YEAR 2023

TRANSFORMATION

JOURNEY CONTINUES

Aspo supports the growth of its businesses and

aims to improve their profitability and ensure

steady cash flows.

Our ambition is to take an even more active role in

mergers, acquisitions, and other restructuring

activities as well as in growth investments in the

current businesses.

Aspo in brief 3

CEO’s review 6

Strategy 8

ESL Shipping 9

Telko 10

Leipurin 12

Aspo’s Sustainability Report 13

Environmental sustainability 18

Personnel 21

Governance 23

Sustainability tables 26

Corporate Governance 33

Board of Directors 39

Group Executive Committee 41

Subsidiaries’ Boards of Directors 43

ASPO YEAR 2023

ASPO GROUP

BUSINESSES

SUSTAINABILITY

GOVERNANCE

FINANCIAL STATEMENTS AND MANAGEMENT REPORT

142

INFORMATION FOR INVESTORS

143

AUDITOR’S REPORT ON ESEF

2023 in brief

Transformation progressed in 2023 as we continued to develop Aspo’s

business portfolio and driving the shift to the western markets in line

with our strategy.

Despite the challenging geopolitical and macroeconomic environment,

our continuing operations delivered financial performance clearly above

historical levels, which reflects the competitiveness and profitability of

our core business in the future. In terms of sustainability we also

progressed well and achieved great results especially in improving

employee safety.

At Aspo we are heading to 2024 confidently as we continue the

determined implementation of our strategy, targeting to accelerate

organic growth with acquisitions.

MEUR 536.4

-4%

MEUR 26.2

-40 %

Accelerating green

transition in sea

transportation

ESL Shipping progressed as planned with

the green coaster project. In addition,

OP Finland Infrastructure and Varma

invested a total of EUR 45 million in ESL

Shipping to accelerate further growth.

Leipurin’s focus

on core operations

Leipurin divested its bakery equipment

trading business and sold and leased

back several properties in Sweden and

Lithuania. The integration of Kobia

progress well.

Great improvement in

employee safety

Aspo’s key focus areas in sustainability

include reducing emission intensity

and improving occupational safety. In

2023 accident frequency decreased

significantly from the previous year.

Active

search for

acquisitions

In 2023 Telko acquired Eltrex, a Polish

distributor of specialty chemicals and

packaging materials. Telko continues

to actively pursue acquisitions, both

synergistic add-ons as well as new

growth platforms.

NET SALES,

CONTINUING OPERATIONS

COMPARABLE OPERATING PROFIT,

CONTINUING OPERATIONS

GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONASPO YEAR 2023

ASPO’S YEAR 2023

700

600

500

400

300

200

100

19 20 21 22 23 19 20 21 22 23 19 20 21 22 23 19 20 21 22 2319 20 21 22 23

180

150

120

Sustainable value creation

Aspo creates value by owning and developing business operations sustainably and in the long term.

Our companies aim to be market leaders in their sectors. They are responsible for their own operations,

customer relationships and the development of these aiming to be forerunners in sustainability. Aspo

supports its businesses profitability and growth with the right capabilities. Aspo Group has businesses in

13 different countries, and it employs a total of approximately 700 professionals.

NET SALES

COMPARABLE

OPERATING PROFIT EMPLOYEES RETURN ON EQUITY GEARING

553.0 M€ 26.5 M€ 712 1.2% 117.6%

-15% -52%

ASPO’S FINANCIAL TARGETS

KEY FIGURES

OPERATING PROFIT

8 %

ANNUAL NET SALES GROWTH

5–10 %

RETURN ON EQUITY GEARING

> 20 % < 13 0 %

1,000

800

600

400

200

GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONASPO YEAR 2023

ASPO’S YEAR 2023

297

ESL Shipping is the leading dry bulk cargo company in the

Baltic Sea region. ESL Shipping’s competitive edge is based on

its ability to secure product and raw material transportation

for industry and energy production year-round, even in difficult

weather conditions.

Telko is a leading distributor and solution provider for

converters and brand owners looking to safeguard

their business with future-proof plastics, chemicals or

lubricant solutions.

Leipurin operates as part of the food chain, acquiring raw

materials in global markets and from domestic companies,

and supplying them through its effective logistics chain

according to customer needs.

NET SALES

M€

COMPARABLE

OPERATING PROFIT M€

EMPLOYEES

SHARE OF GROUP’S

NET SALES %

189.0 18.3

- 23% -51%

35%

218211.3 9.0

+ 1% -20%

39%

157136.1 4.2

+ 29% + 282%

25%

GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONASPO YEAR 2023

ASPO’S YEAR 2023

■

CEO’S REVIEW

Transformation continued

in line with the strategy

In 2023, we continued to further develop Aspo’s busi-

ness portfolio. Over the past two years, we have with-

drawn from Russia and other selected eastern mar-

kets. We have also sold properties and the bakery equip-

ment business of Leipurin. The three businesses of

Aspo Group today focus on western markets and form a

strong platform for profitable growth.

FINANCIAL TARGETS WERE NOT MET

IN THE TRANSFORMATION PROCESS

In 2023, Aspo Group’s financial performance was more

modest than in the previous year, when we recorded

exceptionally strong results. We did not achieve our

financial targets in 2023. Largely because of the divest-

ment of our Russian business operations, our net sales

decreased significantly to EUR 553.0 million (652.6). The

comparable operating profit decreased to EUR 26.5 mil-

lion (55.3), and the comparable operating profit rate was

4.8% (8.5). The return on equity was also lower than

the target level, at 1.2% (15.2). Gearing remained at the

target level, at 117.6% (108.4). Almost all of the costs

related to our withdrawal from eastern markets are now

reflected in our figures, so we are heading forward on a

clean slate.

However, it is important to note that the performance

of our continuing business operations in 2023 was well

above historical levels. This shows that Aspo’s future

core businesses are competitive and capable of high per-

formance.

Financial development varied between business oper-

ations. ESL Shipping’s market environment was challeng-

ing, as demand and price levels in the spot market in par-

ticular were decreasing and markedly weaker than in the

previous two years. For Telko, the withdrawal from the

Russian market meant a decrease of EUR 70 million in

net sales. For Leipurin, the year was a significant suc-

cess, as both operational development and the syner-

gies of the Kobia acquisition implemented in 2022 pro-

duced record results.

BUSINESS OPERATIONS ARE PROGRESSING

IN LINE WITH THEIR STRATEGIES

All our three businesses have clearly defined strategies

that guide their operational development and allocation

of resources.

ESL Shipping leads the way in providing industrial

customers with environmentally friendly marine trans-

port and aims to develop a fully fossil-free service in

the future. The investment in twelve Green Coaster

electric hybrid vessels in 2022 was an important step

toward lower-emission marine transport. The first ves-

sel was delivered in December 2023, and around three

new vessels on average will be in operation during 2024.

To finance its growth and accelerate its green transi-

tion, ESL Shipping entered into an agreement with OP

The performance of our

continuing business

operations shows

that Aspo’s future

core businesses are

competitive and capable

of high performance.

GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONASPO YEAR 2023

ROLF JANSSON

ASPO’S YEAR 2023

Suomi Infra Ky on an investment of EUR 30 million in

2023. With the investment, OP Finland Infrastructure LP

became a minority shareholder in the company. In Feb-

ruary 2024, Varma Mutual Insurance Company made

a co-investment of EUR 15 million alongside OP Infra.

These investments and future measures enable ESL

Shipping to accelerate its green transition.

Telko is seeking strong growth both organically and

through acquisitions. Aspo’s vision is to grow Telko into

a leading European player in distribution of specialty

products in Europe. In 2023, Telko acquired Eltrex, a Pol-

ish special chemicals and industrial packaging materials

distribution company, thus supplementing its business

portfolio in Poland, which was previously focused on

chemical distribution.

The move of our head office

to Keilaniemi in Espoo and

the merger of our Lintulahti

locations in early autumn 2023

created both cost savings and

opportunities to enhance our

internal cooperation.

Leipurin is continuing to improve its performance by

further developing its commercial operations, supply

chains and procurement. The strong growth in 2023 was

driven by the Kobia acquisition in Sweden and high infla-

tion.

GOOD RESULTS IN SUSTAINABILITY

In line with Aspo’s strategy, all our businesses aim to

be frontrunners in sustainability in their own fields. Sus-

tainability also guides Aspo’s management system and

the process of exploring new investment opportunities.

Aspo’s key focus areas in sustainability include reduc-

ing emission intensity and improving occupational safety.

We made good progress in terms of these targets in

2023: we almost reached our emission intensity target,

and our accident frequency rate decreased significantly.

All our personnel completed the Code of Conduct and

Compliance trainings during the year, including issues

related to preventing corruption, among other top-

ics. During the year, we also started our work to pro-

mote diversity, equity and inclusion (DEI) in the com-

pany because we believe that this development is essen-

tial for our business operations. To succeed now and in

the future, we need a diverse range of skills, perspec-

tives and backgrounds, and we work to strengthen a cul-

ture at Aspo where everyone has equal opportunities to

thrive in their work.

STABLE OUTLOOK

Although our operating environment has changed signif-

icantly over the past two years, our strategy is still rel-

evant. We published our strategy at the end of 2021

and announced already then that we would be seeking

growth in western markets in particular.

Nordic industrial companies will be investing tens of

billions of euros in the green transition in the near future.

ESL Shipping’s market will grow significantly, and it has

excellent opportunities to further strengthen its market

position. We estimate that the development of ESL Ship-

ping’s key customer industries will be stable and show

an upward trend in 2024. Telko seeks to accelerate its

growth through acquisitions that support organic devel-

opment. Leipurin will continue its successful work to

improve its performance in its generally stable markets.

The move of our head office to Keilaniemi in Espoo

and the merger of our Lintulahti locations in early

autumn 2023 created both cost savings and opportuni-

ties to enhance our internal cooperation. The recruitment

of key people during the year also supports our transfor-

mation, which has progressed well.

I believe that our operating environment and highly

competent personnel will create good conditions for pos-

itive performance development in 2024.

Rolf Jansson

Group CEO

GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONASPO YEAR 2023

ASPO’S YEAR 2023

Aspo creates value by owning and developing its busi-

nesses responsibly in the long term. Aspo’s portfolio

consists of three businesses, i.e. ESL Shipping, Telko and

Leipurin. The common goal of the owned businesses is

to be the market leaders and sustainability forerunners

in their respective fields. The subsidiaries are responsible

for their operations, customer relationships and develop-

ment.

At the end of 2023, Aspo Group had business pre-

sence in 16 different countries, and employed some 800

professionals.

ACTIVE OWNERSHIP ENABLING GROWTH

Aspo supports the growth of its businesses and aims to

improve their profitability and ensure steady cash flows.

Our ambition is to take an even more active role in mer-

gers, acquisitions, and other restructuring activities as

well as in growth investments in the current businesses.

Aspo focuses especially on industrial services, and its

key clusters include logistics and trade. Sustainability is a

key element in our management system and guides the

process for new investment opportunities.

TRANSFORMATION PROGRESSING

In 2023 we continued executing our strategy succes-

sfully. ESL Shipping progressed as planned with the

ongoing investment in twelve green coasters: seven ves-

sels are under construction and the first vessel in the

Strategy execution continued

■

STRATEGY

series, Electramar, was successfully launched in June and

was delivered in December. The second vessel, Stella-

mar, was launched in October.

Aspo initiated a review of strategic options in spring

2023 to support and further accelerate ESL Shipping’s

low-carbon growth strategy. The program is assessing

alternative measures, including launch of a second wave

investment pool, potential minority equity investments

in ESL Shipping, and the sale of the two supramax ves-

sels. As the first result of this assessment, Aspo signed

an agreement in November with OP Finland Infrastruc-

ture LP regarding an investment of EUR 30 million into

ESL Shipping. In February 2024, Varma Mutual Insurance

Company made a co-investment of EUR 15 million along-

side OP Finland Infrastructure.

Telko continues to actively pursue acquisitions, both

synergistic add-ons as well as new growth platforms.

In January Telko acquired a Polish distribution company

Eltrex, which is a distributor of specialty chemicals and

industrial packaging materials. The company’s wide offe-

ring includes raw materials for coatings, flooring and

household chemicals industries.

Telko also continues to pursue organic growth, based

on the growth in the underlying market as well as

through gaining market share. Telko completed the sale

of its Russian operations in April.

Leipurin’s full profit potential program progressed as

planned, with significant profit improvement compared

to 2022. The integration of Kobia progressed well and

the acquisition has proven to be a game changer for Lei-

purin, strategically serving principals and customers in

the Nordics.

The divestment of bakery equipment trading business

in October and series of sales and lease backs of Swe-

dish and Lithuanian properties during the year supported

Leipurin’s strategy to be a focused, Nordic ingredient

and service company. The completion of the divestment

of Leipurin Russian, Belarusian and Kazakh operations is

still pending on approval of the local authorities.

SUSTAINABILITY IN THE CORE OF BUSINESS

Sustainability is a key driver for Aspo’s management

system and especially for the company’s investments.

Aspo’s businesses aim to be forerunners in sustainability

in their respective sectors.

The current key target of Aspo is to reduce emission

intensity, CO

(tn) per net sales (EUR thousand), by 30%

by 2025. The starting point (2020) was 0.44, while the

target level (2025) is 0.30. In 2023 the emission inten-

sity was at 0.37, only marginally behind the set goal of

0.36.

Another key sustainability focus area of Aspo is emp-

loyee safety, measured by the development of accident

frequency. Here we achieved great development, totaling

into TRIF at 4.8 (8.1 in 2022).

CAPITAL EFFICIENCY SUPPORTING

STRATEGY EXECUTION

The Group’s capital efficiency is tightly linked to the ful-

fillment of Aspo’s strategy. Aspo’s high debt manage-

ment capacity, supported by its strong cash flow, enab-

les the effective use of capital markets.

As part of its strategy, Aspo also takes care of its

capital structure to support strategy execution. Aspo

must have sufficient resources for operations and struc-

tural arrangements that produce more value.

Aspo’s long-term

financial targets

Operating profit 8 %

Annual increase in net sales 5–10 %

Return on equity > 20 %

Gearing < 130 %

GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONASPO YEAR 2023

ASPO’S YEAR 2023

ESL Shipping is the leading shipping services provider in

the Northern Baltic Sea in its core segments. The com-

pany’s core is to provide reliable shipping services for

its industrial partners. To meet that purpose ESL Ship-

pings’s active operating region extends to South-West-

ern Europe.

PARTNERSHIP AS BUSINESS MODEL

The company aims to build long-term relationships with

its selected partner clients. Seven out of the top ten ESL

Shipping’s customers have a longer than 10-year con-

tractual relationship with ESL Shipping. This is an out-

come of high customer advocacy that has been reached

through in-depth understanding of clients’ service needs

and delivery of high-quality services. ESL Shipping builds

a competitive edge through its ability to provide highly

reliable transportation services year-round, despite

sometimes harsh and challenging weather conditions.

STRONG FINANCIAL RESULTS DESPITE

CHALLENGING ENVIRONMENT

To provide flexible and reliable services, a sufficiently

large and interchangeable fleet is required. At the end

of 2023, ESL Shipping had 43 vessels in use, all 1A ice

classed. Out of the vessel fleet 24 are 100%-owned, 2

minority owned and 17 are time-chartered. ESL Ship-

ping’s total fleet has a deadweight tonnage of more

than 443,000 tons.

Year 2023 was characterized by a challenging busi-

ness environment. In various core customer segments,

the business activity has been declining, pulling down

especially spot volumes and rates, and the cost inflation

and interest rates have been high. Further, since spring

2022 and following Russia’s war against Ukraine, ESL

Shipping has made decision to withdraw fully from Rus-

sian ports.

Despite all this, ESL Shipping delivered solid financial

performance in 2023. The partnership-based strategy

proved its strength within this adverse business environ-

ment.

STRATEGY BUILT ON GREEN GROWTH

ESL Shipping’s core market, the Northern Baltic Sea, is

experiencing an unforeseen investment wave. Various

billion-scale investments are currently ongoing, prepared

or planned. The common denominator for these invest-

ments is the green transition. Major industrials are exe-

cuting their strategies that build on e.g. green steel, sus-

tainable and recyclable raw materials, low CO

emissions

and renewable energy.

The “Green Growth” drives substantial boost for sus-

tainable shipping needs in the region. Within ESL Ship-

ping’s core segments, the need for shipments is pro-

jected to double within the next 5–10 years. Fur-

thermore, given increased focus on emissions, the

requirement for low or no emission sea transportation

will be highlighted.

ESL Shipping is taking active steps to respond to this

development. The company has already ordered twelve

highly energy-efficient Coaster-sized electric hybrid ves-

sels and the delivery of the first vessel took place at the

end of 2023. The company is preparing the next wave

of green vessel investments and ESL Shipping has rein-

forced its capabilities and capacity in renewable energy

and project shipments. In addition, ESL Shipping is tak-

ing an active part in future fuel development and is well

positioned to play a leading role in the provision of CO

free shipments.

ADDITIONAL EQUITY TO ACCELERATE

GREEN GROWTH

ESL’s green transition demands substantial investments.

To secure fast progress of green shipping investments,

additional financing muscle is needed. In line with that

purpose Aspo entered in November 2023 into agree-

ment with OP Finland Infrastructure where OP Finland

Infrastructure injects additional equity of EUR 30 mil-

lion to ESL Shipping and becomes a minority shareholder

in the company. In February 2024, Varma joined the

arrangement with its own co-investment of EUR 15 mil-

lion.

Pursuing accelerated

green growth

MEUR18.3

Comparable operating profit

- 51%

MEUR189.0

Net sales

-23%

297

Personnel

ASPO YEAR 2023 GOVERNANCESUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONBUSINESSES

■

ESL SHIPPING

ASPO’S YEAR 2023

■

TELKO

Telko is a leading expert and supplier of plastic raw

materials, industrial chemicals, and lubricants. The com-

pany provides raw materials, technical expertise and sup-

port to various industries. It operates as a sustainable

partner in the value chain, bringing well-known interna-

tional principals and customers together. Telko’s partners

benefit from the company’s technical expertise and sup-

port, as well as its broad portfolio of raw materials that

can help uncover plastic, chemical, and lubricant solu-

tions that achieve greater productivity, sustainability, and

operational quality.

In 2023 Telko had operations in Finland, the Bal-

tic countries, Scandinavia, Poland, Romania, Ukraine,

Kazakhstan, Uzbekistan, and China.

FLUCTUATING DEMAND

AND VOLATILE PRICES

Demand and market prices were significantly volatile

throughout the year, and on average at a lower level

than the previous year. The revenue of Telko’s continu-

ous businesses grew mainly due to the acquisitions, but

profitability declined because of market price decreases.

Telko managed to improve its cost efficiency and adapt

costs, which mitigated the impact on profit caused by

market conditions.

Telko completed successfully its withdrawal from

Russia and Belarus and was able to continue its busi-

ness and operations in Ukraine. However, the market in

Ukraine is still demanding due to the war, and thus, the

level of business stays lower than before.

SUCCESSFUL ACQUISITIONS AND EXITS

According to its strategy, Telko participates actively in

market consolidation. In January 2024, Telko completed

the acquisition of Eltrex, a Polish distribution company

that specializes in specialty chemicals and industrial

packaging materials. During the year, Telko completed its

exit from the Russian market by selling its Russian sub-

sidiary. Telko also ceased it operations in Belarus and

started the liquidation process of its Belarussian sub-

sidiary. In September Telko sold its injection moulding

machinery business operations in the Baltic countries.

Telko continued to explore further merger and acquisi-

tion opportunites throughout the year.

To describe Telko’s efforts to improve the

environmental, financial, and technical per-

formance of their customers, Telko launched

its crystallized brand image, Telko Effect™. In

essence, Telko’s expertise, processes, total

cost of ownership approach, and exceptional

service attitude help Telko’s customers, prin-

cipals, and end-users to improve their perfor-

mance in a sustainable manner.

Unleashing the Telko Effect means

improved quality, productivity, sustainability,

and efficient use of costs and resources. Telko

adopts a solution-based focus with tailored,

technically-minded expertise that achieves the

standards that brand owners strive for.

Scalable business

MEUR9.0

Comparable operating profit

-20%

MEUR211.3

Net sales

+ 1 %

218

Personnel

Telko provides raw materials,

technical expertise and support

to various industries.

ASPO YEAR 2023 GOVERNANCESUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONBUSINESSES

THE TELKO EFFECT™

ASPO’S YEAR 2023

Scalability enabling

efficient growth

■

TELKO CASE

Scalability requires uniform and

replicable operational models,

clear roles and responsibilities,

and the automation and

digitization of processes.

Telko is committed to excellence, innovation, and sustainable

growth. The ongoing strategic projects focused on scalability

and the organizational remodeling underscore Telko’s dedica-

tion to staying ahead in a dynamic business environment.

Telko’s goal to grow significantly both organically and

through M&A enables economies of scale that benefit the

entire value chain: better cost efficiency and an even higher

level of service for both customers and principals. Not only

does scalability of operations bring cost efficiency but also

improves business continuity, quality of operations and ena-

bles the efficient takeover of new business functions by lev-

eraging synergies.

Telko aims to build a scalable platform that facilitates flexi-

ble business development so that Telko’s relative profitabil-

ity improves when it grows. Scalability requires uniform and

replicable operational models, clear roles and responsibilities,

and the automation and digitization of processes. This also

allows for greater transparency across the entire value chain

and optimization of the supply chain.

ONGOING TRANSFORMATION JOURNEY

The journey towards more scalable operations began with

the renewal of Telko’s operating model. Telko’s segment

organization was introduced in 2021, replacing the previ-

ous country-based organization. This initiative is designed to

align the company’s structure with its growth objectives, and

position Telko for sustained success in the years to come.

During recent years, Telko has undertaken significant pro-

jects aimed at enhancing scalability across various opera-

tional domains. The development of scalability continued

through organizational changes, harmonization of processes

and by building technical capabilities. The initial results

can be seen as synergies in the successful integration of

acquired companies in recent years.

Scalability work continues especially by utilizing the oppor-

tunities of modern technology to enhance process effi-

ciency and supply chain optimization. These initiatives have

not only bolstered operational efficiency but have also posi-

tioned Telko to adapt seamlessly to the evolving business

landscape.

ASPO YEAR 2023 GOVERNANCESUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONBUSINESSES

ASPO’S YEAR 2023

■

LEIPURIN

MEUR4.2

Comparable operating profit

+ 282 %

MEUR136.1

Net sales

+ 29 %

157

Personnel

New set up, new focus

Leipurin operates as part of the food chain, sourcing raw

materials in global markets and from domestic compa-

nies and supplying them through its effective logistics

chain to serve customer needs. With operations in six

countries including Finland, Sweden, the Baltic countries,

and Ukraine, Leipurin serves bakeries, the food industry,

and food service customers by providing raw materials,

supporting research & development, recipes, and innova-

tions for new products.

In 2023, Leipurin East with operations in Russia, Bela-

rus and Kazakhstan were detached completely from Lei-

purin. An agreement to sell these operations was signed,

but the process to close the case with approvals from

Russian authorities continued throughout the year, still

waiting for completion when entering year 2024.

ENTERING NEW MARKET

SEGMENTS IN SWEDEN

Swedish Kobia, acquired in 2022, was on board at Lei-

purin for its first full year. Integration activities contin-

ued throughout the year, and the operating models of

Kobia and Leipurin were aligned. The sale and leaseback

of Kobia’s facilities was successfully completed. Kobia

entered new market segments, and synergy realization

proceeded as planned, continuing in 2024 with further

commercial synergies. A significant efficiency improve-

ment potential was identified in the supply chain.

FURTHER FOCUS FOR

FINLAND AND BALTICS

Finland performed extremely well under new country

management, demonstrated not only in financials, but

also in drastically improved Net Promoter Score and

employee satisfaction ratings. The biggest single move

during the year was divesting the remaining machinery

business, turning the business focus even more to food

ingredients. Market expansion outside the bakery indus-

try started a few years ago and has turned into a signifi-

cant new business leg. This initiative is being pushed for-

ward in all Leipurin countries.

Baltics accomplished a good result overall. Biggest

changes were made in Lithuania, with renewed man-

agement, and the turnaround from a commodity gener-

alist towards a more specialized product and customer

mix was started. Leipurin Lithuania facilities were sold,

and the operations will move to a more modern setup in

2024.

CLARITY THROUGH COUNTRY-BASED

OPERATING MODEL

The Leipurin Group operating model and management

structure was changed from the previous matrix to more

country-based businesses with clearer P&L responsibil-

ities, while still recognizing the synergy benefits in com-

mon sourcing, cross-selling, and administrative functions

across the Group.

Ukraine continued at low level, due to the obvious dif-

ficulties. Food and bakery industry in Ukraine operates as

such, but has turned to predominantly cheaper domes-

tic ingredient supplies, while the Leipurin business in

Ukraine has traditionally been with imported goods.

Kobia entered new market

segments, and synergy

realization proceeded as

planned, continuing in 2024

with further commercial

synergies.

ASPO YEAR 2023 GOVERNANCESUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONBUSINESSES

ASPO’S YEAR 2023

Aspo sustainability report 2023

Socially, financially and environmentally sustainable business is a

requirement for creating long-term value. A responsibly led growing

company can create jobs, tax revenues and wellbeing.

Year 2023:

Aspo’s key focus areas include reducing emission

intensity and improving occupational safety.

These targets showed good progress in 2023

and the development work in sustainability con-

tinued on several fronts.

The long-term goal of Aspo’s businesses is to be

frontrunners in sustainability in their respective

sectors. Each business has separate focus areas

in their sustainability activities.

Zero tolerance

for corruption

Aspo’s Code of Conduct prohibits corruption

and bribery in all their forms. Aspo’s Code

of Conduct and Compliance trainings include

anti-corruption issues and provide guidance

for identifying any suspicious situations and

practices considered unethical.

2022: 0.33

2022: 8.1

INJURY FREQUENCY RATE

TRIF

4.8

SHARE OF ASPO’S EMPLOYEES WHO

COMPLETED THE TRAININGS IN 2023

CARBON INTENSITY

(tn) / net sales (t€)

0.37

Code of Conduct Compliance

100 % 100 %

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

A year of progress in sustainability

■

SUSTAINABILITY

The long-term goal of Aspo’s businesses

is to lead the way in sustainability in their

respective sectors. Each business has

separate focus areas in their sustainability

activities, and the development of

sustainability continued on several fronts

in 2023.

While sustainability is an integral part of Aspo’s strategy, we

have strengthened the company’s sustainability expertise

and resources to lead and coordinate sustainability activities

even more closely at a Group level. During 2023, the mon-

itoring of key sustainability targets and development pro-

jects was incorporated more systematically into the continu-

ous activities of the Board of Directors and the Group Execu-

tive Committee.

Our operations are guided by the Group’s sustainabil-

ity policy, and the implementation of the sustainability tar-

gets integrated into the remuneration plan is monitored on a

shared reporting platform. Sustainability also guides Aspo’s

management system and the process of investigating new

investment objects. We continued to develop ESG assess-

ment criteria for potential acquisitions.

Aspo’s key joint focus areas in sustainability include reduc-

ing emission intensity and improving occupational safety. We

made excellent progress in occupational safety in 2023: our

total recordable injury frequency decreased from 8.1 in the

previous year to 4.8.

Also, with our emission intensity of 0.37, we were very

close to the target of 0.36 set for 2023, and we are quickly

approaching the long-term target set for 2025 to reduce

emission intensity by 30% from the 2020 baseline. The ener-

gy-efficient electric hybrid vessels ordered by ESL Shipping,

the first of which was deployed in December 2023, will play

a significant role in reducing emission intensity in the future.

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

ESL Shipping has actively reduced its environmen-

tal footprint by bringing down its fleet’s emissions and

energy consumption. At the end of 2023, ESL Shipping

joined the Science Based Targets initiative (SBTi) and

committed to setting short- and long-term science-based

emissions reduction targets that are in line with the

Paris Agreement to limit global warming to 1.5 degrees.

ESL Shipping develops and validates its targets using

the SBTi.

For Telko, a link between industrial customers and

international raw material manufacturers, product safety

is especially important in terms of sustainability. In addi-

tion to food safety, Leipurin focuses on reducing waste

and emissions from product transport, and on favoring a

plant-based product range.

In the People Power index, an indicator of the person-

nel’s job satisfaction, more sustainability-related ques-

tions were added in 2023, and the development of its

results is monitored. In 2023, job satisfaction remained

at the fairly high target level: the Group as a whole

achieved the targeted AA rating, and there were no sig-

nificant differences between the businesses.

In total, 100% of the Group’s all employees com-

pleted Code of Conduct and Compliance training dur-

ing the year, which includes, for example, anti-corruption

issues and provides guidance for identifying any suspi-

cious situations and practices considered unethical.

In 2023, diversity, equity and inclusion (DEI) were

selected as specific development themes, and a sepa-

rate DEI policy was approved for the company. The first

steps have been taken to increase DEI awareness and

understanding, and they lay the foundation for the con-

tinuous development of the operating culture and prac-

tices throughout the Group.

We continued our active preparations for the entry

into force of the EU Corporate Sustainability Reporting

Directive. At the end of the year, we conducted a double

materiality assessment at both Group and segment lev-

els to identify material sustainability aspects for compli-

ant reporting. Several development projects are in pro-

gress to ensure CSRD reporting capabilities for 2024.

Since 2018, Aspo has been a member of the UN’s

Global Compact initiative, and the Group’s operations

are steered by the ten Global Compact principles related

to human rights, working life principles, the environment

and the prevention of corruption. Aspo will report its

progress in implementing the Global Compact principles

annually as part of this Sustainability Report.

In its Management Report, Aspo releases information

about environmentally sustainable economic activities

in accordance with the non-financial reporting directive

(NFRD) as defined in the EU taxonomy, the EU’s classifi-

cation system for sustainable economic activities.

In addition to this Sustainability Report, ESL Ship-

ping publishes a separate sustainability report and Telko

releases more detailed information about sustainability

in its operations on its website.

Helsinki, February 15, 2024

Aspo Plc

Board of Directors CEO

The UN’s Sustainable Development

Goals that have been defined

to be the most significant for Aspo

and on which Aspo can have the

most impact.

Increasing our business

operations, while

reducing their

environmental loads

Improving the Aspo

experience for people

in our value chain

Advancing the practices

of good governance

at all levels

Aspo and its businesses share the following

sustainability commitments:

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

Aspo Group

key sustainability themes

■

SUSTAINABILITY

E S G

Growing our business

while lowering pressure to

the environment

OUR AMBITION

OUR COMMITMENTS/

KEY FOCUS AREAS

MATERIAL THEMES

FOR ALL BUSINESSES

To reduce emission intensity

Ensuring employee safety

Sound governance practices

Driving sustainable innovations

Improving the employee, customer

and principal experience

Thorough risk management

Improving recycling and

waste management

Enhancing product

and service quality

Continuous development

of the Sustainability program

Aspo portfolio companies aim to be sustainability forerunners in their industries

Improving the Aspo

experience for people in our

value chain

Driving sound governance

practices at all levels

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

Sustainable shipping as part

of the green transition

■

ENVIRONMENTAL RESPONSIBILITY

A more effective use of energy and raw materials play

a key role in reducing Aspo’s environmental impact.

The key goal related to the Group’s environmental sus-

tainability is to reduce emission intensity, CO

(tn) per

net sales (EUR thousand), by 30% by 2025. In 2023,

emission intensity increased slightly, being 0.37 (0.33

in 2022). The slight increase in emission intensity came

from the decrease in Aspo’s net sales, partly as a result

of a drop in fuel prices, as absolute emissions decreased

during the last 12 months. The structure of the fleet and

weather, including ice conditions and storms, also had a

particular impact on ESL Shipping’s emission intensity.

A more effective use of energy and raw materials

play a key role in reducing Aspo’s environmental impact.

As ESL Shipping’s vessels generate the majority of

the Group’s carbon dioxide emissions, the most signif-

icant environmental aspects for the shipping company

are related to the improved energy efficiency and the

reduced carbon footprint of its fleet.

TOWARDS FOSSIL-FREE SEA

TRANSPORT FOR CUSTOMERS

ESL Shipping’s goal is to halve its carbon dioxide emis-

sions per transportation unit by the end of the decade.

Achieving this goal calls for significant investments in

new vessels, fuel solutions and other operating models

to improve energy efficiency. Progress can already be

seen in various areas. During 2023, ESL Shipping tran-

sported 12.8 (14.7) million tonnes of cargo, and its ves-

sels consumed 769,317 (819,988) MWh of energy. CO

emissions per transported tonne of cargo increased by

7.5% in 2023, mainly due to longer transportation dis-

tances. Absolute CO

emissions decreased by 7.4% to

204,795 tonnes.

Electramar, the first next-generation electric hybrid

vessel, was delivered to ESL Shipping’s subsidiary Ato-

B@C Shipping in India on December 15. Equipped

with a shore-side electricity connection and one mega-

watt-hour batteries, the vessels are the most energy-ef-

ficient in the world in their size category, and their green-

house gas emissions per transported unit of cargo are

nearly 50% lower compared with current vessels. The

order consists of a total of 12 vessels, with a new ves-

sel being delivered to AtoB@C Shipping roughly every

three months. The shipping company’s building supervi-

sors are monitoring the construction of the vessels at

the shipyard.

In the fall, the shipping company deployed a new por-

tal, in which crew members can view their vessel’s emis-

sions, energy consumption and other operational met-

rics, and compare them with the shipping company’s

other vessels in the same size category. The portal uses

the same data that has previously been used in inter-

nal reporting and provided for customers through a cus-

tomer portal. The goal of the portal is to integrate envi-

ronmental awareness as a key part of daily activities and

decision making.

LOWERING CARBON INTENSITY

(tn) / Net sales (t€)

IMPROVING RECYCLING AND WASTE MANAGEMENT

Business-specific targets have been set for recycling and waste management.

DRIVING SUSTAINABLE INNOVATIONS

Business-specific development of sustainable innovations.

In 2023 the increase in emission intensity came from the

decrease net sales, as absolute emissions decreased during

the last 12 months

0.36 0.37

Target 2023 Notable SDG

0.33

Total 2023 2022

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

ESL Shipping improved its performance in the 2023

EcoVadis sustainability assessment from 66 to 72

points, achieving the gold level. In terms of the environ-

ment, the shipping company was rated in the top 6%. At

the end of 2023, ESL Shipping joined the Science Based

Targets initiative (SBTi) and committed to setting short-

and long-term science-based emissions reduction targets

that are in line with the Paris Agreement to limit global

warming to 1.5 degrees. ESL Shipping develops and vali-

dates its targets using the SBTi.

In the EU, emissions trading expanded to shipping at

the beginning of 2024, covering vessels of more than

5,000 GT in the first phase, including ESL Shipping’s

Handy and Supramax class vessels. Preparations for

emissions trading were started early in 2023, assisted

significantly by comprehensive emissions reporting,

which has already been conducted for several years now.

In addition to emissions to air, the shipping company’s

operations have an impact on seas. International regu-

lation allows cargo hold wash water that is not hazard-

ous to the environment to be pumped into the sea. ESL

Shipping’s goal is to exceed the level set by regulation

and pump all cargo hold wash water onshore. The com-

pany invested systematically in this in 2023, as a result

of which 43.5% (9.3%) of water was pumped onshore

for processing. The shipping company is engaged in an

active dialogue with ports to improve arrival procedures.

Virtual Arrival launched by ESL Shipping in summer

2021 is still used successfully in transportation between

Luleå and Oxelösund in cooperation with SSAB and the

Port of Oxelösund. The idea of Virtual Arrival is to reduce

a ship’s speed if it is known that its berth at the port will

not be available upon arrival. Regardless of the actual

arrival time, a ship’s position in the port’s line-up is deter-

mined based on the arrival time calculated using the nor-

mal service speed. Energy savings have been significant:

the carbon dioxide emissions of sea transportation have

decreased by up to 24% as a result of the optimized ser-

vice speed. The energy savings equal the annual con-

sumption of roughly 200 Finnish households.

In April 2023, a program was launched to accelerate

ESL Shipping’s green transition by assessing three alter-

native measures: the establishment of a new investment

pool for fossil-free vessels, the strengthening of ESL

Shipping’s capital by a minority owner, and the sale of

two Supramax vessels of the shipping company. As the

first result of this assessment, Aspo signed an agree-

ment with OP Finland Infrastructure in November on an

equity investment in ESL Shipping, and Varma joined the

agreement in February 2024 by making an investment of

its own alongside OP Finland Infrastructure.

We will continue our development by modernizing our

fleet and deploying new non-fossil fuels. Playing a sig-

nificant role in the zero-emission transportation of our

industrial partners’ zero-emission products is the corner-

stone of our shipping company’s strategy.

EMISSION REDUCTIONS THROUGHOUT

THE VALUE CHAIN AS THE GOAL

The largest environmental impact of Leipurin and Telko,

which operate in the fields of trade and logistics, comes

from elsewhere in the supply chain. As defined by Aspo’s

Board of Directors, the goal of these companies is to be

the best and the most responsible partners for their cus-

tomers and principals in their respective fields and to

reduce emissions in the entire supply chain through their

expertise. This includes planning logistics flows effecti-

vely and ensuring the quality of products. We will con-

tinue goal-driven work throughout the value chain to

understand our environmental impact more closely,

regardless of the party which carries out each type of

operation.

