Operating environment

Delete is one of the leading environmental full-service providers in the Nordic countries. The Group offers business-critical services that require specialist competences and specialized equipment through three business segments: Industrial Cleaning Services, Demolition Services, and Recycling Services. The business dynamics and types of customer agreements vary somewhat per segment.

Industrial Cleaning Services

Industrial Cleaning Services segment consists of a comprehensive industrial services offering as well as property services, such as high-power vacuuming and blowing services, industrial shutdown and maintenance, exposure vacuuming of sewers and well emptying, industrial cleaning, blast cleaning services and washing and cleaning of facades. Most of the revenue is related to ongoing plant cleaning, shutdown maintenance cleaning, as well as sewage services. The Group provides services of all sizes, from entire factories down to the smallest cleaning jobs on a production line. Delete has an extensive network of production sites covering Finland and Sweden.

The key value proposition to customers in the Industrial Cleaning Services segment includes capabilities and scale to handle highly complex maintenance shutdowns on schedule, secure and fast response time to minimize costly process interruptions, and ability to offer precautionary services to minimize downtime and services that can be carried out even while the plant is in full operation.

Key equipment and vehicles fleet within the Cleaning Services segment include 73 combi units, 9 camera units, 86 hi-power vacuum units, 39 chassis and 104 high-pressure units.

Demolition Services

Demolition is one of the core competencies of the Group, including the knowledge and skills acquired over several years to successfully complete very complex heavy demolition projects. The services offered in the segment also include renovation demolition inside buildings, asbestos and other hazardous substance removal as well as hydrodemolition and water jet cutting. Demolition targets include buildings of all kinds and also demanding wreck demolition of ships. Delete actively makes use of subcontracting. Subcontractors typically provide the bulk of the basic equipment needed in demolition projects. The Group calculates the carbon footprint (emissions) of the demolition work for each project it executes. The report produced supports the customers’ sustainability strategy and shows the value of the materials produced in the demolition work to avoid the use and the production of virgin materials.

The key value proposition to Demolition Services customers includes, inter alia, one-stop shop solutions including project management, ability to handle all kinds of projects from entire industrial plant demolition to small and agile demolitions, optimization of environmental sustainability as well as health and safety issues, and entire process of material handling either in the Group’s recycling facilities or with a chain of subcontractors.

Delete owns a modern fleet of core machinery required for the key tasks. The fleet consists of 47 pieces of heavy machinery, including large excavators.

Recycling Services

The Group serves its customers at all stages of material processing; in re-use, recycling and re-utilization. The Group has five recycling stations in the Helsinki, Tampere and Espoo urban areas. Recycling Services uses subcontracting to a large extent in its operations. The Recycling Services plants receive, re-use, recycle and process all construction, demolition, industrial and mixed waste in an efficient, sustainable and environmentally friendly manner. The business segment provides services such as recycling and waste processing, reception of oily waste, open large waste container services and crushed concrete.

All of the Group’s recycling facilities accept solid materials. Additionally, the facilities in Juvanmalmi (Espoo, Finland) and Rusko (Tampere, Finland) accept liquid waste, such as port and ship vessel bilge water and liquids from construction sites. The Group manufactures a product called DeleKivi® from concrete and brick waste obtained mainly from demolition. The end product is suitable for a variety of civil engineering and infrastructure projects.

Especially in its Recycling Services, the Group pursues to meet the highest level of the EU Waste Hierarchy, which aims in waste management primarily to re-use and after that recycling and waste to energy use.

The mixed construction materials such as metals and plastics are sorted and sold onwards to be reused or recycled to materials for new products. This helps to avoid the use of virgin materials. A part of the sorted and processed high quality mixed material is processed into recovered fuel (REF) and delivered onwards for waste-to-energy purposes. As a result, REF is used as a fuel for district heating and electricity production as well as for production of process steam for industrial use.

Circular economy has been identified as the future of material handling. The Group continuously investigates and develops its material handling and sorting processes to meet an even higher re-use and recycling rates. The Group’s reutilization rate (reuse, recycling and waste to energy use) in 2017 was approximately 96%.

Market Overview

Market Dynamics

Delete operates in the Nordic environmental services market with a focus on industrial cleaning, demolition services (including special demolition and heavy demolition) and recycling services. The Group’s core geographic markets are Finland and Sweden, and the Group has a well-established presence in industrial cleaning and demolition services both in Finland and in Sweden, and in recycling services in Finland. The market characteristics are similar in Finland and Sweden, which offers an opportunity to operate across borders, although the underlying service markets are distinct. Both markets provide opportunities to differentiate through critical mass, project management capabilities and references among others. Furthermore, both markets are protected by increasing barriers to entry due to e.g. need for special skills and equipment, investment needs, CSR capabilities, existing relationships and brand, the need for references as well as regulations.

Growth Drivers

  • Aging infrastructure supports positive demand outlook both in the Finnish and Swedish markets.
  • Urbanisation drives demand for renovation and replacement and the demolition of old buildings
  • Increased focus on environment increases demand for specialised services and recycling
  • Positive economic outlook supports overall demand in environmental services
  • Digitalisation and technology will create opportunities for innovative players in the market

Competitive Landscape

The environmental services markets are fragmented both in Finland and Sweden.

Industrial cleaning

The core demand for industrial cleaning services remains stable and the industrial customers’ demand is expected to remain on a good level. The market continues, to an even greater extent, to demand that suppliers are able to handle increasingly complex projects with high-quality environmental, health and safety standards favouring large professional players.

Demolition services

The ageing building stock in both countries increases the demand for renovation demolition services, with buildings from the 1960s and early 1970s being renovated. In the public sector, especially municipality-owned real estate such as hospitals and schools require renovation. In addition, urbanisation drives demand for renovation, replacement and demolition of old buildings.

Recycling services

Growth in recycling services is driven particularly by the growth in renovation construction. Increased environmental awareness also continues to drive improvements and new regulations in the recycling segment. Examples of this are e.g. the EU’s 70% recycling target by 2020 and landfill ban on C&D waste. Regulatory development in both the EU Circular Economy Action plan and national legislation, such as the updated Finnish Waste Act, as well as generally increasing sustainability awareness continue to keep the demand for recycling services on a high level.