ASPO GROUP'S FINANCIAL STATEMENT RELEASE
(Thomson Reuters ONE) - ASPO Plc STOCK EXCHANGE RELEASE February 15, 2010 at 11:15ASPO 2009: Aspo improved, dividend unchangedJanuary-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 debtstood at EUR 58.8 million at the end of the review period (EUR 82.4 million) andnet 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 ROEwas 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 quarterOctober-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 itsearnings 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 toextend my thanks for the good result both to the personnel and our establishedand loyal customers.Aspo is highly successful in its four strong business areas. Our guidance for2009 was that Aspo had good preconditions to reach the 2008 level of result forcontinuing operations. We believe that, despite being challenging, this goal wasattainable. We were successful in reaching our goals on a broad spectrum. In2009, we managed to reduce our debt considerably, strengthen our capitalstructure and made all businesses profitable. We consider our fourth quarteroperating profit particularly good in light of the market situation. We exceededour annual target and reached an operating profit of EUR 15.3 million (14.1) forcontinuing operations.Earnings per share did not, in accordance with our guidance, reach the 2008record level when we recognized a sales gain from the divestment of AutotankGroup.In 2009, Aspo's operations in Russia and Ukraine were able to increase theirrelative share of Group net sales, even though the local currencies had beenheavily devalued at the turn from 2008 to 2009. We believe that the CIS andUkraine economic area is among the global growth centers. Our local organizationin these countries did a great job and generated profit while creatingpreconditions for further growth. Aspo's subsidiaries are now also present, inaddition to Western Russia, in Siberia, Tatarstan and the Volga region. At theend of 2009, Leipurin also launched operations in Ukraine.Aspo has, in accordance with its strategy, been able to carry out severalacquisitions in 2009. At the end of the year, Leipurin acquired the Latvianbakery food company Raugs un citas preces SIA.In terms of Group administrative costs, we have reached the targeted efficiencyand at an annual level the savings will amount to approximately EUR 2 million.The stability of the conglomerate does not prevent growth, however. Aconglomerate like Aspo has good preconditions for growth, as the practices thathave proven good within one business area can quickly be applied to otherbusiness areas.ASPO AS A COMPANYAspo is a conglomerate that owns and develops business operations in the BalticSea region focusing on demanding B-to-B customers. Our strong company brands -ESL Shipping, Leipurin, Telko and Kaukomarkkinat - aim to be the market leadersin their sectors. They are responsible for their own operations, customerrelationships, and the development of these. Together they generate Aspo'sgoodwill. Aspo's Group structure and business operations are continuallydeveloped without any predefined schedules.From January 1, 2009, Aspo's business segments are ESL Shipping, Leipurin, Telkoand Kaukomarkkinat. Other operations include Aspo Group's administration andother operations not belonging to the business units. The segment structurecorresponds with Aspo Group's organizational structure and internal earningsreporting. IFRS regulations are applied to management reporting.From January 1, 2009, the Group has monitored its net sales on the basis of thefollowing geographical division: Finland, the Nordic countries, the Balticcountries, Russia and other CIS countries (including Ukraine), and othercountries.Leipurin and Kaukomarkkinat have been included in Aspo Group's figures from thebeginning of May 2008. Telko's comparison figures include Kauko-Telko'sindustrial raw materials purchased in the spring of 2008 from the beginning ofMay 2008. Kaukomarkkinat was reported as a separate segment for the first timein 2009.Discontinued operations in 2008 include Autotank Group, Kauko-Telko'sprocurement unit, the Finnish packaging business and the Swedish packaging andadhesive tape business.OPERATIONAL PERFORMANCEThe 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 thefall, product prices and demand made a moderate upturn. The prices of food rawmaterials showed a slight decline in 2009, but demand remained stable.Among important customer segments, the steel industry decreased productionconsiderably, which was reflected in cargo volumes. In the fall, a productionincrease in the Scandinavian steel industry boosted the volume of cargo