Telko is playing its part in improving the circular econ-

omy involving plastics and is providing its customers

with environmentally sustainable solutions. For example,

Telko was the first Finnish distributor to receive the ISCC

Plus certificate. ISCC Plus is a certificate granted for bio-

based plastics. Accordingly, Telko can provide plastic raw

materials produced in line with mass balance principles

for its customers. In 2023, Telko achieved the silver level

in the EcoVadis sustainability assessment.

SYSTEMATIC RISK MANAGEMENT

Aspo has classified environmental damage resulting

from its operations and especially from fuel processing

in the shipping company’s operations and the practices

of its partners, for example, in the transport and storage

of chemicals as significant risks associated with the envi-

ronment. Changing regulations, such as stricter environ-

mental laws, changes in energy policies or the develop-

ment of fuel taxation, can also have a significant impact

on operating conditions and costs.

Aspo continuously monitors the regulatory situation

and aims to develop its operations cost-effectively and

at the correct time so that it can keep any investment

needs resulting from changing regulations under control.

The investigation conducted in recent years to identify

the impact of the EU taxonomy for sustainable economic

activities on the Group’s businesses and reporting prac-

tices took new steps forward during 2023. To address

environmental aspects in supply chains, Aspo has pre-

pared the Supplier Code of Conduct.

Aspo prepares for and controls risks through effec-

tive environmental management. For example, ESL Ship-

ping has its own environmental management system,

certified by ISO 14001. In 2023, ESL Shipping registered

two (2022: 3) minor oil spills from its vessels. As a result

of these incidents, some 10 liters of oil or water mixed

with oil were released into the environment. These were

handled properly and resulted in no consequences from

the authorities.

Telko’s environmental protection practices are under

constant development in accordance with the princi-

ples of the ISO 9001 standard. Telko has the ISO 14001

environmental certificate, which covers all of its units in

the EU. In addition, Telko is a member of the Responsi-

ble Care program for chemical distributors, which guides

operational development to be more extensive than the

minimum requirements set out in acts and regulations.

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

■

ENVIRONMENTAL RESPONSIBILITY

Digital solutions improve

efficiency and reduce emissions

ESL Shipping is at the forefront of developing digital

solutions for more sustainable shipping. For several

years, the company has collected comprehensive emis-

sion data from our vessel operations and the data is

used in several applications across the company.

In 2023, the most significant business intelligence

project has been the new fleet scheduling optimiser

software, which has been developed together with

Finnish software development company Siili Solutions.

The first version of the software, which is due to enter

the testing phase in early 2024 is aimed to help char-

tering and operations departments find the most opti-

mal schedule for each vessel and provide opportuni-

ties to easily optimise the schedule based on different

objectives such as the lowest environmental footprint.

Development of the Customer Portal has contin-

ued in 2023 with the addition of a tool to estimate

the impact of using renewable fuels as a part of the

fuel mix. Providing clients with transparent data on the

emissions of their shipments is even more important

now that shipping was included in the EU Emission

Trading System from the beginning of January.

VESSEL PORTAL ENHANCES

DECISION-MAKING ONBOARD

In the autumn, ESL Shipping launched the Vessel Por-

tal designed exclusively for vessels’ crews. This inno-

vative portal utilises the same advanced platform and

data that is accessible to the company’s clients in the

Customer Portal.

The introduction of this portal marks a significant

milestone in the ongoing commitment to seamlessly

integrate sustainability into the daily operations and

decision-making processes both onboard and ashore.

In the portal, the crew has access to comprehensive

statistics and data about the performance of their ves-

sels. Moreover, they can compare their performance

with that of sister vessels, allowing for meaningful

benchmarking.

”We are constantly developing our digital solutions to better leverage

the data we are collecting. Our in-house data team has done excellent

work developing our solutions on many fronts. One small but concrete

example is the automated emission report, which is distributed to all

employees every month to increase understanding of where we are in

our emission reduction journey”

Kirsi Ylärinne

Operations and Environmental Director

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

Personnel at the core of our success

■

SOCIAL RESPONSIBILITY

At Aspo, work environments range from cargo vessels

to chemical warehouses, and specific focus is placed

on safety guidelines and training in all businesses.

Aspo is committed to respecting internationally accepted

human rights as defined in the Universal Declaration of

Human Rights and the UN Guiding Principles on Busi-

ness and Human Rights. We do not accept any discrimi-

nation based on education, competence, position, per-

sonality, way of life, work experience, ethnic origin, reli-

gion, gender, sexual orientation, age, nationality, abilities

or other qualities.

Aspo treats its employees in a just and equal man-

ner in all countries where it operates. The applica-

ble local legislation and regulations are complied with

in all contracts of employment. These concern, among

other things, working hours, remuneration, development

opportunities, human rights and working conditions.

We aim to improve the personnel’s engagement and

wellbeing at work by promoting employees’ professional

development at all organizational levels and by building

an encouraging atmosphere.

INVESTING EVEN MORE

IN OCCUPATIONAL SAFETY

The most significant social risks are associated with

occupational safety and health, and the availability and

commitment of the personnel. At Aspo, work environ-

ments range from cargo vessels to chemical warehou-

ses, and specific focus is placed on safety guidelines and

training in all businesses. The goal is that there are zero

occupational accidents.

In 2023, the total recordable injury frequency (TRIF)

was 4.8, significantly better than in the previous year

(8.1), and the target set for 2023 (6.0) was achieved.

Aspo has several projects in progress to improve occupa-

tional safety and health, focusing especially on ESL Ship-

ping’s operations, in which occupational accident risks

are higher than in our other subsidiaries. Operating mod-

els have been developed to address safety and invest-

ments have been made in communication, with the long-

term goal being to develop the company’s safety cul-

ture. Telko continued the new Safety Walk policy in its

own and external warehouses and at each of its offices

to increase safety and awareness of it. The process has

proven an effective and productive way to make obser-

vations that improve safety and to carry out corrective

measures on the basis of them.

JOB SATISFACTION AT A HIGH LEVEL

Aspo regularly assesses the satisfaction of employees

with their own tasks, the quality of management, and

Aspo as an employer by conducting an annual atmos-

phere survey. Aspo measures its employees’ job satis-

faction through the People Power index which is part of

the Group’s sustainability goals. In 2023, job satisfac-

tion remained at the fairly high target level: the Group as

a whole achieved the targeted AA rating, and there were

no significant differences between the businesses.

In addition to employees, Aspo Group also monitors

the satisfaction of other stakeholders actively, and it has

set business-specific goals to ensure the quality of prod-

ucts and services. The businesses regularly monitor the

satisfaction of stakeholders and the likelihood that they

would recommend each business to others using the net

promoter score (NPS), a broadly used international mar-

ket research metric. The NPS surveys conducted in 2023

showed that customer satisfaction is at least at a high

level in all businesses.

ENSURING EMPLOYEE SAFETY

Total Recordable Injury Frequency (TRIF)

IMPROVING THE EMPLOYEE, CUSTOMER AND PRINCIPAL EXPERIENCE

Employee satisfaction is measured by the People Power index

PRODUCT AND SERVICE QUALITY

Business-specific targets have been set to ensure the quality of products and services.

The net promoter score is used in each business.

Accident rates remain low. Each individual accident significantly affe-

cts the TRIF figure.

No significant differences between the businesses

6.0

4.8

Target 2023

Note

SDG

8.1

Total 2023

2022

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

Developing safety culture

at ESL Shipping

”I embarked as an apprentice aboard MS Arkadia, ESL

Shipping’s biggest vessel, 24 years ago. The expe-

rience was enchanting, sailing the seas and exploring

ports across Europe and Africa.

Safety and emergency protocols were practiced

among the crew, but there was hardly any empha-

sis on occupational safety back then. Helmets were

nonexistent, awareness of high visibility clothing was

lacking, and risky activities such as climbing on top of

hatch coamings without safeguards was not uncom-

mon. Sometimes we worked 24 hours without rest

during crane operations. Jokes were made about the

aftermath of cleaning holds, with dust in our eyes,

ears, and throats. Signs like ‘enclosed space’ were

seen, but preventive measures were not implemented

when entering. Sadly, some incidents resulted in seri-

ous injuries, casting a shadow over our experiences.

HUGE LEAPS IN SAFETY

DEVELOPMENT OVER THE YEARS

In 2023, I assumed the role of Safety Manager at ESL

Shipping after 18 years elsewhere. A remarkable tran-

sformation had taken place! A strong safety mindset

now prevails in the company, with management acti-

vely steering the development of a safety culture by

setting targets and monitoring progress.

Ship masters demonstrate strong commitment to

safety leadership, and the crew earnestly adheres to

their responsibilities. Feasible safety procedures and

tools supporting documentation, incident analysis,

and root cause identification are in place. Violations

of rest hours and alcohol policy are closely monitored,

with thorough analysis conducted alongside the crew.

The persistent long-term effort invested in instilling

a safety mindset and ensuring vessel operations are

conducted safely is bringing great results.

SAFETY REQUIRES CONTINUOUS FOCUS

In safety, there is always room for further improve-

ment. Deep-rooted habits persist, such as some crew

members still need to be reminded of the use of hel-

mets due to decades of sailing without them. Safety

procedures exist to ensure the well-being of the crew,

not for satisfying the inspectors.

Some vessels excel in proactive safety manage-

ment, while others might be more reactive in their

mindset. For example risks relating to new cargo

acquisitions highlight the continuous need for care-

ful safety planning. Despite preventive measures, slips

and trips sometimes still occur, prompting the neces-

sity for continuous improvement.

Proactive measures such as risk assessments and

structured management of change are crucial steps

towards achieving excellence in safety leadership.

Leading indicators show an effective avenue for suc-

cesses, while lagging indicators provide valuable feed-

back on our shortcomings.

Better communication with ship masters and the

entire crew at safety meetings and internal audits fos-

ters deeper commitment to safety. Management’s

safety walks ensure that onboard operations are in

the core of safety leadership.

Over the past year, injury and safety results have

improved. Although setbacks and mistakes may occur,

the collective dedication to striving for a high safety

culture is motivating. Together, we aim for a shared

goal – ensuring everyone returns home from work

safely.”

Suvi-Tuuli

Lappalainen

HSEQ Manager, DPA,

CSO at ESL Shipping

”Together, we aim for

a shared goal – ensuring

everyone returns home

from work safely.”

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

A responsible

employer and partner

■

CORPORATE GOVERNANCE

As one part of Aspo’s corporate governance, sustainability forms

an integral part of our acquisition process and ownership agenda.

Aspo Group’s sustainability activities are coordinated

by a sustainability team, the goal of which is to develop

and share best practices in all businesses. Aspo’s Code

of Conduct, and HR management and development prin-

ciples guide the Group’s operations as a responsible

employer. Aspo respects the freedom of association of

employees and complies with local laws in each opera-

ting country. In emerging markets, in particular, Aspo

aims to lead the way and spread sustainable operating

methods.

A stage in Aspo’s history ended in 2023 when Telko

divested its operations in Russia in April and a decision

was made in December to discontinue the operations of

Leipurin in the east. ESL Shipping already divested its

Russian operations in summer 2022. As an international

company, Aspo continues to operate in countries in

which corruption is common. According to Transparency

International, these include Uzbekistan and Ukraine.

A key tool in the prevention of corruption and brib-

ery is the responsible management of the supply chain.

To ensure appropriate operating methods, Aspo’s busi-

nesses monitor compliance with the Supplier Code of

Conduct in various ways. In spring 2023, ESL Ship-

ping joined the Maritime Anti-Corruption Network, which

seeks to eliminate corruption in the maritime indus-

try. Its extensive databanks and contact networks pro-

vide support for crew members and help anticipate

any problematic situations in countries in which corrup-

tion and bribery continue to be problems. For exam-

ple, specific sustainability audits have been conducted

at Telko since 2019, and monitoring continued in 2023

through broader individual warehouse audits. In addi-

tion to on-site audits, a larger group of suppliers is moni-

tored through self-assessment. A new AI-based tool will

be tested in 2024 to verify the sustainability of suppliers

and assess risks.

Aspo’s Code of Conduct absolutely prohibits corrup-

tion and bribery in all their forms. Aspo’s Compliance and

Code of Conduct training includes anti-corruption issues

and provides guidance for identifying any suspicious sit-

uations and practices considered unethical. In 2023,

100% of the Group’s employees completed Code of Con-

SOUND GOVERNANCE PRACTICES

Percentage of Aspo’s personnel who completed the Code of Conduct & Compliance trainings

CONTINOUS DEVELOPMENT OF THE SUSTAINABILITY PROGRAM

In 2023 the company’s sustainability expertise and resources were strengthened

to lead the sustainability activities at Group level.

THOROUGH RISK MANAGEMENT

Further development of systematic risk management process together with portfolio companies.

100 %

100%

Target 2023 Note SDG

10 0 %

Total 2023 2022

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

TARGET MAPPING ACQUISITION PROCESS OWNERSHIP

OUR APPROACH

We evaluate potential targets based on financial

performance and strategic fit.

Sustainability forms an integral part of the

strategic fit –evaluation.

We deepen our understanding of the financial

performance and strategic direction.

Sustainability is evaluated both in terms

of evaluating

· Target performance across Aspo’s

key sustainability themes

· Impact on Aspo’s opportunity

to reach set KPI targets

The evaluation may result in us not investing in

a company

We develop a sustainability strategy, incl. priority

areas, together with the acquired company.

We set targets, define key actions, and monitor

results – we provide active support from the

group where needed.

We are committed to progress reporting to Aspo

board and shareholders.

SUSTAINABILITY TO FORM AN INTEGRAL PART OF OUR ACQUISITION PROCESS AND OWNERSHIP AGENDA

duct training and 100% completed Compliance training.

Aspo’s goal is that all of the Group’s personnel complete

the training every year.

MONITORING COMPLIANCE WITH

REQUIREMENTS IN VARIOUS WAYS

Aspo’s businesses are also monitoring sector-speci-

fic regulations and Telko, for example, uses more detai-

led guidelines for bribery, and it complies with the FECC’s

Code of Conduct.

Product safety is key in the operations of both Telko

and Leipurin. Non-conformities in quality and deliveries

of incorrect products may have severe consequences. In

2023, the accuracy of product deliveries was at an excel-

lent level at both Telko and Leipurin.

Significant numbers of the partners of ESL Shipping,

Telko and Leipurin are important international compa-

nies, with which each of these businesses have been

engaged in long-term cooperation and which have their

own stabilized processes for the responsible manage-

ment of supply chains. In addition, ESL Shipping regularly

audits its time-chartered vessels, focusing especially on

safety, the environment and quality.

Aspo’s Internal Audit and Legal Affairs departments

also conduct regular audits within all businesses.

MISUSE CAN BE REPORTED ANONYMOUSLY

Since 2020, Aspo has been using a fully anonymous

whistleblowing channel maintained by an external party

for suspected misuse. Through the service, emplo-

yees can express their concerns over anything that is

non-compliant with Aspo Group’s values or Code of Con-

duct and may have serious consequences for our orga-

nization or individuals. Reports are forwarded to the

whistleblowing channel team, led by the Group’s Dire-

ctor of Legal Affairs. Reports are processed in accor-

dance with a fixed process and forwarded to Aspo’s

Board of Directors, which will also process them if neces-

sary. Employees are notified of the whistleblowing chan-

nel, for example, in conjunction with annual Code of Con-

duct training.

A total of 14 reports were submitted through the

whistleblowing channel in 2023. These reports were pro-

cessed and responded to in accordance with the Group’s

processes. The reports were mainly related to minor vio-

lations of internal policies. No new cases of fraud were

discovered in the investigations conducted, and no con-

firmed violations related to corruption or bribery were

reported through the whistleblowing channel.

Aspo also has a broad impact on the communities in

which it operates. For example, ESL Shipping is a sig-

nificant organizer of maritime transport and plays a key

role in Finland’s emergency supply, as maritime trans-

port accounts for roughly 95% of Finland’s imports and

exports. In the event of a crisis, vessels operating under

the Finnish flag safeguard connections to other coun-

tries.

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

Promoting Diversity, Equity, and Inclusion:

A Commitment to Positive Change

”Our commitment is to foster an equitable,

diverse and inclusive workplace that

recognizes and values difference and

where everyone is treated fairly with

dignity and respect. We recognize that our

diversity—the many different and unique

things we individually and collectively bring

to work each day—contributes to building

a stronger workforce and forms a platform

for success of the company.”

In 2023, Aspo Group established a DEI (Diversity,

Equity, Inclusion) Task Force as part of our sustainabi-

lity development work. Since its launch, the DEI Task

Force has led several key initiatives to strengthen our

DEI commitment aligned with our ESG targets.

One of the most significant achievements in 2023

was the internal launch of our DEI policy. This policy

serves as a guiding framework, outlining our commit-

ment to creating an inclusive workplace that values

diversity and ensures equal opportunities for all.

CREATING A WORKPLACE FOR EVERYONE TO

THRIVE, CONTRIBUTE AND BE RECOGNIZED

In Aspo’s pursuit of a more inclusive workplace,

we evaluated the insights gathered from the 2023

engagement survey, which included also additional

sustainability questions for the first time. Notably,

sustainability was primarily perceived as environmen-

tal and product-related responsibility, with an impres-

sive Responsibility Index of 87.8 at Aspo Group level.

The survey delved into perceptions of diversity

and inclusion within Aspo Group. Findings indicate

that 90% of employees feel that diversity is viewed

positively in our company, with a strong sentiment

against discrimination. While there are some variations

between countries, even the lowest results are con-

sidered very positive.

These overall positive survey results fortified our

confidence in existing strengths regarding diversity

and inclusion. Moreover, the findings emphasized the

importance and opportunities for investing further in

the growth of more diverse teams at Aspo Group.

FOSTERING AWARENESS AND SKILLS

ABOUT DEI ACROSS THE ORGANIZATION

Recognizing the pivotal role that DEI plays in organ-

izational success, we organised trainings to all lead-

ership teams as they are in the position to influence

organizational strategy and priorities and enable sus-

tainable DEI change throughout the organization. By

delving into the principles and practices underpinning

DEI initiatives, leadership teams gained insights into

the tangible impact of diversity, equity, and inclusion

on organizational culture, employee engagement, and

overall business success.

To widen the DEI knowledge to all employees,

Aspo Group established a comprehensive hub for DEI

resources, including core concepts and articles. Pro-

duction of the training materials continues in 2024.

ONGOING EVOLUTION

TO GO BEYOND COMPLIANCE

Looking ahead to 2024, we are committed to pro-

viding comprehensive training to all supervisors and

employees, and also renewing our annual Code of

Conduct (CoC) training to raise awareness of DEI. Like

many organizations navigating the complexities of

DEI, Aspo Group is committed to move beyond aware-

ness and take concrete action to develop practices

and policies towards even more inclusive and diverse

workplace.

Taru Uotila

SVP, Legal, HR and

Sustainability at Aspo Plc

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

■

THE USE OF ENERGY AND EMISSIONS

ESL Shipping 2023 2022 2021 2020 2019

Purchased energy

1,2

, Mwh 391.1 328.4 322.1 243.4 117.6

Total use of fuel, Mwh 769,317 820,496 898,551 838,743 892,250

tCO

204,795 217,526 237,621 220,122 237,296

g-CO

per ton mile 14.7 13.67 15.74 15.48 15.47

tSO

137.72 87.34 98.36 56.44 179.27

mg-SO

per ton mile 8.58 5.52 5.93 3.97 11.69

Telko 2023 2022 2021 2020 2019

Purchased energy

, Mwh 1,030.0 1,347.7 1,172.0 768.5 1,093.0

tCO

162.7 219.6 340.1 215.8 306.9

Leipurin 2023 2022 2021 2020 2019

Purchased energy

, Mwh 2,930.3 3,681.1 3,212.8 4,148.0 3,394.8

tCO

176.6 606.2 965.4 1,124.0 1,154.2

Other operations 2023 2022 2021 2020 2019

Purchased energy

, Mwh 258.8 192.6 180.9 182.7 150.3

tCO

27.4 20.0 27.2 27.5 23.7

Aspo Group 2023 2022 2021 2020 2019

tCO

205,186 218,385 238,963 221,511 238,805

Net sales, M€ 553.0 652.6 573.3 500.7 587.7

Aspo Group carbon intensity 0.37 0.33 0.42 0.44 0.41

Purchased energy mainly measured, if not possible to measure the figures are estimated.

The figures include Raahe from 2021 onwards. Tug Charlie’s use of shore-side electricity increases energy consumption

from 2021 onwards.

The reporting period is the calendar year 2023. In principle, the reporting covers the entire Aspo Group. Any exceptions have been stated in conjunction with the indicators. The

personnel figures given in the sustainability report include all permanent employees, including long-term absentees. The personnel figures also include the temporary maritime crew

of AtoB@C Shipping, a subsidiary of ESL Shipping, but only with regard to vessels owned by the company. In the financial statements, the personnel figures only include Aspo

Group’s own employees, not temporary external workers.

Sustainability

tables

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

■

INJURY FREQUENCY AND SICK LEAVES

ESL Shipping – Office 2023 2022 2021 2020 2019

TRIF

0.0 8.2 8.1 2.7

Sick leaves, %

0.7 0.5 0.7 0.8 1.4

ESL Shipping – Marine personnel 2023 2022 2021 2020 2019

TRIF

14.5 22.0 22.3 21.4 22.1

Sick leaves, %

2.1 2.0 3.7 4.6 4.0

AtoB@C Shipping – Marine personnel 2023 2022 2021 2020 2019

TRIF

0.0 10.2 10.9

Sick leaves, %

0.1 0.2 0.30

Telko 2023 2022 2021 2020 2019

TRIF

2.2 1.7 0 0

Sick leaves, %

1.0 1.4 1.2 1.2 1.4

Leipurin 2023 2022 2021 2020 2019

TRIF

0 0 6.3 10.3

Sick leaves, %

2.7 2.5 3.5 2 4.0

Other operations 2023 2022 2021 2020 2019

TRIF

0 0 0 0

Sick leaves, %

0.2 0.6 0.3 0.3 1.6

Aspo Group 2023 2022 2021 2020 2019

TRIF

4.8 8.1 8.8 8.5

Injury frequency is presented per 1,000,000 working hours.

TRIF = All injuries that require medical treatment and/or alternative work.

Sick-leave absence ratio is calculated: (sick days/total work days)*100. For AtoB@C Shipping’s marine personnel in Sweden,

the sick leave % is calculated only for days at sea.

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

■

NUMBER OF PERSONNEL BY GEOGRAPHICAL AREA, DECEMBER 31

ESL Shipping

2023 2022 2021 2020 2019

Finland 284 277 276 275 262

Scandinavia 84 78 79 79 74

Baltic countries

Russia, other CIS countries and Ukraine

Other countries 1 1

Total 368 355 355 355 337

Telko 2023 2022 2021 2020 2019

Finland 48 52 50 49 52

Scandinavia 43 48 38 37 24

Baltic countries 40 52 54 34 36

Russia, other CIS countries and Ukraine 54 114 155 140 162

Other countries 32 27 24 25 25

Total 217 293 321 285 299

Leipurin 2023 2022 2021 2020 2019

Finland 38 39 76 73 80

Scandinavia 70 70

Baltic countries 43 48 47 49 50

Russia, other CIS countries and Ukraine 6 98 147 141 167

Other countries

Total 157 255 270 263 297

Other operations 2023 2022 2021 2020 2019

Finland 40 42 36 32 27

Scandinavia

Baltic countries

Russia, other CIS countries and Ukraine

Other countries

Total 40 42 36 32 27

Aspo Group 2023 2022 2021 2020 2019

Finland 410 410 459 450 451

Scandinavia 197 196 57 116 98

Baltic countries 83 100 101 83 86

Russia, other CIS countries and Ukraine 60 212 302 281 329

Other countries 32 27 25 27 27

Total 782 945 944 957 991

ESL Shipping’s marine personnel of the subsidiary AtoB@C Shipping reported for the vessels owned.

From the beginning of year 2023, following the shift of the strategic focus towards western markets, Aspo changed the market areas

when reporting net sales. The new reportable market areas regarding net sales are: Finland, Scandinavian countries, Baltic countries, Other

European countries and Other countries. The personnel figures for 2023 are reported with the old market area structure.

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

■

NUMBER OF PERSONNEL BY CATEGORY, DECEMBER 31

ESL Shipping

2023 2022 2021 2020 2019

Office staff 43 47 43 41 38

Supervisors 9 6 7 8 3

Management 7 6 7 6 7

Non-office staff 0 2 2 2 2

Total 59 61 59 57 50

Telko 2023 2022 2021 2020 2019

Office staff 161 234 265 233 250

Supervisors 43 47 26 25 19

Management 6 5 24 20 24

Non-office staff 7 7 6 7 6

Total 217 293 321 285 299

Leipurin 2023 2022 2021 2020 2019

Office staff 94 164 190 182 206

Supervisors 23 39 35 37 40

Management 5 7 17 16 19

Non-office staff 35 45 28 28 32

Total 157 255 270 263 297

Other operations 2023 2022 2021 2020 2019

Office staff 34 34 28 26 22

Supervisors 2 3 2 2 2

Management 4 5 6 4 3

Non-office staff

Total 40 42 36 32 27

Aspo Group

2023 2022 2021 2020 2019

Office staff 332 478 541 497 538

Supervisors 77 95 72 74 65

Management 22 23 55 47 56

Non-office staff 42 54 40 41 45

Total 473 650 708 659 704

Excluding marine personnel.

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

■

NUMBER OF PERSONNEL BY CONTRACT TYPE, DECEMBER 31

ESL Shipping

2023 2022 2021 2020 2019

Amount of personnel 59 355 295 355 337

Full-time contract 59 63 59 56 50

Part-time contract 1

Excluding marine personnel.

Telko 2023 2022 2021 2020 2019

Amount of personnel 217 293 321 285 299

Full-time contract 214 287 315 278 293

Part-time contract 3 6 6 7 6

Leipurin 2023 2022 2021 2020 2019

Amount of personnel 157 255 270 263 297

Full-time contract 153 246 264 260 293

Part-time contract 4 9 6 3 4

Other operations 2023 2022 2021 2020 2019

Amount of personnel 40 42 36 32 27

Full-time contract 39 41 35 30 26

Part-time contract 1 1 1 2 1

■

GENDER DISTRIBUTION, DECEMBER 31

ESL Shipping 2023 2022 2021 2020 2019

Women 43 45 40 40 36

Men 325 310 255 315 301

Total 368 355 295 355 337

Telko 2023 2022 2021 2020 2019

Women 102 148 168 151 164

Men 115 145 153 134 135

Total 217 293 321 285 299

Leipurin 2023 2022 2021 2020 2019

Women 66 132 154 149 166

Men 91 123 116 114 131

Total 157 255 270 263 297

Other operations 2023 2022 2021 2020 2019

Women 22 22 18 18 16

Men 18 20 18 14 11

Total 40 42 36 32 27

The Boards of Aspo and segments 2023 2022 2021 2020 2019

Women 6 6 6 6 7

Men 13 14 8 9 9

Total 19 20 14 15 16

Aspo Group 2023 2022 2021 2020 2019

Women 233 347 383 367 394

Men 549 598 561 605 613

Total 782 945 944 972 1,007

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

■

AGE DISTRIBUTION, DECEMBER 31

ESL Shipping 2023 2022 2021 2020 2019

< 24 11 10 4 5 12

25–39 127 128 114 132 119

40–54 153 140 119 141 127

55 < 77 77 58 77 79

Total 368 355 295 355 337

Telko 2023 2022 2021 2020 2019

< 24 0 1 3 3 8

25–39 69 106 144 131 140

40–54 110 137 131 116 117

55 < 38 49 43 35 34

Total 217 293 321 285 299

Leipurin 2023 2022 2021 2020 2019

< 24 5 7 8 1 3

25–39 41 75 97 105 129

40–54 76 130 122 121 132

55 < 35 43 43 36 33

Total 157 255 270 263 297

Other operations 2023 2022 2021 2020 2019

< 24 0 1 1

25–39 17 19 16 13 6

40–54 16 14 11 9 10

55 < 7 9 9 9 10

Total 40 42 36 32 27

Aspo Group 2023 2022 2021 2020 2019

< 24 16 18 15 10 24

25–39 254 328 375 385 400

40–54 355 421 394 397 402

55 < 157 178 160 165 165

Total 782 945 944 957 991

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

■

AVERAGE AGE OF EMPLOYEES

ESL Shipping 2023 2022 2021 2020 2019

Average age of employees 45 44 44 45 45

Telko 2023 2022 2021 2020 2019

Average age of employees 43 41 41 42 41

Leipurin 2023 2022 2021 2020 2019

Average age of employees 46 44 42 43 41

Other operations 2023 2022 2021 2020 2019

Average age of employees 44 44 49 43 47

Aspo Group 2023 2022 2021 2020 2019

Average age of employees 44 44 42 44 44

■

EMPLOYEE TURNOVER RATE

ESL Shipping 2023 2022 2021 2020 2019

turnover rate, ground staff 11 10 8 9 16

Telko 2023 2022 2021 2020 2019

turnover rate 24 21 17 8 20

Leipurin 2023 2022 2021 2020 2019

turnover rate 20 17 17 10 26

Other operations 2023 2022 2021 2020 2019

turnover rate 22 8 13 19 39

Aspo Group 2023 2022 2021 2020 2019

turnover rate 15 17 15 9 23

Average turnover, %

■

CODE OF CONDUCT AND COMPLIANCE -TRAINING 2023

Compliance, % Code of Conduct, %

ESL Shipping 100 100

Telko 100 100

Leipurin 100 100

Other operations 100 100

Aspo Group 100 100

Family leave and other long absences have been excluded. Excluding marine personnel.

■

PEOPLE POWER (SCALE 0–100)

 2023 rating 2022 rating

ESL Shipping 80.6 AA+ 78.9 AA

Telko 80.8 AA+ 81.8 AA+

Leipurin 75.8 A+ 70.5 A

Other operations 69.7 A+ 75.2 AA+

In 2021, Aspo introduced People Power personnel survey, which aims to identify the organisation’s strengths and areas for development in

terms of its own work, the community work community and the entire organization.

ASPO YEAR 2023 GOVERNANCEBUSINESSES MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONSUSTAINA BILITY

ASPO’S YEAR 2023

Corporate governance

statement

ASPO’S GOVERNING PRINCIPLES

Aspo’s decision-making and governance comply with the

Finnish Limited Liability Companies Act, securities mar-

ket legislation, other regulations concerning listed com-

panies, Aspo Plc’s Articles of Association, and the rules

and regulations of Nasdaq Helsinki Ltd.

Aspo follows the Finnish Corporate Governance Code

2020, effective from January 1, 2020. The Code is pub-

licly available on the website of the Finnish Securities

Market Association www.cgfinland.fi.

In addition to this Corporate Governance Statement

2023, Aspo has published a separate management

report in the Aspo’s Year 2023 publication. This state-

ment will not be updated during the financial year, but

the information about the topics included in it, as well

as other necessary and up-to-date information for inves-

tors, is available on the company’s website at www.

aspo.fi.

The Corporate Governance Statement as well as the

company’s financial statements, annual report and audi-

tor’s report are available on Aspo’s website at www.

aspo.com.

GROUP STRUCTURE

Aspo Group’s parent company, Aspo Plc, is a Finnish

public limited company domiciled in Helsinki. The main

responsibility for Aspo Group’s administration and oper-

ations lies with Aspo Plc’s governing bodies: the General

Meeting, the Board of Directors and the CEO. The high-

est decision-making power is exercised by the sharehold-

ers at the General Meeting. The Board of Directors and

the CEO are responsible for the management of Aspo

Group. The Audit Committee and the Human Resources

and Remuneration Committee support the Board of

Directors’ work. The Group Executive Committee assists

the CEO in managing Aspo Group (the Group).

■

GOVERNANCE

Aspo develops its group structure and businesses

responsibly over the long term. Aspo Plc’s task is to

own, lead and develop the operations of its subsidiar-

ies and other Group companies, centrally administer the

Group companies, take care of matters related to financ-

ing and strategic planning, and plan and implement finan-

cially appropriate investments. Aspo supports the suc-

cess and growth of its businesses through appropriate

capabilities.

Aspo seeks sustainable long-term growth by invest-

ing revenues profitably and by seeking to implement a

compounder profile. Aspo enables growth for the busi-

nesses it owns, and aims to improve their profitability

and revenues by developing them and ensuring steady

cash flows. The goal is to assume an even more active

role in corporate arrangements, growth investments

and business acquisitions. Sustainability is a key fac-

tor in guiding Aspo Group’s management system and

the process of identifying new investment opportuni-

ties. Aspo’s businesses aim to lead the way in sustaina-

bility in their respective fields. In support of sustainabil-

ity commitments, Aspo determined new ESG goals for

key parts of the Group and its businesses. Aspo focuses

on B-to-B industrial services in particular, and its key clus-

ters include logistics and trade.

The Group’s operational business is carried out by the

Group companies, ESL Shipping Ltd, Leipurin Plc and

Telko Ltd, and by their subsidiaries in Finland and abroad.

GENERAL MEETING

The Annual General Meeting is held every year on a date

determined by the Board of Directors, and it deals with

matters falling within the competence of the Annual

General Meeting based on the Articles of Association,

the proposals of the Shareholders’ Nomination Board

and the Board of Directors, and other possible propos-

als to the Annual General Meeting. The Annual Gen-

eral Meeting, amongst other things, adopts the financial

statements, elects the Board members and the auditor,

and decides on profit distribution and the remuneration

of the Board members and the auditor.

When required, an Extraordinary General Meeting is

convened. The Board of Directors must also convene an

Extraordinary General Meeting if an auditor or sharehold-

ers with a total of at least 10% of all shares so request

in writing in order for a given matter to be dealt with.

According to the Limited Liability Companies Act, a

shareholder is entitled to have a matter falling within

the competence of the Annual General Meeting dealt

with by the Annual General Meeting if the shareholder

so requests in writing from the Board of Directors well in

advance, so that the matter can be included in the notice

of the meeting.

The Board of Aspo Plc convenes the Annual Gen-

eral Meeting. The notice of the meeting is published by

means of a stock exchange release and on the compa-

ny’s website no earlier than two months and no later

than twenty-one (21) days prior to the meeting, but at

least nine (9) days prior to the record date of the Annual

General Meeting. In addition, the Board of Directors may,

at their discretion, decide to announce the Annual Gen-

eral Meeting in one or several newspapers. In addition,

the following information is published on the company’s

website no later than 21 days before the Annual General

Meeting:

Aspo Plc is a Finnish publicly listed company. Its objective is to

increase the shareholder value responsibly in the long term by

leading and developing the businesses it owns.

ASPO YEAR 2023 BUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONGOVERNANCE

ASPO’S YEAR 2023

• Total number of shares and voting rights by share

class on the date of the notice of the meeting

• Documents to be presented to the Annual General

Meeting

• Decisions proposed by the Board of Directors or

other competent body

• Any matter that is included in the agenda of the

Annual General Meeting but for which no decision is

proposed

The decisions of the Annual General Meeting are pub-

lished after the meeting by means of a stock exchange

release. The minutes of the Annual General Meeting,

with the possible voting results and appendices related

to the decisions, are published on the company’s web-

site within two weeks of the Annual General Meeting.

SHAREHOLDERS’ NOMINATION BOARD

Aspo Plc has a Shareholders’ Nomination Board that pre-

pares proposals to the Annual General Meeting regard-

ing the election and remuneration of the Board members

and the remuneration of the Board’s committees. Aspo

Plc’s Shareholders’ Nomination Board consists of the

representatives of the four largest shareholders. In addi-

tion, the Chair of Aspo Plc’s Board of Directors acts as

an expert member of the Nomination Board.

1 Annika Ekman recused herself from the preparation and decision-making concerning the proposals to be made to the 2024

Annual General Meeting, and announced her resignation from the Nomination Board on November 13, 2023. The Nomination

Board will not elect a new member to replace the resigned member during this term of office because the minimum number of

members specified in the standing orders is met. The Shareholders’ Nomination Board of Aspo proposed to the 2024 Annual

General Meeting that Annika Ekman be elected as a member of the Board of Directors.

The following representatives of the largest share-

holders were members of the Nomination Board which

prepared proposals for the 2024 Annual General Meet-

ing: Roberto Lencioni, Chair (Vehmas family, including

AEV Capital Holding Oy); Gustav Nyberg (Nyberg family,

including Oy Havsudden Ab); Annika Ekman

(Ilmarinen

Mutual Pension Insurance Company); and Pekka Pajamo

(Varma Mutual Pension Insurance Company). In addi-

tion, Heikki Westerlund, Chair of Aspo’s Board of Direc-

tors, has served as an expert member of the Nomination

Board.

In 2023, the Shareholders’ Nomination Board con-

vened three times. The attendance rate was 100%.

BOARD OF DIRECTORS

The Board of Directors is responsible for the administra-

tion of Aspo Plc and the appropriate organization of its

operations. The Board of Directors has established an

Audit Committee and a Human Resources and Remu-

neration Committee to support its work. When required,

the Board of Directors can establish other permanent or

temporary committees.

