Half Year 2026 Luotea Oyj Earnings Call

August 6, 2026

Speaker #1: Luotea Q2, Q4, and Q6 results webcast. Thank you for joining us today. In this session, we will walk you through our second quarter performance and key financials, and take a look at Luotea's strategic direction going forward.

Antti Niitynpää: Luotea's Q2 2026 Results Webcast. Thank you for joining us today. In this session, we will walk you through our Q2 performance and key financials and take a look at Luotea's strategic direction going forward. I will deliver the presentation together with our CFO, Mika Stirkkinen. Throughout the presentation, you can submit questions in the comment field, and we will address them in a Q&A session at the end of the webcast. I will start with some highlights from the Q2. In Q2, our group net sales increased by 1.5% from the Q2 of last year. Our adjusted EBITDA was EUR 2.5 million, up from EUR 1.9 million in the corresponding quarter last year. The adjusted EBIT was EUR 2.2 million, up from EUR 1.5 million last year. This year, we expect reported group costs to normalize and group costs to decrease.

Speaker #1: I will deliver the presentation together with our CFO, Mika Stirkkinen, and throughout the presentation you can submit questions in the comment field, and we will address them in Q&A session at the end of the webcast.

Speaker #1: I will start with some highlights from the second quarter. In Q2, our group net sales increased by 1.5% from the second quarter of last year.

Speaker #1: Our adjusted EBITA was €2.5 million, up from €1.9 million in the corresponding quarter last year. And the adjusted EBIT was €2.2 million, up from €1.5 million last year.

Speaker #1: This year, we expect reported group cost to normalize, and group cost to decrease. Another positive development has been seen in our contract portfolio. Thanks to positive contract intake, it is up from the end of 2025.

Antti Niitynpää: Another positive development has been seen in our contract portfolio. Thanks to positive contract intake, it's up from the end of 2025. There are also some significant current news. We announced yesterday that we have appointed a new CEO for Luotea Sweden, Rikard Nyhrén, and he will start latest by 5 February of next year. More on this shortly in this presentation. As for our guidance, it remains unchanged. In 2026, our adjusted EBITDA is expected to be better or materially better than the adjusted EBITDA EUR 7 million in 2025. On this slide, we see the development of Luotea's net sales and our adjusted EBITDA. In the Q2 of 2026, our group net sales were EUR 88.1 million, up by EUR 1.3 million from the corresponding quarter in 2025.

Speaker #1: There are also some significant current news. We announced yesterday that we have appointed a new CEO for Luotea Sweden, Rikard Nyrén, and he will start latest by February 5th of next year.

Speaker #1: More on this shortly in this presentation. As for our guidance, it remains unchanged. In 2026, our adjusted EBITA is expected to be better, or materially better, than the adjusted EBITA of €7 million in 2025.

Speaker #1: On this slide, we see the development of Luotea's net sales and our adjusted EBITA. In the second quarter of 2026, our group net sales were 88.1 million euros, up by 1.3 million euros from the corresponding quarter in 2025.

Speaker #1: If you wonder why the sales are still down slightly from Q4 2025, that is a question of normal seasonality, and the last quarter of the year is always the busiest of the year.

Antti Niitynpää: If you wonder why the sales are still down slightly from Q4 2025, that is a question of normal seasonality, the last quarter of the year is always the busiest of the year. The group's adjusted EBITDA also increased by EUR 0.7 million and is now EUR 2.5 million. Here we see the development in sales and adjusted EBITDA from our operations in Finland. The sales were EUR 55.7 million in the Q2, down by EUR 1.3 million from the corresponding quarter in 2025. The adjusted EBITDA also decreased by EUR 0.7 million from the Q2 of 2025 and was now EUR 3.4 million. On a positive note, it was considerably better than in the previous two quarters.

Speaker #1: And the group's adjusted EBITA also increased by €0.7 million and is now €2.5 million. Here we see the development in sales and adjusted EBITA from our operations in Finland.

Speaker #1: The sales were €55.7 million in the second quarter, down by €1.3 million from the corresponding quarter in 2025. The adjusted EBITA also decreased by €0.7 million from the second quarter of 2025 and was now €3.4 million.

Speaker #1: On a positive—and it's very positive—note, it was considerably better than in the previous two quarters. The decrease in sales in Finland was largely due to intense price competition in the cleaning market, where our sales decreased by 7%.

Antti Niitynpää: The decrease in sales in Finland was largely due to an intense price competition in the cleanings market, where our sales decreased by 7%. Many companies have ongoing cost-saving measures which affect our add-on sales especially. We are not engaging in margin undercutting in our contract sales. As a result, our net sales in Finland decreased by 2.3%, and it's however really important to note that in property maintenance and technical services, we saw a very robust sales growth of 5%, which is really good. Our Luotea Smart Service is also making some promising inroads. More on those later in this presentation. We also see several other opportunities for a positive contract sales growth in Finland. Our new contract intake has been positive both in the Q4 in 2025 and in both quarters of this year, and it's really good also.

Speaker #1: Many companies have ongoing cost-saving measures, which affect our add-on sales especially. We are not engaging in margin undercutting in our contract sales.

Speaker #1: As a result, our net sales in Finland decreased by 2.3%. However, it's really important to note that in property maintenance and technical services, we saw a very robust sales growth of 5%, which is really good.

Speaker #1: And our Luotea Smarty services also making some promising inroads, more on those later in this presentation. And we also see several other opportunities for a positive contract sales growth in Finland.

