Aspo

Aspo Plc
Press release
October 10, 2024 at 8:00 pm

Aspo’s subsidiary Leipurin completes the divestment of its Russian operations

Aspo Group’s subsidiary Leipurin has completed the transaction of selling its Russian subsidiaries to Mr. Timur Akhiyarov. The transaction will not significantly impact the reported EBITA result of Aspo Group.

Leipurin signed a binding preliminary agreement to sell its Eastern operations to Mr. Timur Akhiyarov in January 2023. In year-end 2023 all net assets, incl. translation differences of Leipurin East were written down, generating a negative impact of EUR 5.4 million to the reported EBITA of Aspo. Aspo has not included Leipurin East in its consolidated financial statements anymore in 2024. The completion of the transaction was prolonged due to required authority approvals.
“This transaction finally completes Aspo’s exit from Russia. This costly and time-consuming exit process has tied up significant management resources. Now we are in a position where we can fully focus on implementing our profitable growth strategy in western markets”, says Rolf Jansson, CEO of Aspo Group.

Aspo Plc
Rolf Jansson
CEO

Further information, please contact:
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com

Distribution:
Nasdaq Helsinki
Key media
www.aspo.com

Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 17 different countries, and it employs approximately 800 professionals.

Attachment

• 20241010__Press release Aspo’s subsidiary Leipurin completes the divestment of its Russian operations

Aspo Plc
Inside information 
Stock Exchange Release
October 9, 2024 at 09.45 am

Inside information: Aspo subsidiary ESL Shipping builds a series of fossil free handy sized vessels to serve the Nordic green transition

ESL Shipping, a subsidiary of Aspo Group, builds a series of four new, fossil free handy sized vessels. These new 1A ice class vessels are top of the market in terms of cargo capacity, technology and innovation. The total value of the four ships is approximately EUR 186 million and this investment will take place during the years 2024–2028. ESL Shipping has the option to expand the order with several ships.

The competitiveness of these next generation ships is based on over time increasing customer preference towards fossil free cargo solutions. The new vessels can be operated entirely fossil free by use of green hydrogen-based E-fuel, namely e-methanol. The competitiveness of these next generation vessels is in addition a function of market leading energy efficiency, efficient and flexible cargo space design and lower costs to operate.

The loading capacity of the vessels is 17.000 tonnes (dwt), length 150 meters, breadth 23,77 meters and shallow maximum draft of 8,6 meters. The new vessels will be built in Nanjing, China at China Merchants Jinling Shipyard (Nanjing) Co, Ltd. The vessels will enter service starting from the third quarter of 2027. The fourth ship of this series will enter service in the first quarter of 2028.

The design of the ships and comprehensive model tests have been carried out together with leading Finnish ship designer Deltamarin Ltd and Swedish SSPA model test facility. ESL Shipping has been from the beginning closely involved in the design of the vessels to ensure that they are fully tailored to meet local customer needs. Majority of major equipment, such as power train including battery hybrid drive, cargo handling equipment and many other leading technologies come from European companies.

" This investment is fully aligned with Aspo’s portfolio vision and financial ambition as communicated on Aspo’s capital markets day on May 14, 2024. ESL Shipping aims to be at the forefront in supporting its industrial partners towards delivering entirely fossil-free products and services. This investment in fossil free handy sized vessels is a natural step to take now, when the still ongoing investment in low-emission hybrid coasters has proven to be highly successful”, says Rolf Jansson, CEO of Aspo.

"Our strategy is based on sustainability leadership and our unique ability to develop and provide reliable infrastructure for the ice-bound Nordic green transition industries. We have developed these state of the art, highly flexible multi-fuel vessels in close cooperation with our industrial partners,” says Mikki Koskinen, Managing Director of ESL Shipping and Chairman of the Board of AtoB@C Shipping.

ESL Shipping has strengthened its balance sheet by an equity injection of EUR 45 million as communicated previously on February 8, 2024. In connection with the vessel order, the possibilities of using various ship ownership and financing solutions to accelerate business growth and expand the service will be explored. This may include, among others, pooling as a financial instrument, already successfully used by ESL Shipping when financing the smaller hybrid coaster vessels. The actions and the timing will be done in line with Aspo’s portfolio strategy and financial targets.

ASPO PLC
Further information, please contact:
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264
Mikki Koskinen, Managing Director, ESL Shipping tel. +358 50 351 7791

Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 17 different countries, and it employs a total of approximately 800 professionals. 

Distribution:        
Nasdaq Helsinki
Key media
www.aspo.com

Attachment

• 2024_10_09_Inside information Aspo subsidiary ESL Shipping investment

Aspo Plc
Stock exchange release
October 4, 2024, at 12.00 pm

Karri Kivi appointed Senior Vice President, Corporate Development of Aspo Group

Aspo has appointed M.Sc. (Econ.) Karri Kivi (b. 1974) as the new Senior Vice President, Corporate Development. Karri reports to Rolf Jansson, CEO of the Aspo Group, and is a member of the Group Executive Committee.

Karri’s responsibilities include development of the company’s portfolio strategy, supporting and developing business strategies in cooperation with Group subsidiaries and mergers and acquisitions. Karri will start in his new position latest in December 2024.

Karri has wide experience from investment banking, in Finland and abroad, incl. Citigroup, Carnegie, Nomura International, Lincoln International and PwC. Karri has also worked for Wärtsilä as a director in M&A and corporate development.

"Karri has relevant experience to execute on Aspo’s portfolio vision and financial ambitions. I want to wish him a warm welcome to the Aspo team," said Rolf Jansson, CEO of Aspo.

"Aspo is in a very interesting development stage with ambitious growth plans in all of its businesses. I look forward to the journey ahead together with the Aspo team," said Karri Kivi.

Aspo Plc

Rolf Jansson
CEO

Further information, please contact:
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264

Distribution:        
Nasdaq Helsinki
Key media
www.aspo.com

Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 17 different countries, and it employs a total of approximately 800 professionals.  

Aspo Plc
Half-year financial report              
August 14, 2024, at 8:00 am

Aspo Group’s half-year financial report, January 1 – June 30, 2024

Successful strategy execution and improved profitability

Figures from the corresponding period in 2023 are presented in brackets.

April–June 2024

• Net sales from continuing operations increased to EUR 153.5 (132.5) million
• Comparable EBITA from continuing operations was EUR 7.4 (3.9) million, 4.8% (2.9%) of net sales. The comparable EBITA of ESL Shipping was EUR 6.1 (3.3) million, Telko EUR 1.8 (1.1) million, and Leipurin EUR 1.3 (1.1) million
• EBITA from continuing operations was EUR 6.9 (3.1) million. EBITA of ESL Shipping was EUR 5.9 (3.4) million, Telko EUR 1.7 (0.1) million, and Leipurin EUR 1.0 (1.4) million
• Comparable ROE from continuing operations was 9.9% (6.0%)
• Comparable earnings per share from continuing operations were EUR 0.09 (0.05)
• Free cash flow was EUR 26.4 (5.9) million
• Aspo announced a new portfolio vision and its financial ambition for 2028 in its Capital Markets Day in May 2024
• Telko entered the German market by acquiring Polyma and ESL Shipping completed the sale of its two supramax vessels. The first two green coasters started commercial operation in the Baltic Sea region
• After the reporting period on July 1, 2024, Telko acquired Swed Handling AB, a leading distributor of chemicals in Sweden
  
  

January–June 2024

• Net sales from continuing operations increased to EUR 286.2 (274.2) million
• Comparable EBITA from continuing operations was EUR 12.4 (12.6) million, 4.3% (4.6%) of net sales. The comparable EBITA of ESL Shipping was EUR 8.8 (9.3) million, Telko EUR 4.2 (3.9) million, and Leipurin EUR 2.5 (2.2) million
• EBITA from continuing operations was EUR 3.9 (12.0) million. EBITA of ESL Shipping was EUR 1.0 (9.4) million, Telko EUR 4.1 (2.9) million, and Leipurin EUR 2.1 (2.7) million
• Comparable ROE from continuing operations was 8.0% (11.8%)
• Comparable earnings per share from continuing operations were EUR 0.18 (0.23)
• Free cash flow was EUR 22.9 (15.1) million
• Net debt to comparable EBITDA was 2.0 (2.3)
• Successful strategy execution including the sale of a minority stake in ESL Shipping, sale of the supramax vessels and Telko’s expansion through acquisitions into France, Benelux and Germany

Guidance for 2024 unchanged

Aspo Group’s comparable EBITA is expected to exceed EUR 32 million in 2024 (EUR 27.9 million in 2023).

Assumptions behind the guidance

Aspo’s operating environment is estimated to remain challenging. Market recovery is expected to be delayed with limited positive impact on Aspo’s profitability during the second half of the year. Aspo’s profit improvement for the second half of the year is expected to mainly come from profit generation of the green coaster vessels, from Telko’s recently completed acquisitions, as well as from various intensified profit improvement actions throughout Aspo’s businesses. The result of the first half of the year was negatively impacted by political strikes and tough ice conditions.

For ESL Shipping, demand for the second half of the year 2024 is expected to remain at a fairly good level in the steel industry and gradually to pick up in the forest industry. Summer is seasonally a softer time period for ESL Shipping. The longer-term outlook for ESL Shipping is positive given the overtime tightening supply and demand situation as a result of the expected high industrial investment activity in the main operating area, combined with the overall aging fleet of vessels in the market. For Telko, overall stable market development is expected going forward with gradually increasing price levels and demand slowly picking-up during the second half of the year. After successfully completing three acquisitions in 2024, the focus will be on integrating the acquired companies. Thus, the acquisition-related expenses are expected to be at a lower level during the second half of the year. For Leipurin, the market is expected to be slightly deflationary, with modest volume growth partly due to deliberate reduction of low-margin commodities. Significant opportunity for growth remains in the food industry, where the addressable market for Leipurin is multiple compared to bakery.