According to the Articles of Association, Aspo Plc’s

Board of Directors consists of five to eight members.

The number of members of the Board is determined at

the Annual General Meeting, where its members are also

elected. The Board of Directors elects a Chair and a Vice

Chair from among its members. In the 2023 Annual Gen-

eral Meeting, seven members were elected. The term

of the members ends upon the conclusion of the next

Annual General Meeting following the election.

The Board constitutes a quorum when more than

half of the members, including either the Chair or the

Vice Chair, are present. The Board of Directors seeks

to make unanimous decisions, but matters are put to a

vote when required. The decisions are made by a major-

ity of votes. In the event of a tie, the Chair has the cast-

ing vote.

The Board of Directors convenes at regular intervals,

and whenever necessary.

The duties and responsibilities of the Board of Direc-

tors are set out in the Articles of Association, the Finn-

ish Limited Liability Companies Act, and other applicable

legislation. The particular duty of the Board of Directors

is to promote the interests of the shareholders and the

company by taking care of strategic policy decisions and

the appropriate organization of business operations and

administration, for example. The Board of Directors is

also responsible for ensuring that the supervision of the

company’s accounting and asset management has been

appropriately organized. The Board of Directors pro-

cesses and decides on all matters concerning the com-

pany’s operations that are most significant for the com-

pany. The Board of Directors has competence in all mat-

ters that are not handled by other administrative bodies

pursuant to law or the Articles of Association.

Aspo Plc’s Board of Directors has confirmed written

standing orders, which state that the matters to be han-

dled by the Board include, but are not limited to, the fol-

lowing:

• Aspo Group’s strategic guidelines and the strategies

of its businesses

• Group structure

• Matters to be presented to the Annual General Meet-

ing

• Interim reports and consolidated financial statements

• The Group’s business plans, budgets and invest-

ments

• Expanding and scaling back operations, acquisitions/

divestments of companies or operations

• Group risk management, insurance and financial poli-

cies

• Group environmental policy

• Remuneration and incentive plans for the manage-

ment

• Appointment of the CEO

• Monitoring the financial and financing situation of

Aspo Group

The Board carries out an annual self-evaluation of its

operations and working methods.

The Board of Directors had 15 meetings in 2023. The

attendance rate was 100%.

The majority of Aspo’s Board members are independ-

ent of the company and its major shareholders.

Board committees

The Board of Directors may establish committees or

other permanent or temporary bodies to carry out tasks

determined by the Board in compliance with its stand-

ing orders. The Board of Directors elects the members

of the committee and appoints its Chair. The Board of

Directors confirms the standing orders for each commit-

ASPO YEAR 2023 BUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONGOVERNANCE

ASPO’S YEAR 2023

tee, specifying the key tasks and operating principles of

the committee. The majority of members of each com-

mittee must be independent of the company, and at

least one member has to be independent of the compa-

ny’s major shareholders. The members of committees

must have the competence required for the range of

tasks handled by the committee concerned.

Audit Committee

The Audit Committee is responsible for preparing mat-

ters related to the company’s financial reporting and con-

trol. The Audit Committee does not have independent

decision-making powers, but the Board makes decisions

on the basis of preparations by the committee. The

Audit Committee consists of the Chair and at least two

members, whom the Board appoints from among its

members for one year at a time. In 2023, Mammu Kaario

served as Chair of the Audit Committee until April 4,

2023, and Kaarina Ståhlberg served as Chair from April

4, 2023, with Patricia Allam, Mikael Laine and Tatu Veh-

mas as its members.

The duties of the Audit Committee include:

• Monitoring the financial statements reporting pro-

cess

• Supervising the financial reporting process

• Assessing the use and presentation of alternative

performance measures

• Monitoring the effectiveness of internal control and

audit and risk management systems

• Reviewing the plans and reports of the internal audit

function

■

ATTENDANCE AT THE MEETINGS BY MEMBERS OF THE BOARD AND ITS COMMITTEE MEMBERS IN 2023

Attendance

Board member since Committee membership Board Audit Committee

Human Resources and

Remuneration Committee

Allam Patricia 2021 Audit Commitee 15/15 5/6

Kaario Mammu 2012 Audit Committee 4/4 1/1

Laine Mikael 2016 Audit Committee 15/15 6/6

Kolunsarka Tapio 2022 Human Resources and Remuneration Committee 15/15 4/4

Pöyry Salla 2016 Human Resources and Remuneration Committee 15/15 4/4

Vehmas Tatu 2018 Human Resources and Remuneration Committee as well as Audit Committee 15/15 6/6 4/4

Westerlund Heikki 2020 Human Resources and Remuneration Committee (Chair) 15/15 4/4

Kaarina Ståhlberg* 2023 Audit Committee (Chair) 11/11 5/5

* Member of the Board and Human Resources and Remuneration Committee since April 4, 2023

• Reviewing the plans and reports of the company’s

compliance function

• Handling of the company’s corporate governance

statement and non-financial report

• Monitoring the statutory audit of the financial state-

ments and the consolidated financial statements

• Assessing the independence of the auditing firm

• Assessing the ancillary services provided by the

auditing firm

• Preparing the proposal for/of the appointment of the

auditor

• Other communications with the auditor in addition to

the duties required by regulations

• Defining the principles for the monitoring and evalua-

tion of related party transactions

The Audit Committee convenes regularly at least twice

a year. In 2023, the Audit Committee held six meetings.

The attendance rate was 96%.

Human Resources and Remuneration Committee

The Human Resources and Remuneration Committee is

responsible for preparing matters related to the remu-

neration and appointment of the CEO and other mem-

bers of the company’s management and to other per-

sonnel renumeration systems. The committee does not

have independent decision-making powers; the Board

makes the decisions collectively on its behalf. The

Human Resources and Remuneration Committee con-

sists of the Chairman and two to three members elected

by the Board from among its members for one year at a

time.

In 2023, Heikki Westerlund served as Chair of the

Human Resources and Remuneration Committee, with

Tapio Kolunsarka, Salla Pöyry and Tatu Vehmas as its

members.

The duties of the Human Resources and Remuneration

Committee include:

• Preparing the appointment of the CEO and other

members of the management and their successor

planning

• Preparing the remuneration of the CEO and other

members of the management

• Preparing matters related to the company’s remuner-

ation system

• Assessing the remuneration of the CEO and other

members of the management, and ensuring that

remuneration systems are appropriate

• Assessing and presenting recommendations to the

Board of Directors regarding programs and other

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incentive systems that are share-based or based on

special rights entitling to shares

• Planning the remuneration of other personnel and

the development of the organization

• Preparing the remuneration report

• Drawing up/issuing the Board’s diversity report

• Monitoring the need to update the remuneration pol-

icy and compliance with the policy (regarding the

remuneration of the CEO)

• Responding to questions related to the remuneration

report at the General Meeting

• Recommending an advisor for the company’s Board

of Directors, if necessary, and preparing a proposal

for fees paid to experts.

The Human Resources and Remuneration Committee

convenes regularly at least three times a year. In 2023,

the committee held four meetings. The attendance rate

was 100%.

Chair of the Board of Directors

Heikki Westerlund (b. 1966), M.Sc. (Econ.), has served

as Chair of Aspo Plc’s Board of Directors since April 8,

2021.

Diversity of the Board of Directors

Aspo Plc regards diversity of the Board of Directors as a

significant part of sustainable operations and a success

factor that allows the company to reach its strategic

goals. Diversity is part of an effective Board of Directors

that is able to work together and respond to the require-

ments set by the company’s businesses and strategic

goals, and to challenge the company’s executive man-

agement in a proactive and constructive manner.

The Shareholders’ Nomination Board prepares and

presents the proposal for the composition of the Board

of Directors to the Annual General Meeting. When plan-

ning the composition of the Board of Directors, the

Shareholders’ Nomination Board takes into account

these diversity principles and particularly the needs

and development phases of the company’s businesses,

as well as the competence areas required by different

Board committees. When selecting Board members, the

key objective is to ensure that the Board of Directors as

a whole supports the development of Aspo Plc’s current

and future business operations.

The Shareholders’ Nomination Board discusses the

competence, know-how and suitability required of Board

members so that each member can be assumed to have

the required expertise and experience for successfully

carrying out their duties. The objective of the prepara-

tory work of the Nomination Board is to ensure that the

Board of Directors forms an effective entity.

Diversity on the Board of Directors is examined from

different perspectives. For the composition of Aspo Plc’s

Board of Directors, key factors are, in particular, com-

petence, with each board member supplementing one

another, and education and experience in different mar-

kets and fields of business and in management and oper-

ations in different development phases, as well as the

personal characteristics of each member. In addition,

diversity in the Board of Directors is supported by expe-

rience in an international operating environment and con-

sideration of the age and gender distribution, among

other factors.

The members of Aspo Plc’s Board of Directors must

have the competence required for the position and the

ability to allocate sufficient time to their duties. When

composing the Board of Directors, long-term needs and

succession planning are also taken into account. The

composition of the Board of Directors and its number of

members must enable the Board of Directors to work

effectively.

CEO

Aspo Plc’s CEO is appointed by the Board of Directors.

The Board also approves the remuneration payable to

the CEO, on long-term and short-term incentive pro-

grams, and other terms and conditions of the CEO’s ser-

vice contract. The terms and conditions of the CEO’s

service are specified in writing in the CEO’s service con-

tract approved by the Board of Directors. The CEO is

appointed for an indefinite term.

Rolf Jansson (b. 1969), M.Sc. (Tech.), M.Sc. (Econ.),

serves as the CEO of Aspo Plc. The CEO leads and devel-

ops the Group’s business operations and is responsi-

ble for the operative management in accordance with

the guidelines provided by the Board of Directors. The

CEO presents matters and reports to the Board of Direc-

tors. The CEO is responsible for the Group’s adminis-

tration in accordance with the instructions of the Board

of Directors, for ensuring that the company’s account-

ing complies with applicable legislation, and for the reli-

able management of the company’s assets. The CEO

also serves as Chairman of the Board of Directors for

subsidiaries and as the operational supervisor for Aspo

Plc’s administration and for the Managing Directors of

the sub-groups. Furthermore, the CEO is responsible for

the internal audit and for the Group’s risk management,

which are coordinated by the director of legal affairs.

GROUP EXECUTIVE COMMITTEE

The CEO is assisted by the Group Executive Committee.

The Group Executive Committee is responsible for devel-

oping the strategic structure of Aspo Group and its per-

formance, and it prepares the Group’s policies and com-

mon practices. The Group Executive Committee consists

the following members: the CEO; the CFO; Vice Pres-

ident, Corporate Development; Senior Vice President,

Legal; and the Managing Directors of the Group’s busi-

ness units. The Group Executive Committee convenes at

least six times a year.

REMUNERATION

The Remuneration Policy concerning Board members

and the CEO was approved by the Board of Directors

of Aspo Plc on March 4, 2022. The Remuneration Pol-

icy describes the decision-making procedures and princi-

ples concerning the remuneration of the Board of Direc-

tors and the CEO, and it is presented to the Annual Gen-

eral Meeting every four years or whenever amendments

are made. The salaries, remuneration and other financial

benefits of the Board of Directors and the CEO are pre-

sented in a separate remuneration report available on

the company’s website at www.aspo.com/en/govern-

ance/remuneration.

AUDIT

The statutory duty of the independent external auditor

is, in particular, to ensure that the financial statements

provide accurate and sufficient information about the

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company’s financial results for the period and its finan-

cial position.

In accordance with the Articles of Association, the

Annual General Meeting elects the auditor, which must

be an auditing firm approved by the Finland Chamber

of Commerce. In addition, the Annual General Meeting

decides on the fee payable to the auditor and on the

grounds for the fee. The term of the auditor ends upon

the conclusion of the next Annual General Meeting fol-

lowing their election. When changing the auditor, the

Annual General Meeting elects the new auditor on the

basis of the proposal of the Board of Directors, prepared

by the Audit Committee.

The auditor selected by the Annual General Meeting

is responsible for providing auditing guidelines and coor-

dinating the auditing work throughout the Group. As

part of the annual audit, the auditor audits the compa-

ny’s accounts and administration. In addition, the audi-

tor audits the consolidated financial statements and

other relations between Group companies. The audi-

tor provides the company’s shareholders with the audi-

tor’s report required by law in connection with the finan-

cial statements. The Board also receives other possible

reports and statements issued by the auditor.

The 2023 Annual General Meeting elected the Audit

Firm Deloitte Oy as the auditor. Jukka Vattulainen, KHT,

serves as the auditor-in-charge. In 2023, companies

belonging to Deloitte Oy in Finland and abroad were

paid around EUR 228,373 in fees for performing audits

for Aspo Group. In addition, non-audit services were

acquired for around EUR 71,133.

INTERNAL CONTROL

The particular objective of Aspo Plc’s internal control is

to ensure the profitability and efficiency of operations,

reliable financial reporting, and compliance with the appli-

cable laws and regulations and the agreed practices and

operating principles. Aspo Plc’s internal control includes

the control integrated into the business processes, the

Group’s management system, and financial reporting

covering the entire Group. Internal control is an integral

part of the company’s management, risk management

and administration.

The aim of internal control is to create sufficient cer-

tainty of goals and objectives being reached in terms of

the following:

• Operational profitability and efficiency and capital

management

• Reliability and integrity of financial and operational

information

• Compliance with laws, regulations and agreements,

as well as ethical principles and social responsibility

• Safeguarding and responsible management of assets

and brands

The responsibility to arrange internal control lies with

the Board of Directors and the CEO both at Group level

and in the different businesses. The Board of Direc-

tors is accountable to the shareholders, and the CEO

is accountable to the Board. The internal audit function

supports the Group and business management in their

internal control responsibility, and the aim is to provide

Aspo Plc’s Board of Directors with sufficient certainty

of the effectiveness of internal control. The Audit Com-

mittee monitors the operations and effectiveness of the

company’s internal control at its meetings and reviews

the plans and reports of internal control.

FINANCIAL REPORTING

The control of financial reporting is based on monitoring

business processes. The information for financial report-

ing is created as business processes progress, and the

responsibility for accurate information is shared by all

participants in the process. The financial reporting pro-

cess is decentralized and it is monitored by the Audit

Committee.

Consolidated financial statements are prepared in

accordance with the IFRS standards as adopted by the

EU. The financial statements of the parent company and

the Finnish subsidiaries are prepared in accordance with

the Finnish Accounting Standards. Each separate com-

pany complies with the legislation of the country where

it is located, but reports the information in accordance

with Aspo’s internal accounting guidelines. Separate

companies may have their own chart of accounts, but all

information is consolidated on the basis of a common

chart of accounts to the unit level, where its reliability is

assessed before the information is transferred to Group

level. Aspo Group’s financial information is verified, and

assessed on a monthly basis. In each phase, the unit

responsible for the quality and generation of information

will assess its reliability. The Group-level monitoring and

reconciliation mechanisms are used on a monthly basis.

The systems required for financial reporting are

decentralized and used in accordance with the princi-

ples of internal control. The achievement of the set tar-

gets is monitored on a monthly basis within the Group’s

consolidation and reporting system. In addition to actual

and comparison figures, the system provides up-to-date

forecasts. The reports are provided for Aspo’s Board of

Directors monthly. The Board of Directors assesses the

Group’s position and future based on the information

provided. The Board of Directors is responsible for the

content and publication of the financial statements.

In addition to the Audit Committee, the reliability of

reporting and processes is assessed by an independent

external audit firm.

INTERNAL AUDIT

Internal audit assists the Board of Directors in its control

responsibility by, amongst other things, assessing the

level of internal control maintained to achieve Aspo Plc’s

operational targets. Internal audit supports the organiza-

tion by assessing and verifying the effectiveness of busi-

ness processes and risk management, as well as man-

agement and administration.

The operating principles for internal audit are

approved as a part of the internal control principles pro-

vided by the Board of Directors. The Group’s director of

legal affairs is responsible for the coordination of internal

audit activities, and internal audit findings are reported

to the CEO, the Audit Committee and the Board of Direc-

tors. Internal audit is organized corresponding to the size

of the Group. Additional resources and special exper-

tise are acquired if necessary. Audits are based on risk

assessments. Audit assessment and assurance target

the profitability and effectiveness of operations, the reli-

ability of financial and operational reporting, compliance

with the law, and the safeguarding of assets.

Written audit reports are prepared and distributed to

the Group’s CEO, the senior management of the audited

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sub-group, and the management of the audited business

or unit. Internal audit prepares a summary report on con-

ducted audits, the most significant findings and agreed

measures at least quarterly for the Audit Committee of

Aspo Plc’s Board of Directors.

The Audit Committee monitors the operations and

effectiveness of the company’s internal audit at its meet-

ings and reviews the plans and reports of internal audit.

RISK MANAGEMENT

The purpose of risk management is to promote the

achievement of the Group’s goals. Risk management

aims to proactively identify and manage potential prob-

lems and to identify and seize business opportunities.

Risk management supports the development and imple-

mentation of Aspo Plc’s strategy.

The purpose of risk management is that:

• Aspo Plc has an effective risk management control

model, and related processes integrated into its busi-

ness management.

• Managers have access to high-quality and up-to-date

information about business risks and their control

measures, providing support for decision-making.

• The probability of the materialization of risks and

unexpected events and their impacts on financial per-

formance and reputation can be reduced effectively.

• Risk management measures and selected control

measures are based on Aspo Plc’s willingness to take

risks and ability to tolerate risks.

• Cooperation in risk management is effective between

Aspo Plc’s different businesses.

The managers of the Group and its businesses are

responsible for risk management. They are also respon-

sible for determining sufficient measures and their imple-

mentation, and for monitoring and ensuring that the

measures are implemented as part of the daily manage-

ment of operations. Risk management is coordinated by

the Group’s director of legal affairs, who reports to the

CEO.

The Audit Committee monitors the effectiveness of

the risk management systems and deals with risk man-

agement processes, plans and reports.

Each business has a separate risk management pro-

gram. Business risks and their management are dis-

cussed regularly by the management teams of the busi-

nesses. The Group’s shared functions ensure that suf-

ficient risk assessment and reporting procedures are

incorporated into the processes they are responsible for.

The Group’s administration is responsible for Group-level

insurance plans.

Characteristic risks in each business area are identi-

fied in the business units, assessed in the business units’

management teams, and reported to the subsidiaries’

Boards of Directors and, if necessary, also to Aspo Plc’s

Board of Directors or the Audit Committee.

Risks are continuously assessed, and their manage-

ment is discussed in the business units’ management

teams. Risk assessments are updated in accordance

with Aspo Plc’s management policy, and the most note-

worthy findings are presented in the quarterly interim

reports.

Financial risks, their management principles and the

related organization are presented in the notes to the

financial statements.

RELATED PARTY TRANSACTIONS

Aspo complies with the legislation governing related

party transactions, the Finnish Corporate Govern-

ance Code 2020, and the rules and instructions of Nas-

daq Helsinki Ltd. Based on these, Aspo Plc must eval-

uate and monitor the business transactions in which it

is engaged with its related parties, and ensure that any

conflicts of interest are appropriately addressed in deci-

sion-making. Aspo Plc maintains a list of related parties

and verifies any changes at least once a year. If related

party transactions are significant for Aspo Plc and dif-

fer from normal business activities, or have been carried

out on the basis of unusual market conditions, the deci-

sion-making processes associated with these related

party transactions must be described in the financial

statements.

Aspo Plc’s related party transactions are described in

Note 5.3 (“Related Parties”) to the consolidated financial

statements. Related party transactions are not signifi-

cant for the company, nor do they differ from the compa-

ny’s normal business activities, and they have been car-

ried out at normal market terms.

INSIDER ADMINISTRATION

Aspo Group complies with the EU’s Market Abuse Reg-

ulation (EU No 596/2014) and regulations issued pur-

suant to it, and other applicable guidelines, including the

insider guidelines of Nasdaq Helsinki Ltd.

Permanent insiders of Aspo Plc include the members

of the Board of Directors, the Group Executive Commit-

tee, the auditor and other individuals who have regu-

lar access to insider information. Individuals working in

managerial positions at Aspo Plc include members of the

Board of Directors and the Group Executive Committee.

When necessary, Aspo establishes and maintains pro-

ject-specific insider lists of persons involved for projects

involving insider information .

A closed period of 30 calendar days before the publi-

cation of interim reports, half-year financial reports and

financial statements applies to individuals working in

managerial positions at Aspo Plc and to permanent insid-

ers. During the closed period, the persons are prohib-

ited from trading on Aspo’s shares and other financial

instruments on one’s own account or for the account of

a third party. . Furthermore, individuals entered in pro-

ject-specific insider lists cannot trade in financial instru-

ments / on securities issued by the company during the

specific project period. Individuals working in manage-

rial positions at Aspo Plc and their related parties must

report any business transactions associated with the

company’s financial instruments to the company and to

the Finnish Financial Supervisory Authority.

The Group’s CFO is responsible for the control and

monitoring of insider issues.

Aspo Plc’s insider register and project-specific insider

lists are maintained in the Sire service, an application ser-

vice provided by Euroclear Finland for its customers to

maintain registers associated with insider administration.

Aspo Plc

Board of Directors

Published on March 21, 2024

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ASPO’S YEAR 2023

PATRICIA ALLAM

HEIKKI WESTERLUND SALLA PÖYRY

MIKAEL LAINE

TATU VEHMAS

TAPIO KOLUNSARKA

KAARINA STÅHLBERG

Board of

Directors

DECEMBER 31, 2023

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Board of Directors

DECEMBER 31, 2023

HEIKKI WESTERLUND

M.Sc. (Econ.), born in 1966

Board professional

Board member, Duuri Group Oy, since 2018

Board member, Kemppi Oy, since 2018

Board member, Marinetek Group, since 2021

Board member, Oras Invest Oy, since 2022

Chair of the Board, Oriola Oyj, since 2023

Chair of the Board, Kvanted Oy, since 2023

Chair of the Board of Directors since 2021

Member of the Board of Directors since 2020

Chair of the Human Resources and Remuneration Committee

since 2021

Member of the Audit Committee in 2020

Independent of the company and its major shareholders

SHAREHOLDING

Shareholding in Aspo Plc on December 31, 2023: 15,000

shares, or 0.05% of the total number of shares; held by related

party Procurator-Holding Oy: 20,000 shares, or 0.06% of the

total number of shares.

No holdings or rights based on share-based incentive plans.

PATRICIA ALLAM

M.Sc. (Econ.), MBA (IMD), born in 1985

Fastned B.V. – Head of Funding & Investor Relations since

2023

Member of the Board of Directors since 2021

Member of the Audit Committee since 2021

Independent of the company, dependent on its major sharehold-

ers

SHAREHOLDING

Shareholding in Aspo Plc on December 31, 2023: 6,371 shares,

or 0.02% of the total number of shares; held by related party

Oy Havsudden Ab: 3,262,941 shares, or 10.39% of the total

number of shares.

Aspo’s hybrid bond 2022: EUR 0.2 million; EUR 0.7 million held

by related party Oy Havsudden Ab.

No holdings or rights based on share-based incentive plans

TAPIO KOLUNSARKA

M.Sc. (Tech.), M.Sc. (Econ.), born in 1975

President & CEO, Insta Group, since 2023

Board member, Cargotec Oyj, since 2023

Board member, Aidian Oy, since 2023

Board member, Millog Oy, since 2023

Board member, Senop Oy, since 2023

Chair of the Board of Directors, Leijona Instituutti Oy, since

2023

Member of the Board of Directors since 2022

Member of the Human Resources and Remuneration Commit-

tee since 2022

Independent of the company and its major shareholders

SHAREHOLDING

Shareholding in Aspo Plc on December 31, 2023: no shares

No holdings or rights based on share-based incentive plans.

MIKAEL LAINE

M.Sc. (Econ.), born in 1964

SVP, Strategy, Cargotec Corporation, since 2014

COO, Kalmar, since 2023

Member of the Board of Directors since 2016

Member of the Audit Committee since 2016

Independent of the company and its major shareholders

SHAREHOLDING

Shareholding in Aspo Plc on December 31, 2023: 10,000

shares, or 0.03% of the total number of shares.

Aspo’s hybrid bond 2022: EUR 0.2 million.

No holdings or rights based on share-based incentive plans.

SALLA PÖYRY

D.Sc. (Econ.), CEFA, born in 1984

Chair of the Board, Procurator-Holding Oy, since 2015

Chair of the Board, Managing Director, Aspana Ab, since 2021

Member of the Board of Directors since 2016

Member of the Human Resources and Remuneration Commit-

tee since 2020

Member of the Audit Committee 2016–2020

Independent of the company and its major shareholders

SHAREHOLDING

Shareholding in Aspo Plc on December 31, 2023: 1,000 shares,

or 0.003% of the total number of shares; held by related party

Procurator-Holding Oy: 564,882 shares, or 1.80% of the total

number of shares.

Aspo’s hybrid bond 2022: EUR 1.3 million held by related party

Procurator Holding Oy

No holdings or rights based on share-based incentive plans

KAARINA STÅHLBERG (from April 4, 2023)

LL.B. (University of Helsinki), LL.M. (Columbia University), born

in 1966

SVP, General Counsel and M&A, Posti Group Corporation, since

2016

Board member and Chair of the Audit Committee (since 2016)

and member of the Nomination Committee (since 2022), Vais-

ala Corporation

Member of the Board of Directors since 2023

Chair of the Audit Committee since 2023

Independent of the company and its major shareholders

SHAREHOLDING

Shareholding in Aspo Plc on December 31, 2023: no shares

No holdings or rights based on share-based incentive plans

TATU VEHMAS

Bachelor of Science, born in 1994

Chair of the Board: AEV Capital Holding Oy since 2020

Managing Director, TAAVi capital, since 2020

Member of the Board of Directors since 2018

Member of the Human Resources and Remuneration Commit-

tee since 2019

Member of the Audit Committee since 2020 and in 2018–2019

Independent of the company, dependent on its major sharehold-

ers

SHAREHOLDING

Shareholding in Aspo Plc on December 31, 2023: 42,790

shares, or 0.14% of the total number of shares; held by related

party AEV Capital Holding Oy: 3,253,554 shares, or 10.36% of

the total number of shares.

Aspo’s hybrid bond 2022: EUR 1.5 million.

No holdings or rights based on share-based incentive plans.

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MISKA KUUSELA

ROLF JANSSON

MIKKO HEIKKILÄ

ARTO MEITSALO

TARU UOTILA

MIKKO PASANEN

MATTI-MIKAEL KOSKINEN

Group Executive

Committee

DECEMBER 31, 2023

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Group Executive Committee

DECEMBER 31, 2023

ROLF JANSSON

CEO, Aspo Plc, 2021–

M.Sc. (Tech.) and M.Sc. (Econ.), born 1969

KEY WORK EXPERIENCE

President and CEO, VR-Group Ltd, 2016–2021

Senior Vice President Logistics, VR-Group Ltd, 2011–2016

Senior Vice President Corporate Development, VR-Group Ltd,

2009–2011

Executive Director, Nordea Corporate Finance, 2007–2009

Principal, Booz Allen Hamilton, 1999–2007

Senior consultant, Smg consulting, 1995–1999

KEY POSITION OF TRUST

Chairman of the Board; NRC Group ASA

Shareholding in Aspo Plc on December 31, 2023:

72,500 shares, or 0.23% of the total number of shares.

Aspo Plc’s hybrid bond 2022: EUR 0.1 million.

MIKKO HEIKKILÄ

Vice President, Corporate Development, Aspo Plc, 2021–

M.Sc. (Tech.), born 1984

KEY WORK EXPERIENCE

Investment Manager, Onvest, 2019–2021

Management consultant, McKinsey & Company, 2015–2019

Management consultant, Capacent Oy, 2012–2015

Development engineer, Konecranes Corporation, 2010–2012

Shareholding in Aspo Plc on December 31, 2023:

7,698 shares, or 0,02% of the total number of shares

MATTI-MIKAEL KOSKINEN

Managing Director, ESL Shipping Ltd, 2013–

M.Sc. (Econ.), born 1972

KEY WORK EXPERIENCE

Managing Director, Meriaura Ltd, 2007–2013

Chartering Manager, Deputy Managing Director, Meriaura Ltd,

2004–2006

Consultant, The World Bank, 2004

Project researcher, Turku School of Economics and Business

Administration, 2003–2004

KEY POSITIONS OF TRUST

Vice Chairman of the Board: Arctia Oy

Member of the Board: Finnish Shipowners´ Association, Interna-

tional Chamber of Shipping, Finnish Coal info Hiilitieto ry

Member: ICC Finland Business Council

Shareholding in Aspo Plc on December 31, 2023:

71,857 or 0.22% of the total number of shares

ARTO MEITSALO

CFO, Aspo Plc, 2009–

Managing Director, Aspo Services Ltd, 2013–

M.Sc. (Econ.), born 1963

KEY WORK EXPERIENCE

Managing Director (acting), Kauko Ltd, 2018–2019

President, Kauko-Telko Ltd, 2008

CFO, Kauko-Telko Ltd, 2007

Director, Kaukomarkkinat Ltd, 2005–2007

Group Controller, Kaukomarkkinat Ltd, 2002–2005

Financial Accountant, Bank of Finland, 1993–2002

Financial Accountant, Kaukomarkkinat Ltd, 1989–1993

KEY POSITIONS OF TRUST

Chairman of the Committee: Federation of Finnish Commerce,

Trade Policy Committee

Vice Chairman of the Board: Silmäsäätiö

Shareholding in Aspo Plc on December 31, 2023:

76,596 shares, or 0.24%, of the total number of shares.

MIKKO PASANEN

Managing Director, Telko Ltd., 2019–

M.Sc. (Econ.), born 1973

KEY WORK EXPERIENCE

CEO, Onninen Oy, 2016–2018

Vice President, Kesko, 2010–2018

Country Director for Russia, Rautakesko Oy, 2007–2010

CFO, Rautakesko Russia, 2005–2007

Management positions, Outokumpu Copper Products, 2000–

2005

KEY POSITIONS OF TRUST

Member of the Board: East Office of Finnish Industries Oy,

European Association of Chemical Distributors (FECC), The

Association of Finnish Technical Traders, Teknisen Kaupan

Palvelut-TKP Oy

Shareholding in Aspo Plc on December 31, 2023:

48,904 shares, or 0.15%, of the total number of shares.

Aspo plc’s hybrid bond 2022: EUR 0.1 million.

MISKA KUUSELA

Managing Director, Leipurin Oyj, 2023–

M.Sc. (Tech.) and M.Sc. (Econ.), born 1969

KEY WORK EXPERIENCE

CEO, Myllyn Paras Finland Oy, 2019–2022

CEO, Dava Foods Finland Oy, 2017–2019

CEO, Helsingin Mylly Oy, 2009–2017

CEO, Fennobon Oy, 2004–2009

Consultant / Senior Manager, Accenture, 1996–2004

Shareholding in Aspo Plc on Decem ber 31, 2023:

2,400 shares, or 0.007% of the total number of sha res.

TARU UOTILA

Senior Vice President, Legal, HR and Sustainability, Aspo Oyj,

2022–

LL.M, born 1970

KEY WORK EXPERIENCE

General Counsel, VR Group Ltd, 2017–2022

Member of the management team and SVP Sustainability,

VR Group, 2019–2022

Senior Legal Counsel, VR Group, 2013–2017

Senior Legal Counsel, GE Healthcare Finland Oy, 2011–2013

Senior Legal Counsel, Fortum Oyj, 2002–2010

Shareholding in Aspo Plc on December 31, 2023: 2,400 shares,

or 0.007% of the total number of shares.

ASPO YEAR 2023 BUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONGOVERNANCE

ASPO’S YEAR 2023

Board members in Group companies

DECEMBER 31, 2023

ESL SHIPPING LTD

Rolf Jansson

Chair of the Board since 2021

Kimmo Nordström

Senior Adviser, Partner, Capstan Ltd

Member of the Board since 2016

Ulla Tapaninen

Ph.D.

Tenured Associate Professor, Tallinn University of Technology

Member of the Board since 2012

LEIPURIN PLC

Rolf Jansson

Chair of the Board since 2021

Jukka Havia

M.Sc. (Econ.)

Chief Financial Officer, Evac Group

Member of the Board since 2014

Mikko Heikkilä

D.Sc. (Tech.)

Vice President, Corporate Development, Aspo Plc

Member of the Board since 2021

Kaisa Poutanen

D.Sc. (Tech.)

Chief Advisor, Nordic FoodTech Venture Capital

Member of the Board since 2014

Harri Sivula

M.Sc. (Admin.)

Board professional

Member of the Board 2010–2013 and since 2014

TELKO LTD

Rolf Jansson

Chair of the Board since 2021

Ralf Holmlund

M.Sc. (Econ.)

Board professional

Member of the Board since 2018

Elina Piispanen

M.Sc. (Econ.)

Board professional

Member of the Board since 2017

Mika Salokangas

M.Sc. (Econ.)

Board professional

Member of the Board since 2022

ASPO YEAR 2023 BUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATIONGOVERNANCE

ASPO’S YEAR 2023

MANAGEMENT REPORT

ASPO’S OPERATING MODEL

Aspo seeks sustainable long-term growth by investing

revenues profitably and by taking steps towards a com-

pounder profile. Aspo enables growth for the businesses it

owns, and aims to improve their profitability and revenues

by developing them and ensuring steady cash flows. The

goal is to assume an even more active role in corporate

arrangements, growth investments and business acquisi-

tions. Aspo focuses on B-to-B industrial services in particu-

lar, and its key clusters include logistics and trade.

In 2023, Aspo’s reporting segments were ESL Ship-

ping, Leipurin, Telko and Non-core businesses. Other oper-

ations include Aspo Group’s administration, financial man-

agement and ICT service center.

SUPPLEMENTARY REPORTS

Aspo Plc has released a separate 2023 Corporate Gov-

ernance Statement. In addition, Aspo releases a report

on non-financial information as required by the Finn-

ish Accounting Act in compliance with the provisions laid

down in Regulation (EU) 2020/852 of the European Par-

liament and of the Council, in the form of a sustainabil-

ity report at the same time as this annual report. Both

reports will be released on the company’s website at

www.aspo.com/en.

Management report 2023

■

ASPO GROUP KEY FIGURES

2023 2022 2021 2020 2019

Net sales, Group total, MEUR 553.0 652.6 586.4 500.7 587.7

Net sales from continuing operations, MEUR 536.4 560.7 573.3 474.3 587.7

Net sales from discontinued operations, MEUR 16.6 91.9 13.1 26.4

Operating profit, Group total, MEUR 9.8 31.2 33.9 19.3 21.1

Operating profit from continuing operations, MEUR 25.9 38.4 36.9 16.7 21.1

Operating profit from discontinued operations, MEUR -16.1 -7.2 -3.0 2.6

Operating profit, Group total, % 1.8 4.8 5.8 3.9 3.6

Items affecting comparability, MEUR -16.7 -24.1 -8.5

Comparable operating profit, Group total, MEUR 26.5 55.3 42.4 19.3 21.1

Comparable operating profit, Group total, % 4.8 8.5 7.2 3.9 3.6

Profit before taxes, MEUR 16.6 32.5 33.0 12.2 18.2

Profit before taxes, continuing operations, % 3.1 5.8 5.8 2.6 3.1

Profit for the period, MEUR 1.6 20.7 25.3 13.4 16.1

Profit from continuing operations, MEUR 16.2 30.8 28.3 10.8 16.1

Profit from discontinued operations, MEUR -14.6 -10.1 -3.0 2.6

Earnings per share (EPS), EUR -0.01 0.61 0.76 0.39 0.47

Continuing operations EPS, € 0.45 0.93 0.86 0.30 0.47

Discontinued operations EPS, € -0.46 -0.32 -0.10 0.09

Return on equity (ROE), % 1.2 15.2 20.8 11.4 13.5

Equity ratio, % 34.4 34.7 32.0 30.1 30.1

Gearing, % 117.6 108.4 131.0 149.0 162.2

Net cash flow from operating activities 47.6 67.7 44.0 65.0 52.5

Free cash flow 27.3 34.4 27.5 56.0 45.2

Aspo Group has reported items affecting

comparability since 2021. Items affect-

ing comparability are explained on pages

46-47 of this Management report.

The principles for calculating key fig-

ures are presented on the last page of

the Management report.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

MANAGEMENT REPORT

Operating environment, short-term risks

and uncertainties in business operations

Changes in demand and in market prices as well as rising inflation and inter-

est rates impacted financial development and generated uncertainty in the mar-

kets served by Aspo’s businesses. The economy in the European Union broadly

stagnated during the year 2023 and is likely to remain subdued also in the

short and mid-term, which increases the risks in all of Aspo’s businesses. Spe-

cifically, the rising interest rates have negatively impacted investment activities,

particularly through increasing financing costs and decreasing financing oppor-

tunities. As a consequence, the M&A market has slowed down, partially also

because of differing views on valuations by the sellers and buyers.

