Aspo Plc · OMXHEX:ASPO
Aspo — Investor Day (December 2021)
78 slides from Aspo's investor day presentation, Dec 1, 2021
Slide 1: Aspo Capital Markets Day 2021
Aspo Capital Markets Day 2021 December 1, 2021 Capital Markets Day 2021 1
Slide 2: Agenda
Agenda Moving towards a compounder profile Rolf Jansson, CEO of Aspo Group Sustainable growth and strong profitability Mikki Koskinen, Managing Director of ESL Shipping From focused growth to accelerated expansion Mikko Pasanen, Managing Director of Telko Towards full potential Heli Arantola, Managi
Slide 3: Recap of Aspo today
Recap of Aspo today Capital Markets Day 2021 3
Slide 4: Aspo Q1-Q3/2021
Aspo Q1-Q3/2021 Net sales Operating profit EUR 423.2 million (367.2) EUR 28.5 million (11.7) Net sales EUR 136.7 million (107.2) Personnel 295 Finland Net sales EUR 205.1 million (185.6) 14 % 33 % Scandinavia Personnel 308 Net sales Q1-Q3/2021 Baltic countries 26 % Net sales EUR 81.4 million (74.4)
Slide 5: Aspo's journey since 1929
Aspo’s journey since 1929 Capital Markets Day 2021 5
Slide 6: Back to strong growth in 2021
Back to strong growth in 2021 m€ Revenue Revenue growth % 700,0 30% 25% 600,0 20% 500,0 15% 10% 400,0 5% 0% 300,0 -5% 200,0 -10% -15% 100,0 -20% 0,0 -25% LTM 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q3/2021 Revenue 395,9 476,3 481,6 476,3 482,9 445,8 457,4 502,4 540,9 587,7 500,7 556,7
Slide 7: Operating profit above target level in 2021
Operating profit above target level in 2021 Operating profit Operating profit % 40,0 12% 35,0 10% 30,0 8% 25,0 Target >6% 20,0 6% 15,0 4% 10,0 2% 5,0 0,0 0% LTM 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q3/2021 Operating profit 17,9 21,5 10,6 10,8 23,4 20,6 20,4 23,1 20,6 21,1 19,3 36,1
Slide 8: ROE exceeds long-term target in 2021
ROE exceeds long-term target in 2021 ROE % 30 25,5 25 Target >20% 20 19,1 17,8 17,1 16,4 15,2 14,6 15 13,5 11,8 12,4 11,4 10 8,9 5 0 Q3/21 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (cum) Return on equity (cum) 15,2 16,4 11,8 8,9 17,8 19,1 14,6 17,1 12,4 13,5 11,4 25,5 Note: Q3/2021 (cum
Slide 9: Gearing back to the 130% target level in Q3/2021
Gearing back to the 130% target level in Q3/2021 Equity ratio % Gearing % 40 200 35 180 30 160 25 140 Target <130% 20 120 15 100 10 80 5 60 0 40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q3/2021 Equity ratio % 33,2 35,2 29,2 34,4 35,2 33,8 37,4 35,6 29,5 30,1 30,1 31,8 Gearing % 101,5 9
Slide 10: Aspo new strategic direction & revised long-term financial targets
Aspo new strategic direction & revised long-term financial targets Capital Markets Day 2021 10
Slide 11: Aspo revised strategy: key highlights
Aspo revised strategy: key highlights Sustainability shapes Aspo’s Revised long-term financial targets growth and its business portfolio • Increased ambition level • Clear priorities, themes and targets • Focus on both profitability and growth • Target to decouple growth from environmental pressure
Slide 12: Revised long-term financial targets
Revised long-term financial targets reaching in range of over below Revised 8% 5-10% 20% 130% Run rate operating Annual revenue Return on Long-term profit margin growth depending on equity gearing non-organic activity over 6% 130% Previous NA 20% at most on average Capital Markets Day 2021 12
Slide 13: Decisive strategy execution to reach targets
Decisive strategy execution to reach targets Maximizing value of the current business portfolio - Growth and profitability improvement of BUs - Add-on acquisitions to accelerate organic growth and develop positioning Working towards Aspo Group financial targets - Identifying assets that do not gener
Slide 14: ESL Shipping: Industrial partner and forerunner
ESL Shipping: Industrial partner and forerunner • Our success builds on being an industry forerunner; sustainability, technology, operational excellence, new operating models, and quality of services • Aspo core business with strong local market position • Geographical coverage of wider Baltic and N
Slide 15: Telko: Accelerated growth
Telko: Accelerated growth • We will actively participate in consolidating the market, strengthening Telko’s positioning, while securing and developing existing margins • Telko’s growth is supported by strong underlying market trends, incl. outsourcing of non core activities, consolidation, and growi
Slide 16: Leipurin: Towards full potential
Leipurin: Towards full potential • We have launched a program to maximise Leipurin’s margins by developing commercial skills, processes in sales & marketing, procurement, and supply chain. Aspo is committed to drive development of Leipurin • Leipurin’s niche position offers the best access for princ
