally within the Group monthly and disclosed
as interim reports, half-year financial reports and financial
statements releases. The Group’s and its divisions’ budgets
and long-term financial plans are updated annually.
The Group’s financial reporting process includes both
financial accounting and management accounting. The
internal control and risk management processes and pro-
cedures pertaining to the financial reporting process are
explained in more detail below. Their purpose is to ensure
that the information disclosed in the financial reports pub-
lished by the company is essentially correct.
Audit Committee
The Board of Directors’ Audit Committee supervises and
monitors the efficiency of L&T’s financial reporting pro-
cess and internal control systems. The Audit Committee
has reviewed L&T’s internal control policy and the Board of
Directors has approved it.
Lassila & Tikanoja
Financial Review 2022
76
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
L&T may not trade in financial instruments issued by L&T. In
addition, L&T’s aforementioned persons discharging mana-
gerial duties may not trade in L&T’s financial instruments for
a closed period of 30 days preceding the publication of the
company’s interim reports, half-year report and financial state-
ments release, including the date of publication.
The closed period preceding result announcements and
the restriction on carrying out transactions during the closed
period also apply to the persons who participate in the prepa-
ration of interim reports and the financial statements release,
or who otherwise have regular access to L&T’s undisclosed
financial information.
Transactions with related parties
The company and its Board of Directors evaluates and mon-
itors transactions between the company and its related par-
ties, and aims to ensure that any conflicts of interest are taken
into consideration in decision-making. If the related-party
transactions are material to the company and deviate from the
company’s ordinary business operations or are made in devi-
ation from ordinary market terms, the company must report
the decision-making procedure concerning such related-party
transactions.
L&T’s related-party transactions are described in Note 5.4
to the financial statements. L&T did not carry out any busi-
ness transactions with related parties that were material to
the company, deviated from its normal business operations or
were not made on market or market equivalent terms in 2022.
Auditor
L&T has one auditor that must be a firm of auditors approved
by the Finland Chamber of Commerce. The auditor is elected
by the Annual General Meeting. PricewaterhouseCoopers Oy,
Authorised Public Accountants, was elected by the Annual
General Meeting of 2022 as the company’s auditor, with Samuli
Perälä, Authorised Public Accountant, as the principal auditor.
During the financial years 2012–2021, the company’s auditor
was KPMG Oy Ab, Authorised Public Accountants, and auditors
representing KPMG.
The Audit Committee of the Board of Directors processes
the audit plan annually and reviews the audit findings with the
Board of Directors. In 2022, the fees paid for the Group’s statu-
implementation of risk management and assesses the effi-
ciency 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 objectives
and principles, organisation and responsibilities, and proce-
dures of the Group’s risk management. The Group’s financ-
ing 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 Man-
agement and Insurance Policy.
Identification, assessment and reporting of risks
Risks are surveyed regularly and systematically at both the
division and company levels and in functions considered to
be critical. The significance of risks is assessed using a risk
matrix. Measures for managing and minimising the identi-
fied risks are prepared, and responsibility for these meas-
ures is allocated to specified individuals or units. The most
significant risks identified, and the preparations for them
are regularly reported to the President and CEO and the
Board of Directors.
and focal areas specified by the Board of Director and the
President and CEO. The internal audit function reports to the
Audit Committee of L&T’s Board of Directors. In addition, the
President and CEO, the CFO, the General Counsel and the
management of each audited division are informed of the
audit results. The implementation of the measures resulting
from the internal audit recommendations is monitored and
the monitoring results are reported to the Audit Committee.
Insider guidelines
The company complies with the Market Abuse Regulation
(596/2014, “MAR”) and the Securities Market Act and related
regulations and guidelines issued by the European Securities
Markets Authority, the Finnish Financial Supervisory Authority
and Nasdaq Helsinki Ltd. Moreover, the Board of L&T’s has also
verified insider guidelines to supplement the Guidelines for
Insiders issued by Nasdaq Helsinki Ltd.
