2010-02-15 10:15:10 CET
2010-02-15 10:20:21 CET
REGULATED INFORMATION
Aspo - Financial Statement Release
ASPO GROUP'S FINANCIAL STATEMENT RELEASE
ASPO Plc STOCK EXCHANGE RELEASE February 15, 2010 at 11:15
ASPO 2009: Aspo improved, dividend unchanged
January-December, continuing operations
- Group net sales in 2009 were EUR 329.4 million (EUR 358.2 million)
- Operating profit was EUR 15.3 million (EUR 14.1 million)
- Profit before taxes amounted to EUR 11.7 million (EUR 9.5 million)
- Profit after taxes amounted to EUR 8.6 million (EUR 7.0 million)
- Earnings per share stood at EUR 0.33 (EUR 0.27)
- Free cash flow for 2009 was EUR 1.31 per share
- The consolidated balance sheet strengthened clearly. Interest bearing net debt
stood at EUR 58.8 million at the end of the review period (EUR 82.4 million) and
net gearing decreased considerably to 87.9% (124.9%).
- Equity ratio at the end of the period was 34.6% (30.6%).
- The Group's operating margin was 4.6% (3.9%), ROI was 11.1% (18.5%) and ROE
was 13.0% (24.1%).
- The Board of Directors proposed a dividend of EUR 0.42 per share (EUR 0.42).
ASPO October-December 2009: strong last quarter
October-December, continuing operations
- Group net sales amounted to EUR 90.1 million (EUR 100.2 million).
- Operating profit was EUR 4.0 million (EUR 1.2 million)
- Profit before taxes amounted to EUR 4.0 million (EUR -0.4 million)
- In 2010, Aspo has the preconditions to increase its net sales and improve its
earnings per share.
KEY FIGURES
1-12/2009 1-12/2008
Continuing operations
Net sales, MEUR 329.4 358.2
Operating profit, MEUR 15.3 14.1
Share of net sales, % 4.6 3.9
Profit before taxes, MEUR 11.7 9.5
Share of net sales, % 3.6 2.7
Personnel at the end of period 717 821
Earnings per share, EUR,
continuing operations 0.33 0.27
Earnings per share, EUR,
discontinued operations 0.00 0.33
Earnings per share, EUR, total 0.33 0.60
EPS adjusted for dilution, EUR,
continuing operations 0.33 0.26
EPS adjusted for dilution, EUR,
discontinued operations 0.00 0.30
EPS adjusted for dilution, EUR, total 0.33 0.56
Comparable earnings per share, EUR,
continuing operations 0.16* 0.27
Comparable earnings per share, EUR,
discontinued operations 0.00 -0.03
The Group on the whole
Equity per share, EUR 2.59 2.56
Equity ratio, % 34.6 30.6
Gearing, % 87.9 124.9
*excluding the sales gains from m/s Kontula and Hamina Terminal Services'
operations.
Aki Ojanen, Aspo's CEO:
Aspo's 2009 was good despite the general economic recession. I would like to
extend my thanks for the good result both to the personnel and our established
and loyal customers.
Aspo is highly successful in its four strong business areas. Our guidance for
2009 was that Aspo had good preconditions to reach the 2008 level of result for
continuing operations. We believe that, despite being challenging, this goal was
attainable. We were successful in reaching our goals on a broad spectrum. In
2009, we managed to reduce our debt considerably, strengthen our capital
structure and made all businesses profitable. We consider our fourth quarter
operating profit particularly good in light of the market situation. We exceeded
our annual target and reached an operating profit of EUR 15.3 million (14.1) for
continuing operations.
Earnings per share did not, in accordance with our guidance, reach the 2008
record level when we recognized a sales gain from the divestment of Autotank
Group.
In 2009, Aspo's operations in Russia and Ukraine were able to increase their
relative share of Group net sales, even though the local currencies had been
heavily devalued at the turn from 2008 to 2009. We believe that the CIS and
Ukraine economic area is among the global growth centers. Our local organization
in these countries did a great job and generated profit while creating
preconditions for further growth. Aspo's subsidiaries are now also present, in
addition to Western Russia, in Siberia, Tatarstan and the Volga region. At the
end of 2009, Leipurin also launched operations in Ukraine.
Aspo has, in accordance with its strategy, been able to carry out several
acquisitions in 2009. At the end of the year, Leipurin acquired the Latvian
bakery food company Raugs un citas preces SIA.
In terms of Group administrative costs, we have reached the targeted efficiency
and at an annual level the savings will amount to approximately EUR 2 million.
The stability of the conglomerate does not prevent growth, however. A
conglomerate like Aspo has good preconditions for growth, as the practices that
have proven good within one business area can quickly be applied to other
business areas.
ASPO AS A COMPANY
Aspo is a conglomerate that owns and develops business operations in the Baltic
Sea region focusing on demanding B-to-B customers. Our strong company brands -
ESL Shipping, Leipurin, Telko and Kaukomarkkinat - aim to be the market leaders
in their sectors. They are responsible for their own operations, customer
relationships, and the development of these. Together they generate Aspo's
goodwill. Aspo's Group structure and business operations are continually
developed without any predefined schedules.
From January 1, 2009, Aspo's business segments are ESL Shipping, Leipurin, Telko
and Kaukomarkkinat. Other operations include Aspo Group's administration and
other operations not belonging to the business units. The segment structure
corresponds with Aspo Group's organizational structure and internal earnings
reporting. IFRS regulations are applied to management reporting.
From January 1, 2009, the Group has monitored its net sales on the basis of the
following geographical division: Finland, the Nordic countries, the Baltic
countries, Russia and other CIS countries (including Ukraine), and other
countries.