To improve accuracy, the figures presented have been calculated without rounding and may therefore differ from those published in previous years.

Rolf Jansson, CEO of Aspo Group, comments on the second quarter of 2024:

The second quarter of 2024 was successful for Aspo both strategically as well as financially. All activities of Aspo are based on a clear portfolio vision and on a defined long-term financial ambition. The businesses executed against defined business strategies and financial performance trended positively for all businesses.

Aspo’s financial performance in the second quarter improved significantly compared to previous year. The comparable EBITA from continuing operations was EUR 7.4 million compared to EUR 3.9 million in the corresponding period previous year. Aspo’s total net sales growth of 16% was supported by organic volume growth, acquisitions, as well as sales of a green coaster vessel to the investor pool.

In the second quarter of 2024, all Aspo’s businesses were able to improve their profitability against the previous year. ESL Shipping benefitted from overall good contract volume demand, whereas demand in the open-sea spot markets remained soft. The political strikes as well as the heavier than usual ice conditions continued to negatively affect ESL Shipping’s performance during the beginning of the quarter. Telko’s sales volumes grew in all business lines compared with previous year, although demand remained relatively soft, and prices were lower than previous year in most product categories. The acquisitions contributed positively to growth but had still a negative profitability impact during the quarter, both due to acquisition related expenses as well as the market price-based valuation of inventories. Leipurin successfully improved its sales mix and was able to mitigate any negative impact of deflation by effectively managing pricing and costs of goods sold. Also, a large variety of improvement activities supported the positive profitability trend of Leipurin.

At its Capital Markets Day in May, Aspo announced the new portfolio vision to form two separate companies in the coming years: Aspo Compounder and Aspo Infra. The approach and timing of this transformation is to be determined purely with the aim to maximize shareholder value. During the transformation process Aspo focuses on successful execution of the business strategies and on improving financial performance. Aspo communicated a new financial ambition to reach EUR 1 billion in net sales and 8% of EBITA in 2028.

During the second quarter of 2024, ESL Shipping successfully completed the sale of its two supramax-class vessels to HGF Denizcilik Limited Sirket. This was a major step to further focus ESL Shipping’s business, improve the company’s financial resilience, and to free-up capital for new growth investments both for Aspo as well as ESL Shipping. Already two green coasters out of twelve have started commercial traffic in the Baltic Sea region by end of the second quarter of 2024 and the arrival of the third vessel is expected by end of September.

Telko advanced in its compounder strategy implementation during the quarter by acquiring Polyma Kunststoffe GmbH & Co KG. The acquisition of Polyma Kunststoffe offers a route to expand Telko’s geographical presence in Germany, offering major new growth opportunities in plastics and beyond. In addition, after the end of the reporting period, Swed Handling AB was acquired on July 1, 2024. Swed Handling is a leading distributor of chemicals in Sweden, and the acquisition will double the total chemicals business of Telko and make Sweden the largest country for Telko measured by net sales.

Also on July 1, 2024, Leipurin expanded its presence in Sweden, via Kebelco AB, which is a subsidiary of Swed Handling AB. Kebelco offers Leipurin an opportunity to further expand into the food industry, to shift focus towards technical value-added products, and offers cross-selling synergies within all Leipurin countries.

Successful strategy execution year to date 2024, and particularly the growth investments in all of Aspo’s businesses, enabled by several measures to strengthen Aspo’s balance sheet as well as a wide range of profitability improvement efforts across all the businesses, places Aspo in a strong position to improve its performance during the remainder of year 2024.

ASPO GROUP

Financial performance and targets

Aspo's long-term financial targets introduced at Aspo’s CMD on May 14, 2024, are:

• Minimum increase in net sales: 5–10% a year
• Comparable EBITA of 8%
• Return on equity: more than 20%
• Net debt / comparable EBITDA below 3.0

On a business level, ESL Shipping’s long-term comparable EBITA target is 14%, Telko’s 8% and Leipurin’s 5%.

In January-June 2024, Aspo’s net sales from continuing operations grew by 4.4% to EUR 286.2 (274.2) million. The comparable EBITA rate of the continuing operations stood at 4.3% (4.6%). Comparable return on equity from continuing operations was 8.0% (11.8%) and net debt to comparable EBITDA was 2.0 (2.3).

The comparable EBITA, Group total includes results of the continuing and discontinued operations. In 2024 the Group total figures equal the figures of the continuing operations. The comparable EBITA is calculated by adjusting the reported EBITA with rare and material items affecting EBITA. These may include impairment losses, sales gains and losses from divested businesses and non-current assets.  

In the second quarter of 2024, items affecting comparability were EUR -0.5 million and consisted of EUR -0.1 million for ESL Shipping relating to the sale of the minority stake in ESL Shipping, EUR -0.1 million of exit losses for Telko relating to Azerbaijan and EUR -0.2 million of exit losses for Leipurin relating to Russia. In addition, Leipurin reports the acquisition expenses of Kebelco of EUR -0.2 million as items affecting comparability.

In January-June 2024 the items affecting comparability totaled EUR -8.5 million. EUR -7.8 million reported for ESL Shipping consisted of the impairment loss and other expenses relating to the sale of the supramax vessels amounting to EUR -7.2 million and expenses relating to the sale of the minority stake in ESL Shipping Ltd EUR -0.5 million. Exit losses for Telko relating to Azerbaijan of EUR -0.1 million and for Leipurin relating to the exit of Russia of EUR -0.2 million. In addition, Leipurin reports the acquisition expenses of Kebelco of EUR -0.2 million as items affecting comparability. Items affecting comparability reported in other operations included corporate restructuring expenses of EUR -0.2 million and expenses for the sale of the minority stake in ESL Shipping Ltd of EUR of -0.1 million.

In the second quarter of 2023, items affecting comparability were EUR -8.8 million in total. EUR -1.0 million reported in the Telko segment related to inventory write downs caused by Russia’s invasion in Ukraine. EUR 0.3 million reported in the Leipurin segment consisted of the gain on the sale and lease back transactions of Kobia’s properties in Hässleholm and Tyresö, Sweden. EUR -0.1 million reported in other operations related to corporate restructuring. EUR -8.0 million reported in discontinued operations related to the loss on divestment of Telko’s subsidiary in Russia, as well as some smaller valuation adjustments of the other eastern businesses held for sale.

In January-June 2023 the items affecting comparability amounted to EUR -8.3 million in total. EUR -1.0 million reported in the Telko segment related to inventory write downs caused by Russia’s invasion in Ukraine. EUR 0.5 million reported in Leipurin segment consisted of the gain on the sale and lease back transactions of Kobia’s properties in Sweden. EUR -7.8 million reported in discontinued operations related to the divestment loss of Telko Russia and smaller valuation adjustments of the eastern businesses held for sale. EUR -0.1 million reported in other operations related to corporate restructuring.

Sustainability

Sustainability is an essential component of Aspo’s leadership model and a key driver for the company’s investments and M&A screening activities. Aspo’s businesses aim to be forerunners in sustainability in their respective sectors.

*) Total Recordable Injury Frequency (TRIF) is presented per million hours worked

Aspo’s target is to reduce its emission intensity, CO2 (tn) per net sales (EUR thousand), by 30% by the end of year 2025. The starting point (2020) was 0.44, while the target level (2025) is 0.30. Aspo’s emission intensity slightly decreased due to growth in Aspo’s net sales and a decrease in ESL Shipping's emissions (from the vessels) in May and June. The heavy ice conditions during the beginning of year 2024 had a negative effect on emissions.

Employee safety continues to be a key focus area of Aspo. The Total Recordable Injury Frequency (TRIF) improved further due to increased attention on safety operating models, development of safety culture, launched preventive measures and enhanced communication.

Cash flow and financing

The Group’s operating cash flow in January–June was EUR 15.2 (18.7) million. The cash flow of all businesses contributed positively although the cash flow mainly derived from ESL Shipping segment. The cash flow impact of change in working capital was EUR -6.0 (0.8) million. The operating cash flow was also negatively impacted by increasing interest rates, the interest paid amounted to EUR -5.2 (-4.0) million.

The free cash flow in January–June was EUR 22.9 (15.1) million. Investments amounted to EUR 11.6 (5.9) million and consisted mainly of the investments in the ESL Shipping segment. The proceeds from the sale of the supramax vessels amounted to EUR 33.5 million and the cash outflow relating to acquisitions amounted to EUR 17.2 million. Additionally, in June 2024 a cash inflow of EUR 2.2 million was obtained from the sale of Kobia’s properties in Tyresö that took place in June 2023.

Net interest-bearing debt was EUR 119.6 (12/2023: 165.2) million and net debt to comparable EBITDA was 2.0 (2.3). Net interest-bearing debt decreased due to the cash consideration of EUR 45 million received from the sale of the minority stake in ESL Shipping Ltd. and due to the related increase in cash and cash equivalents as well as total equity. Also, the proceeds of EUR 33.5 million from the sale of the supramax vessels increased the cash and cash equivalents balance. The Group’s equity ratio at the end of the review period was 37.2% (34.8%).

Net financial expenses in January–June totaled EUR -4.3 (-4.1) million. The average interest rate of interest-bearing liabilities, excluding lease liabilities, continued to rise and was 5.4% (4.7%), increasing Aspo’s interest expenses compared to the corresponding period last year.

The Group’s liquidity position remained strong. Cash and cash equivalents stood at EUR 87.2 (12/2023: 30.7) million at the end of the review period. Committed revolving credit facilities, totaling EUR 40 million, were fully unused, as in the comparative period. Aspo’s EUR 80 million commercial paper program also remained fully unused.

In January 2024, Aspo Plc renewed the other of the two revolving credit facility agreements amounting to EUR 20 million. The credit is being granted by Nordea Bank Abp. The maturity of the revolving credit facility agreement is two years plus an option for one additional year.

