Slide 1: Successful strategy execution and improved profitability
Aspo Group Interim Report January–June 2024 Successful strategy execution and improved profitability CEO Rolf Jansson August 14, 2024
Slide 2: Successful strategy execution and improved profitability
Successful strategy execution Q2 2024 Q1- Q2 2024 and improved profitability • Q2 2024 financial performance outperform previous year Net sales, continuing operations EUR 153.5 million (132.5) EUR 286.2 million (274.2) - Net sales from continuing operations increased by 16% in Q2 2024 Comparable EBI
Slide 3: Positive development in emission intensity and employee safety
Positive development in emission intensity and employee safety • 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 0.37 (0.37 in 2023) - 1-6 2024: 0.35 (1-3/2024: 0.41) Target 2024: - Targ
Slide 4: Aspo back on a growth track
Aspo back on a growth track • In H1 2024, Aspo’s net sales from MEUR continuing operations grew by 4% to EUR Net sales Growth % 286.2 (274.2) 200 35% • In Q2 2024, Aspo’s net sales from 180 30% continuing operations grew by 16% to 160 25% EUR 153.5 (132.5) million - ESL Shipping (37%): Overall good
Slide 5: Aspo's profitability improving
• In H1 2024, comparable EBITA from continuing Aspo’s profitability improving operations was EUR 12.4 (12.6) million, the comparable EBITA rate was 4.3% (4.6%). H1 2024 was negatively impacted by political MEUR Comp. EBITA Comp. EBITA % strikes and the difficult ice conditions with an estimate EUR -
Slide 6: Items affecting comparability totaled at EUR -0.5 million in Q2 2024
Items affecting comparability totaled at EUR -0.5 million in Q2 2024 • In Q2 2024 Items affecting comparability totaled EUR -0.5 (-8.8) million EBITA, continuing operations 1-6/2024 - EUR -0.1 million relating to the sale of the minority stake in ESL MEUR Shipping 14 - EUR -0.1 million of exit losse
Slide 7: Strong free cash flow in Q2 2024 – major investments, but balanced by sale
Strong free cash flow in Q2 2024 – major investments, but balanced by sale of the supramax vessels MEUR Cash flow development, Group total • Operating cash flow was EUR 15.2 (18.7) million 70 - Change in working capital was EUR -6.0 (0.8) million, primarily driven by increased inventory in Telko 60
Slide 8: Comparable ROE from continuing operations picking-up to 8.0%
Comparable ROE from continuing operations picking-up to 8.0% ROE % Rep. ROE YTD Comp. ROE YTD 40 • Cumulative return on equity 28,7 adjusted by items affecting 30 27,3 24,7 comparability was 8.0% (11.8%) 18,3 Long-term target >20% - The decline came 20 particularly from ESL 13,1 11,8 12,3 11,9 Shipp
Slide 9: Aspo continues to successfully execute its business strategies
Aspo continues to successfully execute its business strategies Business strategies Execution evidence • Investments in twelve new generation electric ESL Shipping is focused on sustainability-driven hybrid green coaters growth, combined with commercial and • OP Finland Infra and Varma Mutual Pension
Slide 10: The sale of ESL Shipping's two supramax vessels was completed
The sale of ESL Shipping’s two supramax vessels was completed • ESL Shipping successfully completed the sale of its two supramax- class vessels, m/s Arkadia and m/s Kumpula, in May and June 2024 • The vessels were sold to companies belonging to HGF Denizcilik Limited Sirket group, a Turkish shipping
Slide 11: Telko entered Germany by acquiring Polyma Kunststoffe GmbH & Co KG
Telko entered Germany by acquiring Polyma Kunststoffe GmbH & Co KG • Telko expanded its plastics business to Western Europe through an acquisition of Polyma Kunststoffe GmbH & Co KG in Hamburg, Germany • Polyma is a distributor of well-known engineering plastics • The company’s net sales is expected
Slide 12: Telko completed the acquisition of Swed Handling, a leading Swedish chemical distributor
Telko completed the acquisition of Swed Handling, a leading Swedish chemical distributor • Telko expanded its chemicals business in Sweden by acquiring Swed Handling AB, a leading Swedish chemical distributor, from TeRa Invest AB. The transaction was completed on July 1 2024 • The net sales of the p
Slide 13: Leipurin expanded its operations in specialty ingredients and the food Industry
Leipurin expanded its operations in specialty ingredients and the food Industry • Leipurin expanded its food industry business in Sweden, via the technical food ingredient distributor Kebelco AB, a subsidiary of Swed Handing AB, which is integrated into Leipurin segment. The transaction was complete
Slide 14: Aspo has a strong ambition for growth and profitability
Aspo has a strong ambition for growth and profitability, with several steps towards the financial ambition already taken Aspo Group continued businesses Aspo’s businesses have already taken actions towards this ambition ~ 1 000 m Net sales (EUR m) • ESL Shipping minority • We aim to ownership double