The demand for sea transportation is affected by overall economic devel-

opment and specific demand and production volumes in key industries, espe-

cially metal and forest products. However, ESL Shipping comparatively benefits

from long-term industrial partnerships and a general deficit of year-round ves-

sel capacity in the Baltic Sea area. The current outlook suggests stable devel-

opment for the metal industry, whereas the forest industry is slowly expected

to strengthen from a low level. The shipping freight indexes have somewhat

strengthened since the beginning of September, with very high volatility.

Market price development, and especially sudden declines in raw material

prices, can cause a negative profit impact for Telko and Leipurin. The effect of

such development has been mitigated by active product portfolio management,

combined with specific commercial and operational measures, incl. inventory

management.

Recent events in the Middle East can negatively affect Aspo’s businesses,

e.g. in terms of energy prices and supply chain disruptions, as well as infla-

tion-driven wage increases. Additionally, the events can cause both logistics

costs as well as product prices to increase. Prolongation and possible expan-

sion of the war in Ukraine would negatively impact business operations in

Aspo’s market areas. The increase in global tensions weakens operating condi-

tions in all businesses.

In line with its strategy, Aspo aims to increase earnings also via acquisitions.

Strategy execution combined with the currently relatively high financing costs

may reduce free cash flow and lead to a temporary deterioration of the balance

sheet, in situations where capital expenditures and acquisitions require financial

resources, and consequently may reduce solvency. With its strategy, Aspo aims

to reduce the impact of the possibly weakening general economic development

on Aspo’s profit development. This materializes in e.g. ESL focusing on long-

term customer contracts and green solutions, Telko pursuing growth in spe-

cialty products and expanding into new geographical markets, Leipurin increas-

ing its business focus on food ingredients and prioritizing market segments

that offer stable growth opportunities.

Aspo has exited Russia and other selected eastern markets. Telko sold

its Russian business in April 2023, and Leipurin East was deconsolidated in

December 2023. ESL Shipping abandoned the Russian market already by the

summer of 2022. Hence, Aspo’s financial exposure to Russia is limited in 2024.

Because the future estimates presented in this report are based on the cur-

rent situation and knowledge, they involve significant risks and other uncertain-

ties, due to which actual future outcomes may differ from the estimates.

FINANCIAL TARGETS

Aspo’s long-term financial targets are:

• Annual increase in net sales: 5–10%

• Operating profit: 8%

• Return on equity: more than 20%

• Gearing: less than 130%

On a business level, ESL Shipping’s operating profit target is 14%, Telko’s 8%

and Leipurin’s 5%. The operating profit rate targets are evaluated against the

comparable operating profit rate of Aspo Group and its continuing businesses.

The comparable operating profit, Group total includes results of the continu-

ing and discontinued operations. The comparable operating profit is calculated

by adjusting the reported operating profit with rare and material items affect-

ing the operating profit. These may include impairment losses, sales gains and

losses from divested businesses and non-current assets, as well as financial

losses caused by Russia’s invasion in Ukraine.

EARNINGS

Aspo Group’s net sales from continuing operations decreased by 4% during

the financial year and were EUR 536.4 (560.7) million. In 2023, the compara-

ble operating profit from continuing operations decreased to EUR 26.2 (43.9)

million, and the comparable operating profit rate in continuing operations was

4.9% (7.8%). The negative trend compared to 2022 was driven by ESL Ship-

ping, having a record financial performance in the comparative year. The operat-

ing profit from continuing operations was EUR 25.9 (38.4) million. Earnings per

share for continuing operations were EUR 0.45 (0.93)

In 2023, ESL Shipping’s net sales decreased by 23.0% and were EUR 189.0

(245.4) million. The comparable operating profit halved to EUR 18.3 (37.4) mil-

lion, and the comparable operating profit rate was 9.7% (15.2%). Telko’s net

sales increased by 1% in 2023 to EUR 211.3 (209.4) million. Telko’s full-year

comparable operating profit was EUR 9.0 (11.3) million, and its comparable

operating profit rate was 4.3% (5.4%). Leipurin’s net sales increased by 29%

to EUR 136.1 (105.9) million in 2023. Leipurin’s comparable operating profit in

2023 was EUR 4.2 (1.1) million, and its comparable operating profit rate was

3.1% (1.0%).

■

NET SALES BY MARKET AREA, CONTINUING OPERATIONS

2023

MEUR

2022

MEUR

Change

MEUR

Change

Finland 197.4 224.4 -27.0 -12.0

Scandinavian countries 157.6 137.6 20.0 14.5

Baltic countries 63.8 67.8 -4.0 -5.9

Other European countries 74.5 89.6 -15.1 -16.9

Other countries 43.1 41.3 1.8 4.4

Total 536.4 560.7 -24.3 -4.3

From the beginning of year 2023, following the shift of the strategic focus

towards western markets, Aspo changed the market areas when reporting net

sales. The new reportable market areas are: Finland, Scandinavian countries,

Baltic countries, Other European countries and Other countries. The acquisi-

tion of Kobia in Sweden as well as Johan Steenks in Norway have increased the

contribution of Scandinavia to the Group’s total net sales.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

■

OPERATING PROFIT AND COMPARABLE OPERATING PROFIT,

GROUP TOTAL

MEUR 2023 2022 2021

ESL Shipping, operating profit 17.7 38.2 26.8

Telko, operating profit 8.0 8.2 20.4

Leipurin, operating profit 5.6 -1.4 -2.4

Other operations, operating profit -5.4 -6.6 -7.9

Operating profit from continuing operations 25.9 38.4 36.9

Operating profit from discontinued operations -16.1 -7.2 -3.0

Operating profit, Group total 9.8 31.2 33.9

Items affecting comparability -16.7 -24.1 -8.5

Comparable operating profit, Group total 26.5 55.3 42.4

The figures for discontinued operations in 2023 include the figures for the Non-

core businesses segment. Discontinued operations in 2022 include the figures

for Kauko Oy and the Non-core businesses segment. Discontinued operations

in 2021 include the figures for Kauko Oy.

■

ITEMS AFFECTING COMPARABILITY IN 2023

MEUR

ESL

Shipping Telko Leipurin

Other

operations

Discontinued

operations Total

Advisory expenses, minority stake -0.6 -0.6

Write down of inventory, Russia related -1.0 -1.7 -2.7

Sale and leaseback transactions 1.4 1.4

Restructuring activities -0.2 -0.1 -0.3

Withdrawal from Russia -14.7 -14.7

Divestment of businesses 0.2 0.2

Total -0.6 -1.0 1.4 -0.1 -16.4 -16.7

In 2023 the items affecting comparability amounted to EUR -16.7 million in

total. EUR -0.6 million reported for ESL Shipping were advisory costs related to

the sales process of a minority stake in ESL Shipping. EUR -1.0 million reported

in the Telko segment related to inventory write downs caused by Russia’s inva-

sion in Ukraine. EUR 1.4 million reported in the Leipurin segment consisted of

EUR 1.4 million from gains on sale and leaseback transactions of properties in

Sweden and premises in Lithuania, EUR -0.2 million from restructuring activi-

ties in Sweden and EUR 0.2 million from sale on Leipurin’s bakery equipment

trading business. EUR -0.1 million reported in other operations related to corpo-

rate restructuring costs. EUR -16.4 million reported in discontinued operations

consisted of the sales loss of Telko Russia EUR -8.1 million, the write down

of Telko Russia’s inventory EUR -1.7 million, a loss of EUR -0.8 million for the

deconsolidation of Telko’s subsidiary in Belarus, and EUR -5.8 million related to

the deconsolidation of Leipurin’s entities in Russia, Belarus and Kazakhstan.

■

ITEMS AFFECTING COMPARABILITY IN 2022

MEUR

ESL

Shipping Telko Leipurin

Other

operations

Discontinued

operations Total

Sale of Espa 1.5 1.5

Inventory in Ukraine -2.6 -0.7 -3.3

Accounts receivable in Ukraine -0.5 -0.1 -0.6

Withdrawal from Russia -0.7 -16.1 -16.8

Divestment of businesses -0.4 -1.2 -1.6

Other -1.3 -0.7 -1.3 -3.3

Total 0.8 -3.1 -2.5 -0.7 -18.6 -24.1

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

In 2022, items affecting comparability totaled EUR -24.1 million, of which EUR

-20.7 million resulted from the impact of Russia’s invasion in Ukraine on Aspo

Group’s business operations. Items affecting comparability related to the Kauko

business segment totaled EUR -2.5 million. Other items affecting comparability

totaled EUR -0.9 million. Of the items affecting comparability, EUR -18.6 million

is reported in the result of discontinued operations.

In 2021, items affecting comparability totaled EUR -8.5 million, including an

impairment loss of EUR -4.3 million recognized on Leipurin’s goodwill, an impair-

ment loss and restoration provision of EUR -0.8 million recognized on the fixed

assets of Telko’s terminal in Rauma, and an impairment loss of EUR -3.4 million

recognized on Kauko’s goodwill, which is reported as part of the result of dis-

continued operations.

CASH FLOW AND FINANCING

The Group’s net cash flow from operating activities in 2023 was EUR 47.6

(67.7) million. The cash flow of all businesses was positive, and the decrease

compared to the comparative period came from the ESL Shipping segment.

The cash flow impact of change in working capital was EUR 4.4 (-6.7) million.

The positive cash impact was caused by a decrease in inventories driven by a

decline in market prices and proactive operational management actions, espe-

cially in the Telko segment.

The free cash flow in 2023 was EUR 27.3 (34.4) million. Investments

amounted to EUR -21.8 (-17.8) million and consisted mainly of the ESL Ship-

ping segment’s green coaster advance payments. The other items reported in

cash flows used in investing activities included EUR 3.9 million cash outflow

from the acquisitions of Eltrex, EUR 11.6 million cash inflow from the sale and

leaseback of Leipurin’s properties in Sweden and Lithuania, EUR 7.8 million

negative cash impact of the sale/deconsolidation of Telko’s and Leipurin’s sub-

sidiaries in Russia and other eastern countries, EUR 0.5 million dividend cash

inflow from associates, EUR 0.4 million cash inflow from the sale of Leipurin’s

bakery equipment trading business as well as other cash inflow of EUR 0.7 mil-

lion.

■

NET INTEREST-BEARING DEBT, GROUP TOTAL

MEUR 2023 2022 2021

Interest-bearing liabilities, incl. lease liabilities 195.9 189.3 187.3

Cash and cash equivalents 30.7 33.6 17.7

Net interest-bearing debt 165.2 155.7 169.6

Net interest-bearing debt was EUR 165.2 (155.7) million and gearing increased

to 117.6% (108.4%). The Group’s equity ratio at the end of the review period

was 34.4% (34.7%). The net debt increase is primary a consequence of the

green coaster investments and the Eastern exits.

Net financial expenses totaled EUR -9.3 (-5.9) million. The average interest

rate of interest-bearing liabilities, excluding lease liabilities, was 5.3% (3.3%),

causing Aspo’s interest expenses to grow.

The Group’s liquidity position remained strong. Cash and cash equivalents

stood at EUR 30.7 (33.6) million at the end of the year. Committed revolving

credit facilities, totaling EUR 40 million, were fully unused, as in the compara-

tive period. Aspo’s EUR 80 million commercial paper program also was wholly

unused at the end of the year 2023 and 2022.

In December Aspo’s subsidiary ESL Shipping signed two loan agreements in

total of EUR 37.6 million. The loan period for both loans is five years and they

will be paid back in equal installments during the loan period. The loans were

granted by OP Corporate Bank Plc and the loans were used to pay back exist-

ing loans of similar value.

In December, when Electramar was delivered, AtoBatC Shipping AB with-

drew EUR 8.1 million out of the EUR 32.2 million loan agreement with Svenska

Skeppshypotek. The loan agreement was signed in September 2022 to finance

ESL Shipping’s investment in six new electric hybrid vessels. The loan will be

paid back in a time period of 15 years.

In September Aspo signed a loan agreement of EUR 30 million for a three-

year loan period extending the maturity of Aspo’s loan portfolio. The loan has

been taken for general corporate purposes and refinancing a loan of similar

value.

EVENTS AFTER THE FINANCIAL YEAR

On January 2, 2024, Aspo signed a revolving credit facility agreement amount-

ing to EUR 20 million. The credit is being granted by Nordea Bank Abp. The

maturity of the revolving credit facility agreement is two years plus an option

for one additional year. The agreement will replace a prior revolving credit facil-

ity agreement of the same amount which had remained unused.

On February 8, 2024, Aspo announced that Varma Mutual Pension Insur-

ance Company has agreed to co-invest EUR 15 million alongside OP Finland

Infrastructure LP in Aspo’s subsidiary ESL Shipping. As a result, the combined

investment into ESL Shipping managed by OP Finland Infrastructure LP rises

to total of EUR 45 million at the closing of the transaction. The combined EUR

45 million investment managed by OP Finland Infrastructure LP will be made

against issuance of new shares in ESL Shipping with an agreed pre-money

equity valuation of EUR 165 million, corresponding to a 21.43% ownership

stake in ESL Shipping.

GUIDANCE FOR 2024

Aspo Group’s comparable operating profit is expected to exceed EUR 30 mil-

lion in 2024 (2023: EUR 26.5 million).

BOARD OF DIRECTORS’ PROPOSAL ON THE DISTRIBUTION OF FUNDS

Aspo’s target is an annually increasing dividend distribution. The Board of Direc-

tors proposes to the Annual Shareholders’ Meeting of Aspo Plc to be held on

April 12, 2024, that EUR 0.24 per share be distributed in dividends for the

2023 financial year, and that no dividend will be paid for shares held by Aspo

Plc. In addition, the Board of Directors proposes that the Annual Sharehold-

ers’ Meeting authorizes the Board of Directors to decide on a possible distri-

bution of capital from the invested unrestricted equity fund in the maximum

amount of EUR 0.23 per share on a later date, if aligned with the growth strat-

egy execution and considering the long term benefit of Aspo’s shareholders. If

the maximum amount is distributed, a total maximum of EUR 0.47 (0.46) per

share would be distributed in dividends and return of capital for the 2023 finan-

cial year. The authorization would be valid until the next Annual Shareholders’

Meeting.

On December 31, 2023, the parent company’s distributable funds totaled

EUR 30,362,002.30, with the profit for the financial year totaling EUR

1,468,907.45. The funds in the invested unrestricted equity reserve amount to

EUR 21,150,592.47. There are a total of 31,403,535 shares entitling to divi-

dends on the signing date of this management report and financial statements.

The dividend of EUR 0.24 per share would be paid to shareholders who are

registered in the shareholders’ register maintained by Euroclear Finland Ltd on

the record date of April 16, 2024. The Board of Directors proposes that the

dividend be paid on April 23, 2024. The Board of Directors will decide at its

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

meeting scheduled to be held latest in November 2024, on the possible dis-

tribution of capital from the invested unrestricted equity fund in the maxi-

mum amount of EUR 0.23 per share, which would be paid in November 2024

to shareholders who are registered in the shareholders’ register maintained by

Euroclear Finland Ltd on the record date.

Before the Board of Directors implements the decision made at the Annual

Shareholders’ Meeting, it must assess, as required in the Finnish Limited Lia-

bility Companies Act, whether the company’s liquidity and/or financial position

has changed after the decision was made at the Annual Shareholders’ Meeting

so that the prerequisites for the distribution of dividends stipulated in the Lim-

ited Liability Companies Act are no longer fulfilled. The fulfillment of the prereq-

uisites stipulated in the Limited Liability Companies Act is a requirement for the

implementation of the decision made at the Annual Shareholders’ Meeting.

ASPO’S BUSINESS OPERATIONS

ESL Shipping

ESL Shipping is the leading dry bulk sea transport company operating in the

Baltic Sea area. ESL Shipping’s operations are mainly based on long-term cus-

tomer contracts and established customer relationships. At the end of the

review period, the shipping company’s fleet consisted of 43 vessels with a total

capacity of 443,000 deadweight tons (dwt). Of these, 24 were wholly owned

(77% of the tonnage), two were minority owned (2%) and the remaining 17

vessels (21%) were time chartered.

ESL Shipping’s competitive edge is based on its pioneering role and ability to

responsibly and energy efficiently secure product and raw material transporta-

tion for industries and energy production year-round, even in difficult conditions.

The shipping company loads and unloads large ocean liners at sea as a special

service.

ESL Shipping 2023 2022 2021

Net sales, MEUR 189.0 245.4 191.4

Operating profit, MEUR 17.7 38.2 26.8

Operating profit, % 9.4 15.6 14.0

Items affecting comparability, MEUR -0.6 0.8

Comparable operating profit, MEUR 18.3 37.4 26.8

Comparable operating profit, % 9.7 15.2 14.0

In 2023, ESL Shipping’s net sales decreased by 23.0% and were EUR 189.0

(245.4) million. Its comparable operating profit halved to EUR 18.3 (37.4) mil-

lion, and its comparable operating profit rate was 9.7% (15.2%). Items affecting

comparability amounted to EUR -0.6 million (0.8) and mainly consisted of advi-

sory costs related to strategic projects.

Year 2023 was characterized by a challenging business environment. In var-

ious core customer segments, the business activity has been declining, pull-

ing down especially spot volumes and rates, and the cost inflation and interest

rates have been high. Despite all this, ESL Shipping delivered solid financial per-

formance in 2023. The partnership-based strategy proved its strength within

this adverse business environment.

The newbuilding project of ESL Shipping’s Swedish subsidiary AtoBatC Ship-

ping AB at the Chowgule & Company Private Limited shipyard in India pro-

ceeded as planned during the year. The first vessel in the series, Electramar,

was delivered in December and is carrying project cargo from India to Scandina-

via on her home voyage. The second vessel, Stellamar, was launched on Octo-

ber 1st and is expected to be delivered during the first quarter of 2024. Every

other vessel in the series of 12 next-generation electric hybrid vessels will be

sold, as announced earlier, to the company established by the pooling investor

group. Stellamar is the first vessel to be sold further.

In April 2023 Aspo announced that it initiated a program to accelerate

ESL Shipping’s green transition through a program assessing three alterna-

tive measures, including a launch of a new investment pool of fossil-free ves-

sels, a possible equity injection in ESL Shipping by a minority shareholder, and

the sales of the shipping company’s two supramax vessels. As the first result

of this assessment, Aspo signed in November an agreement with OP Finland

Infrastructure LP regarding an equity investment into ESL Shipping and in Feb-

ruary 2024 Varma decided on a co-investment alongside OP Finland Infrastruc-

ture. The closing of the transactions is expected to take place by the end of

February 2024.

ESL Shipping outlook for 2024

Geopolitical tensions and related attacks against commercial shipping in Red

Sea together with natural phenomena caused limitations to Panama Canal

capacity are disturbing global supply chains. At the same time, more shipping

capacity is needed to perform the same transport tasks due to an increase in

distance travelled.

ESL Shipping’s main markets in the Northern Baltic Sea, Scandinavia and

Continental Europe are expected to continue low-cycle level of industrial activ-

ity. Despite that, to the shipping company important steel industry demand

from long term partnership industries is expected to remain at good volume

level. Forest industry is expected to be slowly recovering from the bottom of

the cycle and overall volumes are expected to increase modestly.

Full year financial performance is expected to improve from previous year

despite that at the early part of the year the prevailing most severe winter ice

conditions in ten years will affect result negatively. Also, the announced indus-

trial actions in Finland are expected to cause supply chain disruptions. The new

green coasters to be added to the fleet during 2024 will support the positive

profit development of ESL Shipping.

Telko

Telko is a leading expert in and supplier of plastic raw materials, industrial

chemicals, and lubricants. It operates as a sustainable partner in the value

chain, bringing well-known international principals and customers together. Its

competitive edge is based on strong technical support, efficient logistics, and

local expert service. Telko operates in Finland, the Baltic countries, Scandinavia,

Poland, Romania, Ukraine, Kazakhstan, Uzbekistan, and China.

Telko 2023 2022 2021

Net sales, MEUR 211.3 209.4 268.8

Operating profit, MEUR 8.0 8.2 20.4

Operating profit, % 3.8 3.9 7.6

Items affecting comparability, MEUR -1.0 -3.1 -0.8

Comparable operating profit, MEUR 9.0 11.3 21.2

Comparable operating profit, % 4.3 5.4 7.9

Eastern business operations have been reported in the Non-core business segment for the

years 2023 and 2022. In 2021, the eastern business operations are included in Telko’s

figures.

Telko’s net sales increased by 1% in 2023 and were EUR 211.3 (209.4) million,

driven by acquisitions. Telko’s comparable operating profit was EUR 9.0 (11.3)

million, and its comparable operating profit rate was 4.3% (5.4%). Telko’s oper-

ating profit in 2023 was EUR 8.0 (8.2) million, and its operating profit rate was

3.8% (3.9%).

Net sales of the plastics business decreased by 8% to EUR 101.4 (110.1)

million in 2023. Sales were lower than the previous year due to a lower price

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

level in the market and business restructuring in Central Asia. However, sales

volumes increased slightly when disregarding Central Asia. Economic challenges

in Europe resulted in lower production levels in most industries with long pro-

duction breaks especially during the holiday season.

Net sales of the chemical business increased by 21% to EUR 59.4 (49.2) mil-

lion in 2023. Development of Eltrex, acquired in Q1 2023, was in line with tar-

gets, and integration is ongoing with sales synergies building up. The price level

has been relatively stable in chemicals. Western markets showed a relatively

stable development, except in the Baltics, where demand was significantly

lower than normally.

Net sales of the lubricants business increased by 1% to EUR 50.5 (50.1)

million. For the full year, the industrial lubricants had a very good result reach-

ing all-time high level. Organic growth was achieved by taking market share in

a declining market. Also, automotive lubricants in Scandinavia showed positive

development during the year.

Telko outlook for 2024

As a leading expert serving multiple industries, Telko is in a unique position to

create value by improving its customers’ sustainability, productivity, and oper-

ational quality. The core of Telko´s strategy remains the same despite the sig-

nificant changes in its business environment during last year. Telko´s growth

efforts will increasingly be focused on Europe, and the main components of the

company´s value proposition is unchanged.

Demand is expected to remain slightly soft in key markets especially dur-

ing the first half of 2024. Price levels are under pressure, but still expected

to remain stable. Telko is well positioned in this market. Inventories are in line

with current market conditions and opportunities for organic growth and pos-

itive market share development have been specified. Acquisitions are planned

to support positive development. Telko serves industrial customers in vari-

ous industries. The possible changes in demand will be softened by the hetero-

genic cyclicality of the diversified customer base, and hence Telko’s business is

expected to remain fairly resilient to changes in overall market development.

In plastics, market conditions are expected to remain challenging at least

during the first half of 2024 due to an economic recession that is negatively

impacting the average demand of the customer base. Inventories are well in

line with current market conditions, and inventory rotation has improved. The

latest development in the Red Sea will have some market impact, but it is still

too early to anticipate the magnitude. These impacts could be, for example,

shortages in supply and market price fluctuations. Telko’s plastics business will

continue to focus on high-quality specialty products, providing technical service,

and improving our capabilities to offer sustainable plastic solutions.

In chemicals, demand is expected to remain slightly soft on key markets.

Price levels are stable, following raw material development. Ukraine is expected

to suffer from extensive production shutdowns during the winter. There are

good growth opportunities in mining and metals in Central Asia. Several sup-

pliers have lowered their production output, which may result in shortages of

commodities and will increase volatility in prices of certain product lines.

Industrial lubricants sales is expected to maintain stable and continue to

take market share. Slightly weaker demand in the first half of the year, followed

by stronger second part of the year. Market prices and margins continue to be

under pressure due to oversupply in the market. Prices for finished products are

expected to remain stable, as base-oil and additives supply, and demand is bal-

anced at the beginning of the year. In general, demand is still on the slow side.

Automotive lubricants sales are estimated to be stable.

During the first half of the year, Telko will start the distribution of industrial

lubricants in Poland and the distribution of automotive lubricants in Denmark.

The recent acquisitions have proved to be successful, and they have had a

positive impact on the existing businesses. Telko aims to accelerate its growth

through acquisitions to achieve its strategic goals in all three business areas

and it has a solid pipeline of potential acquisitions. Telko remains confident of

being able to increase the M&A pace. Telko will also seek to strengthen its mar-

ket share in existing markets through organic growth.

In order to secure good profitability, Telko will further strengthen its cost

efficiency and continue developing its operating model towards better scalabil-

ity and flexibility. Good inventory control and capital efficiency will continue to

be a high priority for Telko. The asset-light business model of Telko enables bet-

ter ability to utilize new business opportunities and to react to changes in the

business environment.

Leipurin

Leipurin operates as part of the food chain, sourcing raw materials in global

markets and from domestic companies and supplying them through its effec-

tive logistics chain to serve customer needs. With operations in six countries

including Finland, Sweden, the Baltic countries, and Ukraine, Leipurin serves

bakeries, the food industry, and food service customers by providing raw mate-

rials, supporting research & development, recipes, and innovations for new

products.

Leipurin 2023 2022 2021

Net sales, MEUR 136.1 105.9 113.1

Operating profit, MEUR 5.6 -1.4 -2.4

Operating profit, % 4.1 -1.3 -2.1

Items affecting comparability, MEUR 1.4 -2.5 -4.3

Comparable operating profit, MEUR 4.2 1.1 1.9

Comparable operating profit, % 3.1 1.0 1.7

Eastern business operations have been reported in the Non-core business segment for the

years 2023 and 2022. In 2021, the eastern business operations are included in Leipurin’s

figures.

Leipurin’s net sales increased by 29% to EUR 136.1 (105.9) million in 2023.

Figures for the comparative period included EUR 4.3 million in net sales of the

divested Vulganus Oy. Kobia AB acquired in September 2022 contributed to

the net by EUR 50 million (17) and its share of Leipurin’s net sales was 37%

during the period. The steep increase in raw material prices in global markets

had a significant impact on the euro-denominated increase in sales, particu-

larly in the first quarter and the beginning of the second quarter, flattening out

towards the end of the year. Excluding the impact of Kobia AB, sales volume in

kilos decreased by slightly over 10%.

Leipurin’s comparable operating profit in 2023 was EUR 4.2 (1.1) million,

and the comparable operating profit rate was 3.1% (1.0%). Items affecting

comparability, totaling EUR 1.4 (-2.5) million, were mainly related to the gain on

the sale and leaseback transactions of properties in Sweden and Lithuania, and

to a lesser extent, to the divestment of the bakery equipment trading business

in Finland. The comparative period was mainly affected by the destroyed ware-

house in Ukraine, items related to the divestment of Vulganus Oy, and acquisi-

tion of Kobia AB. The operating profit was EUR 5.6 (-1.4) million and operating

profit rate 4.1% (-1.3%).

Leipurin completed the sale and leaseback of the property in Gothenburg,

Sweden in early 2023, and the properties in Hässleholm and Tyresö, Sweden

during the summer. These transactions generated sales proceeds of EUR 13.6

million, which represents a significant share of the capital that was invested

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

when acquiring Kobia AB. In September, Leipurin completed the sale and

leaseback of the property in Kaunas, Lithuania at a sale price of EUR 1.1 mil-

lion. Toward the end of the year, Leipurin divested its bakery equipment trad-

ing business in Finland for EUR 0.5 million, clarifying the business portfolio and

improving focus. The transactions will not have a significant impact on profita-

bility going forward but they will free up management’s time to focus on Leipu-

rin’s core business.

Leipurin outlook for 2024

From mid-2022 and throughout the year 2023, volumes have declined across

the food chain. This is very untypical for the food sector, and hence a recov-

ery has been expected. Despite signs of volume recovery, the current mar-

ket has overall settled at slightly lower volume levels than a year ago. In this

development, Leipurin has not been an outlier. However, Leipurin volumes have

declined predominantly in the low-margin commodities and thereby improving

the product mix, which contributes to enhanced profitability.

Divesting the bakery equipment trading business enables an even bet-

ter focus on food ingredients. Every Leipurin country has a growth and profit-

ability improvement plan for 2024. The ongoing work to upgrade commercial

activities, improve efficiency in the supply, and develop sourcing capabilities, is

expected to improve financial performance also going forward. To strengthen

growth and company positioning, Leipurin also evaluates possible acquisition

opportunities.

While 2022–2023 was defined by inflation-driven revenue growth, price

development is expected to be more stable going forward. Due to this, and the

divestments, organic revenue growth in 2024 is expected to be modest on Lei-

purin -segment level.

Leipurin is entering 2024 from a strong position with Kobia successfully inte-

grated, a new management structure in place, and with improved profitability

as well as demonstrated capability to operate in volatile markets.

Non-core businesses

The Non-core businesses segment includes Telko Russia and Belarus as well as

Kauko GmbH previously reported in the Telko segment, Leipurin Russia, Belarus

and Kazakhstan previously reported in the Leipurin segment and ESL Shipping

Russia previously reported in the ESL Shipping segment. The Non-core busi-

nesses segment was established to separate the results of the non-core busi-

nesses of Aspo from the results of the continuing businesses. The Non-core

businesses segment is presented as discontinued operations. All the entities

in the segment have either been sold or otherwise disposed of during the year

2023. Telko Russia was sold on April 30, 2023 and Telko Belarus was decon-

solidated on August 31, 2023.

Aspo is still in the process of selling Leipurin entities in Russia and Kazakh-

stan, however, the sales process has prolonged and there is a lot of uncertainty

around the transaction. Thus, at the end of the year 2023 Aspo concluded that,

the control of the companies and their returns has ceased, resulting in the deci-

sion to deconsolidate the Leipurin entities in Russia, Belarus and Kazakhstan

from Aspo Group on December 31, 2023. Thus, all the entities in the Non-core

segment are excluded from Aspo Group’s financial reporting going forward.

Non-core businesses 2023 2022

Net sales, MEUR 16.6 82.7

Operating profit, MEUR -16.1 -4.5

Operating profit, % -97.0 -5.4

Items affecting comparability, MEUR -16.4 -16.1

Comparable operating profit, MEUR 0.3 11.6

Comparable operating profit, % 1.8 14.0

Eastern business operations have been reported in the Non-core business segment for the

years 2023 and 2022. In 2021, the eastern business operations are included in the Telko

and Leipurin segments’ figures.

The net sales of the Non-core businesses segment decreased by 80% to EUR

16.6 (82.7) million. The comparable operating profit was EUR 0.3 (11.6) mil-

lion, and the comparable operating profit rate was 1.8% (14.0%). Items affect-

ing comparability, totaling EUR -16.4 (-16.1) million consisted of the divest-

ment loss of Telko Russia EUR -8.1 million, the write down of Telko Russia’s

inventory EUR -1.7 million, a loss of EUR -0,8 million for the deconsolidation

of Telko’s subsidiary in Belarus, and EUR -5.8 million for the deconsolidation of

Leipurin’s entities in Russia, Belarus and Kazakhstan. The operating profit was

EUR -16.1 (-4.5) million, and the operating profit rate was -97.0% (-5.4%).

Other operations

Other operations include Aspo Group’s administration, finance and ICT ser-

vice center. In 2023, the comparable operating profit of other operations was

EUR -5.3 (-5.9) million, and the operating profit was EUR -5.4 (-6.6) million. The

improved profitability derives from some restructuring activities at Aspo Group

level. The items affecting comparability of EUR -0.1 million related to corporate

restructuring costs. In 2022, the items affecting comparability of EUR -0.7 mil-

lion were related to the additional share-based remuneration granted to Aspo’s

previous CEO of EUR -0.5 million and to EUR -0.2 million of corporate restruc-

turing expenses.

STRUCTURAL ARRANGEMENTS

In the ESL Shipping segment, Norra Skeppnings Gruppen AB was merged with

its parent company AtoBatC Shipping AB.

On January 31, 2023, the Telko segment acquired Eltrex Sp. z.o.o., a Polish

distributor of specialty chemicals and industrial packaging materials. Telko Mid-

dle East Co., a company in Iran, was closed down in April 2023.

In the Non-core Businesses segment, OOO Telko, a company in Russia, was

sold on May 10, 2023, to GK Himik, which is a Russian industrial operator. The

consolidation of FLLC Telko into the Group ended on August 31, 2023, when

the company was placed into liquidation and its operations ceased. Kauko

GmbH has been placed in voluntary liquidation, and the operations of ESL Ship-

ping Russia LLC have ceased. These two companies were consolidated into

Aspo Group until October 31, 2023. OOO Leipurien Tukku, OOO NPK Leipu-

rin, FLLC Leipurin and TOO Leipurin were consolidated into Aspo Group until

December 31, 2023, when control over these companies was deemed to have

ceased.

INVESTMENTS

In 2023, Aspo Group’s investments totaled EUR 21.8 (17.8) million. The invest-

ments mainly consisted of ESL Shipping’s green coaster advance payments of

EUR 14.2 million.

■

INVESTMENTS, GROUP TOTAL

MEUR 2023 2022 2021

Investments in intangible and tangible assets 21.8 17.8 15.9

Advance payments for the green coaster vessels to be sold further have been

recognized in inventories. At the end of the financial year, inventories included

EUR 15.1 (10.2) million in advance payments for the green coaster vessels.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

PERSONNEL

The employee benefit expenses of continuing operations in 2023 amounted to

EUR 48.5 (48.8) million. More detailed information about the personnel is pro-

vided in Aspo’s sustainability report.

■

PERSONNEL, GROUP TOTAL

2023 2022 2021

Number of personnel, December 31 712 886 944

Average number of personnel 835 914 911

Wages, salaries and fees, MEUR 43.2 47.3 43.9

REMUNERATION

Share-based incentive plan 2023–2025

On February 15, 2023, Aspo Plc’s Board of Directors approved a new incen-

tive plan for the Group key employees by establishing a Performance Share Plan

2023–2025. The aim of the plan is to combine the objectives of the sharehold-

ers and the key employees in order to increase the value of the Company in the

long-term, to retain the key employees at the Company, and to offer them com-

petitive reward plan based on earning and accumulating the Company´s shares.

Rewards earned from each of the three performance periods of the Perfor-

mance Share Plan will be based on the Group’s Earnings per Share (EPS) and

two criteria based on sustainability targets. The prerequisite for participation in

the plan and for receipt of reward on the basis of the program is that a key per-

son holds the Company’s shares or acquires the Company’s shares, up to the

number predetermined by the Board of Directors.

The potential reward will be paid partly in the Company´s shares and partly in

cash in 2024, 2025 and 2026. The cash proportion is intended to cover taxes

and tax-related costs arising from the reward to a key employee. As a rule, no

reward will be paid if a key employee´s employment or service ends before the

reward payment. The shares paid as reward may not be transferred during the

restriction period. As a rule, if a key employee´s employment contract or director

contract terminates during the restriction period, he or she must gratuitously

return the shares earned as reward.

The Performance Share Plan 2023–2025 is directed to a maximum of 30

participants, including the members of the Group Executive Committee. The

rewards to be paid on the basis of the plan correspond to the value of a maxi-

mum total of 320,000 Aspo Plc shares including also the proportion to be paid

in cash.

For the 2023 earnings period, the targets were met at 10% overall.

Share-based incentive plan 2022–2024

On February 16, 2022, Aspo Plc’s Board of Directors decided to establish a

share-based incentive plan for 2022–2024. The share-based incentive plan con-

sists of three earnings periods, with the earned reward being based on the

Group’s earnings per share (EPS) and two sustainability indicators.

The share-based incentive plan is directed at a maximum of 30 people,

including the members of the Group Executive Committee. The potential reward

will be paid partly in the company’s shares and partly in cash in 2023, 2024 and

2025. The rewards payable based on the plan correspond to a maximum total

value of 400,000 Aspo Plc shares, also including the proportion to be paid in

cash.

For the 2022 earnings period, the targets were met at 90% overall. On

March 29, 2023, Aspo Plc granted 76,050 treasury shares to employees

included in the plan. The transfer was based on the share issue authorization of

the Annual Shareholders’ Meeting held on April 6, 2022.

For the 2023 earnings period, the targets were met at 30% overall.

Share-based incentive plan 2020

In June 2022, Aspo’s Board of Directors granted 20,000 Aspo shares to

Aspo’s CEO Rolf Jansson based on the share-based incentive plan for 2020

and the conditions of the CEO’s contract of service. 10,000 of the shares and

an amount of cash equaling their value to cover taxes were transferred in June

2022 and at the same time, Jansson acquired 10,000 shares from the markets

at his own expense in accordance with the contract. A second transfer of equal

nature and quantity took place in June 2023.

RESEARCH AND DEVELOPMENT

Aspo Group’s R&D focuses, according to the nature of each segment, on devel-

oping operations, procedures and products as part of the customer-specific

operations, which means that the development inputs are included in other

operating expenses and are not capitalized.

SUSTAINABILITY

Aspo’s businesses aim to be forerunners in sustainability in their respective sec-

tors. Sustainability is a key driver for Aspo’s management system and especially

for the company’s investments.

Key sustainability themes have been defined for Aspo’s businesses:

• Increasing our business operations, while reducing their environmental

impacts

• Improving the Aspo experience for people in our value chain

• Advancing the practices of good governance at all levels

Aspo’s businesses have different individual focus areas in their sustainability

work. ESL Shipping has actively reduced its environmental footprint by bringing

down its fleet’s emissions and energy consumption. Product safety is essential

for Telko, which serves as a link between industrial customers and international

raw material manufacturers. In addition to product safety, Leipurin focuses on

reducing waste and emissions from product transport, and on favoring plant-

based product selection. Aspo’s Code of Conduct provides a common set of

rules for sustainable business operations in all the Group’s subsidiaries.

