Slide 1: Successful strategy execution in a challenging operating environment
Aspo Group Interim Report January–March 2024 Successful strategy execution in a challenging operating environment CEO Rolf Jansson May 7, 2024
Slide 2: Successful strategy execution in a challenging operating environment
Successful strategy execution in a Q1 2024 challenging operating environment Net sales, continuing operations • Net sales from continuing operations decreased by 6% in Q1 2024 EUR 132.7 million (141.6) • Comparable operating profit from continuing operations amounted to Comparable operating profit,
Slide 3: Emission intensity increased due to challenging weather conditions, safety development continues
Emission intensity increased due to challenging weather conditions, the positive development in employee safety continues • Aspo's key target is to reduce emission intensity, CO2 (tn) per net sales (EUR thousand), by 30% by 2025 Emission intensity, LTM - Starting level (2020) was 0.44 0.39 (0.37 in
Slide 4: Total price tag of EUR 4.4 million in Q1 and Q2 from strikes and winter
We expect a total price tag of EUR 4.4 million in Q1 and Q2 for the political strikes and exceptional winter conditions on Aspo Group level Negative profitability impact from the strikes and • The political strikes and exceptional ice conditions, impacted negatively exceptional winter conditions on
Slide 5: Net sales of Aspo for the first quarter in 2024 declined with 6%
Net sales of Aspo for the first quarter in 2024 declined with 6% MEUR Net sales Growth % 200 35% • In Q1 2024, Aspo’s net sales from 180 30% continuing operations decreased by 6% to EUR 133 (142) million. The sales of all 160 25% Aspo’s business segments were in decline: 140 20% - ESL Shipping (-5%)
Slide 6: As expected, Aspo's profitability for the first quarter in 2024 was weak
As expected, Aspo’s profitability for the first quarter in 2024 was weak MEUR Comp. oper. profit Comp. oper. profit % 14,0 14% • In Q1 2024, comparable operating profit from continuing operations was EUR 4.8 (8.4) million and the comparable 12,0 12% operating profit rate was 3.6% (5.9%) - ESL Shippi
Slide 7: Items affecting comparability totaling EUR -8.0 million in Q1 2024
Items affecting comparability, totaling at EUR -8.0 million in Q1 2024, mostly relate to impairment of the supramax vessels Operating profit 1-3/2024 • In Q1 2024 Items affecting comparability totaled MEUR EUR -8.0 (0.5) million on Group total level 4.8 - In ESL Shipping segment EUR -7.2 million was
Slide 8: Negative free cash flow in Q1 2024, driven by acquisitions
Negative free cash flow in Q1 2024, driven by the acquisitions of Optimol and Greenfluid MEUR Cash flow development, Group total • Net cash from operating activities was EUR 5.5 70 (12.2) million - Decline in cash flow particular for ESL Shipping 60 - Change in working capital was EUR -3.9 (-0.6) mi
Slide 9: Return on equity adjusted by items affecting comparability at 4.9%
Return on equity adjusted by items affecting comparability at 4.9% ROE % Rep. ROE (cum.) Adj. ROE (cum.) 40 34,0 32,3 • Return on equity adjusted by the 30,1 30,8 items affecting comparability was 30 4.9% (18.6%). The decline came particularly from ESL Shipping’s 18,6 Long-term target >20% negative
Slide 10: Minority investment completed to drive ESL Shipping's green transition
Minority investment completed to drive ESL Shipping's green transition • OP Finland Infrastructure LP together with Varma Mutual Pension Insurance Company invested a total of EUR 45 million in Aspo’s subsidiary ESL Shipping - Made against issuance of new shares in ESL Shipping with an agreed pre-mon
Slide 11: ESL Shipping to sell its two supramax vessels
ESL Shipping to sell its two supramax vessels to focus its business and free-up capital • ESL Shipping has 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 logisti
Slide 12: Optimol and Greenfluid: Telko entered France and Benelux
Optimol and Greenfluid: Telko entered France and Benelux via acquisitions in industrial lubricants • Telko opened new markets by expanding its lubricants business to Western Europe through acquisitions in France, Belgium, Luxembourg, and Netherlands, making Telko one of the largest industrial lubric
Slide 13: Swed Handling: Major acquisition in Sweden
Swed Handling: Major acquisition in Sweden to take a leading local position and double Telko’s total chemicals business • Telko expands its chemicals business in Sweden by acquiring Swed Handling AB, a leading Swedish chemical distributor (closing expected during Q3 2024) • Swed Handling’s business
Slide 14: Kebelco: Leipurin expands in specialty ingredients and the food industry