Certain key aspects of the insider guidelines are described
below. The insider guidelines clearly specify certain practices
and decision-making procedures to ensure that the compa-
ny’s insider management has been arranged in a consistent
and reliable way. The General Counsel is responsible for insider
issues in the company. L&T maintains an internal non-public list
of the persons discharging managerial duties and the persons
closely associated with them who, pursuant to MAR, are under
an obligation to disclose their transactions involving L&T’s
financial instruments.
L&T has defined the company’s Board of Directors and the
President and CEO as persons discharging managerial duties
pursuant to the Market Abuse Regulation, and each of these
persons has been instructed to inform the persons closely
associated with them of the notification obligation concern-
ing transactions. Transactions by managers and the persons
closely associated with them are published as stock exchange
releases via the company website.
The company maintains separate project-specific insider
lists pursuant to MAR on significant projects that may have a
significant impact on the value of financial instruments issued
by L&T. Such lists are established and maintained following the
decision to postpone the disclosure of inside information.
Persons who are entered in a project-specific insider list or
other persons in possession of inside information concerning
tory auditing totalled EUR 364,000 (264,000). The fees paid to
the auditing company and companies belonging to the same
group for non-audit services totalled EUR 167,000 (23,000).
Other information disclosed
in the CG statement
Internal audit
Internal audit enhances the realisation of the monitoring
responsibility of L&T’s Board of Directors. It is the task of L&T’s
internal audit to support the company and its senior manage-
ment in the achievement of strategic and financial goals by
providing a systematic and independent approach to assess-
ing and developing the effectiveness of the organisation’s
internal control, risk management and governance systems
and performance, efficiency and appropriateness of busi-
ness processes.
The Board’s Audit Committee confirms the annual plan
of internal audit, in which items to be audited are selected
based on the Group’s strategic objectives, estimated risks
LEADER OF THE
REGENERATIVE
SOCIETY
Remuneration Report 2022
Lassila & Tikanoja plc
Lassila & Tikanoja
Financial Review 2022
77
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Remuneration Report
This Remuneration Report has been prepared in accordance
with the applicable legislation and the Securities Market
Association’s Finnish Corporate Governance Code for Finn-
ish listed companies, which entered into force on 1 January
2020. This report describes the remuneration of the Compa-
ny’s governing bodies, namely the Board of Directors and the
President and CEO, for the financial year 2022. The Personnel
and Sustainability Committee of the Board of Directors has
discussed this report and it will be presented to the 2023
Annual General Meeting of Lassila & Tikanoja plc (hereinafter
referred to as “L&T” or the “Company”). The resolution of the
Annual General Meeting concerning the Remuneration Report
is advisory. The 2022 Annual General Meeting voted for the
Remuneration Report for the financial year 2021 and affirmed
it by an advisory resolution. This Remuneration Report, other
information disclosed in accordance with the Corporate Gov-
ernance Code, and information on the remuneration of the
members of the Group Executive Board are available on the
Company’s website.
Introduction
L&T’s Personnel and Sustainability Committee has drafted and
the Board of Directors has approved the Remuneration Policy,
presented to the 2020 Annual General Meeting. The Remuner-
ation Policy describes the remuneration principles concerning
the Company’s governing bodies, namely the Board of Direc-
tors and the President and CEO. During the financial year 2022,
L&T complied with the Remuneration Policy presented to the
Annual General Meeting. An analysis of the total compensation
of the key management is prepared annually by a consultant
independent from the company. The analysis is reviewed by the
Personnel and Sustainability Committee.
There were no deviations from the Remuneration Policy
and no clawback of remuneration. In accordance with the
Remuneration Policy, the aim of the remuneration scheme of
the Board of Directors and the President and CEO is to con-
tribute to the positive development of shareholder value, as
well as to enhance the Company’s competitiveness, long-
term financial success, and fulfilment of the strategy and
goals set by the Company.