Slide 17: Kauko & Vulganus non-core businesses for Aspo
Kauko & Vulganus non-core businesses for Aspo New focus for Kauko Strong demand for Vulganus We will assess strategic options for Kauko We will assess strategic options for Vulganus - Limited size compared with Aspo’s core businesses - Limited synergies with Leipurin’s core trading - Growth and deve
Slide 18: Bridge to reach the new EBIT target level
Bridge to reach the new EBIT target level Simulated based on outcomes of different growth and profit improvement scenarios. Shows magnitude of the different opportunity areas and how they contribute to Aspo Group level ebit-% ½ of margin improvement from changes in Aspo’s business portfolio 8,0% ½ o
Slide 19: Moving towards a compounder profile aiming for growth
Moving towards a compounder profile aiming for growth Add-ons in BUs Aspo growth ambition • Possible add-ons relevant for all core businesses of Aspo, but particularly for • Sustainable long term growth Telko market consolidation is a achieved by re-investing earnings Long term investment horizon st
Slide 20: Aspo growth platform to support businesses with critical competencies
Aspo growth platform to support businesses with critical competencies • No aim to capture operative synergies, but important to create a common platform for success • Tailored support depending on the company situation - Strategic guidance - M&A and development skills - Integrating sustainability in
Slide 21: Dividend policy unchanged, leaving room for strategic investments
Dividend policy unchanged, leaving room for strategic investments 0,61 • Aspo’s dividend policy: target to annually 0,57 increase the amount of dividend 0,56 • Dividend policy will not jeopardise strategic 0,49 0,47 capex investments, compounding Aspo growth 0,45 0,44 0,42 0,42 0,41 0,42 0,43 0,42 •
Slide 22: Aspo sustainability
Aspo sustainability Capital Markets Day 2021 22
Slide 23: Sustainability shaping Aspo
Sustainability shaping Aspo • Sustainability shapes our growth strategy and business portfolio in the face of social, economic, and environmental change • Aspo’s sustainability themes include the overall ambition to decouple business growth from caused environmental pressure over a given period • In
Slide 24: Aspo Group key sustainability themes
Aspo Group key sustainability themes OUR AMBITION Aspo portfolio companies aim to be sustainability forerunners in their industries E S G Improving OUR Growing our Driving sound Aspo COMMITMENTS / business while governance KEY FOCUS AREAS experience for lowering pressure to practices at all people i
Slide 25: Aspo level sustainability Key Performance Indicators
Aspo level sustainability Key Performance Indicators Growing our business while lowering Improving Aspo experience for Driving sound governance E pressure to the environment S people in our value chain G practices at all levels Lowering carbon intensity Ensuring employee safety Sound governance prac
Slide 26: ESG to form an integral part of our acquisition process and ownership agenda
ESG to form an integral part of our acquisition process and ownership agenda Target mapping Acquisition process Ownership We deepen our understanding of the financial performance and We develop an ESG strategy, incl. strategic direction priority areas, together with the ESG is evaluated both in term
Slide 27: Key takeaways
Key takeaways Sustainability shapes Aspo’s Revised long-term financial targets growth and its business portfolio • Increased ambition level • Clear priorities, themes and targets • Focus on both profitability and growth • Target to decouple growth from environmental pressure • All investments assess
Slide 28: ESL Shipping: Sustainable growth and strong profitability
ESL SHIPPING Sustainable growth and strong profitability Aspo Capital Markets Day December 1, 2021
Slide 29: The most sustainable marine logistics partner for selected industries
The most sustainable marine logistics partner for selected industries in Northern Europe and Arctic areas 51 vessels, 473.000 DWT Offices in Finland, Sweden and Russia Main clients: Metals & mining, forest industry, Net sales: EUR 178m (LTM) chemicals, food chain and EBITDA: EUR 46,0m (LTM) energy E
Slide 30: Our Strengths
Our Strengths Sustainability leadership Long-term customer agreements • Strong niche player Industry forerunner in environmental, safety and Built on trust and performance governance issues Strong niche player Operational excellence Northern know-how and deep Highly competent staff & efficient under
Slide 31: Industrial Partnership
