This article first appeared on GuruFocus .
Release Date: October 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Net sales grew 4.1% year-over-year to EUR 328.5 million, driven by hazardous waste and remediation businesses.
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Hazardous waste and remediation business saw over 20% increase compared to previous year, with strong performance in environmental construction projects.
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Corrective measures in waste management are yielding results, visible in Q3 with profitability almost reaching last year's level.
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Industrial services and water treatment showed healthy growth and successful execution of maintenance breaks, supporting EBITDA development.
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Free cash flow improved year-on-year on a comparable basis, and financial position strengthened with net debt to adjusted EBITDA at 2.0.
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Growth initiatives in plastics recycling at Kerava and Merikarvia facilities are progressing according to plan.
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Fixed cost base is coming down through effective measures, while revenue still grew over 4% in the first nine months.
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Carbon handprint increased, and work safety remains at a very good level; launched project to phase out separate collection of energy waste.
Negative Points
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Adjusted EBITDA for the first nine months was EUR 59.5 million, EUR 4.5 million lower than the previous year.
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Q3 adjusted EBITDA was EUR 25.2 million, down from EUR 31.6 million a year ago.
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Diesel prices in Finland were approximately 38% higher year-on-year in Q3, with September almost 50% higher, negatively impacting costs by an estimated EUR 5 million.
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Difficulties in waste-to-energy plants continued, causing extra costs and effort in Q3.
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Amortization of ERP system affected this year's numbers by EUR 1 million.
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Net sales growth in Q3 was lower than in the first two quarters due to the end of active phase in two major environmental construction projects, impacting Q4 as well.
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Unemployment rates remain high, affecting private consumption, especially discretionary spending.
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Carbon footprint increased for the first time in several years due to temporarily reduced use of HVO in diesel purchases because of high prices.
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Gate fees in waste management are expected to remain at higher levels for the next 12-18 months, with overcapacity in the waste-to-energy market persisting.
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There is a delay of two to six months in implementing price increases to fully pass through fuel cost hikes.
Q & A Highlights
Q: With two hazardous waste and remediation projects reaching their final stages and impacting Q3 and Q4 sales, how does the pipeline look for 2027, and are there concrete potential projects waiting? A: CEO Eero Toniemi said the company has clear prospects, with projects ranging from EUR 1 million up to more than EUR 10 million. Several such projects have been identified, and L&T is participating in their tender processes. Historically the company has been successful in a number of tenders, and it hopes to win projects for 2027 as well. He confirmed that market fundamentals remain attractive.
Q: Diesel prices have risen further since the summer. Has L&T taken additional measures to offset this compared with July plans, or does it make reaching last year's adjusted EBITDA level more risky? A: CEO Eero Toniemi said additional measures have been taken and appear effective, allowing the company to cope up to current diesel price levels. Should prices rise even higher, further measures would be attempted, but current measures are sufficient for the record-high levels reached in September.
Q: Do the offsetting measures include items beyond price increases, and will they support results after 2026 or are they specific to H2 2026? A: CEO Eero Toniemi said the measures include price increases and surcharges, plus an ongoing program addressing operational efficiency in waste management. Some streams are already yielding results, with more expected in Q4 and especially in 2027. Fixed-cost measures are already yielding results this year and will likely yield more in 2027.
Q: Is L&T now better positioned to offset the September diesel price hike than the March hike that hit Q2, and has it been able to change contract structures to pass through fuel costs more swiftly? A: CEO Eero Toniemi said price increases and surcharges have been implemented on certain contracts, and the company can now react faster to diesel price changes than at the beginning of the year. However, there is still a delay depending on customer group, ranging from two to six months, and with tens of thousands of contracts, not all can be changed at once.
Q: How does the gate fee situation look in the waste management business, and is any normalization in sight going into 2027? A: CEO Eero Toniemi said the company now expects gate fees to normalize at the higher level experienced this year for at least the next 12 to 18 months. L&T has adjusted customer charges accordingly and is working on operational efficiency and flexibility in waste management to address what it sees as a new normal. Longer term, however, there is known overcapacity in the Finnish waste-to-energy market, which should eventually be reflected in gate fees.
Q: What drove the Q3 profitability improvement, and how close is adjusted EBITDA to last year's level? A: CEO Eero Toniemi said Q3 profitability almost reached last year's level after a challenging first half, thanks to corrective measures and strong performance in industrial services and water treatment, including successful execution of planned maintenance breaks. Cost savings and price increases also supported EBITDA. CFO Joni Sorsanen noted the gap narrowed significantly, with adjusted EBITDA at EUR 25.2 million versus EUR 31.6 million a year ago.
Q: What is the outlook for the full year 2026? A: CEO Eero Toniemi said L&T expects net sales of between EUR 420 million and EUR 450 million and adjusted EBITDA of between EUR 33 million and EUR 38 million for 2026.
Q: How did net sales and profitability develop in the first nine months, and what were the main growth drivers? A: CEO Eero Toniemi said net sales grew 4.1% to EUR 328.5 million in the first nine months, driven predominantly by hazardous waste and remediation, which saw a healthy increase of over 20%. Industrial services and water treatment also grew well, while waste management growth was much less despite a six-month effect from the pallet business acquisition. Adjusted EBITDA was EUR 59.5 million, EUR 4.5 million below the prior year.
Q: What were the main headwinds affecting profitability in 2026? A: CEO Eero Toniemi said the estimated negative impact of diesel prices is EUR 5 million, difficulties at waste-to-energy plants caused extra costs and effort in Q3, and ERP system amortization affects this year's numbers by EUR 1 million. He noted diesel prices in Finland were approximately 38% higher year on year in Q3 and almost 50% higher in September.
Q: How did the financial position and cash flow develop in Q3 and the first nine months? A: CFO Joni Sorsanen said the balance sheet strengthened in Q3 on positive profitability and cash flow, with net debt to adjusted EBITDA at 2.0 versus 2.1 at the end of Q2, an equity ratio of 33.9% and a gearing ratio of 96.8%. Free cash flow for January-September was EUR 8.4 million versus EUR 15.6 million, but adjusted for EUR 6 million in demerger-related one-off payments and comparability issues, free cash flow improved year on year.
Q: What is the status of the plastics recycling investments and the energy waste collection initiative? A: CEO Eero Toniemi said improvements at the Kerava facility and the Merikarvia plastics recycling facility are progressing well, with more detail to come at the full-year results. L&T has also launched, as the first player in the Finnish market, a project to phase out separate collection of energy waste, since it contains recyclable plastics, cardboard and paper.
Q: How is the market environment in Finland developing, and what does it mean for L&T? A: CEO Eero Toniemi described a mixed picture: GDP growth forecasts have strengthened to 1.6%-1.8% for 2026-2027 and retail volumes are gradually growing, but unemployment remains high and weighs on discretionary spending. Infrastructure, especially data centers, is a construction highlight, and L&T has a very strong market share in waste management for the construction phase of data centers. Recycled material prices are stable, though plastics prices are expected to follow high oil prices at some point, potentially in 2027.For the complete transcript of the earnings call, please refer to the full earnings call transcript .