ASPO’S BUSINESSES

ESL Shipping

ESL Shipping is the leading dry bulk sea transport company operating in the Baltic Sea area. ESL Shipping’s operations are mainly based on long-term customer contracts and established customer relationships. At the end of the review period, the shipping company’s fleet consisted of 42 vessels with a total capacity of 337,000 deadweight tons (dwt). Of these, 23 were wholly owned (71% of the tonnage), two were minority owned (3%) and the remaining 17 vessels (26%) were time chartered.

ESL Shipping’s strategy and competitive edge is based on sustainability leadership and the company’s unique ability to develop and provide reliable infrastructure for the ice-bound Nordic industrials investing in the green transition. ESL Shipping loads and unloads large ocean liners at sea as a special service.

Q2/2024

In the second quarter ESL Shipping’s net sales increased by 37 % from the previous year to EUR 60.3 (43.9) million. Net sales for the period include proceeds of EUR 12.8 million from the executed sale of mv Stellamar to the company established by the pool investors. Net sales excluding the sale of mv Stellamar amounted to EUR 47.5 million, increasing by 8% from the previous year. The net sales growth was achieved against weak freight market conditions in the previous year.

The comparable EBITA for the quarter increased significantly by 82% to EUR 6.1 (3.3) million compared to a weak second quarter of the previous year, with the comparable EBITA rate being 10.1% (7.6%). When excluding the sale of mv Stellamar from net sales the comparable EBITA rate was 12.8%. Items affecting comparability amounted to EUR -0.1 (0.0) million and related to the sale of the minority stake. Operations during the second quarter were efficient and personnel ashore and onboard succeeded well in restoring profitability after a difficult first quarter.

During April–June ESL Shipping carried 3.2 (3.0) million tons of cargo. In early April, operational efficiency and carried cargo volumes were still negatively affected by the continued political strikes stopping or limiting production at shipping company’s main clients and closing ports in Finland. The continued strike impact for the second quarter’s profit is estimated to be EUR 0.5 million. In the Northernmost part of Bothnian Bay significantly heavier than usual ice conditions continued until May causing increased energy consumption. Spot-market freight rates remained at good levels in ice trade, while significantly weaker in open water trade.

ESL Shipping’s handy size vessels had good steel industry contract and spot volume demand during the second quarter. Construction material shipments to the Continent were at a satisfactory level. Heating coal and biomass volumes were focused on the earlier part of the winter and inventory emptying was ongoing in the second quarter, resulting in very low energy cargo volumes. Heating coal volume continued to decrease compared to the previous year.

Excluding the strike impact, ESL Shipping’s coaster vessels had improving contract volume demand during the second quarter. Steel, fertilizers and limestone were maintained at robust volume levels whereas forest product contracts experienced low to moderate demand. Demand for forest industry raw material shipments increased during the quarter. For the coaster vessel class, spot market volumes remained limited.

The price of marine diesel fuel remained on the same level as in the previous year whereas the price of liquified natural gas, LNG, decreased slightly compared to previous year and had a small negative impact on net sales. Energy price fluctuations are managed through neutral fuel clauses in long-term transportation agreements.

Q1-Q2/2024

During the first half of the year ESL Shipping’s net sales increased by 14 % from the previous year to EUR 110.2 (96.7) million. Net sales for the period include proceeds of EUR 12.8 million from the executed sale of mv Stellamar to the company established by the pool investors. Net sales excluding the sale of mv Stellamar amounted to EUR 97.4 million, increasing by 1% from the previous year. Despite the successful second quarter, the comparable EBITA for the period decreased by 6% to EUR 8.8 (9.3) million resulting from the very poor first quarter, with the comparable EBITA rate being 8.0% (9.7%). Items affecting comparability amounted to EUR -7.8 (0.0) million and included mainly impairment losses related to the sale of the supramax vessels as well as some advisory costs related to the sales process of a minority stake in ESL Shipping.

During January–June ESL Shipping carried 6.3 (6.3) million tons of cargo. Operational efficiency and carried cargo volumes were negatively affected by the repeated waves of political strikes stopping or limiting production at shipping company’s main clients and closing ports for several weeks in Finland between January-April. Further negative impact was caused by the exceptionally severe winter in Bay of Bothnia, which caused increased energy consumption and unforeseen disruptions and stoppages in ESL Shipping’s contractual traffic. The combined negative impact to comparable EBITA from the political strikes and the exceptionally harsh winter conditions is estimated to be approximately EUR 4.0 million for the first half of the year.

The newbuilding project of ESL Shipping’s Swedish subsidiary AtoBatC Shipping AB at the Chowgule & Company Private Limited shipyard in India proceeded as planned. The first vessel in the series, Electramar, reached the Baltic Sea in mid-April. The second vessel in the series, Stellamar, was delivered in April and started commercial operation in the Baltic Sea at the end of the second quarter. The third vessel, Ecomar was delivered in June and is expected arrive to Baltic Sea in the end of September. Deliveries of subsequent vessels in the series of twelve ships are now expected on a quarterly basis, with the last vessel to be delivered in the autumn of 2026.

The minority investments in Aspo’s subsidiary ESL Shipping Ltd by OP Finland Infrastructure and Varma Mutual Pension Insurance Company were completed in February. The transaction was completed as a share issue where ESL Shipping Ltd issued new shares to OP Finland Infrastructure and Varma against a cash consideration of EUR 45.0 million. This resulted in a minority ownership stake corresponding to 21.43 % in ESL Shipping.

In March Aspo announced that its subsidiary ESL Shipping Ltd had signed a memorandum of understanding according to which it will sell its two supramax class vessels to companies belonging to HGF Denizcilik Limited Sirket group, a Turkish shipping and logistics company, with sales proceeds of EUR 33.5 million. The sales of the supramax vessels were successfully completed in May and June.

Telko

Telko is a leading expert in and supplier of plastic raw materials, industrial chemicals, and lubricants. It operates as a sustainable partner in the value chain, bringing well-known international principals and customers together. The company’s competitive edge is based on strong technical support, efficient logistics and local expert service. Telko operates in Finland, the Baltic countries, Scandinavia, Poland, Germany, Belgium, France, the Netherlands, Romania, Ukraine, Kazakhstan, Uzbekistan, and China.

Q2/2024

In the second quarter of 2024, Telko’s net sales increased by 12% to EUR 60.9 (54.2) million. Sales growth was driven by organic volume growth and acquisitions. Sales prices were on a significantly lower level than previous year, however during the year 2024 sales prices have been mainly stable. The demand has been soft in most European markets, especially in construction and automotive related businesses.

Net sales of the plastics business increased by 8% during the second quarter, amounting to EUR 26.7 (24.7) million. Sales volumes grew significantly compared with previous year. However, the average price level was lower, which impacted top line sales negatively. Net sales of the chemicals business decreased by 2% during the second quarter, amounting to EUR 16.4 (16.7) million. Sales volumes grew significantly compared with previous year, but sales prices were on a significantly lower level. Net sales of the lubricants business increased by 39% to EUR 17.8 (12.8) million. The growth was mainly due to the acquisitions of Optimol and Greenfluid earlier this year, but also the organic net sales increased. Sales volumes excluding acquisitions remained on a same level than previous year and sales prices increased slightly.

Telko’s comparable EBITA in the second quarter of 2024 increased to EUR 1.8 (1.1) million and comparable EBITA rate was 3.0% (2.0%). Profitability improved from the previous year due to improved sales margin and higher sales volumes. Costs related to the acquisitions had a significant negative impact on Telko´s second quarter comparable result. Acquisition related expenses and reversal of fair value allocation to inventory impacted Telko´s comparable EBITA by EUR -1.6 (-0.0) million.

Q1-Q2/2024

During the first half of the year 2024 Telko´s net sales increased by 2% to EUR 111.1 (108.5) million. Sales growth was driven by volume growth and acquisitions. Sales prices were on a significantly lower level than in the previous year. Comparable EBITA improved to EUR 4.2 (3.9) million driven primarily by higher sales margin level. Acquisition related expenses and reversal of fair value allocation to inventory impacted Telko´s comparable EBITA by EUR -2.5 (-0.6) million.

The political strikes in Finland had a negative impact on Telko’s EBITA of approximately EUR 0.1 million split evenly between the first and second quarters of 2024, both due to increased logistics costs and to a lesser extent also due to product availability.

Net sales of the plastic business decreased by 2% during the first half of the year 2024 compared to the same period previous year. Sales volumes grew significantly, and prices were on significantly lower level. Net sales of chemicals business decreased by 7%. Sales volumes grew and prices were on significantly lower level. Net sales of the lubricants business increased by 24%. Mainly the acquired businesses contributed to the growth. Sales prices were on a significantly higher level than in the previous year.

Telko made major progress related to its compounder strategy during the first half of 2024. In March Telko acquired Optimol and Greenfluid, industrial lubricants businesses in Benelux and France. The acquisition will almost double Telko’s industrial lubricants business size. In the beginning of the second quarter, Telko started distribution of industrial lubricants in Poland. Concurrently, Telko is ramping-up an automotive lubricants business in Denmark.

In the beginning of June Telko acquired Polyma Kuntstoff plastics business in Germany. The acquisition gives Telko access to the biggest plastics market in Europe and opens great business development opportunities going forward. Polyma Kuntstoff did not have significant impact on net sales during the second quarter.

After the reporting period in the beginning of July Telko completed a major acquisition in Sweden by acquiring Swed Handling AB, a locally leading chemicals distributor. The acquisition doubles Telko´s total net sales in chemicals and makes Sweden Telko’s largest country of operation in terms of net sales. The acquisition had a negative impact on the comparable EBITA of the second quarter due to acquisition related expenses.