Leipurin and Kaukomarkkinat have been included in Aspo Group's figures from the
beginning of May 2008. Telko's comparison figures include Kauko-Telko's
industrial raw materials purchased in the spring of 2008 from the beginning of
May 2008. Kaukomarkkinat was reported as a separate segment for the first time
in 2009.
Discontinued operations in 2008 include Autotank Group, Kauko-Telko's
procurement unit, the Finnish packaging business and the Swedish packaging and
adhesive tape business.
OPERATIONAL PERFORMANCE
The year 2009 began with a steep decline in sold raw material prices and demand,
which bottomed out during summer, and prices stabilized at a low level. In the
fall, product prices and demand made a moderate upturn. The prices of food raw
materials showed a slight decline in 2009, but demand remained stable.
Among important customer segments, the steel industry decreased production
considerably, which was reflected in cargo volumes. In the fall, a production
increase in the Scandinavian steel industry boosted the volume of cargo carried.
Increased volumes in the energy industry boosted the amount of energy coal
carried in the summer and the amount for the full year exceeded the 2008 level.
In the CIS countries and Ukraine, stabilization of currencies for 2009 and the
strengthening of the Russian ruble towards the end of the year have generated
general confidence in a positive turn in the market in Russia, other CIS
countries and Ukraine.
Group net sales started growing after summer, and in December the Group reached
the highest net sales level of the year.
ESL Shipping
ESL Shipping is the leading dry bulk sea transport company operating in the
Baltic Sea area. At the end of the review period, the fleet consisted of 16
vessels, of which the shipping company owns 15. ESL Shipping is an integral part
of the maintenance support performance of the Finnish energy and steel industry.
10-12/2009 10-12/2008 Change 2009 2008
Net Sales, MEUR 17.6 20.9 -3.3 63.8 84.1
Operating Profit, MEUR 3.6 4.2 -0.6 14.7 15.6
Personnel 194 240 -46 194 240
The shipping company's operating environment was challenging throughout 2009. A
considerable drop in the cargo volume for steel industry contract customers, as
well as a decrease in free cargo, reduced net sales. ESL Shipping adjusted to
the situation by selling its oldest vessel, m/s Kontula, in the second quarter,
from which a EUR 2.9 million sales gain was recognized, and by laying up barges
in summer and early fall. Coal shipping partially compensated for the decrease
in steel industry cargo. In August, m/s Nassauborg was period chartered to
ensure winter transport for contract customers. In the last quarter, the cargo
volume for the steel industry increased, which helped raise the cargo volume for
the steel industry in 2009 to 5.7 million tons (8.7). The cargo volume for the
energy industry grew from 3.8 million to 4.6 million tons. The total cargo
volume in 2009 was 10.7 million tons (13.7).
ESL Shipping estimates that the market situation in the ship building industry
has changed for the positive for the company. The company will, in accordance
with its strategy, increase its capacity and renew its fleet. Due to a delay in
the construction schedule, the shipping company cancelled one of two vessels
ordered from India. The vessel that is still under construction has been
delayed, and it is expected to be completed by summer 2010. ESL Shipping has
been compensated for the losses related to the delay. On the other hand,
exchange rate losses have been recorded from reversal of fixed assets and
currency hedging of future installments in the balance sheet. The joint effect
from compensation for loss of income and the exchange rate losses is not
considerable in terms of ESL Shipping's result.
Leipurin
Leipurin serves the baking and food industry by supplying ingredients,
production machinery and production lines, as well as related expertise.
Leipurin operates in Finland, Russia, Poland, the Baltic countries and Ukraine.
In Russia, Leipurin has operations in several large cities in addition to St.
Petersburg and Moscow. Procurement operations are international.
10-12/2009 10-12/2008 Change 2009 5-12/2008
Net Sales, MEUR 27.5 27.1 0.4 99.3 69.3
Operating Profit, MEUR 1.1 1.1 0.0 3.2 3.1
Personnel 218 168 50 218 168
Leipurin's operations developed as planned in terms of bakery raw materials.
Offices were established in Siberia and Tatarstan. The new offices have started
out well and operations were profitable already in the first year of operation.
A subsidiary was established in Ukraine and test bakeries were established in
Siberia and Poland. At the end of the year, Leipurin acquired the share capital
of the Latvian company Raugs un citas preces SIA, which sells and markets
ingredients for the bakery and food industry. Leipurin is now the market leader
in Finland and in all the Baltic countries. Russia's share of sales has
increased and is now approximately 20% of total net sales. Bakery machine sales
increased in 2009 and line deliveries were completed in the last quarter as
planned. Other food industry operations grew modestly. The result in the fourth
quarter was the best for the year.
Telko
Telko is the leading expert and supplier of industrial chemicals and plastic raw
materials in the Baltic Sea region. It operates in Finland, the Baltic
countries, Scandinavia, Poland, Ukraine, Russia, and Belarus. Procurement
operations are international. Business is based on representation by the best
international principals and on the expertise of our personnel. We develop the
production and competitiveness of our customers' products in cooperation with
them.
10-12/2009 10-12/2008 Change 2009 2008
Net Sales, MEUR 33.7 40.3 -6.6 128.8 172.7
Operating Profit, MEUR -0.1 -2.5 2.4 3.1 1.0
Personnel 193 230 -37 193 230
Telko's business environment in 2009 was historically weak. The result was
affected both by a drop in sold raw material prices at the beginning of 2009 and
by a steep drop in demand from 2008. Telko announced at the beginning of the
year that it was aiming to improve profitability without any net sales target.
Telko continued improving internal operations and reorganization measures caused
by weak demand in Finland and Scandinavia. Loss-making products and operations
were abandoned. The new CEO, M.Sc. Kalle Kettunen, took over on August 1, 2009.