Kebelco: Leipurin expands in specialty ingredients and the food Industry • Leipurin expands its food industry business in Sweden, via the technical food ingredient distributor Kebelco. The company is currently part of Swed Handling, and will be integrated into Leipurin (closing expected during Q3 20
Slide 15: Political strikes and exceptional winter conditions weakened profitability
Political strikes and exceptional winter conditions weakened profitability
Slide 16: Healthy contract volumes in ESL Shipping, affected by strikes and winter
Healthy contract volumes in ESL Shipping. Volumes negatively affected by political strikes and exceptional winter conditions. • In Q1 2024, ESL Shipping’s net sales decreased by 5% from MEUR Net sales Growth % the comparison period to EUR 49.9 (52.7) million 90 50% • Total cargo volumes down from th
Slide 17: Operational efficiency and volumes negatively affected by strikes and winter
Operational efficiency and volumes negatively affected by the political strikes and the exceptional winter conditions Comp. oper. profit Comp. oper. profit % MEUR 12 24% • In Q1 2024, the comparable operating profit decreased by 55% to EUR 2.7 (6.0) million, with comparable operating profit rate bei
Slide 18: Telko's first quarter was challenging in a fairly soft, but stable market
Telko’s first quarter was challenging in a fairly soft, but stable market
Slide 19: Telko's Q1 was challenging in a fairly soft, but stable market
Telko’s Q1 was challenging in a fairly soft, but stable market • In Q1 2024, Telko’s net sales decreased by 8% from the MEUR Net sales Growth % comparison period to EUR 50.2 (54.3) million. Low demand 60 15% and significantly lower price level impacted negatively y-o-y, despite the increasing market
Slide 20: Stable market and development, acquisitions to improve Telko's profitability in H2 2024
Stable market and development compared to previous quarter, acquisitions to improve Telko’s profitability gradually in H2 2024 MEUR Comp. oper. profit Comp. oper. profit % • In Q1, the comparable operating profit decreased to EUR 5 10% 2.2 (2.7) million, with comparable operating profit rate being 4
Slide 21: The transformation of Leipurin continues
The transformation of Leipurin continues
Slide 22: Leipurin sales declined driven by lower prices and targeted volume declines
Leipurin sales declined driven by lower prices and targeted volume declines in low margin categories MEUR Net sales Growth % • In Q1 2024, Leipurin’s net sales decreased by 6% from the 45 70% comparison period, amounting to EUR 32.6 (34.6) million 40 60% - The decrease in sales was mainly driven by
Slide 23: Transformation program improved Leipurin's profit margin
The transformation program, incl. sales mix development and successful margin management, improved Leipurin’s profit margin MEUR Comp. oper. profit Comp. oper. profit % • In Q1 2024, the comparable operating profit 1,6 8% increased to EUR 1.1 (1.0) million, with comparable operating profit rate bein
Slide 24: Aspo's financial position and guidance for 2024
Aspo’s financial position and guidance for 2024
Slide 25: Gearing and equity ratio improved
Gearing and equity ratio improved Equity ratio % Gearing % 40 200 • Gearing improved to 74.0% from Gearing target <130 % 117.6% at the year-end 2023, driven 35 180 by the minority investment in ESL Shipping. 30 160 • The Group’s equity ratio at the end of the quarter increased to 38.6% 25 140 from 3
Slide 26: Strong liquidity and balanced maturity structure
Strong liquidity and balanced maturity structure Interest-bearing debt incl. lease Maturity profile (EUR million) liabilities (EUR million) In addition: Svenska Skeppshypotek EUR 24.2 million (undrawn facility) Interest-bearing liabilities EUR 199.4 100 (12/2023:195.9) million 24 90 15 80 Net intere
Slide 27: Executive summary
Executive summary • First quarter 2024 highlights - Aspo Group’s comparable operating profit for Q1 2024 was EUR 4.8 million (EUR 8.4 million in Q1/2023) - At Aspo level, the political strikes and exceptional winter conditions impacted Q1 2024 operating profit negatively with an estimated EUR 3.7 mi
Slide 28: Outlook by business segment
Outlook by business segment 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 peri
Slide 29: Guidance for 2024
Guidance for 2024 Aspo Group’s comparable operating profit is estimated to exceed EUR 30 million in 2024 (EUR 26.5 million in 2023). The profit improvement in year 2024 compared with last year is based on: • Improved market conditions especially during the second half of year 2024 • Profitability ge
Slide 30: Welcome to Aspo's Capital Markets Day
Welcome to Aspo’s Capital Markets Day on Tuesday, 14 May 2024 in Helsinki https://aspo.videosync.fi/cmd-2024 Aspo Q1 2024 results May 7, 2024 30
Slide 31: Q&A
Q&A