Leipurin

Leipurin operates as part of the food chain, sourcing raw materials in global markets and from domestic companies and supplying them through its effective logistics chain to serve customer needs. With operations in five countries including Finland, Sweden, and the Baltic countries. Leipurin serves bakeries, the food industry, and food service customers by providing raw materials, supporting research & development, recipes, and innovations for new products.

Q2/2024

Leipurin’s net sales decreased by 6% during the second quarter to EUR 32.3 (34.4) million. The decrease in net sales was driven by deflationary market prices in certain product categories, as well as by strategic intention to improve sales mix, which resulted in decreased volumes in low margin categories. The negative impact of the strikes in Finland continued somewhat in the beginning of the quarter. In Finland net sales decreased by 7% to EUR 11.7 (12.6) million, in the Baltic countries net sales decreased by 17% to EUR 7.8 (9.3) million, and in Sweden net sales increased by 2% to EUR 12.8 (12.5) million.

During the second quarter, net sales to bakeries decreased by 7% to EUR 23.1 (24.9) million. Net sales to the food industry decreased by 6% to EUR 2.9 (3.1) million. Poor development with a few major customers, including a customer’s debt restructuring, hampered the total revenue trend in the food industry, while good activity level and Leipurin synergies to Kobia continued to generate new sales and openings.

After the review period Leipurin expanded its food industry business in Sweden, via the technical food ingredient distributor Kebelco as the acquisition was closed on July 1, 2024. Kebelco is a subsidiary of Swed Handling AB and will be integrated into Leipurin segment. Kebelco offers a very strong platform to develop food industry sales in Sweden, while bringing also significant cross-selling opportunities across all Leipurin countries.

The comparable EBITA for the second quarter stood at EUR 1.3 (1.1) million, and the comparable EBITA rate was 4.1% (3.3%). In addition to the improved sales mix, the negative impact of the deflationary market on net sales continued to be counteracted by successful management of the costs of goods sold, explaining the improved profitability. The items affecting comparability of the second quarter included expenses related to the acquisition of Kebelco AB EUR -0.2 million and exit losses relating to Russia EUR -0.2 million. In the comparative period, the items affecting comparability included the gain related to the sale and leaseback of Kobia’s properties in Hässleholm and Tyresö EUR 0.3 million.

Q1-Q2/2024

Leipurin’s net sales decreased by 6% during January-June to EUR 64.9 (69.0) million. The deflationary market price trend continued throughout the first half of the year, as well as the impacts of the activities targeting at improving the sales mix, decreasing sales volumes in low margin categories. In Finland net sales decreased by 5% to EUR 23.3 (24.5) million, in the Baltic countries net sales decreased by 17% to EUR 15.7 (18.9) million, and in Sweden net sales increased by 1% to EUR 25.9 (25.5) million. During January-June, net sales to bakeries decreased by 8% to EUR 46.5 (50.6) million. Net sales to the food industry decreased by 1% to EUR 5.9 (6.0) million.

The political strikes in Finland had a negative impact on Leipurin’s EBITA of approximately EUR 0.1 million split evenly between the first and second quarters of 2024, both due to increased logistics costs and to a lesser extent also due to product availability.

The comparable EBITA for the second quarter stood at EUR 2.5 (2.2) million, and the comparable EBITA rate was 3.8% (3.2%). Leipurin continues to execute a wide range of improvement efforts throughout its operations, with the aim of improving profitability, some of which lead to decreased sales volumes in low margin categories.

The items affecting comparability of January-June included expenses related to the acquisition of Kebelco AB and exit procedures from Russia. In the comparative period, the items affecting comparability included the gain on sale and leaseback of Kobia’s properties in Gothenburg, Hässleholm and Tyresö (EUR 0.5 million).

Other operations

Other operations include Aspo Group’s administration, finance and ICT service center. In the second quarter the comparable EBITA of other operations was EUR -1.8 (-1.6) million. EBITA was EUR -1.8 (-1.8) million. In the second quarter of 2023 items affecting comparability were EUR -0.1 million and related to corporate restructuring.

In January-June the comparable EBITA of other operations was EUR -3.0 (-2.9) million and EBITA was EUR -3.3 (-3.0) million. In January-June 2024 items affecting comparability of EUR -0.3 million included corporate restructuring expenses of EUR -0.2 million and expenses for the sale of the minority stake in ESL Shipping Ltd of EUR -0.1 million. In January-June 2023 items affecting comparability were EUR -0.1 million and related to corporate restructuring.

Risks and near-term uncertainties 

Main uncertainties in Aspo’s financial result relate to the demand and to some extent also market price levels for sea transportation as well as volume and price development of products sold by Telko and Leipurin. These items are impacted by general economic development. The economy in the European Union broadly stagnated during the year 2023 and has remained soft during the first half of 2024. Specifically, the higher interest rates and lower consumer and industrial confidences have negatively impacted investment activities and lowered industrial and consumer demand for products and services. Delay of the recovery or further decline of the economy could negatively impact on the performance of Aspo’s businesses.

Geopolitical tensions, including Russia’s ongoing war in Ukraine and recent conflicts in the Middle East, continue to cause uncertainty and can lower the overall economic growth, may impact energy prices and cause supply chain disruptions, as well as inflation-driven cost increases. Prolongation and possible expansion of the geopolitical tensions could negatively impact business operations in Aspo’s market areas. The increase in global tensions weakens operating conditions in all businesses.

Aspo’s operations are dependent on the availability of IT systems and network services. The unavailability of the services can cause disruptions to the business operations. Recent geopolitical tensions have increased the threat of cyber-incidents.

In line with its strategy, Aspo aims to increase earnings by investment in green vessels and by acquisitions. There are uncertainties about the future profitability of these investments. Strategy execution combined with the currently relatively high financing costs may reduce free cash flow and lead to a deterioration of the balance sheet and reduce solvency.  

Because the future estimates presented in this interim report are based on the current situation and knowledge, they involve significant risks and other uncertainties, due to which actual future outcomes may differ from the estimates.

COMPANY INFORMATION

Aspo aims to achieve sustainable long-term growth by re-investing earned profits. Aspo is an active owner of its businesses and aims to improve their profitability by investing in growth and performance improvement. The goal is to, in parallel to organic growth to take an even more active role in mergers, acquisitions, and other restructuring activities. Aspo focuses especially on B-to-B industrial services, and its key clusters include logistics and trade.

Key businesses in Aspo’s portfolio are ESL Shipping, Telko and Leipurin. They are responsible for their own operations and customer relationships, as well as for developing these. Sustainability is a key factor of Aspo’s management system and guides the process of targeting new investment opportunities. Each business of Aspo aims to be a forerunner in sustainability in their industry.     

Share capital and shares

Aspo Plc’s registered share capital on June 30, 2024, was EUR 17,691,729.57, and the total number of shares was 31,419,779, of which the company held 2,268 shares, i.e. approximately 0.01% of the share capital.

Aspo has share-based compensation plans based on which Aspo has granted 13,976 treasury shares to employees included in the plans. The transfers were based on the share issue authorization of the Annual Shareholders’ Meeting held on April 4, 2023.

Aspo Plc has one share series. Each share entitles the shareholder to one vote at the Shareholders’ Meeting. Aspo’s share is quoted on Nasdaq Helsinki Ltd’s Mid Cap segment under Industrial Goods and Services.

In January-June 2024, a total of 1,446,094 Aspo Plc shares, with a market value of EUR 8.6 million, were traded on Nasdaq Helsinki. In other words, 4.6% of the shares changed hands. During the review period, the share price reached a high of EUR 6.35 and a low of EUR 5.56. The average price was EUR 5.97 and the closing price at the end of the review period was EUR 5.86. At the end of the review period, the market value, less treasury shares, was EUR 184.1 million.

The company had 11,497 shareholders at the end of the review period. A total of 948,990 shares, or 3.02% of the share capital, were nominee registered or held by non-domestic shareholders.

Decisions of the Annual Shareholders’ Meeting 2024

Distribution of funds

The Annual Shareholders’ Meeting held on April 12, 2024, decided, as proposed by the Board of Directors, that EUR 0.24 per share be distributed in dividends for the 2023 financial year, and that no dividend is paid for shares held by Aspo Plc. The record date for the dividend was April 16, 2024, and the payment date was April 23, 2024.

Furthermore, the Annual Shareholders’ Meeting authorized the Board of Directors to decide on a possible distribution of capital from the invested unrestricted equity fund in the maximum amount of EUR 0.23 per share on a later date, if aligned with the growth strategy and considering the long-term benefit of Aspo’s shareholders. The authorization is valid until the next Annual Shareholders’ Meeting.

All the decisions of the Annual Shareholders’ Meeting can be found on www.aspo.com.

FINANCIAL INFORMATION

Aspo Group’s condensed consolidated statement of comprehensive income

Aspo Group’s condensed consolidated balance sheet

Aspo Group’s condensed consolidated cash flow statement

Aspo Group consolidated statement of changes in equity

Accounting principles

Aspo Plc’s half year report has been prepared in accordance with the principles of IAS 34 Interim Financial Reporting. As of the beginning of the financial year, Aspo applies certain new or amended IFRS standards and IFRIC interpretations as described in the 2023 consolidated financial statements. In addition, Aspo has described below the accounting policy for obtaining and presenting the non-controlling interest as well as the accounting for the green coaster pool. In other respects, the same accounting and measurement principles have been applied as in the 2023 consolidated financial statements. The information in this half-year report is unaudited.

Aspo Plc applies guidance on alternative key figures issued by ESMA. In addition to IFRS figures, the company releases other commonly used key figures, which are mainly derived from the statement of comprehensive income and balance sheet. According to the management, key figures clarify the view drawn by the statement of comprehensive income and balance sheet of Aspo’s financial performance and financial position. The calculation principles of key figures are disclosed below in this half-year report.