In the fall, a reorganization was carried out and the focus of the organization
was shifted to the Eastern markets, which created preconditions for additional
growth. Operations in Russia and other CIS countries developed well throughout
2009. Their share of net sales was 30%.
In the third quarter, Telko divested its terminal operations in Hamina as
unsuitable for the current strategy, which generated a EUR 3.2 million sales
gain. In the fourth quarter the loss-making Dutch plastic operations' trading
unit was closed. The full-year result includes non-recurring costs of EUR 2.3
million from reorganization measures and a decrease in personnel, of which EUR
0.5 million was allocated to the fourth quarter. The result in the fourth
quarter was also depressed by the write-down of receivables from a Finnish
customer worth EUR 0.4 million.
In the fall of 2009, Telko combined its Finnish operations under one roof and
adopted a new ERP system from the beginning of 2010.
Kaukomarkkinat
Kaukomarkkinat specializes in energy efficiency technology, solutions to improve
efficiency in the process industry, and security and digital applications.
Operations are based on the products of the best companies in the industry and
the willingness of the company's own experts to improve the operations and
efficiency of its customers. Kaukomarkkinat operates in Finland, Poland, Russia,
China, and Vietnam.
10-12/2009 10-12/2008 Change 2009 5-12/2008
Net Sales, MEUR 11.3 10.8 0.5 36.4 30.8
Operating Profit, MEUR 0.5 1.0 -0.5 0.5 2.1
Personnel 90 100 -10 90 100
In energy efficiency products, sales of air-source heat pumps have been weaker
in Finland than last year due to the general economic situation. As a result of
marketing campaigns, sales recovered in the fourth quarter. Kaukomarkkinat's
result was depressed by a EUR 0.5 million sales loss recorded from the
divestment of Metex Deutschland in the summer. In August, Kaukomarkkinat
divested its component and mechatronics operations. The deal had no effect on
Kaukomarkkinat's result.
Towards the end of the year, Kaukomarkkinat signed an agreement on delivering
energy-saving bulbs to the Finnish market. In project sales for improving
process industry efficiency, a slight recovery has been witnessed since the
summer, in Poland in particular. A substantial project from China was recorded
in the fourth quarter. In security and digital solutions, sales of durable
hunting phones and laptops in particular developed favorably.
Other operations
Other Operations include Aspo Group's administration and other operations not
belonging to the business units. The Group's administrative costs were still
unusually high. The ongoing cost-cutting program for fixed costs will reach its
full effect from the fourth quarter 2009 onwards. The aim is annual cost savings
of EUR 2 million. Aspo's offices in Helsinki and Espoo moved into new common
premises during the fall of 2009.
10-12/2009 10-12/2008 Change 2009 2008
Net Sales, MEUR 0.0 1.1 -1.1 1.1 1.3
Operating Profit, MEUR -1.1 -2.6 1.5 -6.2 -7.7
Personnel 22 83 -61 22 83
NET SALES
The net sales for Aspo Group's continuing operations decreased by EUR 28.8
million, or 8.0 percent, to EUR 329.4 million (358.2).
Net Sales by Segment, MEUR
10-12/09 10-12/08 Change 2009 2008
ESL Shipping 17.6 20.9 -3.3 63.8 84.1
Leipurin 27.5 27.1 0.4 99.3 69.3
Telko 33.7 40.3 -6.6 128.8 172.7
Kaukomarkkinat 11.3 10.8 0.5 36.4 30.8
Other operations 0.0 1.1 -1.1 1.1 1.3
Continuing operations total 90.1 100.2 -10.1 329.4 358.2
Discontinued operations 1.9 -1.9 45.1
Total 90.1 102.1 -12.0 329.4 403.3
Inter-segment net sales is not considerable.
Net Sales by Market Area, MEUR
Continuing Operations
10-12/09 10-12/08 Change 2009 2008
ESL Shipping 38.8 25.3 13.5 151.8 166.0
Leipurin 9.6 12.2 -2.6 30.0 47.5
Telko 9.2 12.2 -3.0 37.0 32.8
Kaukomarkkinat 18.0 23.4 -5.4 56.2 61.1
Other operations 14.5 27.1 -12.6 54.4 50.8
Continuing operations total 90.1 100.2 -10.1 329.4 358.2
Discontinued operations 1.9 -1.9 45.1
Total 90.1 102.1 -12.0 329.4 403.3
The significance of Russia and Ukraine in Aspo's business is further emphasized
when ESL Shipping's raw material transport costs from Russia are included in the
net sales of the Russian market area. On an annual level, Russia and other CIS
countries increased their share to 27% (25) of Group net sales. The net sales of
Russia + other CIS countries is as follows:
10-12/09 10-12/08 Change 2009 2008
Russia + other CIS countries 23.9 30.1 -6.2 87.9 90.6
EARNINGS
Operating profit for Aspo Group's continuing operations in 2009 amounted to EUR
15.3 million (14.1). Operating profit includes EUR 6.1 million in sales gains,
EUR 0.5 million in sales losses and non-recurring costs from Telko of EUR 2.3
million.
ESL Shipping's operating profit was EUR 14.7 million (15.6), including a EUR
2.9 million sales gain from m/s Kontula. Leipurin's operating profit was EUR
3.2 million (3.1). Telko's operating profit grew by EUR 2.1 million to EUR 3.1
million (1.0). Kaukomarkkinat's operating profit was EUR 0.5 million (2.1).
Other Operations include Aspo Group's administration and a small share of other
items not belonging to the business units. The operating profit of other
operations was EUR 6.2 million in the red (-7.7). Administrative costs decreased
considerably from the fourth quarter onwards.