Speaker #1: Our new contract intake has been positive both in the last quarter in 2025 and in both quarters of this year, and it's really good also.

Speaker #1: And also our customer satisfaction remains very high, which means that we expect the sales in Finland to improve as our clients outlook improves. Another opportunity lies in public procurement act, Hankintalaki in Finnish, which is expected to open large number of public and municipal contracts for competitive bidding.

Antti Niitynpää: Our customer satisfaction remains very high, which means that we expect the sales in Finland to improve as our clients' outlook improves. Another opportunity lies in Public Procurement Act, Hankintalaki in Finnish, which is expected to open large number of public and municipal contracts for competitive bidding. This is likely to favor large players like Luotea, as we can offer comprehensive and cost-effective services. We also expect further opportunities to emerge in the public sector, particularly within the hyvinvointialueet in Finnish. As the Finnish healthcare system faces increasing financial pressure, these counties are likely to turn more to private service providers to achieve cost savings. This development is also expected to favor companies like us. We also believe that our data-driven services provide a really strong competitive advantage and enable us to consistently outperform market growth. To Sweden.

Speaker #1: This is likely to favor large players like Luotea, as we can offer comprehensive and cost-effective services. We also expect further opportunities to emerge in the public sector, particularly within the well-being service counties—hyvinvointialueet in Finnish—as the Finnish healthcare system faces increasing financial pressure.

Speaker #1: These counties are likely to turn more to private service providers to achieve cost savings, and this development is also expected to favor companies like us.

Speaker #1: We also believe that our data-driven services provide a really strong competitive advantage and enable us to consistently outperform market growth. Then, to Sweden. Sweden comprises roughly a third of our business, and there the market is very different from that in Finland.

Antti Niitynpää: Sweden comprises roughly a third of our businesses, and there the market is very different from that in Finland. Correspondingly, in Sweden, where our sales increased quite significantly. The main reason for that is increased customer satisfaction, which has resulted in strong growth in add-on sales. Sales were up by EUR 2.6 million from the Q2 of last year and were now EUR 32.5 million. At the same time, the turnaround in Sweden is still ongoing, and the Swedish operations registered a loss of EUR 0.6 million in adjusted EBITDA. As you can see, we are now on the way correcting this as the loss was less than half of what it was a year ago and EUR 0.7 million smaller than corresponding quarter in 2025.

Speaker #1: Correspondingly, in Sweden, where our sales increased quite significantly. The main reason for that is increased customer satisfaction, which has resulted in strong growth in add-on sales.

Speaker #1: Sales were up by 2.6 million euros from the second quarter of last year, and were now 32.5 million euros. And at the same time, the turnaround in Sweden is still ongoing, and the Swedish operations registered loss of 0.6 million euros in adjusted EBITA, but as you can see, we are now on the way correcting this, as the loss was less than half of what it was a year ago.

Speaker #1: And €0.7 million smaller than the corresponding quarter in 2025. And as you saw from the results in Finland, we have managed to turn our operations in Finland around and make them profitable in the last few years, and in Sweden we are executing exactly the same playbook.

Antti Niitynpää: As you saw from the results in Finland, we managed to turn our operations in Finland around and make them profitable in last few years. In Sweden, we are executing exactly the same playbook, and I'm really confident that we will be just as successful in Sweden. As I mentioned, another positive sign is that customer satisfaction is up in Sweden, and that has already led to higher add-on sales. Also mentioned, we announced a change in leadership in Sweden yesterday. Mikko Taipale, former CEO of Sweden, has done excellent work, and I want to thank him for his important contribution. However, we need to take the next step, and we have now appointed Rikard Nyrén as the new CEO. Rikard has extensive experience in leadership, business development, and real estate value creation.

Speaker #1: And I'm really confident that we will be just as successful in Sweden. And as I mentioned, another positive sign is that customer satisfaction is up in Sweden, and that has already led to higher add-on sales.

Speaker #1: And also mentioned we announced a change in leadership in Sweden yesterday. Mikko Taipale, former CEO of Sweden, has done excellent work, and I want to thank him for his important contribution.

Speaker #1: However, we need to take the next step, and we have now appointed Rikard Nyrén as the new CEO. Rikard has extensive experience in leadership, business development, and real estate value creation.

Speaker #1: And I'm really confident that he is the right person to execute the next phase of our strategy in Sweden. Those were the key figures from Q2, and our CFO Mika will continue with the financials in more detail shortly.

Antti Niitynpää: I'm really confident that he is the right person to execute the next phase of our strategy in Sweden. Those were the key figures from Q2, and our CFO, Mika, will continue with the financials in more detail shortly. Before that, I will say a few words about our strategy. It's important to understand what our goals are, but it's just as important how we plan to achieve them. This image is Luotea strategy in a nutshell. The foundation of our strategy are our missions and our values. Our mission is to create value for people, companies, and society, value that goes beyond the surface. All this is guided by our values: courage, a down-to-earth attitude, and collaboration. These very Nordic values define how we work together, both with our customers and with each other every day.

Speaker #1: But before that, I will say a few words about our strategy. It's important to understand what our goals are, but it's just as important to clarify how we plan to achieve them.

Speaker #1: This image is Luotea's strategy in a nutshell. The foundation of our strategy is our mission and our values. Our mission is to create value for people, companies, and society.

Speaker #1: Value that goes beyond the surface. All this is guided by our values, courage, a down-to-earth attitude, and collaboration. And these are very Nordic values, defined how we work together, both with our customers and with each other every day.

Speaker #1: And on the next level of the house are our success factors, and then our strategic focus areas. I will shortly cover them in more detail.