Non-controlling interest

The minority investment in Aspo’s subsidiary ESL Shipping Ltd by OP Finland Infrastructure and Varma Mutual Pension Insurance Company was completed on February 28, 2024. The transaction was completed as a share issue where ESL Shipping Ltd issued new shares to OP Finland Infrastructure and Varma Mutual Pension Insurance Company against a cash consideration of EUR 45.0 million. This resulted in a non-controlling interest of 21.43 % in ESL Shipping. In Aspo Group, as control of the subsidiary was not lost, the consideration of EUR 45.0 million was recognized in retained earnings deducted by the lost share of ESL Shipping’s equity EUR 29.3 million resulting in a net increase of EUR 15.7 million in the total equity attributable to owners of Aspo. The cash flow of EUR 45.0 million is presented as cash flow from financing activities.

Non-controlling interest – accounting policy

Changes in the ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity transactions (i.e. transactions with owners in their capacity as owners). The difference between the fair value of the consideration paid and the change in the non-controlling interest is recognized directly in equity and attributed to the owners of the parent. The non-controlling interests is presented in the consolidated statement of financial position within equity, separately from the equity of the owners of the parent. In addition, the profit or loss for the period as well as other comprehensive income is attributed to the owners of the parent and to the non-controlling interests on the basis of present ownership interests.

Acquisition of Optimol and Greenfluid

On March 8, Telko acquired Western European industrial lubricants distribution businesses from Petrus S.A, consisting of shares in the companies: Optimol Tribotechnik SA, Optimol Netherlands BV, Optimol France SAS and Greenfluid SAS. The acquired businesses are leading distributors of premium industrial specialty and high-performance lubricants, metalworking fluids and other general industrial lubricants in France and Benelux. Full year 2023 consolidated net sales of the purchased businesses were EUR 18 million and full year consolidated adjusted operating profit was EUR 2.2 million.

The consideration of EUR 12.6 million was paid in cash. The assets and liabilities of the acquired company were measured at fair value on the acquisition date. A fair value allocation of EUR 3.8 million was made on intangible assets based on principal relationships, and the fair value adjustment relating to inventories was EUR 0.8 million. The deferred tax liability arising from the fair value adjustments was EUR 1.2 million. The carrying amount of the other acquired assets and liabilities were deemed to correspond to their fair values. A goodwill balance of EUR 7.1 million resulted from the acquisition based on the preliminary calculation. The acquisition-related costs of approximately EUR 0.3 million were recognized in the Telko segment’s other operating expenses, however, half of the acquisition-related costs were recognized as expenses already in 2023.

Acquisition of Polyma

On June 4, Telko acquired Polyma Kunststoffe GmbH & Co KG in Hamburg, Germany. The acquired company is a distributor of well-known engineering plastics. The acquisition provides Telko access to the German market, which is the biggest plastics market in Europe. The company’s profitability has fluctuated between EUR 0.3 million and EUR 0.8 million in recent years. In 2024 net sales is expected to reach EUR 15 million and EBIT EUR 0.5 million.

The assets and liabilities of the acquired company were measured at fair value on the acquisition date. Fair value allocations totaling EUR 3.7 million were made on intangible assets, buildings and inventories, and the related deferred tax liability recognized was EUR 1.1 million. The carrying amount of the other acquired assets and liabilities were deemed to correspond to their fair values. A goodwill balance of EUR 1.9 million resulted from the acquisition based on the preliminary calculation. The acquisition-related costs of approximately EUR 0.2 million were recognized in the Telko segment’s other operating expenses. The acquisition includes an earn-out mechanism, the earn-out liability recognized is EUR 2.2 million.

Personnel

At the end of the review period, Aspo Group had 730 employees (712 at the end of 2023). The addition in the number of personnel from the acquisition of Polyma, Optimol and Greenfluid was 39 employees.

Segment information

Aspo Group’s reportable segments are ESL Shipping, Telko and Leipurin. In 2023 the reportable segment also included Non-core businesses but in 2024 this segment is not reported anymore as all the entities were either sold or deconsolidated from Aspo Group in 2023.

The non-core businesses segment was established in the first quarter of 2023 and included the eastern businesses held for sale. The Non-core businesses segment is reported as discontinued operations in 2023.

Green coaster pool

AtoBatC Shipping AB, reported in the ESL Shipping segment, is building a series of six highly energy-efficient electric hybrid vessels. The new vessels of ice class 1A are top of the line in terms of their cargo capacity, technology and innovation. The total value of the first six-vessel investment is approximately EUR 70 million, and its cash flows are divided mainly for the years 2021 - 2026. The new vessels are built at the Chowgule and Company Private Limited shipyard in India, and first of them Electramar was delivered in the second quarter of 2024.

In 2022, it was confirmed that ESL Shipping will establish a green coaster pool. As a result, AtoBatC Shipping AB ordered six additional green coaster vessels from the Chowgule & Company Private Limited in India, which will be sold further green coaster Shipping AB (not part of Aspo Group).

Every other vessel built by Chowgule & Company Private Limited will be produced for AtoBatC Shipping AB, and every other will be sold further to green coaster Shipping AB, after reaching Europe. Advance payments for the vessels to be sold further are recognized in inventories and the sales price is recognized as net sales. The sales price of the vessels is based on their full cost. All the 12 green coasters built and under construction will be operated in the green coaster pool when their building has been completed and they have been delivered.

The green coaster pool started its operation on June 18, 2024, when Stellamar was sold to green coaster Shipping AB. At the same time also Electramar joined the green coaster pool. AtoBatC Shipping AB has made a time-chartered agreement (TC) with green coaster Shipping AB and uses Stellamar in its shipping operations in the same way as it uses Electramar, which it continues to own. AtoBatC Shipping AB makes variable lease payments to green coaster Shipping AB, based on the calculated pool income. The variable lease payments are recognized as lease expenses. No lease liability or lease asset is recognized under IFRS 16 as the lease expenses don’t have a fixed price but are fully variable.

Green coaster investment commitment

As described above AtoBatC Shipping AB, reported in the ESL Shipping segment, is building a series of six highly energy-efficient electric hybrid vessels, with a total value of approximately EUR 70 million. The remaining investment commitment at the end of the review period is EUR 34.9 million.

Aspo Group disaggregation of net sales, from continuing operations

In ESL Shipping segment revenue is recognized over time as the transportation services are rendered. In Telko and Leipurin segments revenue is recognized at a point in time based on the delivery terms.

Discontinued operations and other non-current assets and disposal groups held for sale

The Non-core businesses segment was reported as discontinued operations in 2023 in accordance with the IFRS 5 standard.

The operating profit of Non-core businesses in January-December 2023 was EUR -16.1 million. The operating loss was mainly caused by the divestment loss of Telko Russia EUR -8.1 million, the write down of Telko Russia’s inventory EUR -1.7 million, a loss of EUR -0.8 million from the deconsolidation of Telko’s subsidiary in Belarus, and EUR -5.8 million from the deconsolidation of Leipurin entities in Russia, Belarus and Kazakhstan.

Net cash flows of discontinued operations consist of the Non-core businesses segment’s share of Aspo Group’s cash flows. In 2023, the cash flow from the sale of Telko’s subsidiary in Russia was EUR -4.4 million. The cash impact of the deconsolidation of the other entities in the Non-core businesses segment amounted to EUR -3.4 million. These are presented in the cash flow from investing activities.

Assets and liabilities of discontinued operations at the end of the second quarter 2023 include the assets and liabilities of the Non-core businesses segment.

Contingent liabilities

Telko Ukraine has been subject to a tax inspection based on which the company should pay additional taxes, tax increases and fines totaling EUR 1.9 million. The case is almost entirely related to the tax treatment of old loans granted in 2011-2012. Telko has taken the given decision to court and the case has been analyzed by external experts. Based on the expert opinion the chances of success in court have been assessed to be good. Thus, no liability has been recognized in the balance sheet.

Events after the review period

On July 1, 2024, Aspo announced that it has completed the acquisition of Swed Handling AB, a leading Swedish chemical distributor. As a result of the transaction Telko will become a leading local player in distribution of chemicals in Sweden and Leipurin expands its food industry business in Sweden, via the technical food ingredient distributor Kebelco AB, which is a subsidiary of Swed Handling.

Calculation principles of the key figures

Espoo, August 14, 2024

Aspo Plc
Board of Directors

Press and analyst conference

A press, analyst and investor conference will be held at FLIK’s Eliel studio in Sanomatalo, Töölönlahdenkatu 2, 00100 Helsinki on Wednesday August 14, 2024, at 10:30 a.m. The event is also open to private investors, and participants are requested to register beforehand by emailing viestinta@aspo.com.

The interim report will be presented by CEO Rolf Jansson and CFO Erkka Repo. The presentation material will be available at www.aspo.com/en before the event.

The event will be held in English, and it can also be followed by a live webcast at https://aspo.videosync.fi/q2-2024. Questions can be asked after the event by telephone by registering through the following link: https://palvelu.flik.fi/teleconference/?id=50048703 . After registering, participants will be given a telephone number and identifier to participate in the telephone conference. The recording of the event will be available on the company’s website later on the same day.

Financial information in 2024

Aspo Plc will publish the following reports:

- Interim report for January–September 2024 on October 29, 2024

For more information, please contact:
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com


Distribution:
Nasdaq Helsinki
Key media
www.aspo.com

Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 17 different countries, and it employs approximately 800 professionals (including the personnel of the Swed Handling companies).

Attachment

• Aspo_Half_year_financial_report_Q2_14_8_2024_EN

Aspo Plc

Press Release
August 9, 2024, at 15:45

Aspo Plc will publish its Half-year financial report for January–June 2024 on August 14, 2024

Aspo Plc will publish Half-year financial report for January–June 2024 on Wednesday, August 14, 2024, at approximately 8.00 a.m. Finnish time.

