ASPO Plc STOCK EXCHANGE BULLETIN May 5, 2008, at 8:30
a.m.
Aspo has reorganized its operational group structure. The new Aspo
will include three more independent leading corporate brands as well
as a new Aspo Ventures unit.
Aspo's structural change and new strategy is a consequence of the
acquisition of Kauko-Telko Oy. After the reorganization Aspo will
give up the segment reporting divided into Chemicals, Shipping and
Systems divisions.
The new Aspo owns three leading corporate brands in their sectors:
ESL Shipping handles marine raw material transport and related
services for the energy and heavy industry sectors; Leipurin serves
the bakery industry by supplying raw materials, machinery, production
lines and bakery-related know-how; Telko markets plastics and
chemicals for industrial customers and assists its customers in
product development and product processing.
In 2007, ESL Shipping generated net sales of EUR 85.1 million and the
operating profit totaled EUR 25.1 million (including capital gain of
EUR 10.2 million). The net sales of Leipurin amounted to EUR 92.6
million (pro forma) and the operating profit was EUR 4.2 million (pro
forma). Telko's net sales totaled EUR 198.4 million (pro forma) and
the operating profit EUR 6.3 million (pro forma). Markus Karjalainen
will continue as president of ESL Shipping, and Matti Väänänen will
continue as president of Leipurin. Jari Ranne, the current president
of Aspokem Ltd, has been appointed president of Telko.
Aspo Ventures comprises developing businesses. These are typically at
the stage of development where their size and structure may undergo
major changes. Aspo Ventures provides maintenance services and
automation systems for service stations under the Autotank name and
engages in other operating activities, such as industrial machinery
and technical trade, under the name of Kaukomarkkinat. In 2007,
Autotank generated net sales of EUR 57.7 million and operating profit
of EUR -1.5 million. Kaukomarkkinat generated net sales of EUR 61.5
million (pro forma) and operating profit of EUR 3.6 million (pro
forma).
In 2007, the new Aspo generated net sales of EUR 495.3 million (pro
forma) and operating profit of EUR 22.4 million (pro forma) after
Group administration costs of EUR 5.1 million (pro forma).
Gustav Nyberg, CEO of Aspo:
"All our businesses have a long and successful history; they are the
leading and well known brands in their sectors. According to our new
strategy all these brands will be developed more independently, which
also holds more potential for developing the Group structure
further."
"All Aspo Group companies share certain common characteristics; they
focus on sectors where extensive, specialist knowledge is required
and they have a central role in their customers' value chain. All of
Aspo's business areas serve demanding business-to-business customers
and they have strong presence in the growing Eastern markets."
"Aspo will develop its business operations by utilizing the Group's
strong financial standing and intangible capital. The Group provides
added value to the businesses through long-term investments,
strategic vision and expertise on the Eastern market. As a
conglomerate Aspo is able to efficiently adopt best practices and
proven operating concepts from one business area and put this
expertise to efficient use in other sectors and new markets. This is
very valuable when we are expanding operations to the CIS countries."
The new Aspo was created when Aspo acquired the entire stock of
Kauko-Telko Oy from Kesko Corporation. The acquisition was closed on
April 30, 2008. The transaction value based on the estimated April
2008 balance sheet was EUR 79 million. The acquisition is expected to
have a positive impact on earnings per share during the current
fiscal year.
Kauko-Telko's key business areas prior to the transaction were
industrial raw materials as well as raw materials, ingredients and
equipment for food industry. As a result of the transaction, the
current President of Kauko-Telko Oy, Mikko Teittinen, will resign
from the service of Kauko-Telko. Arto Meitsalo, the current CFO of
Kauko-Telko, has been appointed new acting president.
The new Aspo will employ approximately 1,200 people, almost half of
them abroad. All Aspo's business operations are strongly present in
the growing Russian and other Eastern markets. Through the
acquisition, Aspo gained also a strong presence in Poland.
Leipurin operates in Finland, Russia, Poland, Estonia, Latvia and
Lithuania. In Russia, besides St. Petersburg, Moscow, it has
operations in Tselyabinsk and Yekaterinburg. Leipurin will continue
its international expansion by serving the baking industry at all
stages of the production process. In addition to raw materials and
ingredients as well as machinery and equipment it provides its
customers, both international and regional bakeries, with the latest
know-how in the field and assistance e.g. in product development with
own test bakeries.
Aspokem and the industrial raw materials business of Kauko-Telko were
integrated into Telko. Telko has two business areas: Plastics and
Chemicals. Besides Finland, Telko has operations in Russia, Ukraine,
Belarus, Poland, Estonia, Latvia, Lithuania, Sweden, Denmark and
Norway. Wide geographical coverage and strong market presence in the
Eastern markets make Telko a more interesting partner for large
international suppliers. Large size enables also more efficient
global sourcing.
Aspo's financial reporting will follow the new segment reporting as
of May 1, 2008. ESL Shipping, Leipurin, Telko as well as Aspo
Ventures comprising Autotank and Kaukomarkkinat, will be reported as
separate segments.
Aspo's financial objectives are as follows: Operating profit as
percentage of net sales on average 5-10; approximately 10-15% annual
net sales growth; return on investment and on equity more than 20% on
average; to distribute approximately half of the year's profit in
dividends.