Industrial Partnership We secure product and raw material transportation for industries and energy production year-round Industrial Contracts of Affreightment form vast majority of revenues in both segments. Due to large share of long-term contracts our business model is much less sensitive to marke
Slide 32: ESL Handysize and Supra segment
ESL Handysize and Supra segment 17 vessel units between 9000-56000 dwt All 100 % owned vessels Healthy volume development and strong earnings since Q4/20. Main industrial clients in metals & mining, chemicals and energy. Supras operating in Atlantic basin and Arctic areas including NSR transits to C
Slide 33: AtoB@C Coaster segment
AtoB@C Coaster segment 34 vessel units between 3000-6000 dwt 7 owned, 2 partly owned, 25 time-chartered Healthy volume development and strong earnings since Q1/21. Main industrial clients in forest industry, metals & mining, chemicals and food chain. All vessels operating within range Scandinavia-Ib
Slide 34: Demand recovered towards normal levels
Demand recovered towards normal levels Carried volume is not the only revenue driver, also cargo type and distance carried matter Million tons per quarter 5 4,5 Bigger vessels fully employed 4 Transportation volumes in larger 3,5 vessel categories on healthy level 3 since Q4 2020 2,5 2 1,5 1 AtoB@C
Slide 35: New earnings level 2021
New earnings level 2021 EUR million EUR million Net sales EBIT and EBITDA 2011-2021 200 50,0 45,0 180 Long term financial target tuned up to 14 % EBIT-margin 40,0 160 35,0 140 30,0 120 25,0 100 20,0 80 15,0 60 40 10,0 Solid cash flow generation over the cycle - EUR 271 million of EBITDA in 2011-2021
Slide 36: Transportation volume estimates
Transportation volume estimates* Next 12 months Long-term Steel raw materials Steel products Scrap metals for steel industry Forest industry excluding paper Dry biomass Energy Coal Loading and unloading at sea Food chain Arctic area freight operations (incl. Russia) * Management estimates for main c
Slide 37: Strategic growth drivers - Sustainability and new technologies
Strategic growth drivers - Sustainability and new technologies Fossil free society Carbon free steelmaking Wood based products Circular economy Biofuels Fossil free energy production
Slide 38: Changing environmental regulation in shipping
Changing environmental regulation in shipping Planned GHG reduction regulations applicable for ships over 5000 GT, meaning AtoB@C fleet is excluded EU emissions trade to include Ship specific carbon intensity indicator shipping (CII) • Increasing energy cost between 30-100 % • Measures how efficient
Slide 39: ESG commitments
ESG commitments Reduce emissions to atmosphere and water • -50% of CO2 by 2030 • We work with the ports to minimise the amount of grey • Net zero operations by 2050 water and hold washing • We commit to Science Based water discharge to the sea Targets Initiative by the end of 2023
Slide 40: Our key ESG Targets
Our key ESG Targets Growing our business while lowering Improving the experience for people Driving sound governance practices ENVIRONMENT the pressure to the environment in ourSOCIAL value chain GOVERNANCE at all levels -50% of CO2 by 2030, We conduct ethically in line with applicable Net zero oper
Slide 41: Roadmap towards fossil free shipping
Roadmap towards fossil free shipping Shipping Investment Energy Sourcing Transport Demand Best available ship design and power train Building industrial scale availability of Customer commitment. Building and sharing capable of shifting to drop-in fossil free renewable fuels in partnership with comm
Slide 42: Green Coaster Concept
Green Coaster Concept AtoB@C Shipping invests in a series of six future proof, highly energy-efficient hybrid vessels MAIN PARTICULARS Length 90 m Breadth 16 m Draft 6m DWT 5,350 tons Cubic capacity 7,650 m3 Deliveries Q3/2023 -
Slide 43: Green Coaster highlights
Green Coaster highlights New electric-hybrid technology enables noise-free and emission-free port visits Further emission reduction potential by shore power, AtoB@C Shipping invests in a Nearly -50 % renewable fuels and wind series of six highly energy-efficient propulsion. green coaster diesel-hybr
Slide 44: Metsä Group – AtoB@C long-term partnership
Metsä Group – AtoB@C long-term partnership Increased transport efficiency with Green Coasters enables low emissions, competitive transport cost and improved profitability. Timber shipment GHG emissions Woodpulp Shipment GHG kg/loaded m3 emissions kg/loaded ton 35,00 50,00 45,00 30,00 40,00 25,00 35,
Slide 45: Green Coaster Pooling – shipping re-invented
