Luotea (LUOTEA) Q2 2025 & Investor Update earnings summary

Executive summary

• Board approved a demerger plan to separate the Circular Economy business into a new listed company, with Facility Services to operate as Luotea; EGM approval is expected in December 2025, with completion by year-end and trading to begin in early 2026.

• The demerger aims to unlock shareholder value by enabling focused strategies and growth for both entities, with major shareholders representing 27.59% committed to support.

• Profitability improved significantly in H1 2025, driven by strong performance in Facility Services Finland and stable Circular Economy margins, despite a 3.2% decline in net sales.

• Sustainability performance was strong, with a 22% reduction in carbon footprint and record-high customer satisfaction (NPS 41–48).

Financial highlights

• H1 2025 group net sales were €371.8 million, down 3.2% year-over-year; adjusted operating profit rose 38.5% to €17.6 million, with margin up to 4.7%.

• H1 adjusted EBITDA was €45.4 million (12.2% margin); earnings per share improved to €0.30 from €0.16.

• Free cash flow for H1 2025 was €2.4 million, up from -€3.7 million; net interest-bearing debt decreased by €16.8 million to €178.2 million.

• Gross capital expenditure for H1 was €19.8 million, with €7.6–8 million for the acquisition of Stena Recycling Oy's pallet business.

• Dividend of €0.50 per share (total €19.1 million) paid in April 2025.

Outlook and guidance

• 2025 net sales and adjusted operating profit are expected to be at or above 2024 levels; guidance remains cautious due to seasonality and market uncertainty.

• Both new companies target a dividend payout ratio of at least 50% of net income/profit.