Luotea (LUOTEA) Q2 2025 & Investor Update earnings summary

Executive summary

• Board approved a partial demerger to separate Circular Economy and Facility Services into two listed companies, aiming to enhance strategic focus, agility, and shareholder value; shareholders will receive shares in both entities, with completion targeted by 31 December 2025 and trading expected in early January 2026.

• Circular Economy segment delivered stable profitability and strong adjusted EBIT, with a 22% reduction in carbon footprint and record customer satisfaction (NPS).

• Facility Services Finland achieved significant profitability improvement, while Facility Services Sweden showed sales growth but remained loss-making; ongoing turnaround actions are in place.

• Profitability and cash flow improved in H1 2025 despite a 3.2% decline in net sales, driven by efficiency measures and segment gains.

• Sustainability performance was strong, with operational initiatives and acquisitions supporting improved recycling rates.

Financial highlights

• H1 2025 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% from 3.3%.

• H1 adjusted EBITDA was €45.4 million (up 19.7%); 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.

• Capital expenditure in H1 2025 was €19.8 million, down €1.9 million from prior year; acquisition of Stena Recycling Oy's pallet business completed in June.

• 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 companies are expected to benefit from increased transparency, simplified structures, and clarified responsibilities, supporting faster organic and inorganic growth.