Welcome to Lassila & Tikanoja's first quarter result webcast. The webcast is hosted by L&T CEO Eero Hautaniemi and CFO Valtteri Palin. There's an opportunity to ask questions after the presentation via phone or by typing your question to the chat box below. Thank you very much. Eero, please go ahead.
Thank you, Inka. Welcome also on my behalf to this first quarter earnings release. Few highlights. We had a good start for the year. Especially I'm happy for the Facility Services Finland's performance in the first quarter compared to the previous year. We actually made a positive EBIT on the first quarter, which is typically very challenging quarter for especially property maintenance. Also, our net cash flow from operating activities after investments was EUR 0.50 compared to EUR -0.16 previous year. When we look at the top line development, we can see that in Environmental Services, Industrial Services and Facility Services Sweden, we had growth.
As planned in Facility Services Finland, our net sales declined somewhat and this was due to the fact that we terminated, as we communicated last year, some unprofitable contracts and we do not expect our sales to grow in Facility Services this year because of the same fact. We did win some new contracts and overall the performance was good but the amount of terminated contracts is bigger at least currently than the new contracts. Moving on to adjusted operating profit. In Environmental Services, a nice increase. In Industrial Services, pretty much in line with last year and as I said in Facility Services Finland, a clear improvement from the previous year.
In Facility Services Sweden, our challenges continued and I'll get deeper into those during the presentation. From this quarterly presentation you can see that the first quarter typically is seasonally the weakest for us and considering that I'd say that in general we had a pretty solid performance. In Industrial Services especially, the first quarter is typically challenging and now when we had SVB for a full quarter in our numbers we could also see the difficult January in these numbers in Industrial Services. In Environmental Services our sales activities were good and we managed to win some new targeted customers and I'm quite pleased about that.
In general, the winter conditions were challenging but not quite as challenging as they were in the previous year. Also, the sick leave % was lower in 2023 compared to 2022, and that helped us obviously to plan and run the operations. At the same time we did have the strike from the AKT which is the transportation employees union, and that affected negatively to our performance during the month when we had the strike.
Also the recyclable raw material prices, as we communicated in Q4, they started to decline and now the decline has leveled off. The raw material prices were pretty stable compared to where they were in the beginning of the year. As we all know, right now there are little bit gray clouds in overall economy, and we do not expect a rapid turnaround in the material prices. Especially in the construction, the market is very slow and that does affect to our business as well this year. Despite of these, so this headwind, I'm expecting a solid performance from Environmental Services in 2023.
Industrial Services, hazardous waste volumes were still on normal level in first quarter and especially in environmental construction, we had a very good start for the year, and our order book is full and we have projects for the remainder of the year in the environmental construction. In process cleaning, there was snow quite late still in April, and that affected a little bit sewer maintenance projects, but also, there were very few planned maintenance breaks in Q1 as we expected. Unlike previous year, we expect the third quarter to be the main quarter when we see the maintenance breaks and also the highest turnover in Industrial Services.
Overall, the performance was solid and I'm quite pleased with the start of the year also in Industrial Services. As I said in the beginning, the highlight for our first quarter was Facility Services Finland, and I could say finally we can see now the results of the hard work we have been doing in Facility Services to turn around the financial performance. Obviously, there is still work to be done, but now it does look good and the projects we have ongoing are proceeding according to the plans. We expect a clearly better year in 2023 compared to the previous year.
We also managed to pass on the inflation to our prices, at least most of them, and that also helps us in 2023 to offset the salary increases which were quite high, especially for the cleaning workers this year and therefore, it was an important thing to make sure that we get the price increases accepted by the customers. In Facility Services Sweden, we did start our work to simplify the operations and increase the efficiency already end of last year, and the work intensified and continued in the first quarter. The first projects are ongoing as we speak, and others will start in the second quarter.
We do expect to see improving performance also in Sweden within the next 18 months. In Sweden, the issues are a little bit different and perhaps more deep-rooted and therefore it will require hard work from our entire Swedish organization to turn around the business. The plans are solid and I'm confident that we will see improving performance in Sweden as well, within the next 18 months. Few highlights from sustainability. Last year we did have a dip in our customer satisfaction, and I'm pleased to report that this year's or this spring's survey resulted with much better scores and the improvement was 5 points and was now 31.
Even though this is better, actually quite a lot better than it was last fall, there is still work to be done and we have actions ongoing to improve our quality, but also to improve our customer service and hence the customer satisfaction. Few other sustainability highlights. Our own operations carbon footprint continued to go down and this was due to very good work in all of our businesses. As you can see, there is a decline from 8,500 equivalent tons to 7,500 and this is a quite significant improvement, and as I said, a result of a very broad-based work in all of our businesses. Our work safety developed nicely.