The key principle of the Remuneration Policy is that
remuneration of the Board of Directors and the Presi-
dent and CEO shall contribute to the achievement of the
abovementioned goals and provide – in terms of both level
and structure – a fair and competitive package that pro-
motes commitment and retention and is in line with market
practices. The aim of all remuneration throughout Lassila
& Tikanoja Group is to promote good performance and to
motivate personnel to engage in long-term efforts to pro-
mote the achievement of the Company’s goals.
Remuneration is one factor through which the Company
strives to ensure the availability of skilled and motivated
persons for all positions at all levels of the organisation.
These principles apply also to the remuneration of the
members of the Board of Directors and the President and
CEO. The chart shows the development of the remuneration
of the Board members and the President and CEO during
the financial years 2018–2022 relative to the development
of the average remuneration of employees and the Group’s
financial performance.
Fees paid to the Board of Directors for the
financial year 2022
The Annual General Meeting annually determines the
annual fees and the meeting fees payable to the members
of the Board of Directors for Board and committee work.
The Shareholders' Nomination Board prepares proposals
on remuneration for the Annual General Meeting to be held
in the spring 2023.
Annual fees, meeting fees for Board and committee
meetings, and other financial benefits
The Annual General Meeting held on 17 March 2022
resolved on the remuneration of the Board of Directors in
2022 as follows:
• Chairman of the Board EUR 60,000
• Vice Chairman of the Board EUR 40,000
• members EUR 30,000
The fees shall be paid so that 40% of the annual fee is paid in
Lassila & Tikanoja plc shares held by the Company or, if this is
not feasible, shares acquired from the market, and 60% in cash.
Shares are to be issued to Board members and, where nec-
essary, acquired directly from the market on behalf of Board
members on the third trading day after the publication of the
interim report for the first quarter of the year.
In addition, meeting fees were paid to the members of the
Board of Directors as follows: EUR 1,000 to the Chairman,
EUR 700 to the Vice Chairman, and EUR 500 to each member
for each meeting. Meeting fees were also paid to the Chair-
men and members of committees established by the Board
of Directors: EUR 700 to the Chairman of a committee and
EUR 500 to each member for each meeting.
None of the members of the Board of the Directors is
employed by the company or a company belonging to the
same group of companies with the company or acts as
the company’s advisor, and thereby they receive no salary,
pension benefits, other financial benefits associated with
employment or service, or other emoluments or fees not
associated with Board work from the company.
The members of the Board are not included in the compa-
ny’s share-based incentive schemes and they do not have
any pension contracts with the company. For the payment
of the 40 per cent proportion of the annual fee of the mem-
bers of the Board of Directors, a total of 8,618 shares held by
the Company were transferred to the Board members on 2
May 2022 at a rate of EUR 10.205 per share in the following
amounts: 2,351 shares to the Chairman, 1,567 shares to the
Vice Chairman, and 1,175 shares to each member.
180
135
90
45
0
2018 2019 2020 2021
2022
Development of business and remuneration,
indexed, 2018=100
Adjusted operating profit*
Employees, average**
CEO***
Board of directors, average****
* Reported operating profit for 2018 does not differ significantly
from the adjusted operating profit
** Employee salaries relative to the total number of personnel,
converted to a full-time equivalent basis
*** Total remuneration, with the incentive schemes being based
on the preceding year’s results (based on the achievement of the
performance criteria for the earnings period that corresponded
to the financial year 2021, the incentive bonus was earned
at 72% of the maximum amount for the short-term incentive
scheme and at 69.9% of the maximum amount for the long-term
incentive scheme)
**** Total remuneration
Lassila & Tikanoja
Financial Review 2022
78
KEY FIGURES FINANCIAL STATEMENTSREPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
Fees paid to the members of the Board of Directors
2022
EUR
Annual
fee
Meeting
fees Total
Jukka Leinonen,
Chairman*) 60,000 13,400 73,400
Heikki Bergholm,
Chairman**) 4,400 4,400
Sakari Lassila, Vice
Chairman 40,000 12,600 52,600
Teemu Kangas-Kärki,
member 30,000 9,000 39,000
Laura Lares, member 30,000 9,000 39,000
Laura Tarkka, member 30,000 7,500 37,500
Pasi Tolppanen, member 30,000 8,500 38,500
*) Chairman of the Board from 17 March 2022, member of the Board until
that date.