A press, analyst and investor conference will be held at FLIK’s Eliel studio in Sanomatalo, Töölönlahdenkatu 2, 00100 Helsinki on August 14, 2024 at 10.30 a.m. The event is also open to private investors, and participants are requested to register beforehand by emailing viestinta@aspo.com. The Half-year financial report will be presented by CEO Rolf Jansson and CFO Erkka Repo. The presentation material will be available at www.aspo.com/en before the conference.

The event will be held in English, and it can also be followed by a live webcast at https://aspo.videosync.fi/q2-2024. Questions can be asked after the event by telephone by registering through the following link: https://palvelu.flik.fi/teleconference/?id=50048703. After registering, participants will be given a telephone number and identifier to participate in the telephone conference. The recording of the event will be available on the company’s website later on the same day.

Aspo Plc

Rolf Jansson
CEO

Further information:
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com

Distribution:
Key media
www.aspo.com

Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 17 different countries, and it employs approximately 800 professionals (including the personnel of the Swed Handling companies). 

Attachment

• 9_8_2024_Q2_invitation

Aspo Plc  
Stock exchange release 
August 8, 2024, at 9:45

Correction: Aspo’s revised financial key figures

Aspo Plc corrects the stock exchange release published on June 26, 2024, at 8.50 a.m. The key figures have been corrected due to some errors, as well as rounding adjustments. To improve accuracy, the revised key figures have been calculated without rounding and may therefore differ from those published in previous years. Below is the correct release in its entirety.

Aspo has revised its financial key figures in line with its updated financial targets announced on 14 May 2024 on Aspo's Capital Markets Day.

Aspo Plc applies guidance on alternative key figures issued by the European Securities and Market Authority and publishes in addition to IFRS figures other commonly used key figures, which are mainly derived from the statement of comprehensive income and balance sheet. According to management, the alternative key figures clarify the view drawn by the statement of comprehensive income and balance sheet of Aspo’s financial performance and financial position.

The principles for preparing the alternative key figures have not been defined in IFRS or other applicable accounting standards. They also do not replace the key figures required by IFRS. For these reasons, they may not be comparable with alternative performance measures presented by other companies. The purpose of the alternative key figures published by Aspo is to provide deeper insight into the results of Aspo's business segments and how management reviews different business segments.

Below you can find the revised key figures and their calculation principles. The key figures have been calculated based on exact values. Thus, the total does not necessarily equal the sum of its components when viewed with one decimal.

Financial key figures by quarter

EBITA reconciliation, continuing operations

EBITA reconciliation, Group total

Reconciliation of operating profit, Group total

Definitions of financial key figures

Aspo Plc  

Rolf Jansson  
CEO  
  
Further information:  
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com  

Distribution:  
Nasdaq Helsinki  
Key media  
www.aspo.com  
  
Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 17 different countries, and it employs a total of approximately 800 professionals (including the personnel of the Swed Handling companies).   

Attachment

• 8_08_2024_Correction_Key_Figures_EN

Aspo Plc

Press Release
July 1, 2024 at 13.00

Aspo’s subsidiary Telko has completed the acquisition of leading Swedish chemical distributor Swed Handling AB

Aspo’s subsidiary Telko Ltd has completed the acquisition of Swed Handling AB in Sweden. Aspo announced on 29 April 2024 that Telko expands its chemicals business in Sweden by acquiring Swed Handling AB, a leading Swedish chemical distributor, from TeRa Invest AB. As part of the transaction, Aspo’s subsidiary Leipurin Plc expands its food industry business in Sweden, via the technical food ingredient distributor Kebelco AB, which is a subsidiary of Swed Handling. The transaction has been completed today on 1 July 2024.

The purchase price for Swed Handling AB’s shares was agreed to be paid in full with a cash consideration of SEK 473 million (approx. EUR 42 million*), subject to customary post-closing adjustments. Aspo’s shares are thus not used for the payment of the purchase price. Additionally, Telko has committed to pay in 2026 in cash an additional earn-out of SEK 0–130 million (approx. EUR 0 – 11 million*) based on the 2024–2025 results, depending on Swed Handling AB’s profitability development, excluding Kebelco.

*Based on the SEK–EUR exchange rate of 11.338 on 27 June 2024. Actual future outcomes may differ from the estimates.

Aspo Plc

Rolf Jansson
CEO

Further information:

Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com
Mikko Pasanen, Managing Director, Telko Ltd, tel. +358 40 743 6665, mikko.pasanen@telko.com
Miska Kuusela, Managing Director, Leipurin Plc, tel. +358 40 820 1943, miska.kuusela@leipurin.com

Distribution:
Key media
www.aspo.com

Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 16 different countries, and it employs a total of approximately 700 professionals.

Attachment

• 01_07_2024_Swed_Handling_AB_EN

Aspo Plc

Stock Exchange Release
June 26, 2024, at 15.45

Change in Aspo Group’s Executive Committee

Mikko Heikkilä, Vice President, Corporate Development, has resigned to join another company. Heikkilä will leave in December 2025 at the latest, and the process of selecting his successor has begun.

“I want to thank Mikko for playing an instrumental role in the transformation of Aspo Group and want to wish him great success in the future”, says Rolf Jansson, CEO of Aspo Group.

Aspo Plc

Further information, please contact:
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264

Distribution:        
Nasdaq Helsinki
Key media
www.aspo.com

Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 16 different countries, and it employs a total of approximately 700 professionals.  

Attachment

• 26_06_2024_Changes_in_Aspo_Group_Executive_Committee_EN

Aspo Plc  

Stock exchange release 
June 6, 2024, at 8:50 a.m.

Aspo’s revised financial key figures

Aspo has revised its financial key figures in line with its updated financial targets announced on 14 May 2024 on Aspo's Capital Markets Day.

Aspo Plc applies guidance on alternative key figures issued by the European Securities and Market Authority and publishes in addition to IFRS figures other commonly used key figures, which are mainly derived from the statement of comprehensive income and balance sheet. According to management, the alternative key figures clarify the view drawn by the statement of comprehensive income and balance sheet of Aspo’s financial performance and financial position.

The principles for preparing the alternative key figures have not been defined in IFRS or other applicable accounting standards. They also do not replace the key figures required by IFRS. For these reasons, they may not be comparable with alternative performance measures presented by other companies. The purpose of the alternative key figures published by Aspo is to provide deeper insight into the results of Aspo's business segments and how management reviews different business segments.

Below you can find the revised key figures and their calculation principles. The key figures have been calculated based on exact values. Thus, the total does not necessarily equal the sum of its components when viewed with one decimal.

Financial key figures by quarter

EBITA reconciliation, continuing operations

EBITA reconciliation, Group total

Reconciliation of operating profit, Group total

Definitions of financial key figures

Aspo Plc  
Rolf Jansson  
CEO  
  
Further information:  
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com  

Distribution:  
Nasdaq Helsinki  
Key media  
www.aspo.com  
  
Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 16 different countries, and it employs a total of approximately 700 professionals.  

Attachment

• 26_06_Key_Figures_EN

Aspo Plc  

Stock exchange release 
June 12, 2024 at 17:15 p.m.  
  
Members of the Shareholders’ Nomination Board of Aspo 
Representatives of the four largest shareholders registered in Aspo’s shareholder register as of May 31, 2024, are elected to Aspo's Shareholders' Nomination Board. The four largest shareholders of Aspo Plc have nominated the following members to Aspo's Shareholders' Nomination Board: 

• Roberto Lencioni, Vehmas family including AEV Capital Holding Oy 
• Gustav Nyberg, Nyberg family including Oy Havsudden Ab 
• Pekka Pajamo, Varma Mutual Pension Insurance Company 
• Karoliina Lindroos, Ilmarinen Mutual Pension Insurance Company 

The Nomination Board elected Roberto Lencioni as the Chairman in its organizing meeting. In addition, Heikki Westerlund, Chairman of Aspo Board of Directors, acts as an expert member of the Nomination Board. 
The Shareholders' Nomination Board of Aspo is an organ established by the Annual Shareholders Meeting consisting of shareholders or representatives of shareholders to prepare and present proposals to Annual Shareholders Meeting concerning the number and members of the Board of Directors and the remuneration of the Board of Directors and its committees. 
 
Aspo Plc  
Rolf Jansson  
CEO  
  
Further information:  
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com  

Distribution:  
Nasdaq Helsinki  
Key media  
www.aspo.com  
  
Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 16 different countries, and it employs a total of approximately 700 professionals.  
  

Attachment

• 12_06_2024_Nomination_Board_of_Aspo_EN

Aspo Plc
Press release
June 11, 2024 at 10:00.

The sale of Aspo's subsidiary ESL Shipping's Supramax vessels has been completed on June 11 2024

ESL Shipping, a subsidiary of the Aspo Group, has successfully completed the sale processes of m/s Arkadia and m/s Kumpula, two Supramax-class vessels, as previously announced. The vessels were sold to companies belonging to the Turkish shipping and logistics group HGF Denizcilik Limited Sirket. The sale price was USD 37.1 million.

Aspo Plc

Rolf Jansson
CEO

Further information, please contact:

Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com
Mikki Koskinen, Managing Director of ESL Shipping, mikki.koskinen@eslshipping.com

Distribution:
Nasdaq Helsinki
Key media
www.aspo.com

Aspo creates value by owning and developing business operations sustainably and in the long-term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 16 different countries, and it employs a total of approximately 750 professionals.

Attachment

• Aspo Plc Press release

Aspo Plc
Press release
June 4, 2024 at 10:00.


Aspo's subsidiary Telko expands its operations further via a strategic acquisition in Germany

Aspo's subsidiary Telko expands its plastics business to Western Europe through an acquisition of Polyma Kunststoffe GmbH & Co KG in Hamburg, Germany. The acquired company is a distributor of well-known engineering plastics. The acquisition provides Telko access to the German market, which is the biggest plastics market in Europe.

"The transaction strengthens our engineering plastics business and opens new markets for Telko in Germany and neighboring countries. This is yet another step of Telko’s compounder strategy, which focuses on high value-added products and further growth towards our 8 % EBITA target," says Mikko Pasanen, Managing Director of Telko.