Antti Niitynpää: On the next level of the house are our success factors, then our strategic focus areas. I will shortly cover them in more detail. At the top of the house is our vision: to navigate the way toward a smarter tomorrow. This is the direction in which we want to take Luotea. There are also more concrete midterm goals, these can be seen in 2028 financial targets on the right side of the house. Of course, the world around also affects us. In the clouds, you can see the major societal shifts that affect our businesses. These large-scale megatrends, such as climate change, growing repair debt, and urbanization, increase the need for predictive maintenance, energy efficiency, and intelligent facility management. Our services are designed to address these needs.

Speaker #1: And at the top of the house is our vision to navigate the way toward a smarter tomorrow, and this is the direction in which we want to take Luotea.

Speaker #1: There are also more concrete mid-term goals, which can be seen in the 2028 financial targets on the right side of the house. Of course, the world around us also affects us, and in the clouds you can see the major social shifts that affect our businesses.

Speaker #1: These largely large-scale megatrends, such as climate change, growing repair debt, and urbanization, increase the need for predictive maintenance, energy efficiency, and intelligent facility management.

Speaker #1: And our services are designed to address these needs. As you can see, Luotea is a next-generation facility services company that navigates the way toward a smarter tomorrow. We have developed services where technology and human expertise complement one another, making buildings more sustainable, intelligent, and more functional for their users.

Antti Niitynpää: As you can see, Luotea is a next-generation facility services company that navigates the way toward a smarter tomorrow. We develop services where technology and human expertise complement one another, making buildings more sustainable, intelligent, and more functional for their users. In doing so, we help keep the infrastructure of businesses and the whole society running smoothly. Our ambition is to create deeper impact by improving our customers' everyday lives, by helping them to do business, and by contributing to a better society. Let's take a closer look inside the house and open the door and start with our success factors. We have specified four success factors that enable Luotea's growth. We provide a full service offering that makes facility services smooth and cost-efficient. Our data-driven services provide real-time insights and help allocate resources precisely where they are needed.

Speaker #1: And in doing so, we help keep the infrastructure of businesses and the whole society running smoothly. And our ambition is to create deeper impact by improving our customers' everyday lives.

Speaker #1: And by helping them to do business, and by contributing to a better society. But let's take a closer look inside the house, open the door, and start with our success factors.

Speaker #1: We have specified four success factors that enable Luotea's growth. We provide the full service offering that makes facility services smooth and cost-efficient, and our data-driven services provide real-time insights and help allocate resources precisely where they are needed.

Speaker #1: And our expertise in sustainability is reflected in our commitment to biodiversity and energy-efficient solutions. In addition, our Smart Service enables intelligent and climate-smart energy management in buildings.

Antti Niitynpää: Our expertise in sustainability is reflected in our commitment to biodiversity and energy-efficient solutions. In addition, our Smartti service enables intelligent and climate-smart energy management in buildings. Next, let's look at our strategic focus areas. Here are the most important strategic focus areas we will concentrate in 2026, of which we have OKR measures and KPIs to all our employees so that technicians, cleaners, and property maintenance technicians know what their part of executing the strategy is. That is also important. Everything starts with our first focus area, our services. We plan to drive growth in our core business areas through high-quality, sustainable services that create real value for our customers. We aim to achieve market leadership in selected business segments. Our success, of course, depends on customer satisfaction. We plan to deliver the best customer experience in the industry.

Speaker #1: And next, let's look at our strategic focus areas. Here are the most important strategic focus areas we will concentrate on in 2026, and for which we have clear measures and KPIs for all our employees, so that technicians, cleaners, and property maintenance technicians know what their part in executing the strategy is, and that's also important.

Speaker #1: And everything starts with our first focus area, our services. We plan to drive growth in our core business areas, through high-quality sustainable services, services that create real value for our customers.

Speaker #1: And we aim to achieve market leadership in selected business segments. Our success, of course, depends on customer satisfaction. We plan to deliver the best customer experience in the industry.

Speaker #1: We are already on the right track, as we can see from our improved MPS scores, both in Finland and Sweden. And the key to profitability is not just sales, but also efficiency—our second focus area.

Antti Niitynpää: We are already on the right track, as we can see from our improved NPS scores, both in Finland and Sweden. The key to profitability is not just sales, but also efficiency, our second focus area. As I mentioned earlier, we are in the process of turning around our businesses in Sweden by executing our playbook, which proved highly successful in Finland. The goal is to ensure operational efficiency through effective management and cost control. The third focus area is our goal to be the best place to work in the industry. This is a people's business, especially. We want our people to be safe, happy, and motivated because that is the only way to ensure that our customers are happy, too.

Speaker #1: And as I mentioned earlier, we are in the process of turning around our businesses in Sweden, by executing our playbook which proved highly successful in Finland.

Speaker #1: And the goal is to ensure operational efficiency through effective management and cost control. The third focus area is our goal to be the best place to work in the industry.

Speaker #1: This is a people’s business, especially. And we want our people to be safe, happy, and motivated, because that is the only way to ensure that our customers are happy too.

Speaker #1: And as I mentioned, we are already on the right track on both counts, as both our employee satisfaction and our customer satisfaction figures have improved significantly.