Green Coaster Pooling – shipping re-invented Platform for investors to finance additional six newbuild hybrid vessels Asset light growth model Green infra investment Pooling Pooling will enable accelerated The hybrid vessels represent the most All newbuilt vessels will be placed in a growth and impr
Slide 46: Well positioned for sustainable growth and strong profitability
Well positioned for sustainable growth and strong profitability • We are well positioned for supporting our clients’ transition towards fossil free shipping. • Based on our long term strategy we are now delivering the expected strong profitability after the historical drop caused by Covid-19. • Inve
Slide 47: From focused growth to accelerated expansion
From focused growth to accelerated expansion Mikko Pasanen ASPO Capital Markets Day 2021
Slide 48: What is Telko
What is Telko We bridge industrial customers and principals in a sustainable way Telko is primarily an expert Telko’s business is based on Telko is the link in material and organization, which has the ability to sustainable partnerships by creating information flow between customers create additiona
Slide 49: Telko at a glance
Telko at a glance Net sales (Q4/20 – Q3/21) EBIT % Personnel 253 7,6 ~300 mEUR (Q4/20 – Q3/21) employees FINNISH COMPANY HAVING 23 LOCAL OFFICES IN 15 COUNTRIES FINLAND | SWEDEN | NORWAY | DENMARK | ESTONIA | LITHUANIA | LATVIA | RUSSIA | UKRAINE BELARUS | POLAND | CHINA | KAZAKHSTAN | UZBEKISTAN |
Slide 50: Back to growth track with solid profitability
Back to growth track with solid profitability
Slide 51: Unusual market situation continues
Unusual market situation continues Price index, Chemicals • Despite the difficult corona situation, in year 2020 Telko made best ever result. In 200 year 2021 this record breaking profitability level of the previous year was achieved 180 already in August 160 140 120 • Market situation has been favo
Slide 52: Telko Plastics
Telko Plastics 55% • Wide range of plastic raw materials and additives for various applications and industries. • Plastics is the biggest Business Segment for Telko. Present in all Telko countries. • The sales mix has shifted significantly towards more value-added products • Plastics distribution in
Slide 53: Telko Chemicals
Telko Chemicals 31% • Broad portfolio of chemicals for different industry segments, such as paints and coatings, personal care and food. • Chemicals business has the most diversified business portfolio • International business lines, but also several regional businesses • Clearly more than half of s
Slide 54: Telko Lubricants
14% Telko Lubricants • Industrial, marine and automotive lubricants, own production of car chemicals • Telko is one of the biggest distributors for Castrol in Europe • Lubricants is the smallest, but most stable business segment • Unified business portfolio in all countries • Sales volumes of recent
Slide 55: Sustainability drives industry transformation
Sustainability drives industry transformation • Our customers and principals expect that cooperation with Telko not only meets all legal requirements but enables our partners to achieve their own ambitious targets and commitments. • Based on customer and supplier surveys Telko is seen as a reliable
Slide 56: Telko sustainability targets & KPIs
Telko sustainability targets & KPIs Growing our business while lowering the Improving the Aspo experience for people in Driving sound governance practices at all pressure to the environment our value chain levels Lowering carbon intensity Ensuring employee safety Sound governance practices Scope 3:
Slide 57: Telko's journey to create value
Telko’s journey to create value EXPANSION • Continuous profitable organic growth in core businesses • Expansion to carefully selected FOCUSED GROWTH new geographies and business areas • Further improvement and • Updated strategy automatization of processes • Defined competitive edge on all • Unified
Slide 58: Clear focus areas for each phase
Clear focus areas for each phase EXPANSION FOCUSED GROWTH EFFICIENCY 2019 - 2021 2021 - 2022 2022 -->
Slide 59: Focus Areas for Expansion Phase
Focus Areas for Expansion Phase Focused and Profitable Accelerated growth through Strengthened ORGANIC GROWTH ACQUISITIONS BRAND & MARKETING Passionate and Skilled Systematic utilization of Unified and PERSONNEL BUSINESS INTELLIGENCE SCALABLE TELKO
Slide 60: Key takeaways
Key takeaways We bridge industrial customers and principals in a sustainable way TELKO TELKO’S TELKO’S TELKO is now more transformation: strategy: aims to become a efficient and Updated strategy Focused organic forerunner in profitable than and scalable growth will be sustainability in ever before o
Slide 61: THANK YOU!