In first quarter, our TRIF was 23 and the rolling 12 months TRIF was 22, which is the best performance ever, and this was due to very good proactive and preventive work that we have done in all of our businesses and across the organization. Also, the sick leave % declined to 5.6, but obviously 5.6 is still fairly high compared to our targets and I would say normal levels, which should be either at 5% or preferably below 5%. With this, I hand over to our CFO Valtteri, and he will go more deeper into the financials. Go ahead, Valtteri.
Thank you, Eero, and good morning. Let's move on to the numbers and financing, and I will start with the adjusted operating profit. Operating profit was EUR 1.4 million compared to last year's EUR 0. As Eero mentioned, we had a solid first quarter in Industrial Services and in Environmental Services and a big improvement in result in Facility Services Finland. The project to improve the profitability is now impacting well. The EBIT in Facility Services Sweden decreased, but we have a similar approach that ongoing, and as Eero said, it's we are waiting or expecting it to have an effect during the next 18 months.
The strikes had a little negative impact on the result, but on the other hand, a lower sickness rate had a positive impact on the result. Basically, there were no one-off items or surprises in the Q1 result. In the comparison period, there is Renewable Energy Sources EBIT, but now when we combined the joint venture with Neova similar business, it's now reported under the EBIT, and it was EUR 1.5 million our share of the net result of the company. Key figures, a few highlights from here. Investments were EUR 13.8 million. Last year, EUR 28.5 million, but it included acquisitions of EUR 21 million.
In this year first quarter, no acquisitions were made. Return on equity, return on capital employed, they both improved. Our capital employed increased by EUR 90 million. We were able to decrease the amount of capital in our operations, but our cash balance was EUR 25 million more than in the comparison period. Equity ratio and gearing, balance sheet KPIs, they both improved. We paid the dividend from company's bank account at the end of March, EUR 18 million. It was paid to the shareholders the third of April. Net working capital was EUR 49.5 million.
It had a positive effect on the cash flow in the first quarter of EUR 12 million, and also it improved from the comparison period by EUR 3 million. Our inventories increased, but we were able to decrease or lower the amount of trade receivables and uninvoiced net sales. Cash flow, EUR 19.2 million. After the investments, it was really good, EUR 0.50 per share. The net investment, cash used in net investments was EUR 8 million. In the comparison period, the cash flow was minus EUR 6 million due to the acquisitions we made. Interest-bearing debt and liquidity, there's no changes on this side. The bank loans were EUR 144 million, and the IFRS leasing liabilities, EUR 75 million.
Cash in the bank account, 48 million EUR. Also, we don't have any commercial papers in use or the revolving credit facility is unutilized. Loan portfolio, no changes on this side either. We will pay the rest of the old bond in September, 18 million EUR. The 50 million EUR bank loan will mature next year in August. The bond which we emitted last year in May will mature in 2028. Average effective interest rate was 2.8%. It increased. In the comparison period, it was 1.1%.
Now, when the inflation is high and there might be more, increases in interest rates, it's, good that the 86% of our loans have a fixed interest rate. Good. Now I hand over to Eero.
Thank you, Valtteri. We keep our outlook for 2023 unchanged, which means that the net sales and adjusted operating profit are estimated to be at the same level as in the previous year, even though the comparison period includes the net sales from Renewable Energy Sources business, which was about EUR 35 million. Thank you. Now we are ready for your questions.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Nikko Ruokangas from SEB. Please go ahead.
Hello, this is Nikko Ruokangas from SEB. I have a couple of questions. First of all, you mentioned that the strikes created challenges in some of your divisions in Q1. How big was this effect from these strikes?
Not significant. Altogether, less than EUR 1 million, clearly.
All right. Thanks. You mentioned that you expect effects of your efficiency program in Sweden to realize during the next 18 months. Could you describe the steps during this 18-month period?
Well, the basic structure is similar what we have done now in Finland. We have done a very careful planning and it consists of several different sort of sub-projects, where we have obviously a person responsible for each area. As I said, partly the project is in place already and effective, so we are working on the projects. Partly we are still finalizing the sub-projects and they will start on the second quarter. Gradually we expect to see the improving performance in our Swedish numbers like we have seen in Finland.
All right. The effect will be gradual during this year.
Yes.
Great. One last question. Your CapEx was higher than last year if we exclude the acquisitions. What are your expectations for this year? I understand the IT investments and so on, do you expect a similar kind of run rate going forward?
Yeah. Well, one of the reasons why we have higher CapEx beginning of this year is the fact that we were unable to get all the trucks that we ordered last year. There is still very long lead times for especially special trucks and special equipment, and it really depends kind of when do we receive the, all the trucks and machinery that we order. That is one thing. This year, as you mentioned, one part is the IT investment, which will be very high this year. Overall, we expect our investments, excluding acquisitions, to be higher this year than they were last year.
All right. Understand. Thanks. That's all from me.
There are no other questions.
There are no other questions. I thank you all for joining us in this Q1 earnings release, and I wish you very nice rest of the week. Thank you very much. Bye-bye.