carried.Increased volumes in the energy industry boosted the amount of energy coalcarried 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 thestrengthening of the Russian ruble towards the end of the year have generatedgeneral confidence in a positive turn in the market in Russia, other CIScountries and Ukraine.Group net sales started growing after summer, and in December the Group reachedthe highest net sales level of the year.ESL ShippingESL Shipping is the leading dry bulk sea transport company operating in theBaltic Sea area. At the end of the review period, the fleet consisted of 16vessels, of which the shipping company owns 15. ESL Shipping is an integral partof 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 240The shipping company's operating environment was challenging throughout 2009. Aconsiderable drop in the cargo volume for steel industry contract customers, aswell as a decrease in free cargo, reduced net sales. ESL Shipping adjusted tothe 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 bargesin summer and early fall. Coal shipping partially compensated for the decreasein steel industry cargo. In August, m/s Nassauborg was period chartered toensure winter transport for contract customers. In the last quarter, the cargovolume for the steel industry increased, which helped raise the cargo volume forthe steel industry in 2009 to 5.7 million tons (8.7). The cargo volume for theenergy industry grew from 3.8 million to 4.6 million tons. The total cargovolume in 2009 was 10.7 million tons (13.7).ESL Shipping estimates that the market situation in the ship building industryhas changed for the positive for the company. The company will, in accordancewith its strategy, increase its capacity and renew its fleet. Due to a delay inthe construction schedule, the shipping company cancelled one of two vesselsordered from India. The vessel that is still under construction has beendelayed, and it is expected to be completed by summer 2010. ESL Shipping hasbeen compensated for the losses related to the delay. On the other hand,exchange rate losses have been recorded from reversal of fixed assets andcurrency hedging of future installments in the balance sheet. The joint effectfrom compensation for loss of income and the exchange rate losses is notconsiderable in terms of ESL Shipping's result.LeipurinLeipurin 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 168Leipurin's operations developed as planned in terms of bakery raw materials.Offices were established in Siberia and Tatarstan. The new offices have startedout well and operations were profitable already in the first year of operation.A subsidiary was established in Ukraine and test bakeries were established inSiberia and Poland. At the end of the year, Leipurin acquired the share capitalof the Latvian company Raugs un citas preces SIA, which sells and marketsingredients for the bakery and food industry. Leipurin is now the market leaderin Finland and in all the Baltic countries. Russia's share of sales hasincreased and is now approximately 20% of total net sales. Bakery machine salesincreased in 2009 and line deliveries were completed in the last quarter asplanned. Other food industry operations grew modestly. The result in the fourthquarter was the best for the year.TelkoTelko is the leading expert and supplier of industrial chemicals and plastic rawmaterials in the Baltic Sea region. It operates in Finland, the Balticcountries, Scandinavia, Poland, Ukraine, Russia, and Belarus. Procurementoperations are international. Business is based on representation by the bestinternational principals and on the expertise of our personnel. We develop theproduction and competitiveness of our customers' products in cooperation withthem. 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 230Telko's business environment in 2009 was historically weak. The result wasaffected both by a drop in sold raw material prices at the beginning of 2009 andby a steep drop in demand from 2008. Telko announced at the beginning of theyear that it was aiming to improve profitability without any net sales target.Telko continued improving internal operations and reorganization measures causedby weak demand in Finland and Scandinavia. Loss-making products and operationswere 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 organizationwas shifted to the Eastern markets, which created preconditions for additionalgrowth. Operations in Russia and other CIS countries developed well throughout2009. Their share of net sales was 30%.In the third quarter, Telko divested its terminal operations in Hamina asunsuitable for the current strategy, which generated a EUR 3.2 million salesgain. In the