Key focus areas for the Group include reducing emission intensity and

improving occupational safety. With an emission intensity of 0.37, we were very

close to the target of 0.36 for 2023, and we are approaching the long-term tar-

get we set for 2025 to reduce the emission intensity by 30% from the 2020

baseline. We achieved great progress in occupational safety, and our accident

frequency rate decreased from 8.1 in the previous year to 4.8 in 2023.

In addition, almost 100% of the Group’s employees completed Code of Con-

duct and Compliance trainings during the year. The trainings cover anti-corrup-

tion aspects and provide guidance for identifying suspicious situations and

unethical conduct. More information about the progress of Aspo and its busi-

nesses in sustainability work can be found in Aspo’s sustainability report for

2023. In addition, ESL Shipping publishes its own sustainability report, and

Telko publishes more detailed sustainability information about its operations on

its website.

In 2023, Aspo continued to develop its sustainability on several fronts. Our

operations were guided by the Group’s sustainability policy, and we contin-

ued to monitor the implementation of the sustainability targets integrated into

the remuneration system on a common reporting platform. Sustainability also

guides Aspo’s management system and the process of identifying new invest-

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

ment opportunities. During 2023, the monitoring of key sustainability targets

and development projects was incorporated more systematically into the Board

of Directors’ and the Group Executive Committee’s work. We continued to

develop ESG assessment criteria for potential acquisitions.

We also continued to prepare for the entry into force of the EU Corporate

Sustainability Reporting Directive (CSRD). We carried out a double material-

ity analysis at both Group and segment level to identify material sustainability

aspects for compliant reporting. Several development projects are in progress

to ensure CSRD reporting capability for 2024.

EU TAXONOMY REPORTING

Introduction

The EU taxonomy is a classification system for environmentally sustainable

economic activities for directing investments at more sustainable activities.

Economic activities are classified as taxonomy-eligible or taxonomy-non-eligible

according to the delegated acts supplementing the Taxonomy Regulation (Reg-

ulation (EU) 2020/852). The supplementary acts include the following:

• Climate Delegated Act (Commission Delegated Regulation (EU) 2021/2139)

• Disclosures Delegated Act (Commission Delegated Regulation (EU)

2021/2178)

• Complementary Delegated Act (Commission Delegated Regulation (EU)

2022/1214)

• Environmental Delegated Act (Commission Delegated Regulation (EU)

2023/2486)

Taxonomy-eligible activities are further classified as taxonomy-aligned if they

comply with the technical screening criteria as defined in the Climate Dele-

gated Act (and partially supplemented by the Environmental Delegated Act) and

are carried out in compliance with minimum safeguards. To meet the technical

screening criteria, an economic activity should contribute substantially to one

or more environmental objectives while not doing significant harm to any of the

other environmental objectives.

Aspo reports the taxonomy aligned activities in its report on non-financial

information in accordance with the Finnish Accounting Act as defined in the EU

taxonomy. As a rule, our interpretation of eligibility and alignment is based on

the Taxonomy Regulation, the Climate Delegated Act and the Environmental

Delegated Act, as well as the technical criteria defined in them: 1) substantial

contribution to climate change mitigation/adaptation; and 2) Do No Significant

Harm (DNSH) criteria. In addition, we have assessed compliance with the mini-

mum safeguards in our activities.

Aspo’s Sustainability Report is published annually, and ESL Shipping pub-

lishes its own sustainability report. They include information about how the

environment is addressed in business activities. Telko publishes sustainability

information on its website.

Our activities

Aspo’s business operations include ESL Shipping, Telko and Leipurin. We have

conducted an analysis for each business operation to assess the eligibility and

alignment of the activities. Below is a summary of our KPI’s, for more details

see the complete KPI templates (p. 56-58).

FY2023

Total

(mEUR)

Taxonomy

aligned

economic

activities

Taxonomy-

eligible

economic

activities

(non-aligned)

Taxonomy-

non-eligible

economic

activities

Turnover 553 4% 30% 66%

Capital expenditure (CapEx) 21.8 67% 28% 5%

Operating expenditure (OpEx) 0.8 6% 93% 1%

Taxonomy-eligible and Taxonomy-aligned economic activities

We have examined all economic activities carried out by the group to see which

of these are eligible and also aligned in accordance with Annexes I and II to the

Climate Delegated Act supplemented by the Environmental Delegated Act. The

table below presents the taxonomy-eligible activities. Information on the extent

to which the taxonomy-eligible activities are taxonomy-aligned is provided in

the KPI templates (p. 56-58).

Economic activity Description NACE-Code

Climate change mitigation (CCM) 6.10 Sea and coastal freight wa-

ter transport, vessels for port operations and auxiliary activities

Purchase, financing, chartering (with or without crew) and operation

of vessels designed and equipped for transport of freight or for the

combined transport of freight and passengers on sea or coastal

waters, whether scheduled or not. Purchase, financing, renting

and operation of vessels required for port operations and auxiliary

activities, such as tugboats, mooring vessels, pilot vessels, salvage

vessels and ice-breakers.

H50.2, H52.22 and N77.34

Transition to a circular economy (CE) 2.6 Depollution and dismant-

ling of end-of-life products

Construction, operation and upgrade of facilities dismantling and

depolluting complex end-of-life products, movable assets and their

components for materials recovery or preparation for re-use of

components.

E38.31, E38.32 and E42.99

Transition to a circular economy (CE) 5.3 Preparation for re-use of

end-of-life products and product components

Preparation for re-use of products and components at the end of

life.

No specific NACE codes

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

Taxonomy-eligibility

We consider ESL Shipping’s operations eligible as all vessels are eligible under

activity CCM 6.10. During the 2023 financial year we have identified new activ-

ities that are eligible under activities CE 2.6 and CE 5.3 relating to treatment

of decommissioned vessels. However, there is no revenue, capital or operating

expenditure related to these activities as there hasn’t been any disposal of ves-

sels during the 2023 financial year.

Taxonomy-alignment

ESL Shipping, which operates in the vulnerable Baltic Sea and the Arctic, has

eligible activities of which part are also aligned activities. ESL Shipping’s aligned

activities contribute to climate change mitigation. ESL Shipping’s activity CCM

6.10 is partially Taxonomy-aligned as the vessels have transported coal for use

in energy generation. Therefore, the net sales, operating and capital expendi-

ture are partially aligned.

Taxonomy-non-eligible economic activities

We consider a large part of Aspo’s business activities Taxonomy-non-eligible

including the business operations of Telko and Leipurin. Telko is a distributor of

plastics, chemical raw materials and lubricants, while Leipurin is a distributor of

the raw materials and supplies to bakeries and the food industry. These activi-

ties are considered as Taxonomy-non-eligible as the business activities do not

meet the description of any of the eligible activities included in the Climate Del-

egated Act and Environmental Delegated Act.

Assessment of Taxonomy-alignment

To meet the definition of taxonomy alignment the taxonomy-eligible economic

activities should significantly contribute to one or more of the environmental

objectives by fulfilling the technical screening criteria, meanwhile not causing

significant harm to other environmental objectives in accordance with the Do

No Significant Harm (DNSH) criteria. In addition, the activities should be carried

out in compliance with the minimum safeguards.

Substantial contribution to climate change mitigation

In order to determine if an economic activity is Taxonomy-aligned, it should first

be determined if the activity complies with the first requirement as described in

the Taxonomy regulation (section 1.2.2.1(b) of Annex I to the Disclosures Del-

egated Act). The activity must contribute substantially to the achievement of

one or more of the environmental objectives.

Aspo’s aligned activity (CCM 6.10) includes the operation of ESL Shipping’s

newest vessels (Viikki and Haaga) and the construction of new vessels (Green

Coasters). Paragraph 1d of the technical screening criteria of substantial con-

tribution to climate change mitigation regarding activity CCM 6.10 applies to

these vessels. This means that the vessels have been given an energy effi-

ciency design index (EEDI) value until December 31, 2025, which is 10% lower

than the EEDI requirements applied on April 1, 2022, if the vessels are able

to use a fuel that does not generate direct carbon dioxide emissions (exhaust

emissions) or fuels produced from renewable sources. Of ESL Shipping’s ves-

sels, Viikki and Haaga are below the required level by 18.5% and the electric

hybrid vessels under construction by 20.5%. On these grounds, we consider

the taxonomy’s technical criteria to be met, and these vessels are substantially

contributing to climate change mitigation.

Paragraph 2 of the technical screening criteria defined in the article on sub-

stantial contribution to climate change mitigation states that the vessels are

not to be dedicated for transport of fossil fuels. Viikki and Haaga meet the cri-

teria as they are not dedicated for the transport of fossil fuels. These vessels

have however transported fossil fuels which has been considered in the report-

ing by treating the part of the net sales generated through transportation of

fossil fuels as taxonomy eligible but not taxonomy aligned. Therefore, these

vessels are substantially contributing to climate change mitigation.

Do no significant harm (DNSH) criteria

As we have been able to demonstrate a substantial contribution for climate

change mitigation for Aspo’s activity CCM 6.10 the next step is to analyze

the DNSH criteria. As the activity CCM 6.10 only includes the business oper-

ations of ESL Shipping the analysis is conducted mainly at that level (climate

risk assessment has been conducted at the Aspo Group level). The DNSH crite-

ria for CCM 6.10 specified in the Climate Delegated act require compliance with

the general criteria and industry specific criteria. The details of the analysis are

further explained below for each of the five environmental objects. Based on

the analysis we conclude that ESL Shipping’s operations are in compliance with

all the DNSH criteria for climate change mitigation.

Climate change adaptation

The DNSH criteria related to climate change adaption include performance of a

robust climate risk and vulnerability assessment and identification of material

physical climate risks in accordance with Appendix A of the Climate Delegated

Act.

Aspo has conducted a climate risk assessment considering different climate

scenarios, changes in conditions and resulting risks using the mid-term climate

scenarios of the Intergovernmental Panel on Climate Change (IPCC). The World

Wildlife Fund’s (WWF) climate change scenarios and resulting risks have also

been used in the assessment. ESL Shipping’s operations meet the aforemen-

tioned requirements set for climate change adaptation regarding the assess-

ment of climate risks and vulnerabilities. As the lifecycle of ESL Shipping’s oper-

ations has been assessed to be more than ten years, climate risks and vul-

nerabilities have been assessed relative to time and the scope of operations.

Initially, ESL Shipping’s vessels have been designed for conditions expected in

shipping operations, including storms, wind, waves, arctic and other challeng-

ing conditions. According to our assessment, ESL Shipping has a good ability to

respond and adapt to various risks caused by climate change.

Sustainable use and protection of water and marine resources

Appendix B of the Climate Delegated Act specifies the DNSH criteria for sus-

tainable use and protection of water and marine resources including identify-

ing and addressing the risks related to preserving water quality and avoiding

water stress. A water use and protection management plan should be devel-

oped for the potentially affected water body or bodies in consultation with rele-

vant stakeholders.

ESL Shipping has developed a water protection plan in accordance with the

Appendix B of the Climate Delegated Act. ESL Shipping has included meas-

ures related to water protection and water quality monitoring in its guide-

lines according to the water protection plan. In addition, ESL Shipping has

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taken measures to ensure that the activity does not hamper the achievement

of good environmental status of marine waters or does not deteriorate the

marine waters already in good environmental status. The operating vessels

Viikki and Haaga have received several certificates related to water protection

and pollution prevention and therefore meet the aforementioned criteria. The

Green Coaster ships will also receive corresponding certificates upon comple-

tion of construction. According to the EU directive 2011/92/EC an environmen-

tal impact assessment is required for ports and building or operation of water-

ways, but not for operation of vessels. Therefore, ESL Shipping’s vessels do not

require an environmental impact assessment and thus such an assessment has

not been conducted.

Transition to circular economy

The DNSH requirements specified for activity CCM 6.10 presented in the Climate

Delegated Act include requirements of having measures in place to manage and

recycle waste at the end-of-life appropriately. For ships above 500 gross ton-

nage and the new-built ones replacing them, the activity should be in compliance

with Regulation (EU) No 1257/2013 and appropriate recycling facilities should

be utilized (Commission Implementing Decision 2016/2323). The discharge of

waste of ships should comply with Directive (EU) 2019/883 and the ship is to

be operated in accordance with Annex V to the International Convention for the

prevention of pollution (the IMO MARPOL Convention).

Any waste generated during the operation of ESL Shipping’s vessels is sorted

and stored on board each vessel and transferred to ports in a controlled man-

ner. Dockages are carried out by operators that are able to process the waste

generated during dockages sustainably. Lubricants and other hazardous waste

are processed so that they can be used in recycling. If ESL Shipping maintains

any vessels until the end of their lifecycle, the scrapped vessels will be recycled

in a controlled manner. Vessels are operated in accordance with Annex V of the

International Convention for the Prevention of Pollution from Ships (MARPOL)

issued by the International Maritime Organization (IMO) on November 2, 1973.

ESL Shipping has prepared guidelines for waste processing, safety, recycling and

scrapping, and it has issued a statement on compliance with MARPOL.

Pollution prevention and control

For pollution prevention and control the DNSH requirements specified for activ-

ity CCM 6.10 presented in the Climate Delegated Act include that sulfur in fuel

content should not exceed 0,5% (Global limit) or 0,1% in mass (North Sea, Bal-

tic Sea and Mediterranean Sea limit) also complying with the Directive (EU)

2016/802 of and Annex VI to the IMO MARPOL Convention. Vessels should

comply with Regulation 13 of Annex VI to IMO MARPOL Convention related

to nitrogen oxides emissions. Discharges of black and grey water should com-

ply with Annex IV to the IMO MARPOL Convention and measures should be in

place to minimize toxicity of anti-fouling paint and biocides (Regulation (EU) No

528/2012).

ESL Shipping is closely monitoring the sulfur emissions for Viikki and Haaga

on an annual basis for CSI (Clean Shipping Index) verification. In the previous

reporting period (2022) Viikki’s and Haaga’s sulfur emissions were 0.0011% and

0.0015% based on bunkered fuel, which is significantly less than the sulfur con-

tent requirement 0.1% as defined by IMO (Regulation 14 of Annex VI to the

IMO MARPOL Convention). Criteria related nitrogen oxides (NO

) do not apply

to Viikki and Haaga as they do not operate in NO

emission control areas estab-

lished under IMO. As for the discharged of gray and black water Viikki and Haaga

have DNV sewage prevention certificates that cover the regulation’s require-

ments and comply with the Annex IV to the IMO MARPOL Convention. In addi-

tion, ESL Shipping’s internal guidelines mention that processing of grey water

should be arranged at ports to protect waterbodies if it can be reasonably and

practically arranged. The aforementioned DNV certificates also cover the require-

ments related to measures to minimize toxicity of anti-fouling paint and biocides

as stated in Regulation (EU) No 528/2012.

Protection and restoration of biodiversity and ecosystems

The DNSH requirements for protection and restoration of biodiversity and eco-

systems specified for activity CCM 6.10 include controlling that non-indigenous

species are not introduced as part of ballast water releases or by biofouling of

hull or other niche areas of ships. Noise and vibrations are limited by using noise

reducing propellers and the activity does not hamper the achievement of good

environmental status as set out in Directive 2008/56/EC.

ESL Shipping operates in compliance with the International Convention for

the Control and Management of Ships’ Ballast Water and Sediments as ESL

Shipping’s vessels are equipped with ballast water treatment systems that

prevent the spread of invasive alien species from one waterbody to another

through ballast water. ESL Shipping also has its own Biofouling Management

Plan made based on the IMO Biofouling Guideline to prevent the introduction of

non-indigenous species by biofouling of hull and other niche areas of the ship.

Instructions for underwater noise reduction are included in the ESL Shipping’s

internal instructions which comply with IMO Guidelines for the Reduction of

Underwater Noise. Viikki and Haaga have received several certificates that sup-

port the fact that the activity does not hamper the achievement of good envi-

ronmental status, as set out in Directive 2008/56/EC, requiring that appropriate

measures are taken to prevent or mitigate impacts in relation to that Directive’s

Descriptors 1 (biodiversity), 2 (non-indigenous species), 6 (seabed integrity), 8

(contaminants), 10 (marine litter), 11 (noise/energy) and as set out in Commis-

sion Decision (EU) 2017/848 in relation to the relevant criteria and methodolog-

ical standards for those descriptors, as applicable. Corresponding certifications

will be applied for Green Coasters upon completion of construction.

Minimum safeguards

The final step in taxonomy-alignment assessment is compliance with the min-

imum safeguards (MS). The MS include all procedures implemented to ensure

that economic activities are carried out in alignment with the OECD Guidelines

for Multinational Enterprises (OECD MNE Guidelines), the UN Guiding Princi-

ples on Business and Human Rights (UNGPs), including the principles and rights

set out in the eight fundamental conventions identified in the Declaration of the

International Labour Organization (ILO) on Fundamental Principles and Rights

at Work; and the International Bill of Human Rights. Key ILO conventions define

the human rights and workers’ rights that companies should respect.

Aspo’s minimum safeguards assessment is based on the “Final Report on

Minimum Safeguards”, published by the Platform on Sustainable Finance (PSF)

in October 2022. The scope of minimum safeguards work covers human rights

(including labour and consumer rights), corruption and bribery, taxation, and fair

competition. A two-dimensional assessment approach was followed to assess

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compliance with minimum safeguards. Firstly, adequate processes have been

implemented to prevent negative impacts (procedural dimension) and secondly,

outcomes are monitored to check whether our processes are effective (out-

come dimension). Aspo is currently developing its formal policies and processes

related to minimum safeguards requirements. The procedures currently con-

ducted to ensure compliance with the minimum safeguards have been described

below for each topic.

Aspo assesses the minimum safeguards at Group level, while applying all

related principles to each of its businesses. Aspo’s Code of Conduct, commit-

ment to the principles of the UN Global Compact, as well as the training com-

pleted by each employee, and Aspo’s other guidelines set a framework for the

principles and requirements that are expected from Aspo’s all employees and

partners. According to the UN Global Compact, we abide by its principles for

human rights, working life, the environment and anti-corruption. In addition,

Aspo respects and follows internationally recognized standards on human and

workers’ rights. As a result of the MS assessment, Aspo concludes that all of its

taxonomy-aligned activities meet the criteria used.

Human rights

Aspo’s Code of Conduct outlines the norms, rules and responsibilities of

Aspo and its employees, including human rights matters. Aspo is commit-

ted to respecting human rights in line with the United Nations Guiding Prin-

ciples (UNGP) on Business and Human Rights. Aspo’s Code of Conduct and

other guidelines set a framework for the principles and requirements that are

expected from Aspo’s all employees and partners. Aspo’s Code of Conduct is

approved and issued by Aspo’s Board of Directors and is publicly available via

Aspo’s website.

Aspo has an annual Code of Conduct training that applies to all its employ-

ees, job applicants and subcontractors as well as suppliers and other business

partners. In addition, Aspo has a separate Supplier Code of Conduct that sets

standards for its suppliers and expects its partners to commit to it and to follow

all applicable laws and regulations. In Aspo’s Compliance and Code of Conduct

trainings, employees are trained to identify any adverse impact on human rights

questions and situations where human rights may be violated. Furthermore,

Aspo’s businesses continuously assess their customers and suppliers, and they

have been instructed to end a business relationship if any violations are discov-

ered. The principles have been described extensively in Aspo’s Code of Conduct,

and they are applied in the personnel training, and they apply to all our employ-

ees, job applicants and subcontractors.

Aspo has conducted a human rights impact assessment and human rights

related impacts of each of Aspo’s subsidiaries have been assessed and potential

impacts identified. The scope of the assessment has included Aspo’s own work-

force, workers in the value chain, affected communities and consumers and/or

end-users. Aspo pays attention to human rights due diligence (HRDD) commit-

ments and has included the principles to be applied in its policies, guidelines and

personnel training.

ESL Shipping operates in accordance with the Maritime Labour Convention

(MLC), which is reflected in the company’s measures to prevent and mitigate

adverse human rights impacts. Ships are subject to regular audits for compli-

ance with the MLC. The effectiveness of the processes is monitored by reviews

of the audit results. On-board complaint mechanisms have been established, in

addition to Aspo’s whistleblowing channel.

Our businesses continuously audit supply chains to assess measures related

to the minimum safeguards, including human rights. In the financial year 2023,

Aspo has not been convicted in court of violating labour law or human rights. In

addition, Aspo has not been involved in a case dealt with by an OECD National

Contact Point and was not questioned by the Business and Human Rights

Resource Center (BHRRC).

Anti-corruption

Aspo has implemented multiple measures to prevent and fight corrupt practices.

Aspo’s mandatory compliance training for personnel includes an anti-corruption

module. Even before providing regular training, Aspo has combated corruption in

all its market areas with zero tolerance. Aspo’s businesses do not take part of

transactions in markets in which business operations would have required activ-

ities which would breach Aspo’s Code of Conduct. Aspo does not accept corrup-

tion or bribery in any form. Aspo never pays bribes or accept their payment to

the authorities or private individuals, and never requests or accepts them. In par-

ticular, Aspo can never give or offer anything of a monetary value to inappropri-

ately influence decisions to obtain or maintain business activities or to gain an

unfair advantage. Also, Aspo cannot do this directly or indirectly through third

parties.

Aspo aims to engage in a productive, ethical, and transparent relationship

with its principals, representatives, distributors, customers and subcontractors.

Furthermore, Aspo expects its partners to comply with applicable laws and reg-

ulations and commit to abiding by the codes of conduct of our product and ser-

vice suppliers. To ensure appropriate operating methods, Aspo’s businesses

monitor compliance with the Supplier Code of Conduct in various ways. No cor-

ruption cases have occurred during 2023.

Taxation

Aspo’s tax strategy can briefly be defined as follows. Aspo complies with

national and international tax laws. Aspo does not engage in any aggressive tax

planning, and the profit of Aspo’s companies is taxed in the country in which it

has been generated. Aspo or its subsidiaries have never been convicted of any

tax violations, but Aspo may take legal action to defend its tax rights, if nec-

essary. Aspo always complies with local tax law regarding all tax types. Aspo

has special tax characteristics at its shipping companies in Finland and Sweden,

to which local tonnage tax law applies. Aspo’s tax position is openly communi-

cated at least once a year in the financial statements, and in separate bulletins if

required. Deferred tax receivables from losses are not recognized, unless it can

be indisputably proved that they can be utilized according to legislation. No vio-

lations of tax laws have occurred during 2023.

Fair competition

Aspo complies with the principle of fair competition. We provide our personnel

with regular training to help them understand competition law and related prac-

tices. Aspo’s Code of Conduct and Compliance trainings include sections on com-

petition law. Approximately 100% of Aspo’s employees have completed the

Code of Conduct and Compliance trainings during 2023. No legal action has ever

been taken against Aspo, its subsidiaries, management, or managerial employ-

ees for breach of competition law.

KPIs and accounting policies

The key performance indicators (“KPIs”) include the turnover KPI, the CapEx KPI

and the OpEx KPI. For presenting the Taxonomy KPIs, we use the templates

provided in Annex II of the Environmental Delegated Act (amending the original

templates of the Disclosures Delegated Act). The accounting policy and detailed

information for each KPI is presented after the templates.

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■

PROPORTION OF TURNOVER FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES

Substantial contribution criteria DNSH criteria (‘Does Not Significantly Harm’) (h)

Code (a) (2)

Turnover (3)

Proportion of

Turnover, year N (4)

Climate Change

Mitigation (5)

Climate Change

Adaptation (6)

Water (7)

Pollution (8)

Circular Economy (9)

Biodiversity (10)

Climate Change

Mitigation (11)

Climate Change

Adaptation (12)

Water (13)

Pollution (14)

Circular Economy (15)

Biodiversity (16)

Minimum

Safeguards (17)

Proportion of

Taxonomy aligned (A.1.)

or eligible (A.2.)

turnover, year N-1 (18)

Category

enabling activity (19)

Category

transitional activity (20)

Economic Activities MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Sea and coastal freight water transport, vessels for

port operations and auxiliary activities CCM 6.10 21.9 4% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y 3% T

Turnover of environmentally sustainable activities

(Taxonomy-aligned) (A.1) 21.9 4% 4% Y Y Y Y Y Y 3%

Of which Enabling Y Y Y Y Y Y E

Of which Transitional 21.9 4% 4% Y Y Y Y Y Y 3% T

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)

Sea and coastal freight water transport, vessels for

port operations and auxiliary activities CCM 6.10 167.2 31% EL N/EL N/EL N/EL N/EL N/EL 35%

Depollution and dismantling of end-life products CE 2.6 N/EL N/EL N/EL N/EL EL N/EL

Preparation for re-use of end-of-life products and product components CE 5.3 N/EL N/EL N/EL N/EL EL N/EL

Turnover of Taxonomy-eligible but not environmentally sustainable

activities (not Taxonomy-aligned activities) (A.2) 167.2 31% 31% 35%

A. Turnover of Taxonomy eligible activities (A.1+A.2) 189.1 35% 35% 38%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-non-eligible activities 347.3 65%

TOTAL, Continuing operations 536.4 100%

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■

PROPORTION OF CAPEX FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES

Substantial contribution criteria DNSH criteria (‘Does Not Significantly Harm’) (h)

Code (a) (2)

CapEx (3)

Proportion of

CapEx, year N (4)

Climate Change

Mitigation (5)

Climate Change

Adaptation (6)

Water (7)

Pollution (8)

Circular Economy (9)

Biodiversity (10)

Climate Change

Mitigation (11)

Climate Change

Adaptation (12)

Water (13)

Pollution (14)

Circular Economy (15)

Biodiversity (16)

Minimum

Safeguards (17)

Proportion of

Taxonomy aligned (A.1.)

or eligible (A.2.)

CapEx, year N-1 (18)

Category

enabling activity (19)

Category

transitional activity (20)

Economic Activities MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Sea and coastal freight water transport, vessels for

port operations and auxiliary activities CCM 6.10 14.50 67% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y 59% T

CapEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1) 14.5 67% 67% Y Y Y Y Y Y 59%

Of which Enabling Y Y Y Y Y Y E

Of which Transitional 14.5 67% 67% Y Y Y Y Y Y 59% T

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)

Sea and coastal freight water transport, vessels for

port operations and auxiliary activities CCM 6.10 6.2 28% EL N/EL N/EL N/EL N/EL N/EL 35%

Depollution and dismantling of end-life products CE 2.6 N/EL N/EL N/EL N/EL EL N/EL

Preparation for re-use of end-of-life products and product components CE 5.3 N/EL N/EL N/EL N/EL EL N/EL

CapEx of Taxonomy-eligible but not environmentally sustainable

activities (not Taxonomy-aligned activities) (A.2) 6.2 28% 28% 35%

A. CapEx of Taxonomy eligible activities (A.1+A.2) 20.7 95% 94.9% 94%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

CapEx of Taxonomy-non-eligible activities 1.1 5%

TOTAL 21.8 100%

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■

PROPORTION OF OPEX FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES

Substantial contribution criteria DNSH criteria (‘Does Not Significantly Harm’) (h)

Code (a) (2)

OpEx (3)

Proportion of

OpEx, year N (4)

Climate Change

Mitigation (5)

Climate Change

Adaptation (6)

Water (7)

Pollution (8)

Circular Economy (9)

Biodiversity (10)

Climate Change

Mitigation (11)

Climate Change

Adaptation (12)

Water (13)

Pollution (14)

Circular Economy (15)

Biodiversity (16)

Minimum

Safeguards (17)

Proportion of

Taxonomy aligned (A.1.)

or eligible (A.2.)

OpEx, year N-1 (18)

Category

enabling activity (19)

Category

transitional activity (20)

Economic Activities MEUR % % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Sea and coastal freight water transport, vessels for

port operations and auxiliary activities CCM 6.10 0.8 6% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y 7% T

OpEx of environmentally sustainable activities

(Taxonomy-aligned) (A.1) 0.8 6% 6% Y Y Y Y Y Y 7%

Of which Enabling 6% Y Y Y Y Y Y E

Of which Transitional 0.8 6% Y Y Y Y Y Y 7% T

A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)

Sea and coastal freight water transport, vessels for

port operations and auxiliary activities CCM 6.10 12.8 94% EL N/EL N/EL N/EL N/EL N/EL 86%

Depollution and dismantling of end-life products CE 2.6 N/EL N/EL N/EL N/EL EL N/EL

Preparation for re-use of end-of-life products and product components CE 5.3 N/EL N/EL N/EL N/EL EL N/EL

OpEx of Taxonomy-eligible but not environmentally sustainable

activities (not Taxonomy-aligned activities) (A.2) 12.8 94% 94% 86%

A. OpEx of Taxonomy eligible activities (A.1+A.2) 13.6 99% 99.5% 93%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-eligible activities 0.1 1%

TOTAL 13.7 100%

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Turnover KPI

When calculating the performance indicator for turnover, Aspo applies the same

IFRS accounting principles as it does in the consolidated financial statements.

The accounting principles for revenue recognition are presented in Note 3.1 of

the consolidated financial statements. The net sales figure used in calculating

the turnover performance indicator is the net sales of Aspo’s continuing oper-

ations, as presented in the statement of comprehensive income. The Taxono-

my-eligible turnover includes the share of the Group’s net sales that comes from

activities within the Taxonomy scope. The turnover presented in the table above

consists of the sales of the vessels Viikki and Haaga (excluding the sales of coal

transport). The part of net sales obtained from the transportation of coal has

been deducted from the numerator of the turnover indicator. The net sales of

other vessels and correspondingly of Aspo’s other continuing operations are not

taxonomy-aligned, but they have been included in full in the numerator of the

turnover indicator at a Group level.

CapEx KPI

For Aspo capital expenditure as defined in the Taxonomy Regulation includes

investments in tangible and intangible assets. Additions to tangible assets are

presented in Note 4.1 of the consolidated financial statements, and additions

to intangible assets in Note 4.2. The capital expenditure from taxonomy eligi-

ble activities presented in the table include the capital expenditure of ESL Ship-

ping. During the fiscal year 2023 ESL Shipping’s CapEx consisted of additions to

PP&E related to the operational vessels Viikki and Haaga and the Green Coaster

vessels under construction.

The capital expenditure in the table above include the Green Coasters invest-

ments only for the six vessels which will remain in ESL Shipping’s ownership.

Investments in the other six vessels which will be transferred to the investors in

the pooling arrangement are not included in Aspo’s taxonomy reporting. Acquisi-

tions through business combinations are not taken into account in CapEx KPI.

CapEx Plan

As mentioned, twelve new advanced electric hybrid vessels (Green Coasters)

are currently under construction. Aspo’s CapEx plan for the following years con-

sists mainly of the expenditure related to the construction of the Green Coaster

vessels. Aspo discloses all new relevant approved investment decisions in stock

releases.

Future impact of the CapEx investments

The Green Coaster vessels under construction are advanced electric vessels with

modern technology. As these vessels become operational, they will increase

the taxonomy-aligned turnover and OpEx of ESL Shipping and the entire Aspo

Group.

OpEx KPI

Operating expenditure as defined in the Taxonomy Regulation include direct

non-capitalized costs that relate to improvements, maintenance and repair of

vessels, and any other direct expenditures relating to the day-to-day servicing of

assets of property, plant and equipment by the undertaking or a third party to

whom activities are outsourced that are necessary to ensure the continued and

effective functioning of such assets. In Aspo Group’s consolidated statement of

comprehensive income operating expenditure as defined in the Taxonomy Reg-

ulation are included under ’Other operating expenses’, which are presented in

Note 3.5 of the consolidated financial statements.

The taxonomy aligned OpEx presented on the tables above includes the

operating expenditure of Viikki and Haaga only, as the Green Coasters are not

yet operational. The operating expenditure of these vessels consists of techni-

cal maintenance costs. The aligned OpEx does not include the share of OpEx

related to coal transport (the share has been calculated based on the share of

revenue). The operating expenditure allocated to the vessels Viikki and Haaga

follows the distribution of their net sales. As for the OpEx presented in the KPI

template the Taxonomy non-eligible OpEx includes the OpEx of Telko and Lei-

purin in accordance with section 1.1.3.1 of the Disclosures Delegated Act. The

costs related to property, plant and equipment have been defined to include

only buildings that are in Telko’s or Leipurin’s ownership as neither of the compa-

nies does not use any other type of relevant PP&E in their operations.

RISKS AND RISK MANAGEMENT

Companies must accept a certain risk level, relative to which business tar-

gets are set. Aspo also has various risks related to normal operations and busi-

ness-specific operations.

The purpose of risk management is to promote the achievement of the

Group’s goals. Risk management aims to proactively identify and manage poten-

tial problems and to identify and seize business opportunities. Risk management

supports the development and implementation of Aspo’s strategy.

The purpose of risk management in Aspo is that:

• Aspo has an effective risk management control model, and the related

processes are integrated into management of Aspo’s business.

• Management has access to high-quality and up-to-date information about

business risks and their management measures to support decision-making.

• The probability of the materialization of risks and unexpected events and

their impacts on financial performance and reputation can be reduced

effectively.

• Risk management measures and selected control measures are based on

Aspo’s willingness to take risks and ability to tolerate risks.

• Cooperation in risk management is effective between Aspo’s different

businesses.

Aspo has strategic, operational, loss and financial risks. Strategic risks include

risks that have a long-term impact on business operations, such as risks associ-

ated with the operating environment, market risks and political/legislative risks.

Operational risks are managed on a daily basis in business operations, and they

include counterparty risks, price risks associated with raw materials, and risks

associated with non-conformities. The management of risks of loss is based on

insurance and operating guidelines.

There are several geopolitical risk concentrations in the world, the develop-

ment of which is difficult to predict, but which may have an impact on Aspo’s

business operations. Changes in these areas can be rapid and unpredictable,

and it is therefore difficult to predict their potential impact or its scale on Aspo’s

business operations. Sanctions have been imposed internationally, which may

also have direct or indirect impacts on Aspo’s business operations. In addition,

various countries have imposed import duties or other trade restrictions on

each other’s products. For the time being, however, these have not had a direct

impact on Aspo’s business operations. Geopolitical tensions can escalate and

cause direct harm to business operations and payment transactions and, in the

worst case, interrupt business operations in a crisis area. A crisis can also lead

to human, economic and monetary losses. Possible sanctions and counter-sanc-

tions can cause business difficulties and financial losses.

Fluctuations in economic activity can cause rapid fluctuations in the prices of

raw materials, components and logistics, in addition to increasing uncertainty

about the effectiveness of logistics in certain market situations. Aspo may tem-

porarily benefit from increases in prices, while the prices of purchased raw mate-

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

rials or leased capacity, such as leased vessels, may increase at the same time.

Longer delivery times for spare parts, components and raw materials and any

rapid price changes in different market situations are also increasing risks. High

inflation and prolonged high interest rates can slow down general economic

growth and reduce demand for Aspo’s business operations.

In line with its strategy, Aspo seeks to improve its steady performance capac-

ity through business acquisitions. The strategy may lead to a temporary deterio-

ration in the balance sheet and capital structure in situations where acquisitions

require financial investments and consequently may reduce solvency.

The quantity and probability of the Group’s loss risks are assessed regularly.

Bidding processes are arranged for general insurance policies, and the amounts

insured are regularly updated. The amounts insured are sufficient in view of the

scope of Aspo’s operations, but insurance companies may restrict the validity of

insurance policies as a result of risks increasing for various reasons.

As the forward-looking estimates in this report are based on the current sit-

uation, they involve significant risks and other uncertainties that may cause the

actual results to differ from the estimates presented.

Financial risks

Aspo Group’s financing and financial risk management are centralized in the par-

ent company in accordance with the treasury policy approved by the Board of

Directors.

• The refinancing risk is managed by decentralizing interest-bearing liabilities in

terms of the counterparty, the form of funding, and maturity.

• The liquidity risk is managed by ensuring that the Group has sufficient cash

assets, including committed revolving credit facilities and other financial

reserves.

• The company hedges against interest rate changes by tying interest-bearing

liabilities partly to floating rate loans and partly to fixed rate loans. In

addition, interest rate derivatives are used for hedging against interest rate

risks as necessary.

• On a case-by-case basis, the Group uses terms of payment based on advance

payments and bank guarantees to hedge against credit risks. In-depth

knowledge of customers is an important part of credit risk management.

• The exchange rate risk is primarily managed through customer and principal

agreements at the business level, and secondarily by using currency

derivatives, if necessary.

A more detailed description of financial risks is presented in Note 5.1 “Financial

risks and the management of financial risks” to the consolidated financial state-

ments.

Internal control and risk management

One of the responsibilities of Aspo’s Audit Committee is to monitor the effi-

ciency of the Group’s internal control, internal audits and risk management sys-

tems. The Audit Committee monitors the risk management process and pro-

vides guidelines on the necessary measures to prevent strategic risks in particu-

lar. In accordance with the internal control principles approved by the Board of

Directors, risk management is part of Aspo’s internal control, and its purpose is

to ensure the implementation of the Group’s strategy, the development of finan-

cial performance, shareholder value, the ability to pay dividends, and the con-

tinuity of business operations. The management of each business is responsi-

ble for risk management. The management is responsible for specifying suffi-

cient measures and their implementation, and for monitoring and ensuring that

the measures are implemented as part of day-to-day operational management.