Slide 15: Aspo's vision is to form two separate companies
Aspo’s vision is to form two separate companies “before Aspo turns 100 years in 2029” ASPO active ownership ASPO Infra ASPO Compounder Current ASPO segments • Green transition and capex investments • Organic growth supported with acquisitions • Industrial partnership • Partnering with principals and
Slide 16: Profitability recovered with good demand and efficient operations
Profitability recovered with good demand and efficient operations
Slide 17: Good contract volumes and demand in ESL Shipping
Good contract volumes and demand in ESL Shipping • In Q2 2024, ESL Shipping’s net sales increased by MEUR Net sales Growth % 37% from the comparison period to EUR 60.3 (43.9) 90 50% million 80 40% - Net sales includes EUR 12.8 million from the sale of mv Stellamar to pool investors 70 30% • Total ca
Slide 18: Efficient operations and good cargo volumes improved profitability
Efficient operations and good cargo volumes improved profitability Comp. EBITA Comp. EBITA % MEUR 12 24% • In Q2 2024, the comparable EBITA increased by 82% to EUR 6.1 (3.3) million, with comparable EBITA rate being 10.1% (7.6%) 10 20% • Efficient operations and good cargo volumes improved profitabi
Slide 19: Successful execution of the compounder strategy with acquisitions and organic volume growth
Successful execution of the compounder strategy with acquisitions and organic volume growth
Slide 20: Telko's net sales growth driven by acquisitions and organic volume growth
Telko’s net sales growth driven by acquisitions and organic volume growth • In Q2 2024, Telko’s net sales increased by 12% from MEUR Net sales Growth % the comparative period to EUR 60.9 (54.2) million. 75 15% Sales growth was driven by organic volume growth and acquisitions. Sales prices were on a
Slide 21: Stable business performance in Q2, acquisitions to improve Telko's profitability
Stable business performance in Q2, acquisitions to improve Telko’s profitability gradually in H2 2024 MEUR Comp. EBITA Comp. EBITA % • In Q2, the comparable EBITA increased to EUR 1.8 (1.1) 5 10% million, with comparable operating profit rate being 3.0% (2.0%) • Profitability improvement compared to
Slide 22: The transformation of Leipurin continues
The transformation of Leipurin continues
Slide 23: Leipurin sales declined driven by lower prices and targeted volume decline
Leipurin sales declined driven by lower prices and targeted volume decline in low margin categories MEUR Net sales Growth % 45 70% • In Q2 2024, Leipurin’s net sales decreased by 6% from the comparative period, amounting to EUR 40 60% 32.3 (34.4) million 35 50% - The decrease in sales was mainly dri
Slide 24: The transformation program continued to improve Leipurin's profitability
The transformation program continued to improve Leipurin’s profitability MEUR Comp. EBITA Comp. EBITA % 1,6 8% • In Q2 2024, the comparable EBITA increased to EUR 1.3 (1.1) million, with comparable EBITA rate 1,4 7% being 4.1% (3.3%) 1,2 6% • Improved sales mix and successful margin Target 5% manage
Slide 25: Aspo's financial position and guidance for 2024
Aspo’s financial position and guidance for 2024
Slide 26: Net debt to comparable EBITDA improved
Net debt to comparable EBITDA improved Net debt, MEUR Net debt, MEUR Net debt / EBITDA Net debt / EBITDA 180 3,5 Net debt / comparable EBITDA < 3 • Net debt to comparable EBITDA (12 months rolling) was 2.0 (2.3) 160 3,0 • Net debt at the end of the quarter decreased to EUR 119.6 140 2,5 million from
Slide 27: Strong liquidity and declining net debt with balanced maturity structure
Strong liquidity and declining net debt with balanced maturity structure Interest-bearing debt incl. lease Maturity profile (EUR million) liabilities (EUR million) In addition: Svenska Skeppshypotek EUR 16.0 million (undrawn facility) Interest-bearing liabilities EUR 206.8 (12/2023:195.9) million 23
Slide 28: Executive summary
Executive summary • Second quarter 2024 highlights - Aspo Group’s comparable EBITA for Q2 2024 was EUR 7.4 (3.9) million - The profitability of all businesses improved compared with previous year • Aspo gives strong evidence of continuing rigorous execution against strategy in all businesses YTD 202
Slide 29: Outlook by business segment
Outlook by business segment 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 Sh
Slide 30: Guidance for 2024 unchanged
Guidance for 2024 unchanged Aspo Group’s comparable EBITA is estimated to exceed EUR 32 million in 2024 (EUR 27.9 million in 2023). The profit improvement in year 2024 compared with last year is based on: • Market recovery is expected to be delayed with limited positive impact on Aspo’s profitabilit
Slide 31: Q&A
Q&A