Increasing the shareholder value in the long term
INCREASING THE SHAREHOLDER VALUE IN THE LONG TERM
Aspo creates value by owning and developing its businesses responsibly in the long term. The common goal of the owned businesses is to be the market leaders in their respective fields. The subsidiaries are responsible for their operations, customer relationships and their development, aiming to reach a leading position in sustainability in their own field. Aspo supports the success and growth of its businesses through appropriate capabilities.
Throughout Aspo’s more than 90-year history, courage and people have been the defining characteristics of operations. The Group is continuously investigating new possibilities for structural changes that increase the shareholder value. The premise for value creation is to create growing and steady ability to generate results.
Such measures, which aim to produce more value, may include the acquisition or sale of companies or businesses, the listing of businesses or other market operations. At the end of 2022, Aspo Group had business operations in more than 15 different countries, and we employed some 900 professionals.
Progress on many fronts
Aspo published its revised strategy at the end of 2021. Accordingly, Aspo aims to achieve sustainable long-term growth by reinvesting received profit in productive applications and by taking steps towards a compounder profile. Here, corporate arrangements are a key part of value creation, and the aim is to create growth and an income flow through them.
In 2022, the fulfilment of our strategy made good progress. Leipurin completed a significant business transaction in September 2022 when it acquired all shares in Kobia AB, a Swedish distribution company for the bakery industry, from Swedish Abdon Group. Kobia’s net sales more than compensate for the part of Leipurin’s net sales eliminated due to the withdrawal from eastern markets.
Telko completed business acquisitions during the year: the acquisition of the operations of the Norwegian company Johan Steenks AS was published in the fall, and Telko announced the acquisition of the Polish company Eltrex at the beginning of this year. The decision to withdraw from selected eastern markets as a result of Russia’s invasion of Ukraine will also temporarily reduce Telko’s net sales, but the aim is to compensate for its impact by continuing business acquisitions in western markets.
ESL Shipping took a significant strategic step forward when it established a long-term Green Coaster pool for energy-efficient electric hybrid vessels in August 2022 with an investor group consisting of institutional and private investors. The pooling structure is a commonly used practice in international shipping operations for the ownership and operation of vessels. The arrangement accelerates ESL Shipping’s operational growth and improves its profitability and return on equity.
A developing and active owner
Aspo enables growth for the businesses it owns, and aims to improve their profitability and returns by developing them and ensuring steady cash flows. The goal is to assume an active role in corporate arrangements – both in growth investments in the current businesses and in business transactions.
As an owner, Aspo is responsible for the acquisition and allocation of capital and for the investments in its subsidiaries. Aspo’s structure also enables larger investments, which individual businesses might not be able to afford.
Sustainability guides Aspo’s operations
Sustainability is a key factor in guiding Aspo Group’s management system and the process of investigating new investment objects. Aspo’s businesses aim to be pioneers in sustainability in their respective fields. In support of sustainability commitments, Aspo defined new ESG goals for key parts of the Group and businesses. Aspo Group’s key goal is to reduce emission intensity by 30% by 2025. Another shared goal for the Group is to improve occupational safety, measured by the development of accident frequency. Both goals showed positive development during 2022.
A 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. Aspo’s high debt management capacity, supported by its strong cash flow, enables the effective use of capital markets.
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 and structural arrangements that produce more value.