Operating Profit by Segment, MEUR
10-12/09 10-12/08 Change 2009 2008
ESL Shipping 3.6 4.2 -0.6 14.7 15.6
Leipurin 1.1 1.1 0.0 3.2 3.1
Telko -0.1 -2.5 2.4 3.1 1.0
Kaukomarkkinat 0.5 1.0 -0.5 0.5 2.1
Other operations -1.1 -2.6 1.5 -6.2 -7.7
Continuing operations total 4.0 1.2 2.8 15.3 14.1
Discontinued operations 0.6 -0.6 9.6
Total 4.0 1.8 2.2 15.3 23.7
Earnings per share
Earnings per share for continuing operations stood at EUR 0.33 (0.27) and the
diluted earnings per share was EUR 0.33(0.26). Equity per share was EUR 2.59
(2.56).
INVESTMENTS
The investments from the Group's continuing operations amounted to EUR 7.4
million (20.5), which mainly includes ESL Shipping's dockings and Telko's new
ERP system adopted at the beginning of 2010. Other investments were maintenance
investments.
Investments by Segment, acquisitions excluded, MEUR
10-12/09 10-12/08 Change 2009 2008
ESL Shipping 0.2 0.2 0.0 3.1 18.8
Leipurin 0.1 0.1 0.0 0.5 0.1
Telko 1.6 0.1 1.5 2.5 0.4
Kaukomarkkinat 0.2 0.1 0.1 0.6 0.1
Other operations 0.1 0.3 -0.2 0.7 1.1
Continuing operations total 2.2 0.8 1.4 7.4 20.5
Discontinued operations 0.0 0.0 0.6
Total 2.2 0.8 1.4 7.4 21.1
FINANCING
The Group's financing position improved considerably during the year. The
divestment of Hamina Terminal Services Ltd's operations, the Kontula vessel and
smaller individual business operations together with strong operational cash
flow enabled a considerable decrease in interest-bearing debt in the review
period. In addition, the cancellation of ESL Shipping's second vessel order from
India strengthened the Group's financial position. The Group's liquidity is good
and the amount of cash and cash equivalents on the closing date was EUR 11.5
million (12.6). There was a total of EUR 70.3 million (95.0) in interest-bearing
liabilities on the consolidated balance sheet on the closing date. Interest-free
liabilities totaled EUR 58.6 million (43.6).
Aspo Group's net gearing was 87.9% (124.9), the return on equity was 13.0%
(24.1) and the equity ratio was 34.6% (30.6).
The Group's cash flow from operations still remained strong. The cash flow for
January-December was EUR 13.0 million (30.9). The Group maintained its strong
operating profit level but less working capital was released than in the
comparison period. The Group's free cash flow was EUR 33.9 million (-39.8).
Divestment and transfer gains from business operations and material commodities
generated a strong cash flow for the Group. Similarly the low level of
considerable investments affected free cash flow in the period.
The amount of working capital decreased further. At the end of the period the
change in working capital stood at EUR 6.8 million (14.9).
The amount of binding revolving credit facility signed between Aspo and its main
financing banks stood at EUR 80 million at the end of the period. At the end of
the period the binding revolving credit facility remained fully unused.
RISKS AND RISK MANAGEMENT
The deep economic recession that began in 2008 continued in 2009, maintaining an
elevated risk level in all of Aspo's business areas. The economic uncertainty
and slow or even negative growth increased uncertainty throughout early 2009,
but did not prevent operations and controlled growth in most of our business
areas. Towards the end of the year, stabilization in the economy and a slight
recovery in prices also decreased risks.
The Group is growing in developing market areas where growth risks are also
affected by investments, interest rate levels, exchange rates and customers'
liquidity, as well as changes in legislation and import regulations. In terms of
Aspo's market areas, the general economic uncertainty also affects industrial
demand in Western countries. Of customer segments, basic industry in particular
has announced that its order book has decreased from 2009. Changes in demand in
developing markets are more difficult to estimate.
The Group has avoided considerable exchange rate losses due to active hedging of
currency positions and currency flow. Risks of bad debt have increased, and in
2009 the group recognized some provisions for bad debts, of which a significant
was made in the last quarter.
The risks caused by the economic recession were monitored in 2009 particularly
actively at Aspo. The merger of operations as a result of the 2008 acquisition
was completed in the fall of 2009 and the risk management of the merger was
combined with the general Group risk management. The business areas still
continued carrying out risk analyses controlled by external assessors and making
continuity plans. Risks were also analyzed to ensure sufficient insurance
coverage and no major shortcomings were detected. In December, Aspo's Board of
Directors approved internal supervision principles in which risk assessment and
management instructions are included as an integral part.
Risk management is part of Aspo's internal supervision and its task is to ensure
the implementation of the Group's strategy, development of financial results,
shareholder value, dividend payment ability and continuity in business
operations. The operational management of the business areas are responsible for
risk management. The management is responsible for defining sufficient measures,
implementation and for monitoring that the measures are implements as part of
day to day operational control. Risk management is coordinated by Aspo's CFO,
who reports to the Group CEO.
In operational risks, the main risks in terms of likelihood and effect are
connected to the permanence of customer relationships, equipment sufficiency,
maintaining the balance level and key personnel. Risks related to goodwill are
monitored through impairment testing in each business area at least once a year,
but more frequently in 2009 due to the recession. In 2009, there was no need to
make changes to goodwill.
Aspo Group's financing and financing risk management is centralized in the
parent company in accordance with the financing policy approved by the Board of
Directors.
CHANGES IN CORPORATE GOVERNANCE
Aspo follows the Finnish Corporate Governance Code issued by the Securities
Market Association, which became effective on January 1, 2009. Aspo's Board of
Directors approved changes to the company's own insider instructions as from
November 1, 2009. Instead of the previous 14 days, Aspo Plc's permanent insiders
are not allowed to acquire or surrender securities issued by the company within
21 days prior to the publication of the financial statements or interim reviews,
nor on the day of publication.
PERSONNEL
At the end of the period the number of employees at Aspo Group was 717 (827) and
the average during the fiscal period was 723 (882). The average number of
officials during the year was 492 (553) and of employees was 231 (364). The
number of personnel in the parent company consisting of officials was 13 (14) at
the end of the period and 15 (13) on average during the period.
Of Aspo Group's personnel, 59% (64) work in Finland, 4% (4) in other Nordic
countries, 10% (6) in Baltic countries, 18% (14) in Russia and other CIS
countries, and 9% (12) in other countries. Men make up 64% (67) and women 36%
(33) of employees. Of Aspo Group's employment contracts, 99% (99) are full time.
During the financial year, 30 (66) new employment contracts were signed. Total
wages and salaries paid to personnel in 2009 amounted to EUR 36.4 million
(35.4).
Personnel by Segment, year-end
2009 2008
ESL Shipping 194 240
Leipurin 218 168
Telko 193 230
Kaukomarkkinat 90 100
Other operations 22 83
Continuing operations total 717 821
Discontinued operations 6
Total 717 827
REWARDS AND INCENTIVES
The Aspo Group has introduced a profit-sharing scheme. Part of the Group's
profit is placed in a personnel fund as a profit bonus. The objective is for the
fund to use the majority of the profit bonuses to acquire Aspo Plc shares. The
long-term objective is to make the personnel one of the company's key
shareholder groups. The personnel fund covers all of Aspo Group personnel
working in Finnish subsidiaries. In addition to this, Aspo's business areas pay
part of their earnings as bonuses to the personnel. The calculation principles
for the bonuses are decided on by business area.
In 2006, Aspo's Board of Directors decided on a share price-linked incentive
scheme for key personnel, in which any bonus is based on the three-year yield of
the company's share. No bonuses were paid based on the program in 2009. The
Board of Directors decided, however, to continue the 2006 management
share-ownership plan by granting the people included in the plan a possibility
to receive Aspo shares in spring of 2010. The possible bonus will be paid in
part as shares and in part as cash. The 2006 share-ownership plan encompasses
about 30 people.
In March 2009, Aspo's Board of Directors also decided on a share price-linked
incentive scheme for key personnel, in which any bonus is based on the
performance of the company's share in 2009-2011. The scheme covers approximately
40 Aspo Group executives and key employees.
RESEARCH AND DEVELOPMENT
Aspo Group's R&D focuses mainly on developing operations, procedures and
production technology without a separate organization, which means that the
development investments are included in normal operational costs and are not
itemized.
ENVIRONMENT
Aspo Group's regular operations do not have any significant environmental
impact. The Group companies follow Aspo's environmental policy with the main
principle of continuously improving operations. Throughout our operations we
support the principles of sustainable development.
Aspo looks after the environment by taking initiatives and continuously
monitoring the laws and recommendations connected to its operation and any
revisions to these. We want to be pioneers in all of our operations and also
anticipate future developments in environmental regulations.
MANAGEMENT AND AUDITORS
Aspo Plc's Annual General Meeting on March 31, 2009 re-elected Matti Arteva, Esa
Karppinen, Roberto Lencioni, Gustav Nyberg and Risto Salo to the Board of
Directors for a one-year term. As Kari Stadigh opted out of the Board of
Directors, Kristina Pentti-von Walzel was elected as a new member of the Board.
Gustav Nyberg has acted as the full-time Chairman of the Board since January
1, 2009. Matti Arteva has acted as the deputy Chairman.
In 2009, the Board of Directors arranged 13 meetings, of which four were
teleconferences. The average participation rate was 99%.
Since January 1, 2009 the Group CEO has been Aki Ojanen, and the Group CFO Arto
Meitsalo.
The authorized public accounting firm PricewaterhouseCoopers Oy has been the
company's auditor. Mr. Jan Holmberg, APA, has acted as the auditor in charge.
BOARD AUTHORIZATIONS
The Annual Shareholders' Meeting of 2009 authorized the Board to decide on a
share issue, through one or several instalments, to be executed by conveying
shares held by the company. An aggregate maximum amount of 1,020,000 shares may
be conveyed based on the authorization.
The authorization will be used for the financing or execution of corporate
acquisitions or other transactions or for other purposes determined by the
Board. The authorization includes the right of the Board of Directors to decide
on all the terms and conditions of the conveyance and thus also includes the
right to convey shares otherwise than in proportion to the holdings of the
shareholders, in deviation from the shareholders' pre-emptive right on the
conditions provided by law.
Furthermore, the shareholders authorized the Board to decide on the acquisition
of company-held shares using the unrestricted shareholders' equity of the
company. The authorization covers a maximum of 400,000 own shares. The shares
shall be acquired through public trading, for which reason the shares are
acquired otherwise than in proportion to the holdings of the shareholders and
the consideration paid for the shares shall be the market price of Aspo's share
at the time of repurchase. The authorization does not exclude the Board's right
to resolve on a directed repurchase. The shares shall be acquired through public
trading on NASDAQ OMX Helsinki Ltd in accordance with its rules and regulations.
The shares shall be acquired to be used to finance or carry out possible
acquisitions or other arrangements, to balance the financial risk of the
company's share-ownership program or for other purposes determined by the Board.
The Board may not exercise the authorization if after the acquisition the
company or its subsidiary would posses or have as a pledge more than ten (10)
per cent of the company's stock.
The authorization is valid until the Annual Shareholders' Meeting of 2009, but
no more than 18 months from the approval at the Shareholders' Meeting.
The Board of Directors has not exercised the authorizations granted by the
Annual Shareholders' Meeting.
Aspo Plc's Extraordinary Shareholders' Meeting held on June 8, 2009 authorized
the Board of Directors to decide on an issue of shares and special rights
entitling to shares. A maximum of 2,600,000 shares may be issued on the basis of
the authorization. The authorization will be used for a convertible capital loan
to be issued by Aspo Plc, directed to a limited group of investors. The
authorization will not supersede the authorization to decide on a share issue
given to the Board of Directors by the Annual Shareholders' meeting.
The Board of Directors exercised the authorization granted by the Extraordinary
General Meeting on June 8, 2009, and decided to offer a convertible capital loan
with a maximum loan amount of EUR 15,000,000 for subscription by a limited group
of selected investors.
SHARES AND SHAREHOLDERS
Aspo Plc's registered share capital on December 31, 2009, was EUR 17,691,729.57
and the total number of shares was 26,406,063. The company's own shareholding
was 620,000 shares, accounting for 2.35 percent of Aspo Plc's stock. Aspo Plc
has one share series. Each share entitles its holder to one vote at the Annual
Shareholders' Meeting. The company's shares are quoted on NASDAQ OMX Helsinki in
the mid cap category and under the GICS classification Industrials.
During 2009, a total of 2,262,316 Aspo Plc shares were traded at EUR 12.2
million or 8.6% of the shares changed owners. The share reached a high of EUR
6.20 and a low of EUR 3.94 during the period. The average price was EUR 5.43 and
the closing price was EUR 5.90. The market value of the share capital at the
year-end, less treasury shares, was EUR 152.1 million.
At year-end, the number of Aspo Plc shareholders was 5,161. A total of 818,331
shares or 3.1 % of the total share capital was nominee registered or held by
non-domestic shareholders.
Henrik B. Nyberg announced on January 19, 2009 that his share of Aspo Plc's
share capital and votes fell below 10%.
CONVERTIBLE CAPITAL LOAN
The convertible capital loan issued in 2004 of EUR 15,512,500 was repaid on June
4, 2009 in accordance with the loan terms.
Aspo Plc has EUR 15,000,000 in a convertible capital loan issued in 2009. The
loan period is June 30, 2009 - June 30, 2014.The loan will be repaid in one
installment on June 30, 2014, assuming that the repayment conditions outlined in
Chapter 5 of the Finnish Companies Act and the loan terms are met. The loan has
a fixed interest rate of 7%.
The capital notes can be converted into Aspo stock. Each EUR 50,000 share of the
loan entitles the loan shareholder to convert the loan share to 7,690 Aspo Plc
shares. The conversion price for the share is EUR 6.50. The loan can be
converted annually between January 2 and November 11. The conversion period ends
on June 15, 2014. No conversions were made in 2009.
EVENTS AFTER THE REPORTING PERIOD
The company arranged a Capital Markets Day on January 19, 2010 and issued a
stock exchange release on the subject on January 19, 2009.
Revolving credit facilities were reorganized after the review period. The
maturity of the agreements was extended and the total amount was decreased from
EUR 80 million to EUR 50 million. The company also implemented a new financing
source by signing a sales agreement concerning some of Telko's trade
receivables.
The Group CTO Harri Seppälä, was on February 1, 2010, in addition to his
previous duties, appointed responsible for Aspo's investor relations reporting
to the CEO.
DIVIDEND PROPOSAL
At the Annual Shareholders' Meeting scheduled for April 7, 2010, the Board will
propose that a dividend of EUR 0.42 be distributed for fiscal 2009 on shares
outstanding and that no dividend be paid for treasury shares.
OUTLOOK FOR 2010
Aspo Group's current structure creates a good basis for growth in operations.
Administrative costs are expected to decrease considerably from 2009. The Group
is seeking growth in particular in Russia and other CIS countries, as well as in
Western markets as the economy recovers.
Aspo's aim is to improve its profitability.
Aspo has the preconditions to increase its net sales and improve its earnings
per share.
ESL Shipping
The shipping company's vessel capacity has decreased in recent years. The vessel
ordered from India is expected to be completed by summer and be with us on the
Baltic during the fall. In order to ensure winter traffic, which has been more
challenging than in previous years, and to cover docking in early summer, two
new vessels have been period chartered. M/s Beatrix is chartered from February
to June and m/s Princenborg to the end of April. M/s Nassauborg's period of
charter is continuing for the time being. A considerable share of the
transportation capacity of 2010 has been covered with long-term agreements. The
volume in the steel industry is estimated to exceed 2009 levels and the cargo
volumes in the energy sector are expected to remain at the same level as in
previous years. ESL Shipping is preparing to increase its capacity and renewing
its fleet in accordance with its strategy.
The amendment to the tonnage tax legislation that is awaiting approval from the
EU commission would have a considerable effect on ESL Shipping's post-tax result
if applied. The new tonnage tax legislation is expected to become retroactively
valid from January 1, 2010.
Leipurin
Organic growth is expected to continue. During 2010, Leipurin will continue
establishing itself in new major cities in Russia, will establish a test bakery
in Ukraine and investigate the possibility of starting operations in Belarus and
Kazakhstan. The wherewithal for growth is created by a new customs agreement
between Russia, Kazakhstan and Belarus that will take effect on July 1, 2010.
The new offices create a good foundation for several years of growth in bakery
raw material sales. Bakery machine sales is estimated to be at last year's
level. In terms of market areas, growth is expected from Russia, but sales in
the Baltic region is expected to decline. The order book for project deliveries
has decreased from the 2009 level. Leipurin aims at an operating profit level
that is at least on par with the 2009 level.
Telko
The savings effect on fixed costs from reorganization methods completed in 2009
is estimated to be approximately EUR 2 million in 2010. Telko will continue to
make its operations more efficient.
In early 2010 a new subsidiary will be founded in China. Operations will
initially be based on service to Northern European plastic industry customers
operating in China. The company will continue expanding in Russia and the CIS
countries in accordance with its strategy. New offices will be opened in major
cities in Russia. The new customs treaty between Russia, Belarus and Kazakhstan
from July 1, 2010 creates good opportunities to expand into Belarus and
Kazakhstan. The decision to expand into new countries will be made during 2010.
Telko will focus on further developing logistics and finding strong new clients.
The price level increased moderately in the fall of 2009 but is still clearly
below the 2008 level. Prices are not expected to decrease during 2010. Telko is
aiming to improve its operating profit.
Kaukomarkkinat
Kaukomarkkinat's main target is to grow at least as much as general market
growth in the Finnish air-source heat pump markets. In addition, the business is
aiming to expand its product portfolio - the company will introduce its own
air-water source heat pump to the markets by summer.
Project sales in the process industry are expected to improve to 2008 levels.
The company's order book in China has improved compared to 2009. Growth is being
sought in security and digital applications.
Kaukomarkkinat has the preconditions to improve its operating profit level.
Operational risks
The general economic situation is affecting industrial demand in the Baltic Sea
region. Of customer segments, basic industry in particular has announced that
its order book has decreased from 2009. Changes in demand in developing markets
are more difficult to estimate. In Russia in particular the overall market is
expected to continue developing positively, and the share of Russia and CIS
counties in Aspo Group's operations is expected to remain intact or increase.
The risk of a recession in the financial markets and the economy is still
reflected in the exchange rates in our neighboring areas (Russia, Ukraine, the
Baltic region and Poland). The economic recession may affect customers'
liquidity.
Helsinki, February 15, 2010
ASPO Plc
Board of Directors
ASPO GROUP INCOME STATEMENT
10-12/09 10-12/08
MEUR % MEUR %
Net sales 90.1 100.0 100.2 100.0
Other operating income 3.2 3.6 0.4 0.4
Depreciation and write-downs -2.1 -2.3 -3.0 0.0
Operating profit 4.0 4.4 1.2 1,2
Financial income and expenses 0.0 0.0 -1.6 -1.6
Profit before taxes 4.0 4.4 -0.4 -0.4
Profit for the period continuing operations 2.5 2.8 0.5 0.5
Profit for the period discontinued operations 0.3 0.3
Profit for the period 2.5 2.8 0.8 0.8
Other comprehensive income
Translation differences 0.4 -1.3
Cash flow hedges 0.9 0.3
Net result recognized directly to equity 0.2 0.5
Income tax on other comprehensive income -0.3 0.0
Other comprehensive income for the year, net of taxes 1.2 -0.5
Total comprehensive income 3.7 0.3
Profit attributable to shareholders 2.4 0.8
Minority interest 0.1 0.0
Total comprehensive income attributable to
shareholders 3.6 0.3
Minority interest 0.1 0.0
1-12/09 1-12/08
MEUR % MEUR %
Net sales 329.4 100.0 358.2 100.0
Other operating income 10.5 3.2 1.6 0.4
Depreciation and write-downs -8.9 -2.7 -10.8 -3.0
Operating profit 15.3 4.6 14.1 3.9
Financial income and expenses -3.6 -1.1 -4.6 -1.3
Profit before taxes 11.7 3.6 9.5 2.7
Profit for the period continuing operations 8.6 2.6 7.0 2.0
Profit for the period discontinued operations 8.5 2.4
Profit for the period 8.6 2.6 15.5 4.3
Other comprehensive income
Translation differences -0.1 -1.5
Cash flow hedges 0.4 0.9
Net result recognized
directly to equity 0.2 0.0
Income tax on other comprehensive income -0.1 -0.2
Other comprehensive income
for the year, net of taxes 0.4 -0.8
Total comprehensive income 9.0 14.7
Profit attributable to shareholders 8.5 15.5
Minority interest 0.1 0.0
Total comprehensive income attributable to
shareholders 8.9 14.7
Minority interest 0.1 0.0
ASPO GROUP BALANCE SHEET 12/09 12/08 Change
MEUR MEUR %
Assets
Non-current assets
Intangible assets 16.6 17.0 -2.4
Goodwill 40.2 40.4 -0.5
Tangible assets 50.1 69.1 -27.5
Available-for-sale assets 0.2 0.2 0.0
Long-term receivables 0.6 1.1 -45.5
Shares in associated companies 1.6 0.9 77.8
Total non-current assets 109.3 128.7 -15.1
Current assets
Inventories 29.3 33.4 -12.3
Sales and other receivables 44.7 43.3 3.2
Cash and bank deposits 11.5 12.6 -8.7
Total current assets 85.5 89.3 -4.3
Assets classified as held for sale 0.7 -100.0
Total assets 194.8 218.7 -10.9
Shareholders' Equity and Liabilities
Shareholders' equity
Share capital 17.7 17.7 0.0
Other shareholders' equity 49.2 48.3 1.9
Shareholders' equity attributable
to equity holders of the parent 66.9 66.0 1.4
Minority interest 0.0 0.0 0.0
Long-term liabilities 57.1 50.2 13.7
Short-term liabilities 70.8 102.0 -30.6
Liabilities classified as held for sale 0.5 -100.0
Total Shareholders' equity and liabilities
194.8 218.7 -10.9
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
A = Share Capital
B = Premium Fund
C = Fair Value Fund
D = Other Funds
E = Repurchased Shares
F = Translation Difference
G = Retained Earnings
H = Total
I = Minority Interest
J = Total Shareholders' Equity
MEUR A B C D E F G H I J
Balance at
31.12.2008 17.7 4.3 -0.3 0.5 -3.7 -1.5 49.0 66.0 0.0 66.0
Total comprehensive
income 0.3 -0.1 8.8 -0.1 8.9
Dividend payment -10.8 -10.8
Share based payment 0.5 0.5
Equity share of
convertible bond 3.2 3.2
Share of deferred
taxes -0.9 -0.9
Balance at
31.12.2009 17.7 4.3 0.0 2.8 -3.7 -1.6 47.5 67.0 -0.1 66.9
MEUR A B C D E F G H I J
Balance at
31.12.2007 17.7 4.3 -1.0 0.5 -3.0 0.0 44.3 62.8 0.2 63.0
Total comprehensive
income 0.7 -1.5 15.5 0.0 14.7
Dividend payment -10.8 -10.8
Share repurchase -0.8 -0.8
Share disposal 0.1 0.1
Change in minority
interest -0.2 -0.2
Balance at
31.12.2008 17.7 4.3 -0.3 0.5 -3.7 -1.5 49.0 66.0 0.0 66.0
ASPO GROUP CASH FLOW STATEMENT
1-12/09 1-12/08
MEUR MEUR
OPERATIONAL CASH FLOW
Operating profit 15.3 23.7
Adjustments to operating profit 1.7 1.3
Change in working capital 6.8 14.9
Interest paid -5.5 -6.0
Interest received 0.2 1.0
Taxes paid -5.5 -4.0
Total operational cash flow 13.0 30.9
INVESTMENTS
Investments in tangible and intangible assets -3.8 -22.0
Gains on the sale of tangible and intangible assets 13.8 0.7
Gains on the sale of business operations 11.1
Purchases of subsidiary shares -1.2 -78.2
Sale of the subsidiary shares 1.0 28.8
Total cash flow from investments 20.9 -70.7
FINANCING
Share acquisition -0.8
Share disposal 0.1
Change in short-term borrowings -32.7 16.9
Change in long-term borrowings 8.5 34.0
Profit distribution to minorities -0.1
Dividends paid -10.8 -10.8
Total financing -35.0 39.3
Increase / Decrease in liquid funds -1.1 -0.5
Liquid funds in beginning of year 12.6 13.1
Liquid funds at period end 11.5 12.6
KEY FIGURES AND RATIOS 2009 2008
Earnings per share, EUR continuing operations 0.33 0.27
Earnings per share, EUR discontinued operations 0.00 0.33
Earnings per share total 0.33 0.60
EPS adjusted for dilution, EUR continuing operations 0.33 0.26
EPS adjusted for dilution, EUR discontinued operations 0.00 0.30
EPS adjusted for dilution, EUR total 0.33 0.56
Comparable earnings per share, EUR continuing operations 0.16 0.27
Comparable earnings per share, EUR, Discontinued operations 0.00 -0.03
The whole group
Equity per share, EUR 2.59 2.56
Equity ratio, % 34.6 30.6
Gearing, % 87.9 124.9
ASPO GROUP CONTINGENT LIABILITIES 2009 2008
MEUR MEUR
Securities on group liabilities 72.4 79.0
Leasing liabilities 16.9 10.0
Derivative contracts 0.7 0.7
ACCOUNTING PRINCIPLES AND FINANCIAL REPORTING
This interim report has been compiled in accordance with the principles of IAS
34 Interim Financial Reporting. As of January 1, 2009, the Group has applied the
following new and revised standards: IFRS 8 Operating Segments and IAS 1
Presentation of Financial Statements. IFRS 8 has an effect on the segment
information and IAS 1 has an effect on the presentation of the income statement.
The comparison figures have been restated according to the new standards. The
changes have no effect on the Group's result or financial position.
In other regards, the same accounting principles that were applied to the
Financial Statement for December 31, 2008, have been applied. The calculation
formulas for key figures are explained in the 2008 Financial Statements on page
83. The report is unaudited.
Helsinki February 15, 2010
ASPO Plc
Aki Ojanen Arto Meitsalo
CEO CFO
For more information, please contact
Aki Ojanen, tel. +358 9 521 4010, +358 400 106 592
aki.ojanen@aspo.com
www.aspo.com <http://www.aspo.com/>
INFORMATION MEETING
Aspo will arrange a press conference for the media and analysts today, Monday
15 February, 2010, starting at 14:30 at Hotel Kämp, conference room
Gallen-Kallela, Pohjoisesplanadi 29, 00100 Helsinki, Finland.
ANNUAL SHAREHOLDERS' MEETING
The Aspo Plc Annual Shareholders' Meeting is scheduled to be held on Wednesday,
April 7, 2010, at 14:00 in the Stock Exchange Building at Fabianinkatu
14, 00100 Helsinki.
FINANCIAL INFORMATION IN 2010
The 2010 Annual Report will be published during week 13 in Finnish, in English
and in Swedish. You can read and order the report on our website at www.aspo.com<http://www.aspo.com/>.
Aspo Plc will publish three Interim Reports in 2010: for the first quarter on
April 28, 2010, for the second quarter on August 24, 2010, and for the third
quarter on October 26, 2010.
Distribution:
NASDAQ OMX Helsinki
Key media
www.aspo.com <http://www.aspo.com/>
[HUG#1384201]
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