THANK YOU! www.telko.com The ft ASPO Company @ TELKO
Slide 62: Leipurin: Towards full potential
LEIPURIN Towards full potential Strategy update CMD 1.12.2021
Slide 63: Leipurin serves food industries in 3 regions
LEIPURIN SERVES FOOD INDUSTRIES IN 3 REGIONS: FINLAND, BALTICS & EAST 1-9/21 net sales / PY 1-9/21 operating profit Personnel Nov 2021 81 M€ (74 M€) 1,2 M€ (1,2M€) 271 Offices | Countries | Finland | East | Baltics LTIF Accidents -10/21 RU Regions Net Sales 21 | 8 | 13 40% | 30% | 30% Zero NASTOLA S
Slide 64: Stable net sales over business cycles
STABLE NET SALES OVER BUSINESS CYCLES PANDEMIC WEIGHING DOWN DEMAND AND PROFITABILITY IN 2020-21 EBIT% €M €M 140 6 4,5 4 120 5 3,5 100 4 3 80 2,5 3 60 2 2 1,5 40 1 1 20 0,5 0 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LTM 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LT
Slide 65: We work for the vitality of regional food chains
THE FOOD CHAIN STARTS FROM NATURE & ENDS IN OUR HOMES PLANET SOCIETY FARMING INGREDIENTS HORECA & INDUSTRY CONSUMER NUTRITION RETAIL WE WORK FOR THE VITALITY OF REGIONAL FOOD CHAINS 4
Slide 66: Unprecedented market situation 2021
UNPRECEDENTED MARKET SITUATION 2021 • Demand still strongly affected • Supply chain disturbances are • Market demand growth is flat by COVID in Baltics and East here to stay with exception of focus • Remedies • Raw material volatility categories in food industries • eSales • Nordics and Western Euro
Slide 67: Strategy update
STRATEGY UPDATE LEIPURIN.
Slide 68: Strategy & Initiatives Towards full potential 2025
STRATEGY & INITIATIVES Profit Boost Program Growth Sustainability Structural • Q2/21 - 2023 • Plant-based foods • Our new 5 pillars of Development • Accountability & market growth sustainability cover the • Streamlined food chain from nature organisation: performance culture • Focus on Bakery core t
Slide 69: Profit Boost Program 2021-2023
PROFIT BOOST PROGRAM 2021-2023 Direct profit impact and clear monetary targets Profit Boost Program started in Q2 • Actionable analysis 5% EBIT • Continuous execution • Accountability Profit Boost Program 1. Performance culture KPIs Inventory age, NWC, category 2. Modernisation of commercial operati
Slide 70: Growth
GROWTH 1. Core focus on Bakery 2. Food Industry entry 3. Local focus in Russia • Growing focus categories in all food industries: dairy, non-dairy, plant-based foods and ready meals Growth by initiatives • Bakery market demand remains stable and is Leipurin stronghold in all regions 22 % 26 % • Food
Slide 71: Sustainability
SUSTAINABILITY Sustainability drives our growth strategy. We understand that the food chain starts from nature and ends in our homes. • We strive to actively develop Leipurin 5 pillars of sustainable business • Aligned with Aspo-level sustainability commitments Growing our Improving Driving sound bu
Slide 72: 5 Pillars and Targets of Sustainability
5 PILLARS AND TARGETS OF SUSTAINABILITY MATERIAL RESPONSIBLE CORPORATE EMISSIONS CARE FOR PEOPLE EFFICIENCY SUPPLY CHAIN GOVERNANCE • Reducing scope 1 & • Increasing material • Maintaining high • Caring for all the • Creating and 2 emissions in our efficiency and quality and product people in the fo
Slide 73: Structural Development
STRUCTURAL DEVELOPMENT Building a solid base for future growth • Streamlined organisation since June Streamlined organisation: REGIONS • Supporting strategy and profit improvement F • Full benefit from Leipurin international size and scope U N • Performance management: strategy target setting KP
Slide 74: Key Takeaways
KEY TAKEAWAYS Focus Building success on people • Core focus: Bakery industry and culture • New entry: Food industry • Employee satisfaction on great level • New strategy: Russia • Empowering the Manager Network • Profit boost program • Vulganus outside of the core Sustainability strategy • 5 pillars
Slide 75: Leipurin
LEIPURIN.
Slide 76: Key takeaways
Key takeaways Sustainability shapes Aspo’s Revised long-term financial targets growth and its business portfolio • Increased ambition level • Clear priorities, themes and targets • Focus on both profitability and growth • Target to decouple growth from environmental pressure • All investments assess
Slide 77: Q&A session
Q&A session Capital Markets Day 2021 82
Slide 78: Coming events
Coming events Aspo Group’s Financial Statements release February 16, 2022 www.aspo.com Twitter: @AspoPlc 83