“With this acquisition, Telko is taking further steps to become a leading European player in the distribution of specialty products," says Rolf Jansson, CEO of Aspo Group.

The company’s profitability has fluctuated between EUR 0.3 million and EUR 0.8 million in recent years. In 2024 net sales is expected to reach EUR 15 million and EBIT EUR 0.5 million. Telko's strong supplier relationships and customer expertise combined with Polyma's buisness portfolio create the prerequisites for significant business development. The current CEO Alexander Maul will remain as the company's CEO.

Telko aims to accelerate its growth through acquisitions to achieve its strategic goals across all three business areas, and it has a solid pipeline of potential acquisition candidates. The company remains confident in its ability to keep up the active M&A pace. Additionally, Telko will seek to strengthen its market share in existing markets through organic growth.

Aspo Plc

Rolf Jansson
CEO

Further information, please contact:
Rolf Jansson, CEO, Aspo Plc, tel. +358 400 600 264, rolf.jansson@aspo.com
Mikko Pasanen, Managing Director, Telko, tel. +358 40 743 6665, mikko.pasanen@telko.com

Distribution:
Nasdaq Helsinki
Key media
www.aspo.com

Aspo creates value by owning and developing business operations sustainably and in the long term. Our companies aim to be market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these aiming to be forerunners in sustainability. Aspo supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in 16 different countries, and it employs a total of approximately 700 professionals.

Attachment

• Aspo Plc Press Release

Aspo Plc
Stock Exchange Release
Other information disclosed according to the rules of the Exchange
May 14, 2024, at 8:05 a.m.

Aspo's financial targets and dividend policy updated, and profitability metric of the guidance changed

Aspo holds a Capital Markets Day today, May 14, 2024, starting at 9.30 a.m. [(EEST)] in Helsinki. Aspo Group’s new portfolio vision, disclosed earlier today, along with the adjusted long-term financial targets, ESG commitment, business strategies, dividend policy as well as current state of Aspo's business operations and prospects will be presented at the event.

Revised financial targets

Aspo’s long-term financial targets remain fundamentally unchanged, but they have been slightly adjusted to consider the compounder strategy and management of growth financing. Key changes include change from operating profit (EBIT) to operating profit excluding amortization of intangible assets (EBITA) to mitigate the impact of amortization in M&A transactions, which will gradually build-up due to the compounder strategy, as well as replacing the gearing target with a target for Net debt / comparable EBITDA of below 3.0, to manage the growth financing in relation to development of financial performance.

Aspo’s adjusted long-term financial targets are:

• EBITA of 8% (New: operating profit excluding amortization of intangible assets (EBITA), previously operating profit (EBIT))
  • Telko 8%
  • Leipurin 5%
  • ESL 14%
• Net sales growth 5–10% per year (New: defined as the minimum annual growth level to be achieved)
• Return on equity over 20%
• New: Net debt / comparable EBITDA below 3.0 (previously: Gearing less than 130%)
  
  

Updated dividend policy

To support the growth strategy execution, Aspo’s dividend policy has been updated to reflect company strategy and growth ambition, the ongoing transition and specific business characteristics. Aspo's revised dividend policy:

• Aspo’s dividend growth is based on positive profitability development with the aim to pay-out annually up to 50% of net profit as dividend. The goal is to gradually increase the amount of dividends, while considering financing needs of growth initiatives with strategic priority.
  
  

Profitability metric of the guidance changed from EBIT to EBITA, assumptions behind the guidance for year 2024 remain unchanged

Assumptions behind the guidance for year 2024 remain unchanged. The guidance for year 2024 has been changed to the new profitability metric operating profit excluding amortization of intangible assets (EBITA) (previously operating profit (EBIT)). New guidance for 2024 is:

Aspo Group’s comparable EBITA is expected to exceed EUR 32 million in 2024 (2023: EUR 27.9 million)

For reference, Aspo Group’s previous guidance for 2024 with the old profitability metric operating profit was:
Aspo Group’s comparable operating profit is expected to exceed EUR 30 million in 2024 (2023: EUR 26.5 million). 

Capital Markets Day webcast and presentation materials

The webcast can be followed live on Aspo's website (www.aspo.com) from 9.30 a.m. today. Webcast recording and presentation materials (in English) will be available on the website after the event.

"We are delighted to continue to execute clear and successful business strategies for all three segments. ESL Shipping is focused on sustainability-driven growth, combined with commercial and operational excellence. Telko’s strategy is focused on organic growth supported by M&A and scalability. Leipurin continues its path to full profit potential through prioritised growth initiatives and development of commercial, supply chain and sourcing capabilities. We are also keen for sustainability to continue to shape our business strategies. Aspo Group’s ambition is that Aspo and its businesses will commit to Science Based Targets by the end of 2024. Each of Aspo's businesses aim to be a sustainability forerunner in its industry", says Rolf Jansson, CEO of Aspo Group.

ASPO Plc
Rolf Jansson
CEO

Further information:
Rolf Jansson, CEO, tel. +358 400 600 264, rolf.jansson@aspo.com
Erkka Repo, CFO, tel. +358 405 827 971, erkka.repo@aspo.com

Attachment

• Aspo_CMD_2024_Stock Exchange Release (Other matters)

Aspo Plc
Stock Exchange Release
Inside information
May 14, 2024, at 8:00 a.m.

Inside information: Aspo's new strategic portfolio vision

Aspo will pursue a new portfolio vision of forming two separate companies in the coming years: Aspo Compounder and Aspo Infra. Considering the diverging business models and strategies with different ESG agendas, ESL Shipping would belong to ‘Aspo Infra’ and Telko and Leipurin would belong to ‘Aspo Compounder’.

The business models between Aspo Compounder and Aspo Infra differ across multiple dimensions such as type of growth investments capex needs, business time span, funding needs, and ESG agenda, and will further diverge when implementing the selected business strategies.

Aspo’s ambition is to aim to reach EUR 1 billion in net sales and 8% of EBITA (*) in 2028. This ambition for year 2028 is split by business:

• ESL Shipping: net sales of EUR >300 million and EBITA-% of 14% (Aspo Infra)
• Telko: net sales of EUR >500 million and EBITA-% of 8% (Aspo Compounder)
• Leipurin: net sales of EUR >200 million and EBITA-% of 5% (Aspo Compounder)
  
  

This financial ambition is estimated to require cumulated capex investment in the magnitude of EUR 350-400 million during 2024-2028, split approximately fifty-fifty between Aspo Infra and Aspo Compounder.

The approach and timing of the transformation are to be defined with the aim to maximise shareholder value. Different possible approaches will be considered, e.g. demerger, IPO, and full or partial sales. Timing will depend among others on growth investments, the financial performance of the businesses and market conditions. During the transformation process Aspo focuses on successful execution of the business strategies and improving the financial performance of the businesses.

(*) Operating profit excluding amortization of intangible assets (EBITA).

ASPO Plc
Rolf Jansson
CEO

Further information:
Rolf Jansson, CEO, tel. +358 400 600 264, rolf.jansson@aspo.com
Erkka Repo, CFO, tel. +358 405 827 971, erkka.repo@aspo.com

Attachment

• Aspo_CMD_2024_Stock Exchange Release (Strategic Vision)

Aspo Plc
Interim Report              
May 7, 2024, at 8:00 am

Aspo Group Interim Report, January 1 – March 31, 2024

Successful strategy execution in a challenging operating environment

Figures from the corresponding period in 2023 are presented in brackets.

January–March 2024

• Net sales from continuing operations decreased to EUR 132.7 (141.6) million.
  
• Comparable operating profit from continuing operations was EUR 4.8 (8.4) million, 3.6% (5.9%) of net sales. The comparable operating profit of ESL Shipping was EUR 2.7 (6.0) million, Telko EUR 2.2 (2.7) million, and Leipurin EUR 1.1 (1.0) million.
  
• Operating profit from continuing operations was EUR -3.2 (8.6) million, -2.4% (6.1%) of net sales. Operating profit of ESL Shipping was EUR -5.0 (6.0) million, Telko EUR 2.2 (2.7) million, and Leipurin EUR 1.1 (1.2) million.
  
• Items affecting the comparability of operating profit totaled EUR -8.0 (0.5) million at Group total level and were mainly caused by the impairment losses for the supramax vessels.
  
• Earnings per share from continuing operations were EUR -0.16 (0.19).
  
• Operating cash flow was EUR 5.5 (12.2) million. Free cash flow was EUR -3.5 (9.1) million.
  
• Gearing improved to 74.0% from 117.6% at the year-end 2023, driven by the minority investment in ESL Shipping.
  
  
• Successful strategy execution including the sale of minority stake in ESL Shipping, agreement to sell the supramax vessels and Telko’s expansion to France and Benelux.
  
  

Rolf Jansson, CEO of Aspo Group, comments on the first quarter of 2024:

Aspo has successfully pursued its strategical ambitions so far during year 2024.  ESL has secured financing capability for its green transition, Telko has made multiple acquisitions, and Leipurin has both invested in growth as well as improved company profitability.

Aspo’s comparable operating profit from continuing operations was EUR 4.8 million compared to EUR 8.4 million in the corresponding period in the previous year. The profitability development was driven by political strikes in Finland and exceptional ice conditions, impacting negatively ESL Shipping’s profitability with some EUR 3.5 million in the quarter. The negative impact was e.g. due to reduced production volumes of clients, closures of harbors, disturbances in train traffic, longer transportation distances, increased fuel consumption, and overall decline in cargo flow efficiency. Despite the tough conditions, ESL Shipping was able to serve its customers well.