Aspo’s Director of Legal Affairs, who reports to the Group CEO, is in charge of

risk management.

LEGAL PROCEEDINGS

Aspo Group’s companies are party to some legal proceedings and disputes

associated with regular business operations. There were no significant changes

in these during 2023. On the basis of the information available and taking into

account the existing insurance cover and provisions made, Aspo believes that

they do not have any material adverse impact on the Group’s financial position.

MANAGEMENT AND AUDITORS

The Annual General Meeting re-elected Patricia Allam, Tapio Kolunsarka, Mikael

Laine, Salla Pöyry, Tatu Vehmas and Heikki Westerlund as members of the

Board of Directors. Kaarina Ståhlberg was elected as a new Member of the

Board. At its inaugural meeting after the Annual General Meeting, the Board

elected Heikki Westerlund as its Chair and Mikael Laine as its Vice Chair. The

Board elected Heikki Westerlund as Chair of the Personnel and Remuneration

Committee and Tapio Kolunsarka, Salla Pöyry and Tatu Vehmas as its members.

At the meeting, the Board also decided to elect Kaarina Ståhlberg as Chair of

the Audit Committee and Patricia Allam, Mikael Laine and Tatu Vehmas as its

members.

The Board of Directors had 15 meetings in 2023. The attendance rate was

99%.

In August, Erkka Repo was appointed as Aspo Group’s new CFO and a mem-

ber of the Group Executive Committee. Repo will start in his position on March

1, 2024.

Arto Meitsalo, CFO and member of the Group Executive Committee of Aspo

Group, left the company at the beginning of March 2024 after turning 60.

Deloitte Oy, Authorized Public Accountants, has served as the company’s

auditor. Jukka Vattulainen, APA, has served as the principal auditor. The auditor’s

fee will be paid in accordance with an accepted invoice.

BOARD AUTHORIZATIONS

Authorization of the Board of Directors

to decide on the acquisition of treasury shares

The Annual Shareholders’ Meeting authorized the Board of Directors to decide

on the acquisition of no more than 500,000 of the treasury shares. The author-

ization includes the right to accept treasury shares as a pledge. The authoriza-

tion is valid until the Annual Shareholders’ Meeting in 2024 but not more than

18 months from the approval at the Shareholders’ Meeting.

In 2023, Aspo acquired a total of 36,194 of its own shares in trading organ-

ized by Nasdaq Helsinki Ltd.

Authorization of the Board of Directors

to decide on an issue of treasury shares

The Annual Shareholders´ Meeting authorized the Board of Directors to decide

on a share issue, through one or several installments, to be executed by con-

veying treasury shares. An aggregate maximum amount of 2,500,000 shares

may be conveyed based on the authorization. The authorization is valid until the

Annual Shareholders’ Meeting in 2024 but not more than 18 months from the

approval at the Shareholders’ Meeting.

In 2023, a total of 86,050 shares were conveyed based on the share-based

incentive plans.

Authorization of the Board of Directors

to decide on the issue of new shares

The Annual Shareholders’ Meeting authorized the Board of Directors to decide

on a share issue for consideration, or on a share issue without consideration for

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

the Company itself. The authorization includes the right of the Board of Direc-

tors to decide on all of the other terms and conditions of the conveyance and

thus also includes the right to decide on a directed share issue, in deviation

from the shareholders’ pre-emptive right, if a compelling financial reason exists

for the company to do so. The total number of new shares to be offered for

subscription may not exceed 2,500,000. The authorization is valid until the

Annual Shareholders’ Meeting in 2024 but not more than 18 months from the

approval at the Shareholders’ Meeting.

Authorization of the Board of Directors to decide on donations

The Annual Shareholders’ Meeting authorized the Board of Directors to decide

on contributions in the total maximum amount of EUR 100,000 for charitable

or similar purposes, and to decide on the recipients, purposes and other terms

of the contributions. The authorization is valid until the Annual Shareholders’

Meeting in 2024.

In 2023, donations of approximately EUR 10,000 were made.

SHARES AND SHAREHOLDERS

Shares and payment of dividends

Aspo Plc’s registered share capital on December 31, 2023, was EUR

17,691,729.57, and the total number of shares was 31,419,779, of which the

company held 16,244 shares, or 0.05% of the share capital.

Aspo Plc has one share series. Each share entitles the shareholder to one

vote at the Shareholders’ Meeting. Aspo’s share is quoted on Nasdaq Helsinki

Ltd’s Mid Cap segment under Industrial Goods and Services.

In January–December 2023, a total of 2,369,884 Aspo Plc shares, with a

market value of EUR 16.2 million, were traded on Nasdaq Helsinki. In other

words, 7.5% of the shares in the company changed hands. In 2023, the high-

est share price was EUR 8.70 and the lowest EUR 5.50. The average price was

EUR 6.83, and the closing price at the end of the year was EUR 5.98. At the

end of the year, the market value of the shares in the company, less treasury

shares, was EUR 187.8 million.

Based on the authorization by the Annual Shareholders’ Meeting 2022,

Aspo’s Board of Directors decided to start a repurchasing program of the com-

pany’s own shares on March 9, 2023. Additional treasury shares were needed

for the purposes of the share-based incentive programs. During the period from

March 9 to March 31, 2023, Aspo acquired a total of 36,194 of its own shares

in trading organized by Nasdaq Helsinki Ltd.

A total of 3,850 treasury shares granted as share-based incentives were

returned to Aspo in July in accordance with the terms of the incentive plan as

the employment ended.

Aspo Plc’s Annual Shareholders’ Meeting held on April 4, 2023, decided, as

proposed by the Board of Directors, that EUR 0.23 per share be distributed in

dividends for the 2022 financial year, and that no dividend be paid for shares

held by Aspo Plc. The dividend was paid on April 17, 2023.

In addition, the Annual Shareholders’ Meeting authorized the Board of Direc-

tors to decide on another dividend distribution in the maximum amount of EUR

0.23 per share at a later date. The Board of Directors decided in its meeting on

November 1, 2023, of the second dividend distribution of EUR 0.23 per share.

The dividend was paid on November 10, 2023. Thus, Aspo distributed a total

dividend of EUR 0.46 per share in 2023.

Shareholders

Aspo’s shares are included in the book-entry system maintained by Euroclear

Finland Ltd. The company had 11,502 shareholders at the end of the review

period. A total of 969,564 shares, or 3.09% of the share capital, were nomi-

nee registered or held by non-domestic shareholders. A monthly updated list of

Aspo’s major shareholders is available on Aspo’s website.

Share ownership by members of the Board

and the Group Executive Committee

On December 31, 2023, the total number of shares owned by the members

of Aspo Plc’s Board of Directors and their controlled entities was 7,176,538

shares, or 22.84% of the shares and voting rights in the company.

On December 31, 2023, Aspo Plc’s CEO and the other members of the

Group Executive Committee held a total of 273,355 shares, or 0.87% of the

shares and voting rights in the company.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

■

MAJOR SHAREHOLDERS ON DECEMBER 31, 2023

qty

Percentage of shares

and voting rights, %

Havsudden Oy Ab 3,262,941 10.38

AEV Capital Holding Oy 3,253,554 10.36

Varma Mutual Pension Insurance Company 1,423,076 4.53

Tapio Vehmas 1,275,827 4.06

Ilmarinen Mutual Pension Insurance Company 875,226 2.79

Gustav Nyberg 851,524 2.71

Investment fund Nordea Nordic Small Cap 726,040 2.31

Mandatum Life Insurance Company 677,728 2.16

Procurator-Holding Oy 564,882 1.80

IAIK Oy 505,947 1.61

Ten major shareholders, total 13,416,745 42.70

■

DISTRIBUTION OF SHARE OWNERSHIP ON DECEMBER 31, 2023

BY NUMBER OF SHARES

Shares qty

Number of

shareholders

Percentage of

shareholders

Number of

qty

Percentage of

all shares

1–100 2,875 24.99 146,685 0.47

101–500 4,219 36.68 1,154,508 3.67

501–1,000 1,786 15.53 1,368,660 4.36

1,001–5,000 2,114 18.38 4,556,054 14.50

5,001–10,000 273 2.37 1,935,699 6.16

10,001–50,000 191 1.66 3,883,165 12.36

50,001–100,000 16 0.14 1,157,321 3.68

100,001–500,000 18 0.16 3,796,478 12.08

500,001– 10 0.09 13,416,745 42.70

Total in joint accounts 4,464 0.01

Total 11,502 100.00 31,419,779 100.00

■

DISTRIBUTION OF SHARE OWNERSHIP ON DECEMBER 31, 2023

BY OWNER GROUP

Percentage of

shareholders %

Percentage of shares

Households 94.8 50.4

Companies 3.8 29.3

Financial and insurance institutions 0.3 6.3

Non-profit organizations 0.8 3.4

Public organizations 0.1 7.6

Non-domestic 0.4 1.8

Total 100.0 100.0

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

24 12

20 10

16 8

12 6

8 4

4 2

0 0

19 20 21 22 23* 19 20 21 22 23*

19 20 21 22 23

MEUR EUR

0.5

0.4

0.3

0.2

0.1

5.0

4.0

3.0

2.0

1.0

6.0

5.0

4.0

3.0

2.0

1.0

12,000

10,000

8,000

6,000

4,000

2,000

2.9

4.2

10,260

10,904

11,659

11,711

11,502

0.22

0.35

3.92

3.63

4.14

4.58

4.47

MONTHLY TURNOVER, MEUR AVERAGE PRICE, EUR

■

SHARE TRADING AND AVERAGE PRICE

■

DIVIDEND PER SHARE, EUR

■

EQUITY PER SHARE, EUR

■

EFFECTIVE DIVIDEND YIELD, %

■

NUMBER OF SHAREHOLDERS

* Board proposal to the Annual Shareholders’ Meeting* Board proposal to the Annual Shareholders’ Meeting

4.0

5.6

4.0

0.45

0.46

0.24

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

2019 2020 2021 2022 2023

ASPO’S YEAR 2023

■

SHARE-SPECIFIC KEY FIGURES

2023 2022 2021 2020 2019

Equity per share, EUR 4.47 4.58 4.14 3.63 3.92

Dividend per share, EUR (2023 proposal by the Board of Directors) 0.24 0.46 0.45 0.35 0.22

Dividend/earnings, % -1,642.8 75.2 58.9 91.0 46.4

Effective dividend yield, % 4.0 5.6 4.0 4.2 2.9

Price/earnings ratio (P/E) -409.2 13.4 14.9 21.8 16.1

Share price performance, EUR

Average price 6.83 8.01 10.08 6.80 8.20

Lowest price 5.50 6.09 8.28 5.50 7.52

Highest price 8.70 11.80 13.50 8.56 9.42

Closing price 5.98 8.20 11.36 8.40 7.62

Market value of shares, Dec. 31, MEUR 187.8 257.1 355.1 262.6 237.2

Share trading, 1,000 shares 2,370 4,243 4,068 6,798 2,454

Share trading, MEUR 16.2 33.9 41.0 46.3 20.1

Share trading/number of shares, % 7.5 13.5 12.9 21.6 7.8

Total number of shares on the closing date, 1,000 shares 31,420 31,420 31,420 31,420 31,420

Treasury shares 16 62 162 162 297

Outstanding shares 31,404 31,358 31,258 31,258 31,123

Average number of shares (outstanding), 1,000 shares 31,390 31,333 31,258 31,191 31,121

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

■

CALCULATION PRINCIPLES FOR KEY FIGURES

Aspo Plc applies the guidance on alternative key figures issued by the European Securities

and Market Authority (ESMA). In addition to IFRS figures, the company releases other com-

monly used key figures (alternative key figures), which are mainly derived from the consol-

idated statement of comprehensive income and balance sheet. According to the manage-

ment, alternative key figures clarify and supplement the picture drawn by the consolidated

statement of comprehensive income and balance sheet, as well as the IFRS key figures, of

Aspo’s financial performance and financial position.

Return on equity (ROE),

profit for the period × 100

equity (average of the current and previous financial year)

Equity ratio, % =

shareholders’ equity × 100

balance sheet total – advances received

Gearing, % =

(interest-bearing liabilities – cash and cash equivalents*) × 100

shareholders’ equity

Interest-bearing

liabilities, EUR

= loans and overdraft facilities in use (interest-bearing) + lease liabilities

Net interest-bearing

debt, EUR

= interest-bearing liabilities - cash and cash equivalents

Free cash flow, EUR = net cash from operating activities + net cash from investing activities

Earnings per share (EPS),

EUR

profit for the period – hybrid interest, net of tax

average number of shares, excluding treasury shares

Shareholders’ equity per

share, EUR

shareholders’ equity

number of shares on the closing date, excluding treasury shares

Dividend/earnings, % =

dividend per share × 100

earnings per share (EPS)

Effective dividend

yield, %

dividend per share × 100

closing price

Price/earnings ratio

(P/E)

closing price

earnings per share (EPS)

Market value of shares,

EUR

number of shares on the closing date, excluding treasury shares ×

closing price

Comparable operating

profit, EUR

= operating profit, excl. items affecting comparability

*) In the calculation of gearing, interest-bearing liabilities and cash and cash equivalents also include

interest-bearing liabilities and cash and cash equivalents classified as held for sale. In 2022, of cash and

cash equivalents held for sale, EUR 11.5 million are considered restricted cash and cash equivalents in

accordance with IAS 7 standard.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY FINANCIAL STATEMENTS INVESTOR INFORMATIONMANAGEMENT REPORT

ASPO’S YEAR 2023

Financial statements 2023

CONSOLIDATED FINANCIAL STATEMENTS 2023 67

Consolidated statement of comprehensive income 67

Consolidated balance sheet 68

Consolidated cash flow statement 69

Consolidated statement of changes in equity 70

1 Aspo develops businesses responsibly in the long term 71

1.1 Group structure 73

1.2 Acquisitions and divestments 74

1.3 Discontinued operations 78

2 Capital structure 82

2.1 Financial assets and liabilities 83

2.2 Cash and cash equivalents 84

2.3 Loans 85

2.4 Maturity 86

2.5 Leases 87

2.6 Equity 89

2.7 Earnings per share and dividend distribution 90

3 Business operations and profitability 91

3.1 Net sales 93

3.2 Other operating income 95

3.3 Associated companies 96

3.4 Materials and services 97

3.5 Other operating expenses 97

3.6 Employee benefit expenses and number of personnel 98

3.7 Depreciation, amortization and impairment losses 99

3.8 Financial income and expenses 100

3.9 Income taxes 101

4 Invested capital 102

4.1 Tangible assets 104

4.2 Intangible assets 107

4.3 Impairment test of goodwill and brands 108

4.4 Inventories 110

4.5 Accounts receivable and other receivables 111

4.6 Accounts payable and other liabilities 112

4.7 Provisions 112

4.8 Deferred taxes 113

5 Other notes 115

5.1 Financial risks and the management of financial risks 115

5.2 Derivative contracts 118

5.2 Related parties and management compensation 119

5.3 Share-based payments 120

5.4 Contingent assets and liabilities, and other commitments 122

5.5 Events after the financial year 123

5.6 Changes in IFRS standards 123

PARENT COMPANY’S FINANCIAL STATEMENTS 125

Parent company’s income statement 125

Parent company’s balance sheet 126

Parent company’s cash flow statement 127

Notes to the parent company’s financial statements 128

Signature of the financial statements and management report 137

Auditor’s report 138

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

1,000	EUR		Note	Jan 1–Dec 31, 2023	Jan 1–Dec 31, 2022	1,000	EUR	Note	Jan 1–Dec 31, 2023	Jan 1–Dec 31, 2022
Continuing operations						Other comprehensive income
Net sales			3.1	536,434	560,683	Items that may be reclassified to profit or loss in subsequent periods:
Other operating income			3.2	2,989	2,376	Translation differences			12,153	-1,211
Share of profits accounted for using the equity method			3.3	1,268	626	Cash flow hedges		5.2	-47
Materials and services			3.4	-338,603	-332,248	Other comprehensive income for the period, net of taxes			12,106	-1,211
Employee benefit expenses			3.6	-48,539	-48,787	Total comprehensive income			13,747	19,476
Depreciation, amortization and impairment losses			3.7	-19,335	-17,955
Depreciation, amortization		and impairment losses, leased assets	3.7	-14,183	-15,191	Profit for the period attributable to
Other operating expenses			3.5	-94,160	-111,106	Parent company shareholders			1,641	20,687
Operating profit				25,871	38,398
						Total comprehensive income attributable to
Financial income			3.8	1,600	504	Parent company shareholders			13,747	19,476
Financial expenses			3.8	-10,855	-6,382
Financial income and expenses				-9,255	-5,878	Earnings per share attributable to parent company shareholders, EUR
						Basic earnings per share
Profit before taxes				16,616	32,520	Continuing operations		2.7	0.45	0.93
						Discontinued operations		2.7	-0.46	-0.32
Income taxes			3.9	-361	-1,720	Total			-0.01	0.61
Profit from continuing operations				16,255	30,800
						Diluted earnings per share
Profit from discontinued operations			1.3	-14,614	-10,113	Continuing operations		2.7	0.45	0.93
Profit for the period				1,641	20,687	Discontinued operations		2.7	-0.46	-0.32
						Total			-0.01	0.61

Consolidated statement of comprehensive income

Consolidated financial statements

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

		Consolidated balance sheet
ASSETS					EQUITY AND LIABILITIES
1,000	EUR	Note	Dec 31, 2023	Dec 31, 2022	1,000	EUR	Note	Dec 31, 2023	Dec 31, 2022
Non-current assets					Equity attributable to parent company shareholders
Intangible assets		4.2	51,710	46,783	Share capital		2.6	17,692	17,692
Tangible assets		4.1	168,972	178,454	Share premium reserve		2.6	4,351	4,351
Leased assets		2.5	22,516	15,871	Other reserves			16,434	16,472
Investments accounted for using the equity method		3.3	1,703	974	Hybrid bond		2.6	30,000	30,000
Other financial assets			229	207	Translation differences			-13,851	-25,995
Deferred tax assets		4.8	541	330	Retained earnings			85,861	101,165
Total non-current assets			245,671	242,619	Total equity			140,487	143,685
Current assets					Non-current liabilities
Inventories		4.4	59,242	69,900	Deferred tax liabilities		4.8	5,508	6,946
Accounts receivable and other receivables		4.5	73,705	68,995		Provisions	4.7	595	586
Current tax assets			408	255	Loans and overdraft facilities		2.3	138,547	154,301
Cash and cash equivalents		2.2	30,683	21,727	Lease liabilities		2.5	8,331	4,559
			164,038	160,877	Other liabilities			14	99
Assets held for sale		1.3		12,414	Total non-current liabilities			152,995	166,491
Total current assets			164,038	173,291
Total assets			409,709	415,910	Current liabilities
						Provisions	4.7	157	58
					Loans and overdraft facilities		2.3	33,892	17,825
					Lease liabilities		2.5	15,129	11,728
					Accounts payable and other liabilities		4.6	65,667	71,105
					Current tax liabilities			1,382	1,111
								116,227	101,827
					Liabilities directly associated with assets classified as held for sale		1.3		3,907
					Total current liabilities			116,227	105,734
					Total liabilities			269,222	272,225
					Total equity and liabilities			409,709	415,910

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

Consolidated cash flow statement

1,000 EUR	Note	Jan 1–Dec 31, 2023	Jan 1–Dec 31, 2022	1,000	EUR	Note	Jan 1–Dec 31, 2023	Jan 1–Dec 31, 2022
Cash flows from/used in operating activities				Cash flows from/used in investing activities
Operating profit from continuing operations		25,871	38,398	Investments in tangible and intangible assets		4.1	-21,824	-17,818
Operating profit from discontinued operations	1.3	-16,105	-7,214	Proceeds from sale of tangible assets			12,255	1,795
Operating profit total		9,766	31,184	Acquisitions, net of cash		1.2	-3,872	-17,937
Adjustments to operating profit:				Dividends received			542	354
Depreciation, amortization and impairment losses	3.7	33,800	37,815	Cash impact from sale / deconsolidation of business operations **)			-7,387	310
Other impairment losses of the eastern companies classified as held for sale			11,733	Net cash used in investing activities			-20,286	-33,296
Gains (-) and losses (+) on sale of tangible assets		-1,839	-1,637
Gains and losses on sale / deconsolidation of business operations		13,744	1,010	Cash flows from/used in financing activities
Expensed inventory fair value adjustment of acquired businesses		115	634	Proceeds from loans			75,665	29,600
Share of profits accounted for using the equity method	3.3	-1,268	-626	Repayments of loans			-76,003	-18,689
Share-based incentive plan		429	1,152	Proceeds from issuance of commercial papers				30,000
Increase (+) / decrease (-) in provisions	4.7	106	-37	Repayment of commercial papers				-35,000
Unrealized foreign exchange gains and losses on operating activities		126	582	Purchase of own shares			-331
				Payment of lease liabilities			-14,603	-16,227
Change in working capital:				Proceeds from Hybrid bond issue		2.6		30,000
Increase (-) / decrease (+) in inventories		14,657	-12,934	Hybrid bond repayment		2.6		-20,000
Increase (-) / decrease (+) in accounts receivable and other receivables		-1,439	-2,502	Hybrid bond, interest paid		2.6	-2,625	-1,760
Increase (+) / decrease (-) in accounts payable and other liabilities		-8,765	8,785	Hybrid bond, transaction costs paid		2.6		-353
Interest paid		-9,204	-4,224	Dividends paid			-14,445	-14,107
				Net cash used in financing activities			-32,342	-16,536
Interest received		756	307
Income taxes paid		-3,373	-3,571	Change in cash and cash equivalents			-5,017	17,839
Net cash from operating activities		47,611	67,671
				Cash and cash equivalents Jan. 1 *)			33,574	17,724
				Translation differences			109	28
				Impairment of cash of the eastern companies classified as held for sale			2,017	-2,017
				Cash and cash equivalents at year-end *)			30,683	33,574

*) In year-end 2022 cash and cash equivalents of continuing operations totalled EUR 21,727 thousand and cash and cash equivalents classi-

fied as assets held for sale totalled EUR 11,847 thousand. Thus, cash and cash equivalents of the group totalled EUR 33,574 thousand.

**) In 2023 the cash flow from the sale of Telko’s subsidiary in Russia was EUR -4.4 million. The cash impact of the deconsolidation of the

other entities in the Non-core businesses segment amounted to EUR -3.4 million in 2023. The cash impact of the sale of Leipurin’s bakery

equipment business was EUR 0.4 million.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

Consolidated statement of changes in equity

				Share
			Share	premium	Other	Hybrid	Translation	Retained
1,000	EUR	Note	capital	reserve	reserves	bond	differences	earnings	Total
Equity January 1, 2023			17,692	4,351	16,472	30,000	-25,995	101,165	143,685
Comprehensive income
Profit for the period								1,641	1,641
Other comprehensive income, net of taxes
Cash flow hedges					-47				-47
Translation differences					9		-3,045		-3,036
Reclassification of translation differences		1.3					15,189		15,189
Total comprehensive income					-38		12,144	1,641	13,747
Transactions with owners
Dividend distribution								-14,447	-14,447
Hybrid bond interest		2.6						-2,625	-2,625
Purchase of own shares		2.6						-302	-302
Share-based incentive plan								429	429
Total transactions with owners								-16,945	-16,945
Equity December 31, 2023			17,692	4,351	16,434	30,000	-13,851	85,861	140,487
Equity January 1, 2022			17,692	4,351	16,474	20,000	-24,786	95,658	129,389
Comprehensive income
Profit for the period								20,687	20,687
Other comprehensive income, net of taxes
Translation differences					-2		-1,209		-1,211
Total comprehensive income					-2		-1,209	20,687	19,476
Transactions with owners
Dividend distribution								-14,109	-14,109
Hybrid bond		2.6				10,000			10,000
Hybrid bond interest and transaction costs		2.6						-2,223	-2,223
Share-based incentive plan								1,152	1,152
Total transactions with owners						10,000		-15,180	-5,180
Equity December 31, 2022			17,692	4,351	16,472	30,000	-25,995	101,165	143,685

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

Notes to the consolidated financial statements

STRUCTURE OF THE FINANCIAL STATEMENTS

Aspo’s consolidated financial statements are divided into five sections. This section (Aspo develops businesses respon-

sibly in the long term) provides information about Aspo, its tasks and purpose, as well as the Group structure, including

acquisitions and divestments.

This section also describes the accounting principles of the financial statements and summarizes the changes in them

during 2023. The accounting principles as well as the accounting estimates and management’s judgement are presented

in the notes with the related financial statements line item. The financial statements have been divided into themes and

grouped so that they highlight first factors that are the most significant for Aspo and after that present Aspo Group’s

operations and special characteristics in structured format.

INFORMATION OF THE COMPANY AND OF THE FINANCIAL STATEMENTS

Aspo creates value by owning and developing its businesses responsibly in the long term. Aspo aims to achieve sustain-

able long-term growth by re-investing earned profits in profitable investment objects and by taking steps towards a com-

pounder profile. Aspo enables growth for the businesses it owns and aims to improve their profitability and earnings by

developing them and ensuring steady cash flows. The aim is to take on an even more active role in mergers, acquisitions,

and other restructuring activities as well as in growth investments in the owned businesses. Aspo focuses especially on

B-to-B industrial services, and its key clusters include logistics and trade. Aspo Group’s core purpose is to contribute to

the development of the financial results of the businesses it owns, increase the shareholder value, and maintain the divi-

dend payment ability that is expected from it.

The Group’s parent company is Aspo Plc and its Business ID is 1547798-7. Aspo Plc is a Finnish public Corporation,

and its shares are listed on Nasdaq Helsinki Ltd. The parent company is domiciled in Helsinki, and its registered address is

Keilaranta 17, 02150 Espoo, Finland, where also a copy of the consolidated financial statements is available.

In its meeting on February 15, 2024, Aspo Plc’s Board of Directors approved these consolidated financial statements

for issue. Pursuant to the Finnish Companies Act, the shareholders decide of the adoption of the consolidated financial

statements at the Annual Shareholders’ Meeting.

ACCOUNTING PRINCIPLES

Accounting principles are presented as part of the note to which they relate to. Accounting principles are marked

with blue background color in each note.

ESTIMATES AND MANAGEMENT’S JUDGEMENT

The estimates and management’s judgement are presented as part of the note in which the estimated financial

statements item in question is discussed. Estimates and management’s judgement are marked with white back-

ground color in each note.

ASPO DEVELOPS BUSINESSES RESPONSIBLY IN THE LONG TERM

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

Management exercises judgement when applying the

accounting principles. In addition, accounting estimates

are used in the preparation of the financial statements.

Changes in the factors that form the basis of the esti-

mates may cause that the final outcome significantly

deviates from the estimates used when preparing the

consolidated financial statements.

When preparing the consolidated financial state-

ments, the effects of climate change have been

assessed, especially with regard to matters requiring

judgment and estimates by the management, as well

as the presentation of notes information. Aspo has

completed a climate risk assessment, which has taken

into account different climate scenarios, changes in

conditions and the resulting risks in the medium-term

climate scenarios of the IPCC. Aspo has estimated that

climate change will not have an impact on the man-

agement judgements or estimates used in the short or

medium term.

The table below provides an overview of the areas

involving a higher degree of judgement or complex-

ity, and of items which are more likely to be materi-

ally adjusted if estimates and assumptions turn out to

be incorrect. Detailed information about each of these

estimates and management’s judgement is included in

the notes of each affected financial statement line item

together with information about the basis of prepara-

tion.

In 2023, the estimates were still affected by Rus-

sia’s invasion in Ukraine, which has had a significant

impact on Aspo Group’s operations and especially on

the valuation and consolidation of the eastern busi-

nesses.

SIGNIFICANT ESTIMATES AND DECISIONS BASED ON JUDGEMENT
Item	Estimate	Judgement	Note
Discontinued operations	Valuation and consolidation of businesses reported as	Yes	1.3
	discontinued operations
Lease liabilities and leased assets	Determination of the lease term and determination of	Yes	2.5
	the lease component for time-chartered vessels
Tangible and intangible assets	Determination of the useful life, residual value and fair	Yes	4.1, 4.2
	value in business combinations
Goodwill and brands	Assumptions made in the value in use calculations	No	4.3
Inventories	Valuation of inventories	Yes	4.4
Accounts receivable	Valuation of accounts receivable	Yes	4.5
Deferred tax assets	Recognition and recoverability of deferred tax asset	No	4.8

BASIS OF PREPARATION

Aspo Plc’s consolidated financial statements have

been prepared in accordance with International Finan-

cial Reporting Standards (IFRS) as adopted by the EU,

and by applying the standards and interpretations valid

on December 31, 2023. The notes to the consolidated

financial statements are complemented with require-

ments of Finnish Accounting Standards and company

law.

The figures in the consolidated financial statements

are presented in thousands of euros and are based

on the original cost of transactions unless otherwise

stated in the accounting principles. Figures from the

comparative period 2022 are presented in brackets.

SIGNIFICANT CHANGES IN FINANCIAL REPORTING

IN 2023

There were no significant changes in the accounting

principles of Aspo in 2023. The standard amendments

adopted in the financial period are described in note

5.7 Changes in IFRS standards.

To provide a more transparent and clear view of its

businesses and financial results, Aspo established a

new reportable segment called Non-core businesses in

the beginning of year 2023. The Non-core businesses

segment includes Telko Russia and Belarus as well

as Kauko GmbH previously reported in the Telko seg-

ment, Leipurin Russia, Belarus and Kazakhstan previ-

ously reported in the Leipurin segment as well as ESL

Shipping Russia previously reported in the ESL Ship-

ping segment. The Non-core businesses segment was

established to separate the results of the non-core

businesses of Aspo from the results of the continuing

businesses. All the entities in the segment have dur-

ing 2023 been either held for sale or in the process

of being closed down. Due to this the Non-core busi-

nesses segment has been reported as a discontinued

operation. The comparative figures for the Aspo Group

and all segments impacted by this financial reporting

restructuring have been restated. During year 2023

some of the entities in the Non-core businesses seg-

ment were sold and the consolidation of the other enti-

ties in Aspo Group was discontinued. Thus, after the

year 2023 the Non-core businesses segment does not

include any entities to be consolidated into Aspo Group

anymore. More information about the Non-core busi-

nesses segment can be found in notes 1.1 Group struc-

ture and 1.3 Discontinued operations .

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

1.1 Group structure

Aspo’s businesses – ESL Shipping, Telko and Leipurin – are strong corporate brands in the trade and logistics sectors, and they aim for the lead-

ing position in their respective markets. They are responsible for their own operations and customer relationships, as well as for developing

these. Aspo has a 100% ownership in all its subsidiaries in the reporting period and in the previous financial year.

Aspo signed in 2023 financial year an agreement with OP Finland Infrastructure LP regarding an investment of EUR 30 million into Aspo’s

subsidiary ESL Shipping. In February 2024, Varma decided to co-invest EUR 15 million alongside OP Finland Infrastructure. The combined invest-

ment corresponds to a 21.43% ownership stake in ESL Shipping. This will accelerate ESL Shipping’s ambition to lead the green transition in sea

transportation in the Baltic Sea area, enable the company to take advantage of its strong market position and benefit from market growth. The

closing of the transactions is expected to take place by the end of February 2024.

■

GROUP COMPANIES

Company Domicile

Leipurin

Leipurin Plc FI

Leipurien Tukku Oy FI

LT HC One Oy FI

LT HC Two Oy FI

Kobia AB SE

Leipurin Estonia AS EE

SIA Leipurin LV

UAB Leipurin LT

LLC Leipurin UA

Company Domicile

Telko

Telko Ltd FI

Rauma Terminal Services Oy FI

Oy Troili Ab FI

Telko Sweden AB SE

Telko Norway AS NO

Telko Denmark A/S DK

Telko Estonia OÜ EE

Telko Latvia SIA LV

Telko UAB LT

Telko-Poland Sp. z o.o. PL

Troili Poland Sp. z o.o. PL

Eltrex Sp. z o.o. PL

Eltrex Partnership PL

LLC Telko UA

Telko Caucasus LLC AZ

LLC Telko Central Asia KZ

Telko Solution LLC UZ

Telko Romania SRL RO

Telko Shanghai Ltd. CN

Company Domicile

ESL Shipping

ESL Shipping Ltd FI

Oy AtoBatC Shipping Ab FI

Oy Bomanship Ab FI

AtoBatC Shipping AB SE

Bothnia Bulk AB SE

AtoBatC Shipping Cyprus Ltd CY

Company Domicile

Aspo Plc, parent company FI

Aspo Services Ltd FI

Suhi-Suomalainen Hiili Oy FI

■

ASSOCIATED COMPANIES

Aspo Group has two associated companies,

Auriga KG and Norma KG. More information

about the associated companies can be found

in Note 3.3 Associated companies.

The companies listed below belong to the

Non-core businesses segment and continue

to exist, but their consolidation into Aspo

Group has ended. The consolidation of FLLC

Telko into the Group ended on August 31,

2023, when the company was placed into liq-

uidation and its operations ceased. Kauko

GmbH has also been placed into liquidation,

and the operations of ESL Shipping Russia

LLC have ceased. These two companies were

consolidated into Aspo Group until October

31, 2023. Other companies in the Non-core

businesses segment were consolidated into

Aspo Group until December 31, 2023, when

control over these companies was deemed to

have ceased.

Company Domicile

Non-core businesses

FLLC Telko BY

Kauko GmbH DE

ESL Shipping Russia LLC RU

OOO Leipurien Tukku RU

OOO NPK Leipurin RU

FLLC Leipurin BY

TOO Leipurin KZ

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

CONSOLIDATION

The consolidated financial statements include the par-

ent company Aspo Plc and all its subsidiaries. Subsidi-

aries are entities over which the Group has control. The

prerequisite for control is that the parent company has

power over the investee, is exposed to the variable

return of the investee, and is able to affect the amount

of return it receives. Subsidiaries are fully consolidated

from the date on which control is transferred to the

Group and deconsolidated from the date that control

ceases.

Associates are entities in which the Group has

20–50 percentage of the voting rights and at least a

20-percentage shareholding, or over which the Group

otherwise has significant influence.

Intra-group transactions, receivables and liabilities

and intra-group profit distribution have been eliminated

when preparing the consolidated financial statements.

In addition, unrealized gains on transactions within the

Group are eliminated. Unrealized gains on transactions

between the Group and its associates are eliminated in

proportion to the Group’s ownership share.

FOREIGN SUBSIDIARIES

The results and financial position of Group entities are

measured in the primary currency of the unit’s eco-

nomic environment (“functional currency”). The con-

solidated financial statements are presented in euro,

which is the parent company’s functional and presenta-

tion currency.

In the consolidated financial statements, the income

statement items of foreign subsidiaries are translated

into euro by using the average exchange rates of the

financial year. Balance sheet items are translated into

euro by using the exchange rates at the reporting date.

Translation differences are presented as a separate

item under equity. When an interest in a subsidiary is

divested in its entirety or partially so that control is

lost, the accumulated translation differences are reclas-

sified to the statement of comprehensive income as

part of the sales gain or loss.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

ACQUISITIONS

Acquisitions in 2023

Acquisition of Eltrex

On 31 January 2023, Telko acquired Eltrex, a Polish distributor of specialty chemicals and industrial packaging materials,

with net sales of approximately EUR 8 million and operating profit slightly less than EUR 1.0 million in 2022.

The estimated total consideration of EUR 5.0 million will be paid fully in cash, and EUR 3.9 million has been paid in

2023. The rest of the consideration will be paid in the years 2024 and 2025 based on the earn-out clause of the pur-

chase agreement. The assets and liabilities of the acquired company were measured at fair value on the acquisition date.

A fair value adjustment of EUR 3.1 million was made on intangible assets based on customer relationships, non-compete

clauses and trademarks, and the fair value adjustment relating to inventories was EUR 0.1 million. The deferred tax lia-

bility arising from the fair value adjustments was EUR 0.6 million. The carrying amount of the other acquired assets and

liabilities corresponded to their fair values. A goodwill balance of EUR 1.4 million was recognized from the acquisition.

The acquisition-related costs of approximately EUR 0.4 million were recognized in the Telko segment’s other operating

expenses.

The contingent consideration for the Eltrex acquisition is based on the operating profit of the acquired company in

2023 and 2024. The book value of the contingent consideration at the reporting date is EUR 1.3 million and it is based

on Eltrex’s operating profit for the year 2023 and an estimate of the operating profit in the fiscal year 2024. The range of

the contingent consideration is EUR 1.2 to 2.2 million. The lower edge of the range is an estimate, and the upper edge is

based on the agreement.