fourth quarter the loss-making Dutch plastic operations' tradingunit was closed. The full-year result includes non-recurring costs of EUR 2.3million from reorganization measures and a decrease in personnel, of which EUR0.5 million was allocated to the fourth quarter. The result in the fourthquarter was also depressed by the write-down of receivables from a Finnishcustomer worth EUR 0.4 million.In the fall of 2009, Telko combined its Finnish operations under one roof andadopted a new ERP system from the beginning of 2010.KaukomarkkinatKaukomarkkinat specializes in energy efficiency technology, solutions to improveefficiency in the process industry, and security and digital applications.Operations are based on the products of the best companies in the industry andthe willingness of the company's own experts to improve the operations andefficiency 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 100In energy efficiency products, sales of air-source heat pumps have been weakerin Finland than last year due to the general economic situation. As a result ofmarketing campaigns, sales recovered in the fourth quarter. Kaukomarkkinat'sresult was depressed by a EUR 0.5 million sales loss recorded from thedivestment of Metex Deutschland in the summer. In August, Kaukomarkkinatdivested its component and mechatronics operations. The deal had no effect onKaukomarkkinat's result.Towards the end of the year, Kaukomarkkinat signed an agreement on deliveringenergy-saving bulbs to the Finnish market. In project sales for improvingprocess industry efficiency, a slight recovery has been witnessed since thesummer, in Poland in particular. A substantial project from China was recordedin the fourth quarter. In security and digital solutions, sales of durablehunting phones and laptops in particular developed favorably.Other operationsOther Operations include Aspo Group's administration and other operations notbelonging to the business units. The Group's administrative costs were stillunusually high. The ongoing cost-cutting program for fixed costs will reach itsfull effect from the fourth quarter 2009 onwards. The aim is annual cost savingsof EUR 2 million. Aspo's offices in Helsinki and Espoo moved into new commonpremises 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 83NET SALESThe net sales for Aspo Group's continuing operations decreased by EUR 28.8million, 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 -12.0 329.4 403.3Inter-segment net sales is not considerable.Net Sales by Market Area, MEURContinuing 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 -12.0 329.4 403.3The significance of Russia and Ukraine in Aspo's business is further emphasizedwhen ESL Shipping's raw material transport costs from Russia are included in thenet sales of the Russian market area. On an annual level, Russia and other CIScountries increased their share to 27% (25) of Group net sales. The net sales ofRussia + 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 90.6EARNINGSOperating profit for Aspo Group's continuing operations in 2009 amounted to EUR15.3 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 2.3million.ESL Shipping's operating profit was EUR 14.7 million (15.6), including a EUR2.9 million sales gain from m/s Kontula. Leipurin's operating profit was EUR3.2 million (3.1). Telko's operating profit grew by EUR 2.1 million to EUR 3.1million (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 otheritems not belonging to the business units. The operating profit of otheroperations was EUR 6.2 million in the red (-7.7). Administrative costs decreasedconsiderably 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 23.7Earnings per shareEarnings per share for continuing operations stood at EUR 0.33 (0.27) and thediluted earnings per share was EUR 0.33(0.26). Equity per share was EUR 2.59(2.56).INVESTMENTSThe investments from the Group's continuing operations amounted to EUR 7.4million (20.5), which mainly includes ESL Shipping's dockings and Telko's newERP system adopted at the beginning of 2010. Other investments were maintenanceinvestments.