**) Chairman of the Board until 17 March 2022.
Remuneration of the President and CEO for the
financial year 2022
The Board of Directors decides on the remuneration and finan-
cial benefits payable to the President and CEO. Before deci-
sion-making by the Board of Directors, the matter is prepared
by the Personnel and Sustainability Committee of the Board.
Eero Hautaniemi has served as the President and CEO since 1
January 2019. The Company did not have a Deputy CEO.
Key remuneration principles
The remuneration of the President and CEO consists of a
fixed monthly salary and benefits, and a separate annually
decided short-term incentive. In addition, the President and
CEO is included in the share-based incentive scheme, which
serves as a long-term incentive scheme. The short-term
incentive scheme and the share-based incentive scheme that
serves as a long-term incentive scheme constitute the varia-
ble components of the President and CEO’s remuneration.
Short-term incentive scheme
The short-term incentive bonus for the President and CEO cor-
responds to six months’ salary at a maximum. The objectives of
the short-term incentive scheme are set – and their achieve-
ment assessed – annually. Any incentives are usually paid in
February of the year following the earnings period typically
spanning a calendar year. The precondition for payment is that
the President and CEO is employed by the Company at the time.
The President and CEO’s incentive bonus for the earn-
ings period that corresponds to the financial year 2022 was
based on the Group’s profit performance and strategic tar-
gets defined by the Board of Directors as follows: consoli-
dated operating profit (70% weight), employee Net Promoter
Score (eNPS, 10% weight) and customer satisfaction (NPS,
10% weight). Based on the achievement of the earnings cri-
teria for the earnings period that corresponded to the finan-
cial year 2022, the incentive bonus was earned at 29% of the
maximum amount. The President and CEO will be paid EUR
63,882 in the financial year 2023 for the earnings period that
corresponds to the financial year 2022.
Long-term incentive scheme
The President and CEO’s long-term incentive scheme is the
Company’s share-based incentive scheme. The Board of
Directors decides on the share-based incentive scheme as
part of the overall incentive and commitment scheme. The
earnings period of the plan is one calendar year. The Board of
Directors decides on the earning criteria for each earnings
period based on the Personnel and Sustainability Commit-
tee’s proposal. The final numbers of shares issued based on
meeting the earnings criteria are decided by the Board of
Directors at the beginning of the year following the earnings
period. Rewards will be paid in February of the calendar year
following the earnings period. The rewards are paid partly as
shares and partly in cash. The cash component is intended
to cover the taxes and tax-like payments incurred from the
share-based reward. The reward corresponds to 12 months’
salary at a maximum.
The precondition for payment is that the President and
CEO is employed by the Company at the time. Any shares
earned through the incentive scheme must be held for a
minimum period of two years following payment (commit-
ment period). After the two-year commitment period, shares
must continue to be held at a value corresponding to the
President and CEO’s gross salary for six months, as long as
the President and CEO is employed by the Company. If the
President and CEO resigns during the commitment period at
their own initiative, they are obligated to return the received
shares without compensation.
The share-based incentive schemes with the years 2022 and
2021 as the earnings periods are described below:
• The share-based incentive scheme with the financial
year 2021 as the earnings period. The reward was
based on the Group’s EVA result with a weight of 90%
and the carbon handprint target with a weight of 10%.