■

ACQUISITION CALCULATION OF ELTREX

1,000	EUR	2023
Consideration
Paid in cash		5,027
Total consideration		5,027
Assets acquired and liabilities assumed, fair value		Fair value
Intangible assets		3,386
Tangible assets		19
Leased assets		576
Inventories		1,383
Accounts receivable and other receivables		1,124
Cash and cash equivalents		14
Total assets		6,502
Interest bearing liabilities		1,239
Accounts payable and other liabilities		1,018
Deferred tax liability		630
Total liabilities		2,887
Net assets acquired		3,615
Goodwill		1,412
Total		5,027
Acquisition-related costs		354

1.2 Acquisitions and divestments

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

Acquisitions in 2022

Acquisition of Kobia AB

Leipurin acquired the entire share capital of the Swedish distributor in the bakery industry Kobia Ab from the Swedish

Abdon Group on September 1, 2022. The acquisition expanded Leipurin’s geographical presence in the Northern Euro-

pean market and strengthened its position as a leading player in the Baltic Sea region. The new entity provides suppliers

with a compelling gateway to the region’s market. Customers in the bakery and food industry will benefit from a strong

partner in the global raw material market. Kobia AB forms Leipurin’s business unit Sweden established in 2022. The

annual net sales of Kobia amount to approximately EUR 50 million. The acquisition of Kobia AB also included the proper-

ties owned by Kobia. These properties were sold and leased back during 2023, more information on this can be found in

notes 2.5 Leases and 3.2 Other operating income.

The acquisition consideration of Kobia AB was EUR 15.7 million and it was paid fully in cash in 2022. The assets and

liabilities of the acquired company were measured at fair value on the acquisition date. A fair value allocation of EUR 9.7

million was made on the properties, a fair value allocation of EUR 0.4 million was made on the intangible assets based on

customer relationships, and the fair value adjustment relating to inventories was EUR 0.5 million. The deferred tax liabil-

ity arising from the fair value adjustments was EUR 2.2 million. The carrying amount of the other acquired assets and lia-

bilities were deemed to correspond to their fair values. A goodwill balance of EUR 0.1 million resulted from the acquisi-

tion. The acquisition-related costs of approximately EUR 1.0 million were recognized in the Leipurin segment’s other oper-

ating expenses.

Acquisition of Johan Steenks

Telko completed the acquisition of the business operations of the Norwegian company Johan Steenks AS on October 3,

2022. Johan Steenks is a distributor of technical plastic raw materials and additives for plastics, and it has an established

customer base in the Norwegian markets and a number of well-known principals. The company’s annual net sales are

approximately EUR 5 million. The acquisition had no significant impact on Telko’s net sales or results in year 2022. The

acquisition consideration was approximately EUR 2.0 million, of which EUR 0.7 million were allocated to inventories and

the remaining EUR 1.3 million were recognized as an increase in goodwill. The cash flow from the acquisition in 2022 was

EUR -1.9 million.

■

ACQUISITION CALCULATION OF KOBIA

1,000	EUR	2022
Consideration
Paid in cash		15,708
Total consideration		15,708
Recognized amounts of identifiable assets acquired and liabilities assumed		Fair value
Intangible assets		806
Tangible assets		13,579
Leased assets		295
Inventories		4,822
Accounts receivable and other receivables		4,958
Cash and cash equivalents		7
Total assets		24,467
Interest-bearing liabilities		1,245
Accounts payable and other liabilities		5,328
Deferred tax liabilities		2,280
Total liabilities		8,853
Net assets acquired		15,614
Goodwill		94
Total		15,708
Acquisition-related costs		1,043

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

BUSINESS COMBINATIONS

The acquisition method of accounting is used to

account for business combinations. The consideration

and the acquired company’s assets and liabilities are

measured at fair value at the acquisition date. Acqui-

sition-related costs are recognized as expenses. Any

contingent consideration is measured at fair value at

the acquisition date and classified either as a liability or

equity. A contingent consideration classified as a liabil-

ity is measured at fair value at each consequent report-

ing date, and the resulting gain or loss is recognized in

profit and loss. The contingent consideration classified

as equity is not re-measured. The amount by which the

consideration exceeds the net fair value of the acquired

identifiable assets, liabilities and contingent liabilities is

recognized as goodwill.

OTHER RESTRUCTURING

Financial year 2023

In the ESL Shipping segment, Norra Skeppnings Gruppen AB was merged with its parent company AtoBatC Shipping AB.

In the Telko segment, Telko Middle East Co. a company in Iran was closed down in April 2023.

In the Non-core businesses segment, OOO Telko, a company in Russia, was sold on May 10, 2023, to GK Himik, which

is a Russian industrial operator. The consolidation of FLLC Telko into the Group ended on August 31, 2023, when the

company was placed into liquidation and its operations ceased. Kauko GmbH has been placed in voluntary liquidation,

and the operations of ESL Shipping Russia LLC have ceased. These two companies were consolidated into Aspo Group

until October 31, 2023. OOO Leipurien Tukku, OOO NPK Leipurin, FLLC Leipurin and TOO Leipurin were consolidated into

Aspo Group until December 31, 2023, when control over these companies was deemed to have ceased.

Financial year 2022

In the ESL Shipping segment, the operations of Norra Skeppnings Gruppen AB were divested on December 1, 2022.

In the Telko segment Mentum AS was merged into its parent company Telko Estonia OÜ. Before the merger, Men-

tum’s branches in Latvia and Lithuania were sold through intragroup transactions to Telko UAB in Lithuania and Telko SIA

in Latvia.

Leipurin Plc sold Vulganus Oy to KÖNIG Maschinen GmbH on June 30, 2022. In addition, Leipurin Plc acquired two

dormant companies LT HC One Oy and LT HC Two Oy for the purposes of corporate restructuring in eastern markets.

Kauko Oy was sold to Finnish Signal Partners Oy on October 31, 2022. Kauko GmbH is in the process of being dis-

solved, and its operations have been discontinued.

DIVESTMENTS

Leipurin Oyj reported in the Leipurin segment sold its bakery equipment trading business to Orat Oy in December 2023.

Orat Oy is a Finnish family business specializing in import of machinery, accessories and raw materials used in the food

industry and is part of Oy Transmeri Group Ab group. Leipurin bakery equipment trading business serves Finnish bakeries

and other food industry companies with production equipment as well related services and spare parts. The transaction

price was approximately EUR 0.4 million including the business and related inventory. In 2022, bakery equipment trad-

ing business’s net sales amounted to EUR 2 million. The transaction will not have a significant impact on Aspo’s earnings.

The gain on sale of the bakery equipment trading business was EUR 0.2 million.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

Following the Russian invasion in Ukraine in February 2022, Aspo started to seek strategic options for restructuring its

business operations in Russia and its nearby areas. At the beginning of 2023, Aspo established a new reportable seg-

ment: Non-core businesses. The Non-core businesses segment consists of the following: Telko’s operations in Russia and

Belarus, as well as Kauko GmbH, which were previously reported in the Telko segment; Leipurin’s operations in Russia,

Belarus and Kazakhstan, which were previously reported the Leipurin segment; and ESL Shipping’s operations in Russia,

which were previously reported in the ESL Shipping segment.

The Non-core businesses segment has been classified as a discontinued operation in accordance with IFRS 5. The Non-

core businesses segment was established to separate the result of Aspo’s non-core operations from the result of the

continuing operations. The result and balance sheet of discontinued operations are reported separately from the figures

for Aspo Group’s continuing operations. In the statement of comprehensive income, the figures for the comparison peri-

ods have been restated. In the comparative period 2022, the result of the discontinued operations also includes the fig-

ures of Kauko Oy, which was divested on October 31, 2022.

Telko’s subsidiary in Russia was sold in April 2023. The efforts to sell Leipurin’s eastern business operations have been

unsuccessful and a decision to deconsolidate the eastern operations of Leipurin from Aspo Group was made. The ESL

Shipping segment’s business operations in the Russian market ended in the summer of 2022. After 2023, the Non-core

businesses segment has no companies that are consolidated into Aspo Group.

■

		PROFIT FROM DISCONTINUED OPERATIONS
1,000	EUR	2023	2022
Net sales		16,620	91,927
Other operating income		21	304
Materials and services		-14,427	-77,588
Employee benefit expenses		-2,149	-7,136
Depreciation, amortization and impairment losses		-39	-3,165
Depreciation, leased assets		-244	-1,504
Other operating expenses		-15,887	-10,052
Operating profit		-16,105	-7,214
Financial income and expenses		1,750	-396
Profit before taxes		-14,355	-7,610
Income taxes		-259	-2,503
Result for the period		-14,614	-10,113

1.3 Discontinued operations

■
1,000	EUR	2023	2022
Net cash inflow from operating activities		610	20,712
Net cash inflow/outflow(-) from investing activities		-7,842	-967
Net cash inflow/outflow(-) from financing activities		-366	-2,094
Net change in cash generated by the discontinued operation		-7,598	17,651

NET CASH FLOWS OF DISCONTINUED OPERATIONS

Net cash flows of discontinued operations consist of discontinued operations’ share of Aspo Group’s cash flows.

The cash flow from the sale of Telko’s subsidiary in Russia was EUR -4.4 million, and it is presented in the cash flow

from investing activities. The cash received as purchase consideration was EUR 5.7 million and the divested company’s

cash and cash equivalents amounted to EUR 10.1 million. The cash impact of the deconsolidation of the other entities in

the Non-core businesses segment amounted to EUR -3.4 million in 2023.

In 2022, the cash flow from the divestment of Kauko Oy EUR -1.0 million is included in the cash flow from investing

activities. The cost to sell Kauko of EUR -0.4 million is presented in the cash flow from operating activities. The cash flow

from financing mainly consisted of repayments of Kauko Oy’s interest-bearing loans in 2022.

DISCONTINUED OPERATION 2023

The sale of Telko’s subsidiary in Russia was completed in the second quarter. The company was sold to GK Himik, which

is a Russian industrial operator. The sales price was EUR 5.7 million. The loss from the sale amounted to EUR -8.1 million,

including EUR -10.2 million in accumulated translation differences, which were reclassified from the translation difference

reserve through profit or loss to other operating expenses as part of the sales loss. The transaction costs were EUR -0.6

million.

The operations of Telko’s subsidiary in Belarus were discontinued, and its consolidation into Aspo Group ended on

August 31, 2023. The company is currently in liquidation. The loss recognized in the consolidated financial statements

because of the deconsolidated was EUR -0.8 million and included EUR -1.0 million in accumulated translation differences,

which were reclassified from the translation difference reserve through profit or loss to other operating expenses.

At the beginning of 2023, Leipurin signed a binding preliminary agreement to sell all shares in its subsidiaries in Russia,

Belarus and Kazakhstan to Timur Akhiyarov. The Russian-born Akhiyarov would invest in Leipurin’s operations in eastern

markets as a private investor. However, the completion of the transaction required the approval of the local authorities,

which was not obtained, and which involves significant uncertainty as the sales process drags on. For this reason, Aspo

concluded at the end of 2023 that it had lost control over Leipurin’s eastern companies and their variable returns and

decided to end the consolidation of Leipurin’s subsidiaries in Russia, Belarus and Kazakhstan into Aspo Group on Decem-

ber 31, 2023. Following the deconsolidation, the assets and liabilities of Leipurin’s eastern business operations have

been derecognized. The loss recognized as a result of the deconsolidation was EUR -5.8 million and included EUR -3.7

million in accumulated translation differences, which were reclassified from the translation difference reserve in equity

through profit or loss to other operating expenses.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

LOSS ON LOSS OF CONTROL 2023

1,000	EUR	2023
Telko Russia divestment
Gain on sale		2,363
Reclassification of cumulative translation differences		-10,464
Loss on sale, total		-8,101
Leipurin Russia loss of control
Loss on loss of control		-1,611
Reclassification of cumulative translation differences		-3,725
Loss on loss of control, total		-5,336
Loss of control of other eastern operations
Loss on loss of control		-86
Reclassification of cumulative translation differences		-985
Loss on loss of control, total		-1,071
Total
Gain on sale		2,363
Loss on loss of control		-1,697
Reclassification of cumulative translation differences		-15,174
Loss on loss of control, total		-14,508

The loss caused by the loss of control in 2023 mainly consisted of the reclassifica-

tion of translation differences, as substantial impairment losses had been recog-

nized on the assets of the companies in question already in 2022.

■

DISCONTINUED OPERATION 2022

The Kauko operating segment was classified as a discontinued operation in December 2021 as it was no longer part

of Aspo’s core businesses, and, over the years, it had become fairly small in size compared to Aspo’s other businesses.

Kauko is a specialist in applications, devices and services for demanding work environments in mobile knowledge work.

Kauko Oy was sold to Signal Partners Oy on October 31, 2022 and its subsidiary Kauko GmbH is in voluntary liquidation.

In 2022 the profit from discontinued operations includes the Non-core business segment and the income and

expenses of Kauko operating segment, insofar as they are considered to transfer outside Aspo Group in conjunction with

the divestment. Therefore, the profit from discontinued operations does not include all internal administrative charges of

Aspo Group allocated to Kauko operating segment. As a result, the profit from discontinued operations in 2022 is EUR

0.3 million higher than the Kauko operating segment’s profit. An impairment loss of EUR -1.3 million was recognized on

Kauko’s goodwill in June 2022 when it became obvious that the fair value of Kauko operating segment is lower than its

carrying value. More information about goodwill impairment testing is available in Note 4.3 Goodwill impairment testing.

The sales loss recognized in conjunction with sale of Kauko Oy’s shares was EUR -1.2 million.

In the 2022 financial statements, Telko’s companies in Russia and Belarus and Leipurin’s companies in Russia, Belarus

and Kazakhstan were classified as disposal groups classified as held for sale. In connection with the classification as held

for sale, the net assets of the eastern operations were recognized at fair value less cost to sell, being lower than the car-

rying amount for each company. Part of each operating segment’s goodwill was also allocated to the companies in pro-

portion to the fair values. In conjunction with the classification as held for sale, impairment losses were recognized on the

companies’ net assets and goodwill. At the beginning of 2023, the eastern business operations were transferred to the

Non-core businesses segment, and are reported as discontinued operations in these financial statements. The income

statement for the comparative period has been restated to reflect the presentation method applied to the reporting

period. The balance sheet items of the comparative period have not been restated.

■

IMPAIRMENT LOSSES RECOGNIZED IN THE RESULT OF

DISCONTINUED OPERATIONS IN 2022

1,000	EUR	2022
Impairment losses, tangible and intangible assets		-1,668
Impairment losses, leased assets		-883
Materials and services		-7,219
Other operating expenses		-4,514
Income taxes		-256
Total		-14,540

Impairment losses in 2022 are included in the result of discontinued operations

and are allocated to the financial statement line items presented above.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

Because of the prevailing circumstances, Aspo has

concluded that its control over Leipurin’s companies

in Russia, Belarus and Kazakhstan has ceased. As a

result, the consolidation of the companies into Aspo’s

consolidated financial statements ended on Decem-

ber 31, 2023. The decision to deconsolidate involves

the management’s judgement, as efforts continue to

be made to sell the business operations, but there is

considerable uncertainty about the completion of the

transaction, and the likelihood of success is low.

In accordance with IFRS 10, the control over Leipu-

rin’s business operations in Russia has decreased sub-

stantially from the situation that prevailed before Rus-

sia’s invasion in Ukraine. For the investor to have con-

trol over the investee under IFRS, it must have existing

rights that provide it with the ability to direct rele-

vant activities. In Leipurin’s business operations in Rus-

sia, relevant activities include, for example, the follow-

ing: selling and purchasing goods or services; manag-

ing financial assets; selecting, acquiring or disposing of

assets; and determining a funding structure or obtain-

ing funding. The decisions may also include selecting

and rewarding the management or service providers.

In practice, Aspo no longer has the opportunity to

direct business-related purchases and sales. In addi-

tion, cross-border trade is not possible, not even within

the Group, because of obstacles to the flow of goods

or financial transactions. Business continuity is not cer-

tain, and the local management is partly self-directed

despite the fact that Aspo’s senior management dis-

cusses the situation with them as regularly as possible.

It may be illegal to send business accounting figures

from Russia to an “unfriendly country.”

In practice, the management of the financial assets

of Russian companies is in the hands of the local man-

agement. Bank connections and signature rights are

local, so they cannot be managed from Finland. Raising

of financing is also the responsibility of the local man-

agement, and Aspo’s CFO no longer decides on the

banks to be used or on the capital structure or lending.

Aspo has neither the means nor the decision-making

power to repatriate funds. Only a small portion of prof-

its can be repatriated within a strictly regulated frame-

work as dividends. The payment of dividends is also

limited by the strict rules of banks with regard to sanc-

tions policy. In practice, new investments or decisions

to open new businesses or close old ones cannot be

made.

Because of the sales process and practical con-

straints of the business operations, decisions on the

recruitment or dismissal of the local management can-

not be made within the Group.

The efforts to sell the Leipurin businesses men-

tioned above have continued for a year and a half. One

permit application has been rejected by the authorities,

the availability of financing for the acquisition is poor,

and the implementation of the related payment trans-

actions is very uncertain. In the assessment of relevant

activities, the long-term nature of the situation and the

clear weakening of the signs of control are decisive,

and Aspo considers that it is no longer in a position to

consolidate Leipurin’s companies in Russia, Belarus and

Kazakhstan into the Group.

For the above reasons, the balance sheet values

of the companies in question are measured at zero in

Aspo Group, and the consolidation of the companies

into the Group ended in accordance with IFRS 10 on

December 31, 2023. In addition, the translation differ-

ences related to the companies have been reclassified

from equity through profit or loss.

■

IMPAIRMENT LOSSES IN BALANCE SHEET

1,000	EUR	Telko	Leipurin	Total
Goodwill		389	979	1,368
Intangible assets			3	3
Tangible assets		205	92	297
Leased assets		789	94	883
Deferred tax assets		22	234	256
Inventories		4,834	2,385	7,219
Accounts receivable		135	1,323	1,458
Other receivables		970	69	1,039
Cash and cash equivalents		2,015	2	2,017
Total		9,359	5,181	14,540

The impairment losses recognized on the assets of the eastern business operations in 2022 were mainly related to inven-

tories, accounts receivables, and cash and cash equivalents. In addition, impairment losses were recognized on goodwill.

The impairment losses were related to the assets of the Telko and Leipurin segments, and the remaining assets and liabil-

ities of the eastern business operations were transferred to assets and liabilities classified as held for sale.

■

ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

1,000	EUR	2022
Other assets held for sale		12,414
Liabilities directly associated with assets classified as held for sale		3,907

In 2022, the assets and liabilities classified as held for sale included the assets and liabilities of the eastern business

operations classified as held for sale. The assets classified as held for sale mainly consisted of cash and cash equivalents,

and the Russian cash and cash equivalents were restricted cash in accordance with IAS 7. The impact of the exclusion

of the eastern business operations on Aspo Group’s balance sheet in 2023 was EUR 6.7 million in terms of assets, with

EUR 5.7 million arising from the sale of Telko Russia, and EUR 3.9 million in terms of liabilities.

On the balance sheet, the assets and liabilities of the companies classified as held for sale are reported under “Assets

held for sale” and liabilities under “Liabilities directly associated with assets classified as held for sale”. The reporting of

balance sheet items on separate rows starts at the time of classification, therefore the figures of the comparative period

have not been restated. The classification includes the share of the assets and liabilities of Aspo Group that belong to the

companies held for sale, excluding internal assets and liabilities that have been eliminated in consolidation.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

DISCONTINUED OPERATIONS AND DISPOSAL

GROUPS CLASSIFIED AS HELD FOR SALE

Non-current assets or disposal groups are classified

as held for sale if their carrying amount will be recov-

ered principally through a sale transaction rather than

through continuing use and a sale is considered highly

probable. They are measured at the lower of their car-

rying amount and fair value less costs to sell.

The assets of a disposal group classified as held for

sale are presented separately from the other assets

in the balance sheet. The liabilities of a disposal group

classified as held for sale are presented separately

from other liabilities in the balance sheet. The reporting

of balance sheet items on separate rows starts at the

time of classification. Non-current assets are not depre-

ciated or amortized while they are classified as held for

sale. Interest and other expenses attributable to the

liabilities of a disposal group classified as held for sale

continue to be recognized.

A discontinued operation is a component of the

entity that has been disposed of or is classified as held

for sale, that represents a separate major line of busi-

ness or geographical area of operations, and that is

part of a single coordinated plan to dispose of such a

line of business or area of operations. The results of

discontinued operations are presented separately in

the consolidated statement of comprehensive income.

The comparative period’s figures in the consolidated

statement of comprehensive income are restated.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

ASPO’S CAPITAL

1,000	EUR	2023	2022
Total equity		140,487	143,685
Loans and overdraft facilities		172,439	172,126
Lease liabilities		23,460	16,287
Liabilities held for sale and other liabilities			854
Interest-bearing liabilities, total		195,899	189,267
Equity and interest-bearing liabilities, total		336,386	332,952
Interest-bearing liabilities, total		195,899	189,267
- Cash and cash equivalents		30,683	21,727
- Cash and cash equivalents held for sale			11,847
Net debt		165,216	155,693
Gearing, %		117.6%	108.4%
Total equity		140,487	143,685
Equity and liabilities, total		409,709	415,910
Advances received		1,531	1,481
Equity ratio, %		34.4%	34.7%

Net interest-bearing debt was EUR 165.2 (155.7) million and gearing was 117.6% (108.4%). The Group’s equity ratio at

the end of year was 34.4% (34.7%). Net debt is calculated by deducting cash and cash equivalents from interest bear-

ing liabilities. Calculation principles for key figures are presented on the last page of the Management report. The net

debt increase is primary a consequence of the Green Coaster investments and the Eastern exits. The main reason for the

increase in lease liabilities is the sale and leaseback transactions of Kobia AB, a Swedish company reported in the Leipurin

segment, of which more information is provided in Note 2.5 Leases.

CASH FLOW

The Group’s net cash flow from operating activities was EUR 47.6 (67.7) million. The cash flow impact of change in work-

ing capital was EUR 4.5 (-6.7) million. The positive cash impact was caused by a decrease in inventories driven by a

decline in market prices and proactive operational management actions, especially in the Telko segment.

In 2022 the increase in working capital mainly came from the advance payments for the vessels to be built to the ESL

Shipping segment’s vessel pool and the customer receivables accumulated through high sales at the end of the year. This

was partly compensated by the Telko segment’s working capital, which improved towards the year end.

The free cash flow is an important indicator for Aspo, as it represents cash flows generated from business operations

after investments. Therefore, the free cash flow has an impact on the Group’s debt repayment and dividend distribution

abilities, as well as liquidity.

■

FREE CASH FLOW

1,000	EUR	2023	2022
Net cash from operating activities		47,611	67,671
Net cash used in investing activities		-20,286	-33,296
Free cash flow		27,325	34,375

The free cash flow was EUR 27.3 (34.4) million. Investments amounted to EUR 21.8 (17.8) million and consisted mainly

of the ESL Shipping segment’s green coaster advance payments. The other items reported in cash flows used in investing

activities included EUR 3.9 million cash outflow from the acquisitions of Eltrex, EUR 11.6 million cash inflow from the sale

and leaseback of Leipurin’s properties in Sweden and Lithuania, EUR 7.8 million negative cash impact of the loss of con-

trol of Telko’s and Leipurin’s subsidiaries in Russia and other eastern countries, EUR 0.5 million dividend cash inflow from

associates, EUR 0.4 million cash inflow from the sale of Leipurin’s bakery equipment trading business as well as other

cash inflow of EUR 0.7 million.

In 2022 the cash flow from investing activities included in addition to investments EUR -17.9 million cash outflow on

the acquisitions of Kobia, Mentum and Johan Steenks and a total of EUR 2.8 million in cash inflow from the sale of the

vessel Espa and Vulganus Oy.

162.2

30.1

149.0

131.0

108.4

117.6

30.1

32.0

34.7

34.4

■

GEARING, %

■

EQUITY RATIO, %

Aspo’s definition of capital includes all equity items, including the hybrid bond. The objective of the Group is to achieve a

capital structure, with which Aspo Group can ensure the operational framework for short- and long-term operations, and a

sufficient return on equity. The main factors affecting the capital structure are potential restructuring activities, Aspo Plc’s

dividend policy, the vessel investments of ESL Shipping and the profitability of the subsidiaries’ business operations. The

principles of capital management are explained in note 5.1 Financial risks and financial risk management.

CAPITAL STRUCTURE

200

160

120

19 20 21 22 23 19 20 21 22 23

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

Aspo Group’s financial assets and liabilities are as follows:

■

FINANCIAL ASSETS AND LIABILITIES

1,000	EUR	Note	2023	2022
Financial assets
Measured at amortized cost
Loan receivables			1,336	454
Accounts receivable and other receivables*			48,784	47,279
Cash and cash equivalents	2.2		30,683	21,727
Measured at fair value through profit and loss
Other financial assets			128	128
Financial assets, total			80,931	69,588
Financial liabilities
Measured at amortized cost
Loans and overdraft facilities	2.3		172,439	172,126
Accounts payable and other liabilities*			43,249	42,951
Lease liabilities	2.5		23,460	16,287
Measured at fair value through other comprehensive income
Derivatives	5.2		-59
Financial liabilities, total			239,089	231,364

*Comprises financial assets or financial liabilities included in the corresponding balance sheet item.

The Group’s exposure to risks relating to financial instruments is described in Note 5.1 Financial risks and the manage-

ment of financial risks. The maximum exposure for credit risk at the end of the financial year is the carrying amount of

each class of financial asset.

2.1 Financial assets and liabilities

FINANCIAL ASSETS

Aspo classifies its financial assets based on its busi-

ness model as follows:1) measured at amortized cost,

and 2) measured at fair value through profit and loss.

Accounts receivable and other receivables, as well

as cash and cash equivalents, recognized at amor-

tized cost are initially measured at fair value and sub-

sequently at amortized cost. They are classified as cur-

rent when they fall due within twelve months after the

end of the reporting period. Cash and cash equivalents

are always classified as current. The expected credit

loss model applied for accounts receivable is described

in Note 4.5 Accounts receivable and other receivables.

This group includes loan receivables, whose cash flows

consist of the payment of capital and interest, and that

are planned to be held until the date of maturity. Loan

receivables are recognized at amortized cost using the

effective interest rate method. Transaction costs are

included in the original acquisition cost. Credit loss risks

associated with loan receivables are assessed on a

customer-specific basis and, if required, the expected

credit loss is considered when measuring receivables

over the next 12 months or when the credit loss risk

increases throughout the contractual period.

Financial assets measured at fair value through

profit and loss include other non-current financial

assets which include investments in unlisted shares. As

no reliable market value is available, other non-current

financial assets are measured at acquisition cost less

any impairment losses.

Financial assets are derecognized when the Group

has lost the contractual right to cash flows, or when

it has materially moved risks and rewards outside the

Group.

FINANCIAL LIABILITIES

Aspo classifies its financial liabilities as follows: 1)

measured at amortized cost, and 2) measured at fair

value through other comprehensive income. In addi-

tion, the financial liabilities include lease liabilities, the

accounting principles of which are described in Note

2.5 Leases.

Bank, pension, and bond loans recognized at amor-

tized cost, as well as overdraft facilities in use, are ini-

tially recognized at fair value, net of transaction costs,

after which they are measured at amortized cost

using the effective interest rate method. The differ-

ence between the withdrawn amount net of transac-

tion costs and the paid amount is recognized in the

income statement during the estimated loan maturity

period. The fair values of loans do not materially dif-

fer from their carrying amounts, because their interest

rate is close to the market rate. The carrying amounts

of accounts payable and other liabilities are expected

to correspond to their fair values due to the short-term

nature of these items. Aspo classifies the liability as

non-current unless it falls due within a year.

Financial liabilities measured at fair value through

other comprehensive income include derivatives in

hedge accounting. They are measured at fair value

through other comprehensive income.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

CASH AND CASH EQUIVALENTS AND UNUTILIZED COMMITTED REVOLVING CREDIT FACILITIES

1,000	EUR	2023	2022
Cash and cash equivalents		30,683	21,727
Revolving credit facilities		40,000	40,000
Total		70,683	61,727

Cash and cash equivalents include cash funds, bank deposits and other highly liquid investments of no more than three

months. At the end of the financial year, the Group’s cash and cash equivalents were EUR 30.7 (21.7) million. In year

2022, the Group had in addition EUR 11,8 million of cash and cash equivalents classified as held for sale, for further infor-

mation refer to Note 1.3 Discontinued operations. Committed revolving credit facilities, totaling EUR 40 million, were fully

unused, as in the comparative period.

2.2 Cash and cash equivalents

FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

The Group classifies the determination methods of the fair values of financial assets and liabilities based on the fair value

hierarchy. Financial assets and liabilities recognized at amortized cost are at level two in the hierarchy. Their fair values do

not significantly differ from their carrying amount. The fair values of non-current loans have been calculated by discount-

ing future cash flows and by considering Aspo’s credit margin. Other non-current financial assets recognized at fair value

through profit and loss are at level three in the hierarchy. Derivatives recognized at fair value through other comprehen-

sive income are foreign currency forwards, and they are at level two in the fair value hierarchy.

FAIR VALUE HIERARCHY

Preparing the consolidated financial statements

requires the measurement of fair values, for both finan-

cial and non-financial assets and liabilities. Group classi-

fies the fair value measurement hierarchy as follows:

Level 1: The fair values of financial instruments are

based on quoted prices on active markets. A market

may be considered active when quoted prices are avail-

able on a regular basis and the prices represent the

instrument’s actual value in liquid trading.

Level 2: The financial instruments are not traded

on active and liquid markets. The value of the finan-

cial instrument can be determined on verifiable mar-

ket information and possibly partially based on derived

determination of value. If the factors influencing the

instrument’s fair value are nevertheless available and

verifiable, the instrument belongs to level two.

Level 3: The valuation of the financial instrument

is not based on verifiable market information. Nor are

other factors that affect the instrument’s fair value

available or verifiable.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

LOANS AND OVERDRAFT FACILITIES IN USE

1,000 EUR	2023	2022
Non-current
Loans	138,547	139,347
Bonds		14,954
	138,547	154,301
Current
Loans	18,905	17,825
Bonds	14,981
Overdraft facilities in use	6
	33,892	17,825
Total
Loans	157,452	157,172
Bonds	14,981	14,954
Overdraft facilities in use	6
Total	172,439	172,126

2.3 Loans

In December, ESL Shipping Oy reported in ESL Shipping segment signed two loan agreements in total of EUR 37.6 mil-

lion. The loan period for both loans is five years and they will be paid back in equal installments during the loan period.

The loans were granted by OP Corporate Bank Plc and the loans were used to pay back existing loans of similar value.

In the reporting period Aspo signed a loan agreement of EUR 30 million for a three-year loan period extending the

maturity of Aspo’s loan portfolio. The loan was taken for general corporate purposes and for refinancing a loan of similar

value. The loan will be paid back at the end of the loan period.

In 2022, AtoBatC Shipping AB signed an EUR 32.2 million loan agreement with Svenska Skeppshypotek. The loan’s

maturity is 15 years. The loan is withdrawn in parts in line with the financing need for the construction of Green Coasters.

In December, when Electramar was delivered, AtoBatC Shipping AB withdrew EUR 8.1 million of the loan. At the end of

2022, the loan had not yet been withdrawn.

In 2022, a ten-year, EUR 20 million loan agreement was signed with the Nordic Investment Bank to finance ESL Ship-

ping’s investments in electric hybrid vessels.

In addition, in the 2022 fiscal year, Aspo Oyj restructured a bilateral bank loan of EUR 20 million, about to mature

in 2023, with a new bilateral revolving credit facility which will mature in 2025. The loan agreement also includes two

options for a one-year extension.

On September 25, 2019, Aspo Plc issued a EUR 15 million unsecured private placement bond as part of the group

bond of EUR 40 million guaranteed by Garantia Insurance Company. The bond pays fixed interest rate and matures on

September 25, 2024.

At the reporting date, Aspo Plc had a EUR 80 million domestic commercial paper program which were fully unused as

in the comparative period.

Covenant terms and interest rate risk related to loans are disclosed in note 5.1 Financial risks and the management of

financial risks.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

MATURITY ANALYSIS

2023
		Carrying value	Cash flow
1,000	EUR	Dec 31, 2023	2024	2025	2026	2027	2028–
Loans		-172,433	-33,904	-36,796	-43,590	-16,990	-41,172
Overdraft facilities in use		-6	-6
Accounts payable and other liabilities		-43,249	-43,249
Lease liabilities		-23,460	-15,729	-3,984	-2,137	-1,645	-1,164
2022		Carrying value	Cash flow
1,000	EUR	Dec 31, 2022	2023	2024	2025	2026	2027–
Loans		-172,126	-47,825	-57,047	-32,394	-9,187	-25,719
Accounts payable and other liabilities		-42,951	-42,951
Lease liabilities		-16,287	-11,962	-2,791	-1,014	-385	-492

The maturity structure of loans was balanced, and the Group’s refinancing risks were reduced during 2023 and 2022 by means of several bilateral loan arrangements.

Most lease payments fall due within five years and a significant proportion of vessel lease payments fall due in less than a year. However, with the lease period for vessels being a

rolling 13 months, it is likely that the cash flows arising from leases will be substantially the same in 2025–2028 as in 2024.

AtoBatC Shipping AB’s EUR 32.2 million loan agreement with Svenska Skeppshypotek is not fully included in the maturity analysis because only EUR 8.1 million of the loan has been

withdrawn. The final loan repayment date is in 2038.

In 2022, Aspo issued a hybrid bond of EUR 30 million, which is classified as equity. The bond has no maturity, but the company is entitled to redeem it in June 2025 at the earliest.

2.4 Maturity

LIQUIDITY AND REFINANCING RISK

The objective of Aspo Group is to ensure sufficient financ-

ing for operations in all situations and market condi-

tions. In accordance with the treasury policy, the sources

of financing are diversified among a sufficient number

of counterparties and different loan instruments. The

appropriate number of committed financing agreements

and sufficient maturity ensure Aspo Group’s current and

near-future financing needs and decrease the refinancing

risk relating to financing agreements.

The main financing source of Telko and Leipurin is the

cash flow from their operations. ESL Shipping often also

requires external financing in conjunction with investments

due to the nature of its operations. Liquidity is ensured

through cash and cash equivalents, and committed over-

draft facilities, as well as revolving credit facilities granted

by selected cooperation banks. The Group has adopted a

Nordic multi-currency cash pool structure, which improves

the efficiency of the Group’s cash management and cen-

tralization of liquid funds. For loan covenants and interest

rate risk refer to Note 5.1 Financial risks and the manage-

ment of financial risks.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

2.5 Leases

The Group has customary, business related lease contracts, e.g. relating to offices, warehouses, vessels and cars. Part of

the office equipment and software is also leased. Lease terms are negotiated on an individual basis and contain a wide

range of different terms and conditions. The lease term for vessels is in general approximately one year. Other rental

agreement periods are typically less than five years.

SALE AND LEASEBACK

In the 2023 financial year, Kobia AB, which is reported in the Leipurin segment, carried out three sale and leaseback trans-

actions of its properties in Sweden. The lease period agreed for all the properties is five years. The properties came to the

Group in connection with the acquisition of Kobia on September 1, 2022.

The Tyresö and Gothenburg properties were acquired by Revelop, a Swedish real estate investment company, and the

Hässleholm property was acquired by the real estate investment company JS Fastigheter. The total sales price of the

properties was approximately EUR 13.6 million. Aspo recognized a total sales gain of approximately EUR 0.5 million on

these sale and leaseback transactions.

In addition, a sale and leaseback transaction of a warehouse and office property was carried out in the Leipurin seg-

ment in Kaunas, Lithuania, in the 2023 financial year. The buyer was an entrepreneur operating in the same industrial area

in Kaunas. With this transaction and the lease agreement, Leipurin will continue its operations in Lithuania in the same

premises. The lease period is two years. The sales price of the property was EUR 1.1 million, with a sales gain of EUR 0.9

million.

The consolidated balance sheet shows the following amounts relating to leases:

■

LEASED ASSETS

1,000 EUR	2023	2022
Intangible assets	544	653
Land	745	765
Buildings	7,052	3,783
Machinery and equipment	2,044	1,700
Vessels	12,131	8,970
Total	22,516	15,871

■

LEASE LIABILITIES

1,000	EUR	2023	2022
Non-current		8,331	4,559
Current		15,129	11,728
Total		23,460	16,287

At the end of the financial year the most significant leased assets were the vessels leased by ESL Shipping, and the

office and warehouse premises used by the businesses. Towards the end of 2022 six time-chartered vessels of the

smaller vessel category were redelivered to their owners as the charter agreements ended and as the price of an

extended charter period became too high. The lease level of vessels was higher and the fleet grew slightly in 2023. The

additions to the leased assets were EUR 21.9 (16.1) million during the financial year. The most significant cause of the

increase in leased assets and lease liabilities are the sale and leaseback transactions of the Swedish Kobia AB, which is

reported in the Leipurin segment. As a result of the transactions, leased assets are EUR 3.3 million higher and lease liabil-

ities are EUR 3.8 million higher than in the comparative period. Maturity of lease liabilities is presented in Note 2.4 Matu-

rity.

The consolidated statement of comprehensive income shows the following amounts relating to leases:

■

AMOUNTS RECOGNIZED IN PROFIT AND LOSS

1,000 EUR	2023	2022
Depreciation and amortization, leased assets	-14,183	-15,191
Interest expenses	-631	-423
Expenses relating to short-term leases	-217	-46
Expenses relating to leases of low-value assets	-209	-219
Expenses total	-15,240	-15,879
Rental income from operating sub-leases	54	46
Rental income total	54	46

Depreciation and amortization of leased assets is presented in Note 3.7 Depreciation, amortization and impairment

losses.