KEY FIGURES BY SEGMENT (pro forma)
ESL Shipping
1-3/2008 1-12/2007
Net sales, MEUR 21.0 85.1
Operating profit, MEUR 3.2 14.9
Personnel 222 239
Leipurin
1-3/2008 1-12/2007
Net sales, MEUR 25.4 92.6
Operating profit, MEUR 1.6 4.2
Personnel 155 154
Telko
1-3/2008 1-12/2007
Net sales, MEUR 50.2 198.4
Operating profit, MEUR 1.8 6.3
Personnel 221 224
Aspo Ventures
1-3/2008 1-12/2007
Net sales, MEUR 27.4 119.2
Operating profit, MEUR 0.9 2.1
Personnel 470 471
Autotank 1-3/2008 1-12/2007
Net sales, MEUR 12.7 57.7
Operating profit, MEUR -0.4 -1.5
Personnel 309 309
Kaukomarkkinat 1-3/2008 1-12/2007
Net sales, MEUR 14.7 61.5
Operating profit, MEUR 1.3 3.6
Personnel 161 162
Net Sales by Market area, MEUR (pro forma)
1-3/2008 1-12/2007
Finland 68.6 256.1
Nordic countries 21.5 100.8
Baltic countries 9.4 43.3
Russia and others 24.7 95.1
Total 124.2 495.3
OUTLOOK
Aspo estimates that the acquisition will create a substantial amount
of synergies in the long term. Synergies will be created from more
efficient administration, e.g. personnel costs and rents, as well as
more efficient sourcing.
ESL Shipping
ESL Shipping's prospects for the current financial year have been
described in a stock exchange release on April 29, 2008.
ESL Shipping operates in the Baltic Sea area, one of the world's
fastest growing transport markets. ESL Shipping derives its
competitive advantage from its geographical location and expertise in
the Baltic Sea. The future potential for ESL Shipping lies in related
services, such as loading and unloading, also at sea, as well as
salvage operation.
Leipurin
Leipurin will invest in the current fiscal year in Russia especially
in logistics and capable personnel, which is estimated to have a
positive impact on net sales. The order backlog of machinery and
equipment has remained strong. Leipurin is estimated to generate net
sales and earnings at approximately last year's level.
In the long term, Leipurin holds ample opportunities in the CIS
markets. For instance in Russia, the proportion of consumption of
Western-style bread is increasing rapidly along with general changes
in consumption behavior.
In Finland, Leipurin has the objective to maintain its strong market
position, in the Baltic countries the objective is continued growth.
Telko
In 2008, Telko is estimated to generate consolidated net sales and
earnings at least on the same level as Aspokem and Kauko-Telko's
industrial raw materials business generated in 2007. The organic
growth in the net sales is estimated to continue. Modest growth is
estimated to continue in the Nordic countries, while strong growth
appears to be continuing in the CIS countries.
In the Nordic countries the financial performance for 2008 is
estimated to remain at last year's level. In Europe, the slowdown of
demand will put pressure on prices but no significant price drop is
expected. In Russia, the growth trend is expected to continue and the
operational performance is expected to improve. The wider product
portfolio provides new growth opportunities in Russia. For instance,
lubricants enable the broadening of customer base to heavy
industries, such as the mining industry.
In the long term, Telko's size will enable more efficient global
sourcing and it will strengthen Telko's position towards suppliers.
Telko has also an opportunity to increase the size of its operations
through new combinations of principals, products and customers.
Potential changes in the principal base will be identified along the
integration process. Telko will start to build a new organization and
efficient operational structure by combining best practices of
Aspokem's and Kauko-Telko's industrial raw materials business
organizations.
Aspo Ventures
Aspo Ventures comprises businesses under Autotank and Kaukomarkkinat
brands. Autotank's prospects for the current financial year have bee
described in a stock exchange release on April 29, 2008.
For Autotank, the consolidation trend in the industry will continue
creating a need for renewal of station networks. The share of
automated and unmanned petrol stations is also expected to continue
to increase. In Russia, the motor vehicle population is growing
rapidly and growth is particularly strong in initial registrations of
foreign cars. This gives rise to need for new petrol station
investments.
Industrial machinery under Kaukomarkkinat brand is estimated to
maintain its net sales and operational performance level. Investments
in the growth markets are expected to lead to positive development
especially in 2009. Project deliveries to pulp & paper industry have
developed favorably and the share of Chinese sales is increasing.
Kaukomarkkinat will also invest in Russia by recruiting more sales
personnel. The net sales and earnings of other technical trade
businesses are expected to increase. The growth is accelerated by the
increased demand on high efficient heat pumps for heating buildings.
ASPO Plc
Gustav Nyberg
CEO
More detailed information on Aspo's new Group structure and
objectives will be presented at a press conference to be held today,
on May 5, 2008, at 11:00 at Palace Gourmet, Eteläranta 10, 00130
Helsinki.
For more information, please contact
CEO Gustav Nyberg at +358 40 503 6420; gustav.nyberg@aspo.fi or
COO Aki Ojanen at + 358 400 106 592; aki.ojanen@aspo.fi
Aspo is a conglomerate focusing on sectors that require extensive,
specialist knowledge. Aspo is the owner and developer of market
leading niche companies like ESL Shipping, Leipurin and Telko.
Additionally, Aspo Ventures includes developing businesses such as
Autotank and Kaukomarkkinat. Aspo serves demanding
business-to-business customers. Aspo's net sales (pro forma) amounted
to EUR 495.3 million in 2007.
Distribution:
Nordic Exchange Helsinki
The Media
www.aspo.com