The earnings criteria for the earnings period that cor-
responds to the financial year 2021 were achieved to
such an extent that the reward to be paid will repre-
sent 69.9% of the maximum amount. In the financial
year 2022, the President and CEO was paid a total of
EUR 265,132 under the long-term incentive scheme
(corresponding to 10,974 L&T shares to be transferred
and including the cash component) for the earnings
period that corresponded to the financial year 2021,
calculated at the average share price on the day
immediately following the publication of the financial
statements.
• The share-based incentive scheme with the finan-
cial year 2022 as the earnings period. The reward
was based on the Group’s EVA result with a weight
of 90% and the carbon footprint target with a
weight of 10%. As the EVA earnings criteria for the
earnings period corresponding to the financial year
2022 were not met, no long-term incentive bonuses
will be paid to the President and CEO in 2023 for that
earnings period.
Other key terms and conditions
A written service contract has been drawn up for the
President and CEO. According to the contract, the period
of notice is six months should the company terminate the
contract, and six months should the President and CEO
terminate the contract. In the event that the company ter-
minates the contract, the President and CEO will be paid
compensation amounting to twelve (12) months’ salary.
Separate rewards are not paid to the President and CEO
for memberships of the Boards of Directors of the Compa-
ny’s subsidiaries, and the President and CEO receives no
remuneration from L&T Group companies other than the
parent company. The President and CEO’s pension is deter-
mined according to the Employees Pensions Act.
Remuneration paid to the President and CEO
Short-term and long-term incentive bonuses were paid to
the President and CEO in the financial year 2022. Incentive
bonuses amounting to EUR 63,882 will become due for pay-
ment for the financial year 2022. No supplementary pension
was paid.
The following table presents the remuneration paid to the
President and CEO during the financial year 2022:
EUR 2022
Annual salary (including salary and fringe
benefits) 458,640
Incentive bonus 157,248
Share-based bonus 265,132
Fringe benefits (included in the annual salary) 19,260
Total 881,020
Remuneration of the President and CEO:
maximum earning potential
Fixed annual salary,
100%
Short term incentives,
max. 50%
Long term incentives,
max. 100%
Independent Auditor’s Reasonable Assurance Report on
Lassila & Tikanoja Oyj’s ESEF Financial Statements
To the Management of Lassila & Tikanoja Oyj
We have been engaged by the Management of Lassila &
Tikanoja Oyj (business identity code 1680140-0) (hereinaf-
ter also “the Company”) to perform a reasonable assurance
engagement on the Company’s consolidated IFRS financial
statements for the financial year 1 January – 31 December
2022 in European Single Electronic Format (“ESEF financial
statements”) version 743700Z9Z54VGHZA0028-2022-12-
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 com-
ply 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 requirements,
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 Profes-
sional Accountants (including International Independence
Standards) issued by the International Ethics Standards
Board for Accountants (IESBA Code), which is founded on
fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional
behaviour.
Our firm applies International Standard on Quality Man-
agement 1, which requires the firm to design, implement
and operate a system of quality management including
policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal
and regulatory requirements.
Our Responsibility
Our responsibility is to express an opinion on the ESEF finan-
cial 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
Assur-
ance 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 assur-
ance about whether the ESEF financial statements are
free from material noncompliance with the ESEF require-
ments.
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 requirements,
whether due to fraud or error. In making those risk assess-
ments, we considered internal control relevant to the Com-
pany’s preparation of the ESEF financial statements.
We believe that the evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, Lassila & Tikanoja Oyj’s ESEF financial state-
ments for the financial year ended 31 December 2022 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 23.2.2023
PricewaterhouseCoopers Oy
Authorised Public Accountants
Samuli Perälä
Authorised Public Accountant (KHT)
Lassila & Tikanoja
Financial Review 2022
KEY FIGURES
FINANCIAL STATEMENTS
REPORT BY THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REMUNERATION REPORT
80
Lassila & Tikanoja plc
Valimotie 27, 00380 Helsinki
tel. 010 636 111
www.lt.fi/en/
LEADER OF THE
REGENERATIVE
SOCIETY