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 21.1FINANCINGThe Group's financing position improved considerably during the year. Thedivestment of Hamina Terminal Services Ltd's operations, the Kontula vessel andsmaller individual business operations together with strong operational cashflow enabled a considerable decrease in interest-bearing debt in the reviewperiod. In addition, the cancellation of ESL Shipping's second vessel order fromIndia strengthened the Group's financial position. The Group's liquidity is goodand the amount of cash and cash equivalents on the closing date was EUR 11.5million (12.6). There was a total of EUR 70.3 million (95.0) in interest-bearingliabilities on the consolidated balance sheet on the closing date. Interest-freeliabilities 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 forJanuary-December was EUR 13.0 million (30.9). The Group maintained its strongoperating profit level but less working capital was released than in thecomparison period. The Group's free cash flow was EUR 33.9 million (-39.8).Divestment and transfer gains from business operations and material commoditiesgenerated a strong cash flow for the Group. Similarly the low level ofconsiderable investments affected free cash flow in the period.The amount of working capital decreased further. At the end of the period thechange in working capital stood at EUR 6.8 million (14.9).The amount of binding revolving credit facility signed between Aspo and its mainfinancing banks stood at EUR 80 million at the end of the period. At the end ofthe period the binding revolving credit facility remained fully unused.RISKS AND RISK MANAGEMENTThe deep economic recession that began in 2008 continued in 2009, maintaining anelevated risk level in all of Aspo's business areas. The economic uncertaintyand slow or even negative growth increased uncertainty throughout early 2009,but did not prevent operations and controlled growth in most of our businessareas. Towards the end of the year, stabilization in the economy and a slightrecovery in prices also decreased risks.The Group is growing in developing market areas where growth risks are alsoaffected by investments, interest rate levels, exchange rates and customers'liquidity, as well as changes in legislation and import regulations. In terms ofAspo's market areas, the general economic uncertainty also affects industrialdemand in Western countries. Of customer segments, basic industry in particularhas announced that its order book has decreased from 2009. Changes in demand indeveloping markets are more difficult to estimate.The Group has avoided considerable exchange rate losses due to active hedging ofcurrency positions and currency flow. Risks of bad debt have increased, and in2009 the group recognized some provisions for bad debts, of which a significantwas made in the last quarter.The risks caused by the economic recession were monitored in 2009 particularlyactively at Aspo. The merger of operations as a result of the 2008 acquisitionwas completed in the fall of 2009 and the risk management of the merger wascombined with the general Group risk management. The business areas stillcontinued carrying out risk analyses controlled by external assessors and makingcontinuity plans. Risks were also analyzed to ensure sufficient insurancecoverage and no major shortcomings were detected. In December, Aspo's Board ofDirectors approved internal supervision principles in which risk assessment andmanagement instructions are included as an integral part.Risk management is part of Aspo's internal supervision and its task is to ensurethe implementation of the Group's strategy, development of financial results,shareholder value, dividend payment ability and continuity in businessoperations. The operational management of the business areas are responsible forrisk management. The management is responsible for defining sufficient measures,implementation and for monitoring that the measures are implements as part ofday 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 areconnected to the permanence of customer relationships, equipment sufficiency,maintaining the balance level and key personnel. Risks related to goodwill aremonitored 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 tomake changes to goodwill.Aspo Group's financing and financing risk management is centralized in theparent company in accordance with the financing policy approved by the Board ofDirectors.CHANGES IN CORPORATE GOVERNANCEAspo follows the Finnish Corporate Governance Code issued by the SecuritiesMarket Association, which became effective on January 1, 2009. Aspo's Board ofDirectors approved changes to the company's own insider instructions as fromNovember 1, 2009. Instead of the previous 14 days, Aspo Plc's permanent insidersare not allowed to acquire or surrender securities issued by the company within21 days prior to the publication of the financial statements or interim reviews,nor on the day of publication.PERSONNELAt the end of the period the number of employees at Aspo Group was 717 (827) andthe average during the fiscal period was 723 (882). The average number ofofficials during the year was 492 (553) and of employees was 231 (364). Thenumber of personnel in the parent company consisting of officials was 13 (14) atthe 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 Nordiccountries, 10% (6) in Baltic countries, 18% (14) in Russia and other CIScountries, 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. Totalwages 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 827REWARDS AND INCENTIVESThe Aspo Group has introduced a profit-sharing scheme. Part of the Group'sprofit is placed in a personnel fund as a profit bonus. The objective is for thefund to use the majority of the profit bonuses to acquire Aspo Plc shares. Thelong-term objective is to make the personnel one of the company's keyshareholder groups. The personnel fund covers all of Aspo Group personnelworking in Finnish subsidiaries. In addition to this, Aspo's business areas paypart of their earnings as bonuses to the personnel. The calculation principlesfor the bonuses are decided on by business area.In 2006, Aspo's Board of Directors decided on a share price-linked incentivescheme for key personnel, in which any bonus is based on the three-year yield ofthe company's share. No bonuses were paid based on the program in 2009. TheBoard of Directors decided, however, to continue the 2006 managementshare-ownership plan by granting the people included in the plan a possibilityto receive Aspo shares in spring of 2010. The possible bonus will be paid inpart as shares and in part as cash. The 2006 share-ownership plan encompassesabout 30 people.In March 2009, Aspo's Board of Directors also decided on a share price-linkedincentive scheme for key personnel, in which any bonus is based on theperformance of the company's share in 2009-2011. The scheme covers approximately40 Aspo Group executives and key employees.RESEARCH AND DEVELOPMENTAspo Group's R&D focuses mainly on developing operations, procedures andproduction technology without a separate organization, which means that thedevelopment investments are included in normal operational costs and are notitemized.ENVIRONMENTAspo Group's regular operations do not have any significant environmentalimpact. The Group companies follow Aspo's environmental policy with the mainprinciple of continuously improving operations. Throughout our operations wesupport the principles of sustainable development.Aspo looks after the environment by taking initiatives and continuouslymonitoring the laws and recommendations connected to its operation and anyrevisions to these. We want to be pioneers in all of our operations and alsoanticipate future developments in environmental regulations.MANAGEMENT AND AUDITORSAspo Plc's Annual General Meeting on March 31, 2009 re-elected Matti Arteva, EsaKarppinen, Roberto Lencioni, Gustav Nyberg and Risto Salo to the Board ofDirectors for a one-year term. As Kari Stadigh opted out of the Board ofDirectors, 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 January1, 2009. Matti Arteva has acted as the deputy Chairman.In 2009, the Board of Directors arranged 13 meetings, of which four wereteleconferences. The average participation rate was 99%.Since January 1, 2009 the Group CEO has been Aki Ojanen, and the Group CFO ArtoMeitsalo.The authorized public accounting firm PricewaterhouseCoopers Oy has been thecompany's auditor. Mr. Jan Holmberg, APA, has acted as the auditor in charge.BOARD AUTHORIZATIONSThe Annual Shareholders' Meeting of 2009 authorized the Board to decide on ashare issue, through one or several instalments, to be executed by conveyingshares held by the company. An aggregate maximum amount of 1,020,000 shares maybe conveyed based on the authorization.The authorization will be used for the financing or execution of corporateacquisitions or other transactions or for other purposes determined by theBoard. The authorization includes the right of the Board of Directors to decideon all the terms and conditions of the conveyance and thus also includes theright to convey shares otherwise than in proportion to the holdings of theshareholders, in deviation from the shareholders' pre-emptive right on theconditions provided by law.Furthermore, the shareholders authorized the Board to decide on the acquisitionof company-held shares using the unrestricted shareholders' equity of thecompany. The authorization covers a maximum of 400,000 own shares. The sharesshall be acquired through public trading, for which reason the shares areacquired otherwise than in proportion to the holdings of the shareholders andthe consideration paid for the shares shall be the market price of Aspo's shareat the time of repurchase. The authorization does not exclude the Board's rightto resolve on a directed repurchase. The shares shall be acquired through publictrading 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 