Lassila & Tikanoja plc has demerged into two separate listed companies, Luotea plc and Lassila & Tikanoja plc, as of 31 December 2025. L&T’s real estate services business will henceforth be Luotea, and L&T’s circular economy business will be the newly listed company Lassila & Tikanoja.
We are a real estate service company offering comprehensive solutions for the entire lifecycle of properties, combining energy efficiency and smart technology. In this way, we enhance property value and create the best possible conditions for property users. Our services include diverse and advanced property maintenance, technical, and expert services, as well as cleaning and support services.
L&T’s Real Estate Services will continue on the stock exchange after the company’s demerger under the name Luotea. We expect the company’s earnings to rise slightly in 2026-27 and for it to generate steady cash flow. Valuation (e.g. 2026 EV/EBIT 7x) is, in our opinion, moderate. We give the company a target price of EUR 2.7 and an Accumulate recommendation.
Let’s post this piece by Juho Toratti here as well.
Lassila & Tikanoja’s partial demerger seems like a sensible and well-founded strategic move. The Circular Economy business, formed in early 2025 from the company’s previous Environmental Services and Industrial Services segments, is a growing and profitable entity. In contrast, the Facility Services business, formed from the Finnish and Swedish facility services, has in recent years remained at its current level or declined, driven primarily by challenges in the Swedish market.
Rauli’s preview comments as Luotea releases its Q4 results on Friday, Feb 27.
This is the company’s first report following the partial demerger of Lassila & Tikanoja, although technically the official 2025 figures still reflect the old group structure. Clear comparative figures or consensus estimates are also unavailable, which makes interpreting the report more challenging. However, we expect Luotea’s results to improve compared to the comparison period, supported by Sweden. We also estimate that the earnings outlook for this year will be positive as the turnaround in Sweden progresses.
That result isn’t as miserable as it looks on the surface, although it still fell short of expectations. Finland was weighed down timing-wise by the mentioned EUR 0.7 million in side costs, in addition to which there is probably about half a million extra in corporate costs due to accounting rules related to the demerger.
For this year, the CEO projected a clear earnings improvement in Sweden with steady sales, and in Finland, revenue turning back to growth at roughly the current good margin. In my opinion, this is quite an expectedly good outlook.
It would of course be better to keep the contract at a price that would yield a profit, but yes, this was a loss-making contract that was already known to end at the turn of the year, but it had already ended around the turn of November-December.
To mark the first results, we also did an interview with CEO Antti, which will probably be released shortly.
Luotea’s share price rose quite a bit after the spin-off. I personally suspected that not all buyers knew what they were buying. Many forecasts were all over the place, and because of that, many surely drew the wrong conclusions. Even Inderes had €30.7M for the 2025 net profit, but the final figure ended up being €1.2M. Someone might have choked on their coffee there and moved their finger to the sell button. I personally saw more value in the “new” Lassila & Tikanoja and bought that one of the two. I’m following with interest to see what this year will be like for Luotea as an independent company.
The market cap remained at €94M after Friday’s tumble. This isn’t exactly terribly expensive. If, in a semi-non-cyclical industry, we end up with a P/S ratio (=market cap per revenue) below 0.3 and a somewhat low single-digit EV/EBITA. EBITA is a company’s earnings before interest, taxes, and amortization (Earnings Before Interest, Taxes, and Amortization).
It remains for the investor to consider whether Luotea will pull off a rare feat and, as a Finnish company, make its loss-making Swedish operations profitable. In my view, based on the CEO’s chatter (“We’re going to fix Sweden”), this is possible. And whether Finland remains profitable.
Here is a new company report on Luotea from Rauli.
Luotea’s Q4 result fell short of our expectations. The guidance for this year is clearly positive, but we lowered our earnings estimates. However, we see the company’s earnings growth continuing this year and the company generating good cash flow. Valuation (e.g. EV/EBIT 7x) for this year is moderate. We reiterate our Accumulate rating and lower the target price to EUR 2.6 (prev. 2.7e).
Rauli has been writing about Luotea’s Swedish peer, Coor, and its CMD (Capital Markets Day) presentation.
Luotea’s closest listed peer, Swedish Coor, held a Capital Markets Day on Thursday, during which the company reiterated its previous financial targets and updated its strategic priorities. Coor’s financial targets are at a similar level to Luotea’s, so the companies seem to have a roughly consistent understanding of the industry’s growth and earnings potential. However, Coor has historically been able to perform significantly better than Luotea, especially in terms of margins.
Rauli has prepared a comprehensive report on Luotea, which, like other extensive reports, is reliable for everyone.
We expect Luotea to continue its clear trend of improving results in 2026-27, with Swedish losses turning into profits. We estimate the company will generate strong cash flow, which we believe alone provides a sufficient return expectation for investors. We reiterate our “add” recommendation and a target price of 2.6 euros.
Quoted from the report:
Strong cash flow profile
Luotea’s business is asset-light, and thus it should inherently generate good cash flow, naturally depending on the level of profit. Luotea’s reported depreciation level in 2026 will include approximately EUR 1.5 million in acquisition cost depreciation, which does not impact cash flow. We have removed this from our adjusted figures. We estimate that the depreciation of the company’s fixed assets will be slightly higher than investments in the coming years. The company’s net working capital is negative, which means that growth should inherently release capital and support cash flow. However, we do not expect significant growth or the release of net working capital in the coming years. Due to the above factors, the company should structurally generate more cash flow than reported profit. Our forecasts for the coming years are consistent with this, with free cash flow exceeding our net profit estimates.
Indeed, Luotea was the subject of the first extensive report after the demerger of L&T. The business operations had, of course, been part of L&T’s broader scope even before, but as an independent company, Luotea emphasizes its capital lightness and good cash flow profile. As a net debt-free company, this cash flow could largely be returned as dividends, unless the company makes acquisitions, which I do not believe or hope will happen in the coming years.
Profitability has been volatile historically, and currently, Sweden is still operating at a loss, so the main focus, as the video title indicates, is indeed there. If one believes that Sweden will turn profitable, as we do, then the company’s valuation is quite moderate. At the same time, it is naturally important to maintain the good level achieved in Finland.
In connection with this report, I updated the model regarding tax assumptions, which led to an increase in earnings per share forecasts, even though I slightly lowered operational forecasts due to factors such as nascent inflation.
Based on the aforementioned grounds, the acquisition cost of Luotea Oyj (1680140–0) shares is 24.17 percent of the original acquisition cost of Lassila & Tikanoja Oyj (1680140–0) shares before the partial demerger.
Based on the aforementioned grounds, the acquisition cost of the new Lassila & Tikanoja Oyj (3555336–9) shares is 75.83 percent of the original acquisition cost of Lassila & Tikanoja Oyj (1680140–0) shares before the partial demerger.
It probably won’t go through Nordea, but I’ll mark it in Nordea’s online bank myself. And since Nordea doesn’t forward the information I’ve entered to the tax authorities, I’ll then correct the acquisition cost in the tax return again after a possible sale. So wonderfully automatic
A dispute in Sweden from years ago was resolved in Luotea’s favor, with no impact on guidance, and the parties have the right to appeal, so it somehow feels like the other party won’t be satisfied with this:
