Increasing the shareholder value in the long term
INCREASING THE SHAREHOLDER VALUE IN THE LONG TERM
As a compounder, Aspo forms a balanced whole. The company’s cash flow is diversified by business function and geographic region which evens out the impact of economic fluctuations on the Group’s results. Aspo’s structure makes it a defensive whole, which is also able to produce high cash flows in exceptional market situations. The goal of all operations is to develop Aspo’s value steadily in the long term.
A developing and responsible owner
The value of subsidiaries is increased both organically and through business acquisitions. Typically, Aspo owns its business operations in their entirety. As an owner, it is responsible for the raising and allocation of capital and for investments of the subsidiaries. In recent years, the largest investments have been made in shipping company operations: Aspo has invested more than EUR 100 million in ESL Shipping’s growth in recent years. The structure of a conglomerate also enables larger investments, for which individual businesses might not have their own resources. In recent years, Telko has also carried out smaller business acquisitions in the Nordic countries and strengthened its position in the market area.
The development of businesses always starts with management. Here, the selection of Boards of Directors and the acting management for each subsidiary suitable for their development stage is crucial. As a compounder, the Boards of Directors of subsidiaries, consisting of external specialist members, comprise one of the most distinctive features of Aspo. They plan and approve company-specific strategies and select the managers of the businesses. Aspo Group’s CEO acts as the Chairman of all Boards of Directors in Aspo’s subsidiaries, which serves development at the level of the entire Group.
In the fall of 2020, Aspo Plc’s Board of Directors defined a new long-term responsibility goal, according to which Aspo’s businesses will be pioneers in responsibility in their respective fields. In recent years, significant steps have been taken in terms of responsibility at a Group level, and now the bar will be raised even higher in different businesses.
Strong cash flow enables the effective use of capital markets
The Group’s capital efficiency is also tightly linked to the fulfillment of Aspo’s strategy. As a compounder, Aspo has diversified its operational risks, and its high debt capacity, supported by its strong cash flow, enables the effective use of capital markets. While interest rates have remained low, Aspo has used debt financing to accelerate its growth.
As part of its strategy, Aspo also takes care of its capital structure so that the Group can develop its businesses with no predefined schedules. Aspo must always have sufficient resources for operations or structural arrangements that produce more value. A strong capital structure also means that Aspo is not forced by any external factors to sell or otherwise restructure its business operations.
Ready for structural changes
During its over 90-year history, Aspo has acquired and sold several businesses, listed one business and demerged into two independent listed companies. The Group is continuously investigating new possibilities for structural changes that increase the shareholder value. Such structural changes, which aim to produce more value, may include the acquisition or sale of companies or business functions, the listing of businesses or other market operations. During its history, the Group has gained solid expertise in business acquisitions and the successful integration of acquired businesses. The most recent example is the acquisition of AtoB@C, a strategically important Swedish shipping company, and its integration into ESL Shipping. Telko’s acquisitions in Sweden, Norway and Denmark also shift more focus on the Nordic countries.
A firmly Finnish company
Regardless of its international operations, Aspo is a listed company with its roots firmly in Finland. More than 99% of Aspo’s shares are in Finnish ownership. Furthermore, representatives of the largest shareholder families are members of the company’s Board of Directors, together with external specialist members. Through a steady dividend income, effectively diversified business operations and lower than average business risks, Aspo’s shareholders also include a considerable number of Finnish private investors, and the number of shareholders has increased steadily. Aspo has approximately 11,000 shareholders.