possibleacquisitions or other arrangements, to balance the financial risk of thecompany's share-ownership program or for other purposes determined by the Board.The Board may not exercise the authorization if after the acquisition thecompany 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, butno more than 18 months from the approval at the Shareholders' Meeting.The Board of Directors has not exercised the authorizations granted by theAnnual Shareholders' Meeting.Aspo Plc's Extraordinary Shareholders' Meeting held on June 8, 2009 authorizedthe Board of Directors to decide on an issue of shares and special rightsentitling to shares. A maximum of 2,600,000 shares may be issued on the basis ofthe authorization. The authorization will be used for a convertible capital loanto be issued by Aspo Plc, directed to a limited group of investors. Theauthorization will not supersede the authorization to decide on a share issuegiven to the Board of Directors by the Annual Shareholders' meeting.The Board of Directors exercised the authorization granted by the ExtraordinaryGeneral Meeting on June 8, 2009, and decided to offer a convertible capital loanwith a maximum loan amount of EUR 15,000,000 for subscription by a limited groupof selected investors.SHARES AND SHAREHOLDERSAspo Plc's registered share capital on December 31, 2009, was EUR 17,691,729.57and the total number of shares was 26,406,063. The company's own shareholdingwas 620,000 shares, accounting for 2.35 percent of Aspo Plc's stock. Aspo Plchas one share series. Each share entitles its holder to one vote at the AnnualShareholders' Meeting. The company's shares are quoted on NASDAQ OMX Helsinki inthe mid cap category and under the GICS classification Industrials.During 2009, a total of 2,262,316 Aspo Plc shares were traded at EUR 12.2million or 8.6% of the shares changed owners. The share reached a high of EUR6.20 and a low of EUR 3.94 during the period. The average price was EUR 5.43 andthe closing price was EUR 5.90. The market value of the share capital at theyear-end, less treasury shares, was EUR 152.1 million.At year-end, the number of Aspo Plc shareholders was 5,161. A total of 818,331shares or 3.1 % of the total share capital was nominee registered or held bynon-domestic shareholders.Henrik B. Nyberg announced on January 19, 2009 that his share of Aspo Plc'sshare capital and votes fell below 10%.CONVERTIBLE CAPITAL LOANThe convertible capital loan issued in 2004 of EUR 15,512,500 was repaid on June4, 2009 in accordance with the loan terms.Aspo Plc has EUR 15,000,000 in a convertible capital loan issued in 2009. Theloan period is June 30, 2009 - June 30, 2014.The loan will be repaid in oneinstallment on June 30, 2014, assuming that the repayment conditions outlined inChapter 5 of the Finnish Companies Act and the loan terms are met. The loan hasa fixed interest rate of 7%.The capital notes can be converted into Aspo stock. Each EUR 50,000 share of theloan entitles the loan shareholder to convert the loan share to 7,690 Aspo Plcshares. The conversion price for the share is EUR 6.50. The loan can beconverted annually between January 2 and November 11. The conversion period endson June 15, 2014. No conversions were made in 2009.EVENTS AFTER THE REPORTING PERIODThe company arranged a Capital Markets Day on January 19, 2010 and issued astock exchange release on the subject on January 19, 2009.Revolving credit facilities were reorganized after the review period. Thematurity of the agreements was extended and the total amount was decreased fromEUR 80 million to EUR 50 million. The company also implemented a new financingsource by signing a sales agreement concerning some of Telko's tradereceivables.The Group CTO Harri Sepp?, was on February 1, 2010, in addition to hisprevious duties, appointed responsible for Aspo's investor relations reportingto the CEO.DIVIDEND PROPOSALAt the Annual Shareholders' Meeting scheduled for April 7, 2010, the Board willpropose that a dividend of EUR 0.42 be distributed for fiscal 2009 on sharesoutstanding and that no dividend be paid for treasury shares.OUTLOOK FOR 2010Aspo Group's current structure creates a good basis for growth in operations.Administrative costs are expected to decrease considerably from 2009. The Groupis seeking growth in particular in Russia and other CIS countries, as well as inWestern 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 earningsper share.ESL ShippingThe shipping company's vessel capacity has decreased in recent years. The vesselordered from India is expected to be completed by summer and be with us on theBaltic during the fall. In order to ensure winter traffic, which has been morechallenging than in