CEO’s greeting

CEO SIRPA OJALA COMMENTS ON THE INTERIM REVIEW JANUARY-MARCH 2022

The first quarter was a typical slow season for our businesses. I am reasonably satisfied with our performance given the continuing challenges we faced from the coronavirus pandemic, especially in Sweden, with sick leaves burdening our ability to deliver efficiently. With the winter passing in late March, we saw some good development in services demand levels and are preparing for an active high season in the second quarter with fewer coronavirus related hindrances expected.

The geopolitical development in Europe had only limited impact on our business, at least so far, and we have no direct exposure to sanctioned parties or conflict regions. The increasing fuel prices and general cost inflation impacted our margins to some degree in the first quarter, but these will be mitigated with a temporary fuel surcharge, effective gradually in the second quarter.

The divestment of W-Tech business in late 2021 affected the reported net sales of Cleaning Services in the first quarter, but on a comparable basis, our Cleaning Services business grew organically by 4% from the previous year. Despite the coronavirus-related issues with delivery effiency and fuel cost increase, we managed to improve our Cleaning Services’ EBITDA-% to 4% from the previous year’s 2%.

Recycling Services had a slow start to the year with incoming waste volumes and the net sales declining in the first quarter. The activity picked up speed towards the spring season in March. Our Recycling Services’ profitability remained very strong, even improving despite the lower volumes, on the back of solid productivity and favourably developing REF and wood material demand.

We will continue to enforce tight cost and cash flow controls for quick manoeuvring, should the geopolitical development or the coronavirus pandemicrelated issues interfere with the planned 2022 assignments. We will continue to follow the health and safety precautions every day, protecting not only our employees but also our customers and partners with whom we are in contact.

I look forward to continuing the development of our operations and collaborating with our customers in the upcoming busy season. We received a very good net promotion score from our customers in an extensive study conducted in the first quarter and have set an ambitious target to improve further, aiming to be the best partner to our customers also for the years to come.