Antti Niitynpää: As I mentioned, we are already on the right track on both counts, as both our employee satisfaction and our customer satisfaction figures have improved significantly. We still have work to do. Luotea is still a relatively new company, so we have to continue building our own Luotea culture and implementing our values: brave, feet on the ground, and cooperation. We continue leading and developing our personal skills and capabilities. We will also continue building the Luotea employer brand to ensure that we attract the best people. Digital services and AI are our fourth strategic focus area. Our office workers increasingly use AI to support their everyday work and improve efficiency. Just as important is that we use data and AI in our maintenance and cleaning services as a standard way of working, and by developing new services like Smartti.

Speaker #1: But we still have work to do. Luotea is still a relatively new company, so we have to continue building our own Luotea culture and implementing our values.

Speaker #1: Brave feet on the ground and cooperation. We continue leading and developing our personal skills and capabilities, and we will also continue building the Luotea employer brand to ensure that we attract the best people.

Speaker #1: Digital services and AI are our fourth strategic focus area. Our office workers increasingly use AI to support their everyday work and improve efficiency. Just as important is that we use data and AI in our maintenance and cleaning services as a standard way of working.

Speaker #1: And by developing new services like Smarty, it's important to note also that we don't just use data and AI to make ourselves more efficient.

Antti Niitynpää: It's important to note also that we don't just use data and AI to make ourselves more efficient. They also save money and create value for our customers. I believe that these four focus areas form a coherent framework, and they guide our decisions and support our ambition to operate more efficiently, grow in a disciplined way, and continue leading development of modern facility services. To illustrate our strategy in practice, I would like to highlight a couple of customer stories. Let's start with the Port of Helsinki. Our cooperation with the Port of Helsinki illustrates perfectly how a long-term strategic partnership creates value for both sides. It's also an example of how our work helps keep society's most critical infrastructure running, and doing so helps maintain Finland's security of supply.

Speaker #1: They also save money and create value for our customers. I believe that these four focus areas form a coherent framework and guide our decisions, supporting our ambition to operate more efficiently, grow in a disciplined way, and continue leading the development of modern facility services.

Speaker #1: To illustrate our strategy and practice, I would like to highlight a couple of customer stories. Let's start with the Port of Helsinki. Our cooperation with the port illustrates perfectly how a long-term strategic partnership creates value for both sides.

Speaker #1: It's also an example of how our work helps keep society's most critical infrastructure running, and doing so helps maintain Finland's security of supply. And the port of Helsinki is one of the Europe's busiest passenger ports.

Antti Niitynpää: The Port of Helsinki is one of Europe's busiest passenger ports, handling around 9.5 million passengers and over 13 billion tons of cargo annually. That make it Finland's main hub for foreign trade, and it's hard to overestimate how important this Port of Helsinki is for the country. Luotea serves the Port of Helsinki's partner as Luotea Port of Helsinki's partner for property maintenance and technical fire safety services at the Olympic Terminal, West Terminal, and also at the Katajanokka terminal. In addition, Luotea provides cleaning and assistance services at the West Terminal. Reliable terminal maintenance and safety services are, of course, essential to the Port's daily operations for such critical infrastructure. It's also understandable that the Port also values a long-standing strategic partnership. The second one, Jumbo, located in Vantaa in the Greater Helsinki area, is the largest shopping center in Finland.

Speaker #1: Handling around 9.5 million passengers and over 13 million tons of cargo annually. That makes it Finland's main hub for foreign trade, and it's hard to overestimate how important this port is for the country.

Speaker #1: Luotea serves the port of Helsinki's partner as Luotea Port of Helsinki's partner for property maintenance and technical fire safety services, at the Olympic terminal, West terminal, and also in the Katajanokka terminal.

Speaker #1: In addition, Luotea provides cleaning and assistance services at the West Terminal. Reliable terminal maintenance and safety services are, of course, essential to the port’s daily operations for such critical infrastructure.

Speaker #1: It's also understandable that the port values long-standing strategic partnerships. Then the second one, Jumbo. Located in Vantaa, in the greater Helsinki area, it is the largest shopping center in Finland.

Speaker #1: And Jumbo has very ambitious sustainability goals and aims to achieve carbon positivity by the year 2030. Last year, they chose us, Luotea, as their partner in this emissions reduction journey.

Antti Niitynpää: Jumbo has very ambitious sustainability goals and aims to achieve carbon positivity by year 2030, and last year they chose us, Luotea, as their partner in this emissions reduction journey. We provide Jumbo with comprehensive energy management services and continuous energy-saving proposals. At the same time, we help them to optimize their ventilation systems and build better technical capabilities, which also improve their energy efficiency. This has already resulted in continuous emission reductions and considerable cost savings. In long run, this will also increase the value of their properties and extend their lifespan. That's not all. Jumbo has started a pilot with our data-driven Luotea Smartti services, which combines energy conditions and operations into single dashboard view. Luotea Smartti makes predictive energy optimizations possible, which will result in the future savings.

Speaker #1: We provide Jumbo with comprehensive energy management services and continuous energy saving proposals. And at the same time, we help them to optimize their ventilation systems and build better technical capabilities, with also improved their energy efficiency.

Speaker #1: And this has already resulted in continuous emission reductions and considerable cost savings. In long run, this will also increase the value of their properties and extend their lifespan.

Speaker #1: But that's not all. Jumbo has started a pilot with our data-driven Luotea Smarty services, which combines energy conditions and operations in a single dashboard view.

Speaker #1: And Luotea Smarty makes predictive energy optimizations possible, which will result in future savings. And this illustrates how we provide services where technology and human expertise complement one another.