Also, Leipurin’s and Telko’s profitability were negatively impacted by the political strikes with an estimated EUR 0.1 million each during the first quarter of 2024. Unfortunately, we expect the strikes in the first quarter still to affect the efficiency of operations and availability of products in the second quarter. For ESL Shipping this negative impact is estimated to be around EUR 0.5 million and for Telko and Leipurin in the same magnitude as during the first quarter of 2024.

During Q1 2024, OP Finland Infrastructure LP together with Varma Mutual Pension Insurance Company invested a total of EUR 45 million in Aspo’s subsidiary ESL Shipping and obtained a corresponding 21.43% ownership stake in ESL Shipping Ltd. This is a major milestone for both ESL Shipping and Aspo and it will support the execution of the green transition strategy.

ESL Shipping announced that it will sell its two supramax vessels to companies belonging to HGF Denizcilik Limited Sirket group. ESL Shipping will further focus on long-term industrial partnerships as well as on coaster and handy sized vessels, where the company is most competitive. The sale of the supramax vessels will also free-up financial capacity to invest in the green transition.

ESL Shipping’s investments in new technologies took a major step forward, when the first green coaster in a series of twelve reached the Baltic Sea in mid-April. The investment decision was taken in 2021 and will start to have a positive impact on ESL Shipping’s profitability in the second quarter of 2024.

Telko was able to give further evidence of the execution of its compounder strategy when announcing the acquisitions of Optimol and Greenfluid. The acquired companies in France, Belgium and the Netherlands distribute industrial lubricants, i.e. specialty products with a great fit with Telko’s strategy. The acquisitions open up new markets for Telko in France and Benelux and creates synergies with Telko’s existing business. Short-term, the acquisitions have a limited positive impact on the profitability of Telko, both due to the acquisition related costs as well as the reversal of fair value allocation to inventory. The business environment of Telko remained fairly challenging, but stable, during the first quarter due to soft demand and low price levels.

Leipurin was able to continue its path towards improved profitability during the first quarter of 2024. The trend continued in an environment with somewhat deflating prices, compared with the business conditions of last year with high inflation. In addition to upgrading commercial, supply chain, and sourcing capabilities, the performance improvement of Leipurin originated from focusing the product mix towards higher margin products.

After the reporting period in April, Aspo has continued investing in growth. Telko’s acquisition of Swed Handling doubles the company’s net sales in chemicals and at the same time makes Sweden Aspo’s largest country of operation in terms of total net sales. The closing of the Swed Handling acquisition is expected during the third quarter of 2024. ESL Shipping and Leipurin have already earlier completed major acquisitions successfully in Sweden, AtoBatC Shipping AB and Kobia AB respectively. Adding Kebelco to Leipurin is fully aligned with the strategy to expand in the food industry, offering significant top-line synergies and further growth potential.

Strategy execution of Aspo over the past years, incl. acquisitions in Western markets, investments in the green transition of ESL Shipping, and exits from Russia and other selected Eastern markets, places the company in a strong position to improve financial performance going forward. In addition to both organic and non-organic growth, commercial and operational excellence is a top priority on our agenda. We consider the challenges, especially of ESL Shipping during the first quarter of 2024, to be one-time effects, as such harsh exceptional winter conditions occur very seldom in the Bothnia Bay, and also the impact of the political strikes will eventually deteriorate. Despite the considerable headwind of strikes and ice conditions in the first quarter, the underlying business is developing as planned. We look forward to sharing an update of Aspo’s strategy in our Capital Markets Day on May 14, 2024.

Guidance for 2024

Aspo Group’s comparable operating profit is expected to exceed EUR 30 million in 2024 (2023: EUR 26.5 million).

Assumptions behind the guidance

Aspo’s operating environment is estimated to remain challenging. However, the expected improvement in the comparable operating profit in 2024 is based on expected improved market conditions especially during the second half of year 2024, profitability generation of the green coaster vessels, Telko’s acquisitions, and various profit improvement actions throughout Aspo’s businesses.

For ESL Shipping, demand is expected to remain at a good level in the steel industry and gradually to pick up in the forest industry. The prevailing low-cycle in industrial activity, negatively impacted by the political strikes, and summer as a seasonally softer time period create some concerns for the second quarter. The longer-term outlook for ESL Shipping is positive given the tighter supply and demand situation as a result of the expected high industrial investment activity in the main operating area, combined with the overall aging fleet of vessels in the market. For Telko, overall stable market development is expected going forward with gradually increasing price levels and demand picking-up especially during the second half of the year. For Leipurin, the market is expected to be slightly deflationary, with modest volume growth partly due to deliberated reduction of low-margin commodities. Significant opportunity for growth remains in the food industry, where the addressable market for Leipurin is multiple compared to bakery.

ASPO GROUP

Financial results and targets

Aspo's long-term financial targets are:

• Annual increase in net sales: 5–10% a year
• Operating profit: 8%
• Return on equity: more than 20%
• Gearing: less than 130%

On a business level, ESL Shipping’s long-term operating profit target is 14%, Telko’s 8% and Leipurin’s 5%. The operating profit rate targets are evaluated against the comparable operating profit rate.  

In Q1 2024, Aspo’s net sales from continuing operations decreased by 6% to EUR 132.7 (141.6) million. The comparable operating profit rate of the continuing operations stood at 3.6% (5.9%). Comparable return on equity from continuing operations was 4.9% (18.3%) and gearing improved to 74.0% (12/2023: 117.6%).

The comparable operating profit, Group total includes results of the continuing and discontinued operations. The comparable operating profit is calculated by adjusting the reported operating profit with rare and material items affecting the operating profit. These may include impairment losses, sales gains and losses from divested businesses and non-current assets. 

In the first quarter of 2024, items affecting comparability totaled EUR -8.0 million. EUR -7.7 million reported for ESL Shipping consisted of the impairment loss and other expenses relating to the planned sale of the supramax vessels amounting to EUR -7.2 million and expenses relating to the sale of the minority stake in ESL Shipping Ltd EUR -0.5 million. Items affecting comparability reported in other operations included corporate restructuring expenses of EUR -0.2 million and expenses for the sale of the minority stake in ESL Shipping Ltd EUR -0.1 million.

In the first quarter of 2023, items affecting comparability totaled EUR 0.5 million. EUR 0.2 million of the items were reported in the Leipurin segment and consisted of the sales gain on the sale and lease back transaction of Kobia’s property in Gothenburg. EUR 0.3 million of the items came from the Non-core businesses segment and related to valuation adjustments of the eastern businesses held for sale.

Sustainability

Sustainability is a key driver for Aspo’s management system and especially for the company’s investments and M&A screening activities. Aspo’s businesses aim to be forerunners in sustainability in their respective sectors.

*) Total Recordable Injury Frequency (TRIF) is presented per million hours worked

The key target is to reduce emission intensity, CO2 (tn) per net sales (EUR thousand), by 30% by 2025. The starting point (2020) was 0.44, while the target level (2025) is 0.30. Aspo’s emission intensity slightly increased due to the decrease in Aspo’s net sales and increase in ESL Shipping’s emissions due to severe ice conditions.

Another key target is employee safety. The Total Recordable Injury Frequency (TRIF) improved further due to increased attention for safe operating models, development of safety culture, launched preventive measures and enhanced communication.

Cash flow and financing

The Group’s operating cash flow in January–March was EUR 5.5 (12.2) million. The cash flows of all businesses contributed positively during the quarter. The cash flow impact of change in working capital was EUR -3.9 (-0.6) million. The increase in working capital originates primarily from the increased inventory in Telko and advance payments for the green coasters of ESL Shipping. The operating cash flow was also negatively impacted by increasing interest rates, and interest paid amounted to EUR -2.6 (-1.5) million.

The free cash flow in January–March was EUR -3.5 (9.1) million. Investments amounted to EUR 0.6 (1.8) million and consisted mainly of the investments in the ESL Shipping segment. The advance payment received for the sale of supramax vessels amounted to EUR 3.4 million. In addition, the investing cash flow includes EUR 12.1 million cash outflow from the acquisitions of Optimol and Greenfluid and EUR 0.3 million of other cash inflow.

Net interest-bearing debt was EUR 131.5 (156.7) million and gearing improved to 74.0% (12/2023: 117.6%). Net interest-bearing debt and gearing decreased due to the cash consideration of EUR 45 million received from the sale of the minority stake in ESL Shipping Ltd. and due to the related increase in cash and cash equivalents as well as total equity. The Group’s equity ratio at the end of the review period was 38.6% (12/2023: 34.4%).

Net financial expenses in January–March totaled EUR -2.2 (-1.9) million. The average interest rate of interest-bearing liabilities, excluding lease liabilities, rose strongly and was 5.4% (3.7%), increasing Aspo’s interest expenses compared to the corresponding period last year.

The Group’s liquidity position remained strong. Cash and cash equivalents stood at EUR 67.9 (12/2023: 30.7) million at the end of the review period. Committed revolving credit facilities, totaling EUR 40 million, were fully unused, as in the comparison period. Aspo’s EUR 80 million commercial paper program also remained fully unused.

In January 2024, Aspo Plc renewed the other of the two revolving credit facility agreements amounting to EUR 20 million. The credit is being granted by Nordea Bank Abp. The maturity of the revolving credit facility agreement is two years plus an option for one additional year.

ASPO’S BUSINESSES

ESL Shipping

ESL Shipping is the leading dry bulk sea transport company operating in the Baltic Sea area. ESL Shipping’s operations are mainly based on long-term customer contracts and established customer relationships. At the end of the review period, the shipping company’s fleet consisted of 43 vessels with a total capacity of 443,000 deadweight tons (dwt). Of these, 24 were wholly owned (77% of the tonnage), two were minority owned (2%) and the remaining 17 vessels (21%) were time chartered.

ESL Shipping’s competitive edge is based on its pioneering role and ability to responsibly and energy efficiently secure product and raw material transportation for industries and energy production year-round, even in difficult conditions. The shipping company loads and unloads large ocean liners at sea as a special service.

Q1 2024