previous years, and to cover docking in early summer, twonew vessels have been period chartered. M/s Beatrix is chartered from Februaryto June and m/s Princenborg to the end of April. M/s Nassauborg's period ofcharter is continuing for the time being. A considerable share of thetransportation capacity of 2010 has been covered with long-term agreements. Thevolume in the steel industry is estimated to exceed 2009 levels and the cargovolumes in the energy sector are expected to remain at the same level as inprevious years. ESL Shipping is preparing to increase its capacity and renewingits fleet in accordance with its strategy.The amendment to the tonnage tax legislation that is awaiting approval from theEU commission would have a considerable effect on ESL Shipping's post-tax resultif applied. The new tonnage tax legislation is expected to become retroactivelyvalid from January 1, 2010.LeipurinOrganic growth is expected to continue. During 2010, Leipurin will continueestablishing itself in new major cities in Russia, will establish a test bakeryin Ukraine and investigate the possibility of starting operations in Belarus andKazakhstan. The wherewithal for growth is created by a new customs agreementbetween 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 bakeryraw material sales. Bakery machine sales is estimated to be at last year'slevel. In terms of market areas, growth is expected from Russia, but sales inthe Baltic region is expected to decline. The order book for project deliverieshas decreased from the 2009 level. Leipurin aims at an operating profit levelthat is at least on par with the 2009 level.TelkoThe savings effect on fixed costs from reorganization methods completed in 2009is estimated to be approximately EUR 2 million in 2010. Telko will continue tomake its operations more efficient.In early 2010 a new subsidiary will be founded in China. Operations willinitially be based on service to Northern European plastic industry customersoperating in China. The company will continue expanding in Russia and the CIScountries in accordance with its strategy. New offices will be opened in majorcities in Russia. The new customs treaty between Russia, Belarus and Kazakhstanfrom July 1, 2010 creates good opportunities to expand into Belarus andKazakhstan. 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 clearlybelow the 2008 level. Prices are not expected to decrease during 2010. Telko isaiming to improve its operating profit.KaukomarkkinatKaukomarkkinat's main target is to grow at least as much as general marketgrowth in the Finnish air-source heat pump markets. In addition, the business isaiming to expand its product portfolio - the company will introduce its ownair-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 beingsought in security and digital applications.Kaukomarkkinat has the preconditions to improve its operating profit level.Operational risksThe general economic situation is affecting industrial demand in the Baltic Searegion. Of customer segments, basic industry in particular has announced thatits order book has decreased from 2009. Changes in demand in developing marketsare more difficult to estimate. In Russia in particular the overall market isexpected to continue developing positively, and the share of Russia and CIScounties 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 stillreflected in the exchange rates in our neighboring areas (Russia, Ukraine, theBaltic region and Poland). The economic recession may affect customers'liquidity.Helsinki, February 15, 2010ASPO PlcBoard of DirectorsASPO 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 0.7ACCOUNTING PRINCIPLES AND FINANCIAL REPORTINGThis interim report has been compiled in accordance with the principles of IAS34 Interim Financial Reporting. As of January 1, 2009, the Group has applied thefollowing new and revised standards: IFRS 8 Operating Segments and IAS 1Presentation of Financial Statements. IFRS 8 has an effect on the segmentinformation and IAS 1 has an effect on the presentation of the income statement.The comparison figures have been restated according to the new standards. Thechanges have no effect on the Group's result or financial position.In other regards, the same accounting principles that were applied to theFinancial Statement for December 31, 2008, have been applied. The calculationformulas for key figures are explained in the 2008 Financial Statements on page83. The report is unaudited.Helsinki February 15, 2010ASPO PlcAki Ojanen Arto MeitsaloCEO CFOFor more information, please contactAki Ojanen, tel. +358 9 521 4010, +358 400 106 592aki.ojanen(at)aspo.comwww.aspo.com
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