Antti Niitynpää: This illustrates how we provide services where technology and human expertise complement one another, making buildings more sustainable, intelligent, and more functional for their users. It also shows how partnership provide opportunities for add-ons that benefit both sides. Since Jumbo is the largest shopping center in Finland and provides services for hundreds of thousands of people, our work here is another example of how we help keep businesses and services running, creating value not just for the client, but for society as a whole. I hope these client cases give you a clearer idea about our strategy and how we plan to execute it. Now on to our financials and guidance, I will hand over to our CFO, Mika Stirkkinen.

Speaker #1: Making buildings more sustainable, intelligent, and more functional for their users. It also shows how partnership provides opportunities for advances that benefit both sides. Since Jumbo is the largest shopping center in Finland and provides services for hundreds of thousands of people, our work here is another example of how we help keep businesses and services running, creating value not just for the client, but for society as a whole.

Speaker #1: I hope these clients' cases give you a clearer idea about our strategy and how we plan to execute it. But now, on to our financials and guidance, and I will hand over to our CFO, Mika Stirkkinen.

Speaker #2: Thank you, Antti. Here you can see our adjusted EBITDA figures. The Q2 this year figures are €4.3 million, identical with last year's adjusted EBITDA figures.

Mika Stirkkinen: Thank you, Antti. Here you can see our adjusted EBITDA figures. The Q2 this year figures are EUR 4.3 million, identical with last year's adjusted EBITDA figures. On the right-hand side, you can see the rolling 12-month figures, which stood at EUR 17.4 million. As you can see, the level is solid, the EBITDA has stayed really at the solid level during the early part of the year. On the cash flow, our cash flow after investment stood at EUR -1.3 million during the H1 of the year. There were a couple of highlights on that. Networking capital change was EUR -2.7 million. Historically, end of June is the low point or the weak point in terms of seasonality, the networking capital change is expected to improve during the latter part of the year. Another highlight is the income taxes.

Speaker #2: And on the right-hand side, you can see the rolling 12-month figures, which stood at 17.4 million, and as you can see, the level is solid, and the EBITDA has stayed really, really at the solid level during the early part of the year.

Speaker #2: On the cash flow, our cash flow after investment stood at minus €1.3 million during the first half of the year. There were a couple of highlights on that.

Speaker #2: Networking capital change, was negative of 2.7 million euros. Historically, end of June is the low point, or the weak point, of in terms of seasonality, and the networking capital change is expected to improve during the latter part of the year.

Speaker #2: Another highlight is the income taxes. We were a bit upfront in terms of income tax payments, and those are expected to be materially lower in the second half of the year.

Mika Stirkkinen: We were a bit upfront in terms of our income tax payments, those are expected to be materially lower in the H2 of the year. On the financing cash flows, we repaid a EUR 5 million term loan during the H1 of the year, as well as paid a dividend of EUR 2.7 million. On top of that, we repaid leases. Those totaled EUR 10.5 million altogether. On the capital structure, we have a really strong balance sheet. Our cash and cash equivalents stood at EUR 3.9 million. We do not have any traditional bank loans in the balance sheet, hence balance EUR 0. We have IFRS 16 lease liabilities of EUR 13.2 million. These together result in a net debt of EUR 9.3 million.

Speaker #2: And then on the financing cash flows, we repaid a €5 million term loan during the first half of the year, as well as paid a dividend of €2.7 million. On top of that, we repaid leases, so those totaled €10.5 million altogether.

Speaker #2: On the capital structure, we have a really, really strong balance sheet. Our cash and cash equivalents stood at €3.9 million. We don't have any traditional bank loans in the balance sheet.

Speaker #2: Hence, balance zero. We have, IFRS 16 lease liabilities of 13.2 million euros, these together result in a net debt of 9.3 million euros, and when you compare 9.3 million euros with the rolling 12-month adjusted EBITDA of 17.4, our ratio net debt to adjusted EBITDA is 0.5.

Mika Stirkkinen: When you compare EUR 9.3 million with the rolling 12-month adjusted EBITDA of EUR 17.4 million, our ratio net debt to adjusted EBITDA is 0.5x. In connection with the repayment of the EUR 5 million term loan, we upsized our revolving credit facility from EUR 10 to 15 million. This facility is fully unutilized, i.e., we have a strong financial muscle. On the financial targets, these have not changed since the Capital Markets Day last November. Our midterm organic growth target is 4% to 5%. Adjusted EBITDA margin target 5%. Our cash conversion target 90%. Dividend policy is to deliver more than 50% of net profit as dividends. To repeat our guidance. Guidance is unchanged from Q1. We expect our adjusted EBITDA in 2026 to be better or materially better than the adjusted EBITDA of EUR 7 million in 2025. Now it is time for your questions.

Speaker #2: In connection with the repayment of the €5 million term loan, we upsized our revolving credit facility from €10 million to €15 million, and this facility is fully unutilized.

Speaker #2: I.e., we have strong financial muscle. Regarding the financial targets, these haven't changed since the Capital Markets Day last November. Our midterm organic growth target is 4–5%.

Speaker #2: Adjusted EBITDA margin target 5%. Our cash conversion target 90%, and then dividend policy is to deliver more than 50% of net profit as dividends.

Speaker #2: And to repeat our guidance—guidance is unchanged from Q1. We expect our adjusted EBITDA in 2026 to be better, or materially better, than the adjusted EBITDA of €7 million in 2025.

Speaker #2: And now, it's time for your questions.

Speaker #3: Hello, my name is Antti Isokangas. I'm the interim communications director. And I'm here with your questions. There have been quite a few of them, actually, 10, all of them from the same person, someone who called Raymond, who is who types very, very fast.

Antti Isokangas: Hello, my name is Antti Isokangas. I am the interim communications director, and I am here with your questions. There have been quite a few of them, actually 10, all of them from the same person, someone called Raymond, who types very, very fast. These are very long and very detailed questions, some of them overlapping. Let us start with the first one. With quarterly revenue showing very limited growth, how much of the EBITDA improvement is based on permanent productivity gains and better contract margins, and how much comes from timing, seasonal effects, or temporary cost reductions? When should this improvement begin to translate into sustainable free cash flow, earnings per share, and higher shareholder returns?

Speaker #3: These are very long and very detailed questions, some of them overlapping, but let's start with the first one: With quarterly revenue showing very limited growth, how much of the EBITDA improvement is based on permanent productivity gains and better contract margins, and how much comes from timing, seasonal effects, or temporary cost reductions?

Speaker #3: When should this improvement begin to translate into sustainable free cash flow earnings per share, and higher shareholder returns?

Mika Stirkkinen: Multiple questions at the same time.

Speaker #2: Multiple questions at the same time.

Speaker #3: And this is only the first one.

Antti Isokangas: This is only the first one.

Mika Stirkkinen: Okay. If I start from the end, which I can now remember. On the cash flow, when you look at last year's EBITDA figures, and the cash flow. Our cash flow is more taking place in H2, deriving from the seasonality of networking capital, and EBITDA seasonality-wise.

Speaker #2: Okay, if I start from the end, which I can now remember. On the cash flow, when you look at last year's EBITDA figures and the cash flow.

Speaker #2: So our cash flow is more taking place in the second half of the year. Deriving from the seasonality of networking capital, and EBITDA, seasonality-wise.

Speaker #2: Then there were some other questions on the.

Antti Niitynpää: We can also

Antti Niitynpää: We can also.

Speaker #1: Raymond, so was it so that...

Antti Isokangas: This is the first one. How much of the EBITDA improvement is based on permanent productivity gains? That's basically the first question.

Speaker #3: This is the first one. How much of the EBITDA improvement is based on permanent productivity gains? It's basically the first question.

Antti Niitynpää: I think in Sweden, all of the EBITDA improvements are from efficiency programs. In Finland, of course, the cleaning business has suffered of low add-on sales rates and so on. In property maintenance and the technical services, the improvements come from efficiency programs and of course, the higher net sales levels.

Speaker #1: I think in Sweden, all of the EBITDA improvements are from efficiency programs. And in Finland, of course, the greening business has suffered from low add-on sales rates and so on, but in facilities, property maintenance, and technical services, the improvements come from efficiency programs and, of course, higher net sales levels.

Speaker #3: Okay. Well, Raymond's next question is even longer and also contains multiple questions. Luotea describes Smarty as its strategic spearhead and emphasizes the transition from schedule-based services to data-driven, need-based operations.

Antti Isokangas: Well, Raymond's next question is even longer and also contains multiple questions. Luotea describes Smartti as its strategic spearhead and emphasizes the transition from schedule-based services to data-driven, need-based operations. Has Smartti and energy management now moved to the center of Luotea's strategy, replacing the earlier ambition to build Finland's largest cleaning services business? Cleaning still represents a major part of Luotea's operations and workforce, yet the half-year report provides very little information on how data automation and artificial intelligence are being applied to cleaning services. What is Luotea's concrete strategy for data-driven cleaning, and how will it support revenue growth, productivity, and improved margins in its core business?

Speaker #3: Has Smarty and energy management now moved to the center of Luotea's strategy, replacing the earlier ambition to build Finland's largest cleaning services business? Cleaning still represents a major part of Luotea's operations and workforce, yet the half-year reports provide very little information on how data automation and artificial intelligence are being applied to cleaning services.

Speaker #3: What is Luotea's concrete strategy for data-driven cleaning, and how will it support revenue growth, productivity, and improved margins in its core business?

Antti Niitynpää: Yeah. To be the biggest cleaning company has never been Luotea's strategic goal, first of all. We want to use data to improve efficiency and customer satisfaction within our customers. We want to also use data to accelerate our growth in our basic services. These are the two key points of using data in our services.

Speaker #1: Yeah, to be the biggest cleaning company has never been Luotea's strategic goal, first of all. We want to use data to improve efficiency and customer satisfaction within our customers.

Speaker #1: And then we want to also use data to accelerate our growth in our basic services. So these are the two key points of using data in our services.

Speaker #2: And then there was a question on Smarty, which is not on cleaning.

Mika Stirkkinen: There was a question on Smartti, which is not on cleaning.

Antti Niitynpää: Smartti also works, is like a spearhead services for us to how we can enter to the customer side with Smartti, and then create real value for our customers with Smartti, and then customers start to trust us, and then we can sell more of our basic cleaning and support services and property maintenance and technical services.

Speaker #1: Smarty also works as a spearhead service for us in how we can enter the customer side with Smarty, and then create real value for our customers with Smarty. Then customers start to trust us, and we can sell more of our basic cleaning and support services, as well as property maintenance and technical services.

Speaker #3: Okay, next question from Raymond. You state that the turnaround in Sweden continues according to plan. However, the CEO of Luotea Sweden stepped down with immediate effect, while the newly appointed CEO may not start until February 2027.

Antti Isokangas: Okay. Next question from Raymond: You state that the turnaround in Sweden continues according to plan. However, the CEO of Luotea Sweden stepped down with immediate effect, while the newly appointed CEO may not start until February 2027. What caused this abrupt leadership transition? How will you maintain the turnaround momentum during the interim period? What EBITDA margin should shareholders realistically expect from Sweden in 2027 and 2028?

Speaker #3: What caused this abrupt leadership transition? How will you maintain the turnaround momentum during the interim period, and what EBITDA margin should shareholders realistically expect from Sweden in 2027 and 2028?

Antti Niitynpää: We don't publish separately our targets to Sweden. The reason behind the change in CEO is that we want to accelerate our growth and accelerate our profitability improvement in Sweden. Within the interim period, I have nominated our CFO of Sweden, Saman Khalilian, as acting CEO of Sweden until Rikard starts. Saman has worked around our efficiency program all the time during this turnaround program, so he is really on top of those efficiency measures, so he will know what to do.

Speaker #1: We don't publish our targets for Sweden separately, but the reason behind the change in CEO is that we want to accelerate our growth and accelerate our profitability improvement in Sweden.

Speaker #1: And within the interim period, I have nominated our CFO, Sweden Samman Kallilian, as acting CEO, Sweden since until the Richard started. And Samman has worked around our efficiency program all the time during this turnaround program, so he is really on the top of those efficiency program measures, so he will know what to do.

Speaker #3: Okay, Raymond’s next question largely overlaps with the previous one regarding the cleaning services. The short version is: Do you still consider becoming Finland’s largest cleaning business a valid strategic target?

Antti Isokangas: Okay. Raymond's next question largely overlaps with the previous one regarding the cleaning services. The short version is: Do you still consider becoming Finland's largest cleaning business a valid strategic target? If so, what is the timetable, and how will you reverse the current decline in both contract sales and additional sales?

Speaker #3: If so, what is the timetable, and how will you reverse the current decline in both contract sales and additional sales?

Speaker #1: Our contract sales has not declined, as I said. Our contract intake has improved since the beginning of the year. And being a we want to grow our strategic target is to grow 4 to 5% yearly.

Antti Niitynpää: Our contract sales has not declined. As I said, our contract intake has improved since the beginning of the year. Our strategic target is to grow 4% to 5% yearly. That's our target, and it concerns the whole facility services in Luotea in Finland and Sweden. We don't have separate targets to be biggest or second biggest in different services.

Speaker #1: So that's our target, and it concerns the whole facility services in Luotea, in Finland and Sweden. We don't have separate targets to be biggest or second biggest in different services.

Speaker #3: Okay, back to Sweden, and this one yet again from Raymond. Sweden delivered strong net sales growth of 8.7%, improved customer satisfaction, and higher add-on sales, yet adjusted EBITDA remained negative at €0.6 million.

Antti Isokangas: Okay. Back to Sweden, and this one, yet again, from Raymond: Sweden delivered strong net sales growth of 8.7%, improved customer satisfaction, and higher add-on sales, yet adjusted EBITDA remains EUR -0.6 million. What is the concrete timetable for reaching sustainable breakeven and a positive EBITDA margin, and what further operational improvements are still required to get there?

Speaker #3: What is the concrete timetable for reaching sustainable break-even and a positive EBITDA margin, and what further operational improvements are still required to get there?

Speaker #1: We rely on our plans, which have been made earlier, plans consistently. And then also, we don't publish the date or the month where the EBITDA is permanently at the positive level, but we do everything we can to do to make the turnaround to that point that our EBITDA is at the positive level.

Antti Niitynpää: We rely on our plans which have been made earlier, we execute those plans consistently. Also, we don't publish the date or the month where the EBITDA is permanently at the positive level. We do everything we can to make the turnaround to that point that our EBITDA is at the positive level.

Speaker #3: Okay, Raymond's next question, once again, centers on the cleaning business, and this is basically the same question once again. Has the previous cleaning growth ambition been formally abandoned or replaced?

Antti Isokangas: Okay. Raymond's next question, once again, centers on the cleaning business, this is basically the same question once again: Has the previous cleaning growth ambition been formally abandoned or replaced? If so, when was this strategic change made and why?

Speaker #3: If so, when was this strategic change made, and why?

Speaker #1: As I said, we have never published that kind of strategy where we want to be the biggest cleaning company. And then our strategic target is to grow 4 to 5% in our businesses, and it concerns also cleaning and all of our services.

Antti Niitynpää: As I said, we have never published that kind of strategy where we want to be the biggest cleaning company. Our strategic target is to grow 4% to 5% in our businesses, it concerns also cleaning and all of our services.

Speaker #3: Yet again from Raymond, your strategy identifies data-driven services as a key success factor, using real-time building data for smarter resourcing and faster response. However, the only concrete technology example you presented is Smarty energy management, while data-driven cleaning is not mentioned.

Antti Isokangas: Yet again, from Raymond: Your strategy identifies data-driven services as a key success factor using real-time building data for smarter resourcing and faster response. However, the only concrete technology example you presented is Smartti energy management, while data-driven cleaning is not mentioned. How specifically will Luotea use occupancy, utilization, and other real-time building data in cleaning services, what measurable impacts do you expect on cleaning productivity, revenue, and EBITDA margin by 2028?

Speaker #3: How specifically will Luotea use occupancy utilization and other real-time building data in cleaning services, and what measurable impacts do you expect on cleaning productivity revenue and EBITDA margin by 2028?

Antti Niitynpää: I say again, our target is over 5% EBITDA. Of course, we want to have that kind of profitability level also in cleaning and all of our services. That was a choice for this webcast that we talk about Smartti. Data-driven cleaning is as strong as Smartti in our strategy, and we want to utilize data-driven cleaning to our customers as fast as possible. We don't publish the specific timetables or ambition levels about that. We have these strategic targets, which Mika told earlier in this presentation, and I come again back to those.

Speaker #1: I say again, our target is to be over 5% EBITDA, and of course we want to have that kind of profitability level also in Cleaning.

Speaker #1: And all of our services—and we use—I didn’t—that was a choice for this webcast that we talk about Smarty. Data-driven cleaning is as strong as Smarty in our strategy, and we want to utilize data-driven cleaning for our customers as fast as possible.

Speaker #1: But we don't publish the specific timetables or ambition levels about that. We have these strategic targets, which Mika mentioned earlier in this presentation, and I will come back to those.

Speaker #3: Okay, we have a couple more questions from Raymond, and at this point, I would like to remind everyone that we also welcome questions from people not called Raymond.

Antti Isokangas: Okay. We have a couple of more questions from Raymond. At this point, I would like to remind that we also welcome questions from people not called Raymond. This is about customer or client cases. The Port of Helsinki partnership has continued for more than 10 years and combines property maintenance, technical services, and at the West Terminal, cleaning and assistance services. What concrete cross-selling potential do you see in expanding existing property maintenance contracts into cleaning, technical, and data-driven services?

Speaker #3: This is about customer or client cases. The Port of Helsinki partnership has continued for more than 10 years and combines property maintenance, technical services, and, at the West Terminal, cleaning and assistance services.

Speaker #3: How scalable is this full-service model across other major customers, and what concrete cross-selling potential do you see in expanding existing property maintenance contracts into cleaning, technical, and data-driven services?

Speaker #1: It's scalable, and I see really big opportunities in cross-sales in whole Luotea. As I said in capital market takes, they only under 6% of our customers buy all our services, and roughly 20% buys at least two services.

Antti Niitynpää: It's scalable, I see really big opportunities in cross-sales in whole Luotea. As I said in Capital Markets Day, only under 6% of our customers buys all our services. Roughly 20% buys at least two services. From those figures, you can understand that there is lots of potential in scaling those services.

Speaker #1: So, from those figures, you can understand that there is a lot of potential in scaling those services.

Speaker #3: Okay, Raymond also has a question about Jumbo. The Jumbo case highlights energy savings equivalent to the annual consumption of 190 detached houses, but no concrete financial figures are provided.

Antti Isokangas: Okay. Raymond also has a question about Jumbo. The Jumbo case highlights energy savings equivalent to the annual consumption of 190 detached houses, but no concrete financial figures are provided. Could you quantify the actual energy savings in megawatt hours and euros? The customer's payback period, what is revenue and EBITDA contribution from the project, and whether this model can be scaled profitable across existing customer base. I believe the last part is the most important part.

Speaker #3: Could you quantify the actual energy savings in megawatt-hours and euros, the customers' payback period, Luotea's revenue and EBITDA contribution from the project, and whether this model can be scaled profitably across the existing customer base?

Speaker #3: I believe the last part is the most important part.

Speaker #1: Yes, what was the last?

Antti Niitynpää: Yes, what was the last?

Antti Isokangas: Can this model be scaled-?

Mika Stirkkinen: It is scalable.

Speaker #3: Is it scalable? It is scalable.

Antti Niitynpää: It is scalable.

Mika Stirkkinen: It is scalable.

Speaker #1: We don't publish maybe next time we can publish megawatt-hours and so on, but not today.

Antti Niitynpää: We don't want to publish. Maybe next time we can publish megawatt hours and so on, but not today.

Speaker #3: Okay, and one last question. This is probably to Mika. What annual free cash flow level does management consider sustainable once the current turnaround and efficiency measures have been completed?

Antti Isokangas: Okay, one last question. This is probably to Mika. What annual free cash flow level does management consider sustainable once the current turnaround and efficiency measures have been completed?

Speaker #1: Well, it can be derived from our targets of our cash conversion targets to be over 90%. And when you look at the low invest capex levels and then when you look at our financial our balance sheet, we don't have any net debt, so you can figure out you have all the components basically.

Mika Stirkkinen: Well, it can be derived from our cash conversion targets to be over 90%. When you look at our low CapEx levels, and then when you look at our balance sheet, we don't have any net debt, so you can figure out. You have all the components, basically. We have the published targets, revenue growth target, EBITDA target, and so on and so forth, but we won't go any deeper. Naturally, the last component is the guidance.

Speaker #1: We have the published targets revenue growth target, EBITDA target, and so on and so forth, but we won't go any deeper. And then naturally, the last component is the guidance.

Speaker #3: Okay, and that concludes the questions. I hope this answered Raymond's questions, and I hopefully any other questions you other viewers might have.

Antti Isokangas: Okay, that concludes the questions. I hope this answered Raymond's questions, and hopefully, any other questions you other viewers might have.

Speaker #1: Thank you to Raymond for several questions. But thank you to all of you to taking time to join us today's webcast, and we appreciate your interest in Luotea and your continued engagement with us.

Antti Niitynpää: Yeah. Thank you to Raymond for several questions. Thank you to all of you taking time to join us for today's webcast, and we appreciate your interest in Luotea and your continued engagement with us. Our next webcast will take place in October 2026, when we will review the Q3. We will look forward to updating you then. Thank you all, have a good day.

Speaker #1: Our next webcast will take place in October 2026 when we will review the third quarter. We will look forward to updating you then. Thank you all, and have a good day.

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Half Year 2026 Luotea Oyj Earnings Call

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