The lease payments relating to leased assets amounted to EUR 14.8 (15.7) million, of which EUR 0.6 (0.4) million

were interest expenses. The total lease payments, also including the variable lease payments and rents for short-term

and low-value asset leases amounted to EUR 15.7 (17.0) million.

At the end of the financial year, the Group was committed mainly to such future lease agreements that are designated

to replace existing agreements, and the amount of which do not significantly depart from the agreements currently effec-

tive. The lease agreements do not include significant purchase options. Leased assets are not used as security for bor-

rowing purposes.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

LEASES

Leases are recognized as a leased asset and a corresponding liability at

the date when the leased asset is available for use by the Group. Con-

tracts may contain both lease and non-lease components. When the

agreement includes a non-lease component such as maintenance, ser-

vices, and maritime crew Aspo separates them based on their stand-

alone price given in the agreement or by using estimates.

The lease term is based on the agreement period considering any

options to extend or terminate. For contracts valid until further notice,

Aspo estimates the probable lease term according to best knowledge

and based on business plans, considering costs arising from the termina-

tion of the agreement.

Assets and liabilities arising from a lease are initially measured on a

present value basis. Lease liabilities include the net present value of the

following lease payments:

• fixed payments (including in-substance fixed payments), less any lease

incentives to be received

• variable lease payment that are based on an index or a rate, initially

measured using the index or rate as at the commencement date

• amounts expected to be payable by the Group under residual value

guarantees

• the exercise price of a purchase option if the Group is reasonably

certain to exercise that option, and

• payments arising from terminating the lease if the lease term reflects

the Group exercising that option.

Lease payments to be made under reasonably certain extension options

are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in

the lease. If that rate cannot be readily determined, which is generally the

case for leases in the Group, the lessee’s incremental borrowing rate is

used. The criteria used to determine the applicable discount rate for each

lease agreement include the class of underlying asset, geographic loca-

tion, currency, maturity of the risk-free interest rate and lessee’s credit

risk premium.

Right of use assets, i.e., Leased assets are measured at cost compris-

ing the following:

• the amount of the initial measurement of lease liability

• any lease payments made at or before the commencement date less

any lease incentives received

• any initial direct costs, and

• restoration costs.

The Group is exposed to potential future increases in variable lease pay-

ments based on an index or rate, which are not included in the lease liabil-

ity until they take effect. When adjustments to lease payments based on

an index or rate take effect, the lease liability is reassessed and adjusted

against the leased asset.

Leases are recognized in profit and loss as finance expenses of the

lease liability and depreciation of the leased asset. Leased assets are

generally depreciated over the shorter of the asset’s useful life and the

lease term on a straight-line basis. If the Group is reasonably certain

to exercise a purchase option, the leased asset is depreciated over the

underlying asset’s useful life. The finance cost is recognized in profit and

loss over the lease period so as to produce a constant periodic rate of

interest on the remaining balance of the liability for each period.

A lease liability and a leased asset are not recognized on the balance

sheet in respect of leases of low value assets. Aspo has determined the

acquisition value of EUR 5,000 as a threshold for low value assets. Low-

value assets comprise ICT equipment and minor office furniture. Also,

short-term leases, with a lease term of 12 months or less, are not recog-

nized on the balance sheet. Payments associated with low-value assets

and short-term leases are recognized on a straight-line basis in other

operating expenses.

Aspo acts as a lessor in a very minor scale when sub-leasing office

premises. These arrangements have been classified as operating leases

and the lease income is recognized in other operating income on a

straight-line basis over the lease term.

In sale and leaseback situations, it is assessed whether the require-

ments under IFRS 15 are met in a way that the disposal can be treated

as a sale. If the disposal of an asset is a sale, the value of the leased

asset to be recognized is measured as a portion of the carrying amount

of the sold asset that corresponds to the assets right to use value

remaining for the company. As the sales gain or loss is presented only

the portion of the sales gain of the asset that corresponds to the rights

transferred to the buyer .

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

Lease accounting involves significant

management estimates relating to

the determination of the lease term

and the lease components.

The most significant management

judgement regarding the determi-

nation of the lease term relates to

leased vessels, most of which, have

been leased for a period of approxi-

mately one year. As a significant por-

tion of the fleet is leased, it is likely

that, the same or a similar vessel will

be leased again at the end of the

lease term. In case there is no inten-

tion to continue or renew the lease,

the agreement will be treated as a

fixed-term lease contract. If a vessel

is leased for approximately one year,

the lease term used to calculate the

lease liability is 13 months (ongoing

month + the next 12 months). This is

because the agreements may be ter-

minated after the fixed lease term

and each month a new assessment

is made on the probability to use

the termination right. The need of

vessels is planned over a 12-month

planning period and the plan is

adjusted each month as deemed

necessary.

A significant estimate has been

made in the determination of rents

when the lease component and non-

lease components have been sepa-

rated from lease agreements of ves-

sels, i.e. when it is estimated how

large a part of the payment of rent

is associated with the leased vessel

and how large a part is associated

with the crew and other services.

The management estimates that the

vessel accounts for 30% of the rent

and the remaining 70% is made up

of non-lease components. ESL Ship-

ping’s management has made the

estimate based on a statistical calcu-

lation, which is updated for changes

annually. Aspo’s lease liabilities relat-

ing to non-lease components are pre-

sented as other commitments in

Note 5.5 Contingent assets and lia-

bilities, and other commitments.

The determination of the lease

term involves judgement, especially

with regard to agreements valid until

further notice. The estimate of the

duration of the lease term is agree-

ment specific. The probable lease

term of lease agreements valid until

further notice is estimated based on

business plans and considering costs

arising from the termination of the

agreement.

The option to extend or termi-

nate a lease is considered in deter-

mining the lease term. The period

covered by an option to extend the

lease is included into the lease term

if it according to management judge-

ment is reasonably certain that the

option will be exercised. Correspond-

ingly, if it is reasonably certain that

an option to terminate the lease is

not exercised, the lease term will

cover the contract period in full. The

assessment to exercise an option or

not is made case by case based on

the profitability of the arrangement

and needs of the business.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

Aspo’s equity consists of the share capital, share premium, hybrid bond (Hybrid), translation differences, treasury shares,

retained earnings and other reserves including the invested unrestricted equity reserve, legal reserves and fair value

reserve. Dividend distribution is disclosed in the next chapter 2.7 Earnings per share and dividend distribution.

■

SHARE CAPITAL AND SHARE PREMIUM RESERVE

					Share premium
	Number of	Share capital		reserve
	shares	1,000	EUR	1,000	EUR
31.12.2023	31,419,779		17,692	4,351

Share capital includes ordinary shares. Aspo Plc has one share series. Each share entitles the shareholder to one vote at

the shareholders’ meeting. The shares do not have a nominal value. On December 31, 2023, Aspo Plc’s number of shares

was 31,419,779 and the share capital was EUR 17.7 million.

Share subscriptions based on the convertible capital loan that were issued during the validity of the old Companies Act

(29.9.1978/734) were recognized in the share premium reserve. There have been no changes in the number of shares,

share capital or share premium reserve during the financial years ended December 31, 2023, and 2022.

■

TREASURY SHARES

		Treasury shares
	Number of shares	1,000	EUR
Jan 1, 2022	161,650		-920
Share-based incentive plan	-99,400		566
Dec 31, 2022	62,250		-354
Jan 1, 2023	62,250		-354
Purchase of own shares	36,194		-302
Share-based incentive plan	-82,200		523
Dec 31, 2023	16,244		-133

2.6 Equity

Aspo Plc holds treasury shares, which the Board of Directors has transferred to individuals within the scope of share-

based incentive schemes based on authorization granted by the Annual Shareholders’ Meeting. Share-based incen-

tive schemes are described in more detail in Note 5.4 Share-based payments. Treasury shares are presented as part of

retained earnings.

Based on the authorization by the Annual Shareholders’ Meeting, Aspo’s Board of Directors decided to start a repur-

chasing program of the company’s own shares on March 9, 2023. Additional treasury shares were needed for the pur-

poses of the share-based incentive programs. During the period from March 9 to March 31, 2023, Aspo acquired a total

of 36,194 of its own shares in trading organized by Nasdaq Helsinki Ltd.

OTHER RESERVES

The invested unrestricted equity reserve includes other equity-type investments and share subscription price to the

extent that it is not recognized in the share capital in accordance with a separate resolution.

The translation difference reserve includes translation differences arising from the translation of the financial state-

ments of foreign units, as well as unrealized foreign exchange gains and losses from the Group’s net investments in for-

eign operations. More information on translation differences is presented under currency risks in Note 5.1 Financial risks

and the management of financial risks.

EQUITY

Transaction costs, net of tax, resulting directly from

the issuance of new shares are recognized in equity, as

a reduction of the payments received.

When the company purchases treasury shares, the

consideration paid for the shares and the transaction

costs are recognized as a reduction in equity. When the

shares held by the company are sold, the considera-

tion, net of tax and less direct transaction costs, is rec-

ognized as an increase in equity.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

HYBRID BOND

1,000	EUR	2023	2022
Jan 1		30,000	20,000
Repayment of the old hybrid bond			-20,000
Issuance of the new hybrid bond			30,000
Dec 31		30,000	30,000

In June 2022, Aspo issued a hybrid bond of EUR 30 million, with a coupon rate of 8.75% per annum. The hybrid bond has

no maturity, but the company is entitled to redeem it in June 2025 at the earliest. In the beginning of the 2022 financial

year, Aspo also had an EUR 20 million hybrid bond, issued in April 2020. The coupon rate of this hybrid bond was 8.75%.

Aspo redeemed this hybrid bond on May 2, 2022.

During the financial period, hybrid bonds accrued EUR 2.6 (2.0) million in interest. Expenses from the issuance of the

new hybrid in 2022 were EUR 0.3 million. EUR 2.6 (1.9) million of the interest and the expenses for the issuance have

been recognized as a reduction of retained earnings. EUR 2.6 (1.8) million has been paid in interest on hybrid bonds.

HYBRID BOND

The hybrid bond is classified as equity. The interest

payment obligation arises if the Annual Shareholders’

Meeting decides to distribute dividends. If no dividend

is distributed, the company can decide upon the pay-

ment of interest separately. In the consolidated finan-

cial statements, the bond together with its accumu-

lated interest and the transaction costs relating to the

issuance of a new hybrid bond, net of possible tax,

are presented in equity according to their nature. A

hybrid bond is an instrument which is subordinated to

the company’s other debt obligations. The hybrid bond

does not confer to its holders the rights of a share-

holder and does not dilute the holdings of the share-

holders.

EARNINGS PER SHARE

Earnings per share is calculated by dividing the profit and loss attributable to the parent company’s shareholders by the

weighted average number of outstanding shares during the financial year. When calculating earnings per share, the inter-

est of the hybrid bond, net of tax, has been considered as a profit-reducing item. Diluted earnings per share equals basic

earnings per share as there has been no dilution effects in years 2023 and 2022.

■

EARNINGS PER SHARE

1,000	EUR	2023	2022
Profit for the period attributable to parent company shareholders, continuing operations		16,255	30,800
Interest of the hybrid bond (adjusted by tax effect), continuing operations		-2,100	-1,496
Profit for the period attributable to parent company shareholders, discontinued operations		-14,614	-10,113
Total		-459	19,191
Average number of shares outstandning during the financial period (1,000)		31,390	31,333
Basic and diluted earnings per share, EUR
Earnings per share, continuing operations		0.45	0.93
Earnings per share, discontinued operations		-0.46	-0.32
Total		-0.01	0.61

DIVIDEND DISTRIBUTION

The Board of Directors has proposed that a dividend of EUR 0.24 per share is distributed for the financial year 2023. In

addition, the Board of Directors has proposed that the Annual Shareholders’ Meeting authorizes the Board of Directors

to decide on a distribution of capital from the invested unrestricted equity fund in the maximum amount of EUR 0.23 per

share. The authorization would be valid until the next Annual Shareholders’ Meeting.

According to the decision of the Annual Shareholders’ Meeting held on April 4, 2023, a total dividend of EUR 0.46 per

share was distributed for 2022. A dividend payment of EUR 0.23 per share made in April and EUR 0.23 per share was

paid in November. The decision about the second dividend distribution in November was made by the Board of Directors

of the company based on the authorization by the Annual Shareholders’ Meeting.

Dividend distribution to owners of the parent company is recognized based on the Shareholder’s Meeting resolution.

No dividend is paid to the treasury shares held by Aspo Plc.

2.7 Earnings per share and dividend distribution

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

ESL SHIPPING LEIPURINTELKO

19 20 21 22 23 19 20 21 22 23

700

600

500

400

300

200

100

OPERATING SEGMENTS

The operating and reportable segments of Aspo Group’s continuing operations are ESL Shipping, Telko and Leipurin.

In addition, the Non-core businesses segment was established at the beginning of 2023, and is reported as a dis-

continued operation. The Board of Directors, which is the chief operating decision maker in Aspo Group, is respon-

sible for allocating resources to the operating segments and evaluating their performance. The operating segments

have been identified based on Aspo Group’s organizational structure, in which each business is led separately.

• ESL Shipping conducts sea transportation of raw materials for industry and the energy sector and offers related

services.

• Telko acquires and supplies plastic raw materials, chemicals and lubricants to industry. Its extensive customer

service also covers technical support and the development of production processes.

• Leipurin provides solutions particularly for bakery customers and food industry and to retail trade and chain

customers in the foodservice business.

• Non-core businesses segment includes eastern business operations transferred from the ESL Shipping, Telko

and Leipurin segments because of the impacts of the Russian invasion in Ukraine on Aspo’s business operations.

PROFITABILITY OF CONTINUING OPERATIONS

Within the Group, the evaluation of segment results is based on each segment’s operating profit and net sales from

outside the Group. Segment reporting is prepared in accordance with the same recognition and measurement prin-

ciples as the consolidated financial statements. Transactions between segments are based on fair market prices.

There are no significant inter-segment transactions .

587.7

21.1

474.3*

573.3*

560.7*

536.4*

16.7*

36.9*

38.4*

25.9*

■

NET SALES, MEUR

■

OPERATING PROFIT, MEUR

BUSINESS OPERATIONS AND PROFITABILITY

* Net sales and operating profit from continuing operations

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

RECONCILIATION OF SEGMENT OPERATING PROFIT TO THE GROUP’S PROFIT BEFORE TAXES, CONTINUING OPERATIONS

2023
1,000	EUR	ESL Shipping	Telko	Leipurin	Unallocated items	Group total
Operating profit		17,679	7,997	5,610	-5,415	25,871
Net financial expenses					-9,255	-9,255
Profit before taxes						16,616
2022
1,000	EUR	ESL Shipping	Telko	Leipurin	Unallocated items	Group total
Operating profit		38,217	8,185	-1,413	-6,591	38,398
Net financial expenses					-5,878	-5,878
Profit before taxes						32,520

Items unallocated to segments consist of the results of other operations, i.e. mainly administrative costs. Other operations include Aspo Group’s administration, the finance and ICT ser-

vice center. The Group has not allocated net financial expenses to segments, as Aspo monitors and manages them at the Group level.

■

SEGMENT ASSETS AND LIABILITIES

1,000	EUR	ESL Shipping	Telko	Leipurin	Unallocated items	Non-core businesses	Group total
Segment assets Dec 31, 2022		224,796	85,730	68,533	24,437	12,414	415,910
Segment assets Dec 31, 2023		241,525	74,510	58,808	34,866		409,709
Segment liabilities Dec 31, 2022		32,260	34,444	16,389	185,225	3,907	272,225
Segment liabilities Dec 31, 2023		31,817	33,191	19,191	185,023		269,222

The assets and liabilities of the segments are items that the segment uses in its business operations or that can be reasonably allocated to the segment. Items unallocated to seg-

ments consist of items associated with income taxes and centralized financing. The Non-core businesses segment is presented as a discontinued operation. More information is pro-

vided in Note 1.3 Discontinued operations, including the results of discontinued operations.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

3.1 Net sales

LEIPURIN’S NET SALES

Leipurin’s net sales increased by 29% to EUR 136.1 (105.9) million in 2023. Figures for the comparative period included

EUR 4.3 million in net sales of the divested Vulganus Oy. The net sales of Kobia AB, which was acquired in September

2022, amounted to EUR 50 (17) million, meaning that most of the increase in Leipurin’s net sales in 2023 comes from

Kobia.

■

LEIPURIN NET SALES

1,000	EUR	2023	2022
Regions:
Finland		49,272	46,634
Sweden		50,221	17,271
Baltics		35,786	36,775
East		805	967
Total		136,084	101,647
of which:
Bakeries		99,718	74,925
Food Industry		11,844	11,793
Retail, foodservice, other		24,522	14,929
Vulganus			4,262
Leipurin total		136,084	105,909

Aspo’s revenue consists mainly of the following income flows:

• ESL Shipping: Sales of sea freight services mainly to the industry and the energy sector

• Telko: Sales of plastic and chemical raw materials as well as lubricants to industries and trade

• Leipurin: Sales of raw materials to the bakery and other food industry

The external net sales of the segments almost equal the consolidated net sales, and there was only EUR 4,000 (15,000)

of net sales that had not been allocated to the segments. The unallocated net sales include Aspo’s service charges from

divested operations.

Aspo does not depend on any individual significant customers, however, in the ESL Shipping segment the purchases of

one customer in the steel industry account for slightly more than ten percent of the Group’s consolidated net sales.

Aspo Group’s net sales from continuing operations decreased by 4% and were EUR 536.4 (560.7) million. Net sales

include foreign exchange rate differences of EUR -0.2 (0.4) million.

ESL SHIPPING’S NET SALES

In 2023, ESL Shipping’s net sales decreased by 23.0% and were EUR 189.0 (245.4) million. Year 2023 was marked by a

challenging business environment. Business activity has decreased in several key customer segments, which has caused a

decline in spot volumes and spot freight in particular, and cost inflation and interest rates have been high.

TELKO’S NET SALES

Telko’s net sales grew by 1% to EUR 211.3 (209.3) million. Telko’s net sales grew moderately in the declining markets as

a result of the acquisition of Johan Steenks and especially the acquisition of Eltrex.

■

TELKO NET SALES BY BUSINESS AREA

1,000	EUR	2023	2022
Plastics business		101,438	110,082
Chemicals business		59,410	49,143
Lubricants business		50,469	50,118
Telko total		211,317	209,343

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

Aspo specifies net sales by timing of revenue recognition and by market area.

■

NET SALES BY TIMING OF RECOGNITION

1,000	EUR	2023	2022
ESL Shipping
At a point in time		196	3,523
Over time		188,833	241,893
		189,029	245,416
Telko
At a point in time		210,834	208,909
Over time		483	434
		211,317	209,343
Leipurin
At a point in time		136,056	102,589
Over time		28	3,320
		136,084	105,909
Unallocated items
Over time		4	15
		4	15
Total
At a point in time		347,086	315,021
Over time		189,348	245,662
Total		536,434	560,683

Most of the Group’s net sales, 65% (56%), are recognized as revenue at a point in time in conjunction with the delivery of

goods or services. Net sales recognized over time mainly include ESL Shipping’s sea transportation and related services

amounting to EUR 188.8 (241.9) million.

INFORMATION RELATED TO GEOGRAPHICAL REGIONS

From the beginning of year 2023, following the shift of the strategic focus towards western markets, Aspo changed the

market areas when reporting net sales. The new reportable market areas are: Finland, Scandinavian countries, Baltic coun-

tries, Other European countries and Other countries. The acquisition of Kobia in Sweden as well as Johan Steenks in Nor-

way have increased the contribution of Scandinavia to the Group’s total net sales. Net sales of the geographical regions

are presented as per customer location.

■

NET SALES BY MARKET AREA

1,000	EUR	2023	2022
ESL Shipping
Finland		99,411	121,565
Scandinavia		53,367	58,487
Baltic countries		425	2,934
Other European countries		26,118	48,186
Other countries		9,708	14,244
		189,029	245,416
Telko
Finland		48,544	53,464
Scandinavia		54,880	61,689
Baltic countries		27,718	28,230
Other European countries		46,787	39,048
Other countries		33,388	26,912
		211,317	209,343
Leipurin
Finland		49,454	49,376
Scandinavia		49,290	17,405
Baltic countries		35,711	36,621
Other European countries		1,629	2,397
Other countries			110
		136,084	105,909
Unallocated items
Finland		4	15
		4	15
Total
Finland		197,413	224,420
Scandinavia		157,537	137,581
Baltic countries		63,854	67,785
Other European countries		74,534	89,631
Other countries		43,096	41,266
Total		536,434	560,683

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

REVENUE RECOGNITION

The majority of Aspo’s net sales comes from the sale

of products, which are considered to be individual per-

formance obligations. Revenue is recognized when the

performance obligation is fulfilled by handing over the

product or service to the client. Revenue is recognized

upon delivery at a point in time once significant risks

and benefits associated with ownership have been

passed on to the buyer in accordance with the delivery

clauses.

ESL Shipping’s income is recognized over time as

the services are rendered. The revenue recognition is

based on the transportation agreements or other ser-

vice agreements. At the end of each reporting period,

revenue from ESL Shipping’s undelivered or otherwise

incomplete services, is recognized based on the num-

ber of days completed by the reporting date as a per-

centage of the estimated total duration of the service.

Apart from ESL Shipping, only a small part of the

net sales of the operating segments comprises ser-

vices sold to customers, income from which is recog-

nized at a point in time once the service has been ren-

dered, or over time if the customer simultaneously

receives benefits when the service is being rendered.

Majority of other services offered by the segments are

regarded as customer service, and they are not con-

sidered separate performance obligations, because

they are related, for example, to the development and

design of product concepts and customized solutions.

Transaction prices do not include any significant

financing components. Primarily, accounts receiva-

ble fall due within 0–60 days after the invoicing date.

Advance payments received from customers are also

used, typically in projects with a long production period,

where installments are tied to the progress of the

project. These payments are contract liabilities and

recorded in advances received.

Some contracts with customers include discounts

that are tied, for example, to product volumes pur-

chased annually by the customer in question. With

regard to these, the likely amount of a realized dis-

count is estimated on the basis of historical informa-

tion, and these estimates are used to adjust the rec-

ognized revenue. These accruals are recorded on a

monthly basis, and the estimates are updated when

more information is available. The amount of these dis-

counts is not significant within Aspo Group.

Products sold by Aspo involve warranty obliga-

tions, due to the replacement or repair of any defec-

tive products during the warranty period. These war-

ranty obligations do not differ from normal statutory

obligations, or any obligations followed in accordance

with sector-specific market practices. These obliga-

tions are assessed regularly as the likely amount based

on historical experience and recorded in operational

expenses.

Aspo has not had significant incremental costs for

obtaining contracts with customers that should be

capitalized in the balance sheet. Possible incremental

costs are expensed as incurred as their nature is such

that they would be expensed within a year.

■

OTHER OPERATING INCOME

1,000	EUR	2023	2022
Gains on sale of tangible assets		1,479	1,537
Rents and related remunerations		58	111
Gains on sale of business operations		174
Leasing agreement related compensation		49	57
Other income		1,229	671
Total		2,989	2,376

In 2023, several sale and leaseback agreements relating to properties were conducted in the Leipurin segment. These

are included in gains on sale of tangible assets. The gain from the sale of Kobia’s properties was EUR 0.5 million, and the

gain from the sale of the property in Kaunas, Lithuania, was EUR 0.9 million. More information about the sale and lease-

back transactions is provided in Note 2.5 Leases.

The gain on the sale of Leipurin’s bakery equipment business was EUR 0.2 million. More information is provided in

Note 1.2 Acquisitions and disposals.

In 2022, gains on sale of tangible assets included EUR 1.5 million in sales gains from ESL Shipping’s barge Espa.

3.2 Other operating income

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

1,000	EUR	2023	2022
Balance Jan 1		974	701
Dividends received		-539	-353
Share of profits for the the financial year		1,268	626
Carrying amount Dec 31		1,703	974

■

RELATED PARTY TRANSACTIONS WITH ASSOCIATED COMPANIES

	1,000 EUR 2023	2022
Services acquired	-3,080	-3,172
Depreciation of time-chartered vessels	-1,254	-1,509
Interest expense of time-chartered vessels	-29	-36
Leased assets, vessels	1,265	1,538
Other receivables	286	314
Lease liabilities	1,272	1,544

ESL Shipping uses the two vessels of the associated companies in its business operations and pays market rent to the

associated companies.

3.3 Associated companies

SHARE IN COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD

Aspo Group has two associated companies that were acquired in conjunction with the acquisition of AtoBatC in 2018.

These German limited partnership companies, Auriga KG and Norma KG, are domiciled in Leer. Aspo Group holds 49% of

the shares of these companies. The associated companies are included in the ESL Shipping segment.

■

ASSOCIATED COMPANIES

Yritys	Domicile	Holding %
Auriga KG	DE	49.00
Norma KG	DE	49.00

Both companies own one dry bulk cargo vessel. The income of the companies consists of rent income from the vessels

owned. The fair value of these associated companies determined in conjunction with the acquisition was EUR 0.9 million

higher than the carrying amount. The difference between the fair value and carrying amount is attributable to the vessels

owned by the companies, and it is amortized during the useful life of the vessels. The amortization amounts to approxi-

mately EUR 0.1 million per year.

ASSOCIATED COMPANIES

Investments in associates are accounted for using the

equity method of accounting. If the Group’s share of

losses in an associate exceeds the carrying amount,

losses in excess of the carrying amount will not be

recognized, unless the Group undertakes to fulfill the

obligations of the associate. Unrealized gains on tran-

sactions between the Group and its associates are eli-

minated in proportion to the Group’s ownership share.

The share of profits of associated companies pre-

sented in the consolidated statement of comprehen-

sive income is calculated from the associate’s profit for

the period, net of tax.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

MATERIALS AND SERVICES

1,000	EUR	2023	2022
Purchases during the period
ESL Shipping		-47,028	-70,147
Telko		-160,396	-175,549
Leipurin		-106,871	-91,515
Total		-314,295	-337,211
Change in inventories		-14,926	12,619
Services acquired
Telko		-4,159	-3,522
Leipurin		-5,223	-4,134
Total		-9,382	-7,656
Materials and services, total		-338,603	-332,248

Purchases included EUR -0.3 (-1.3) million in exchange rate differences.

3.4 Materials and services

■

OTHER OPERATING EXPENSES

1,000	EUR	2023	2022
ESL Shipping		-78,093	-92,126
Telko		-6,756	-8,583
Leipurin		-5,666	-7,266
Other operations		-3,645	-3,131
Total		-94,160	-111,106

Most of ESL Shipping’s other operating expenses are related to vessel operations, such as port and fairway fees, techni-

cal vessel expenses, service components of lease agreements, and the travel expenses of crew members.

Telko’s other operating expenses decreased from the previous year as a result of cost adjustment measures and

because the expenses in the comparison period included a credit loss allowance of EUR 0.5 million recognized on

accounts receivable in Ukraine.

Leipurin’s other operating expenses were exceptionally high in the comparison period because of the costs related to

the acquisition of Kobia AB EUR 1.0 million and the loss on the sale of Vulganus Oy EUR 0.4 million.

■

AUDITORS’ FEES

1,000 EUR	2023	2022
Audit firm of the parent company
Audit	358	355
Tax advice	3
Other services	70	41
Other audit firms
Audit	43	135
Tax advice	20	18
Other services	4	19
Total	498	568

The authorized public accountant firm Deloitte Oy is Aspo Plc’s auditor. Deloitte’s audit fee for 2023 was EUR 0.4 (0.4)

million, and its fees relating to other services totaled EUR 0.1 (0.0) million.

3.5 Other operating expenses

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

3.6 Employee benefit expenses and number of personnel

■

EMPLOYEE BENEFIT EXPENSES

1,000	EUR	2023	2022
Wages and salaries		-40,247	-39,597
Pension expenses, defined contribution plans		-4,075	-3,974
Share-based payments		-1,114	-1,829
Other employee benefit expenses		-3,103	-3,387
Total		-48,539	-48,787

Aspo benefits from the government subsidy for merchant vessels received from the Ministry of Transport and Communi-

cations, according to which ESL Shipping receives withholding taxes and social security expenses related to marine per-

sonnel’s pays as refunds. The amount of the subsidy for merchant vessels amounted to EUR 5.9 (5.8) million.

In Finland the statutory pension provision is arranged by insurances from pension insurance companies. In foreign

units, the pension provision is arranged in accordance with local legislation and social security regulations. The Group’s

pension schemes are defined contribution plans and the contributions are recognized as employee benefit expense in the

financial period they relate to. Information regarding the employee benefits of key management personnel is presented in

Note 5.3 Related parties and management compensation.

NUMBER OF EMPLOYEES

At the end of the financial year, the number of employees of Aspo Group was 712 (886 at the end of 2022, of which dis-

continued operations accounted for 130 employees), and the average number of personnel during the financial year was

835 (914).

■

PERSONNEL BY SEGMENT, ON AVERAGE

	2023	2022
ESL Shipping	296	298
Telko	237	146
Leipurin	167	242
Other operations	40	41
Continuing operations, total	740	727
Discontinued operation	95	187
Total	835	914

■

PERSONNEL BY SEGMENT AT YEAR-END

		2023 2022
ESL Shipping	297	295
Telko	218	246
Leipurin	157	173
Other operations	40	42
Continuing operations, total	712	756
Discontinued operation		130
Total	712	886

■

PERSONNEL BY GEOGRAPHICAL AREA AT YEAR-END

	2023	2022
Finland	408	410
Scandinavia	128	136
Baltic countries	83	100
Other European countries	60	69
Other countries	33	41
Continuing operations, total	712	756
Discontinued operation		130
Total	712	886

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

DEPRECIATION AND AMORTIZATION, TANGIBLE AND INTANGIBLE ASSETS

1,000	EUR	2023	2022
Intangible assets		-920	-460
Buildings		-455	-453
Vessels		-17,223	-16,436
Machinery and equipment		-720	-589
Other tangible assets		-17	-17
Total		-19,335	-17,955

3.7 Depreciation, amortization and impairment losses

■

DEPRECIATION AND AMORTIZATION, LEASED ASSETS

1,000	EUR	2023	2022
Intangible assets		-418	-433
Land		-99	-96
Buildings		-2,553	-2,023
Vessels		-10,021	-11,685
Machinery and equipment		-1,092	-954
Total		-14,183	-15,191

Aspo’s depreciation expenses mainly relate to vessels owned and leased by ESL Shipping. Accounting principles for

depreciation are included in Note 4.1 Tangible assets and for amortization in Note 4.2 Intangible assets. Accounting prin-

ciples for leases are described in Note 2.5 Leases.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

ASPO’S YEAR 2023

■

DEPRECIATION AND AMORTIZATION BY SEGMENT

									2023 2022
					Other	Group				Other	Group
1,000	EUR	ESL Shipping	Telko	Leipurin	operations	total	ESL Shipping	Telko	Leipurin	operations	total
Intangible assets		-144	-643	-130	-3	-920	-162	-218	-80		-460
Tangible assets		-17,260	-608	-504	-43	-18,415	-16,473	-593	-396	-33	-17,495
		-17,404	-1,251	-634	-46	-19,335	-16,635	-811	-476	-33	-17,955
Leased assets		-10,394	-1,460	-1,581	-748	-14,183	-12,085	-1,352	-1,070	-684	-15,191

■

FINANCIAL INCOME AND EXPENSES

1,000	EUR	2023	2022
Dividend income from other non-current financial assets		3
Interest income from loans and other receivables		684	240
Foreign exchange gains		913	264
Financial income		1,600	504
Interest expenses on leases		-631	-423
Interest and other financial expenses		-8,753	-3,815
Foreign exchange losses		-1,471	-2,144
Financial expenses		-10,855	-6,382
Financial income and expenses		-9,255	-5,878

Net financial expenses totaled EUR -9.3 (-5.9) million. The average interest rate of interest-bearing liabilities, excluding

lease liabilities, was 5.3% (3.3%), causing Aspo’s interest expenses to grow.

3.8 Financial income and expenses

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100

ASPO’S YEAR 2023

■

RECONCILIATION OF THE TAX EXPENSE IN THE STATEMENT OF COMPREHENSIVE INCOME

AND TAXES CALCULATED BY USING THE PARENT COMPANY’S TAX RATE 20%

1,000	EUR	2023	2022
Profit before taxes		16,616	32,520
Taxes calculated using the parent company's tax rate		-3,323	-6,504
Impact of foreign subsidiaries' tax rates		326	264
Impact of tonnage taxation		2,650	8,458
Losses for which no deferred tax asset was recognized		-1,717	-2,477
Utilization of previously unrecognized tax losses		464	92
Deferred tax liability on retained earnings of foreign subsidiaries		24	27
Taxes from previous financial years		-433	1
Withholding taxes		-56	-199
Timing differences, tax-free and non-deductible items		1,704	-1,382
Taxes in the statement of comprehensive income		-361	-1,720
Effective tax rate		2%	5%

In Finland and Sweden, a limited liability company which is obliged to pay taxes and is practicing international marine

logistics has the opportunity to apply for taxation based on vessel tonnage during a tonnage taxation period, instead of

taxation based on the profits of the shipping business. ESL Shipping Ltd.’s and AtoBatC Shipping AB’s taxation is based

on the tonnage taxation regime. The inclusion within the scope of tonnage taxation significantly reduces the Group’s

effective tax rate.

Aspo Group’s effective tax rate was 2% (5%). In the financial year, the tax rate decreased primarily because the gains

from Kobia’s sale and leaseback transactions were mainly tax-free.

■

TAXES IN THE STATEMENT OF COMPREHENSIVE INCOME

1,000	EUR	2023	2022
Taxes for the period		-2,246	-2,219
Change in deferred tax assets and liabilities		2,318	498
Taxes from previous financial years		-433	1
Total		-361	-1,720

■

INCOME TAX ON OTHER COMPREHENSIVE INCOME

1,000	EUR	2023	2022
Cash flow hedges		12

The Group’s income taxes include taxes based on the Group companies’ profits for the financial year, adjustment of taxes

from previous financial years and changes in deferred taxes. Income taxes are recognized in accordance with the tax rate

valid in each country. Regarding the deferred taxes, see Note 4.8. Deferred taxes. The tax calculated on the fair value of

the forward contract in hedge accounting has been netted from the fair value of the forward contract and recognized in

equity.

3.9 Income taxes

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101

ASPO’S YEAR 2023

■

INVESTED CAPITAL

1,000	EUR	Note	2023	2022
Intangible assets		4.2	51,710	46,783
Tangible assets		4.1	168,972	178,454
Leased assets		2.5	22,516	15,871
Inventories		4.4	59,242	69,900
Accounts receivable and other receivables		4.5	73,705	68,995
Other assets			2,340	1,436
Cash and cash equivalents		2.2	30,683	21,727
Accounts payable and other liabilities		4.6	-65,667	-71,105
Other liabilities			-2,148	-1,854
Deferred tax assets and liabilities, net		4.8	-4,967	-6,616
Assets and liabilities classified as held for sale, net				9,345
Total			336,386	332,936

Aspo’s invested capital includes the Group’s assets less liabilities, excluding interest-bearing liabilities. Invested capi-

tal describes where equity and interest-bearing liabilities are tied, which is why it provides interesting information and

is representative of Aspo’s operations. The most significant component of invested capital are the vessels owned and

leased by ESL Shipping, totaling EUR 152.1 million. Goodwill and other intangible assets account for EUR 51.7 million

of invested capital. Goodwill and other intangible assets, such as customer relationships and brands are generated on

Aspo’s balance sheet, when it develops the Group structure through acquisitions according to its strategy. Furthermore,

working capital makes up EUR 69.3 million, and cash and cash equivalents EUR 30.7 million of invested capital.

■

INVESTMENTS BY SEGMENT

1,000	EUR	2023	2022
ESL Shipping		20,723	16,460
Telko		892	1,124
Leipurin		89	208
Other operations		81	2
Continuing operations, total		21,785	17,794
Discontinued operation		40	24
Total		21,825	17,818

Investments consist of additions in tangible assets and intangible assets that will be used during more than one financial

year, excluding additions through acquisitions. The investments of EUR 21.8 (17.8) million mainly consisted of ESL Ship-

ping segment’s Green Coaster advance payments. Additions of leased assets are disclosed in Note 2.5 Leases.

GREEN COASTER INVESTMENT COMMITMENT

AtoBatC Shipping AB, reported in the ESL Shipping segment, is building a series of six highly energy-efficient electric

hybrid vessels. The new vessels of ice class 1A will be top of the line in terms of their cargo capacity, technology and

innovation. The total value of the six-vessel investment is approximately EUR 70 million, and its cash flows will be divided

mainly for the years 2023 and 2024. The new vessels are built at the Chowgule and Company Private Limited shipyard

in India, and the first vessel, Electramar, was delivered in December 2023. The Green Coaster investments totaled EUR

14.2 million in 2023, including advance payments for Electramar and the Green Coaster vessels under construction.

INVESTED CAPITAL

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ASPO’S YEAR 2023

■

NON-CURRENT ASSETS BY MARKET AREA

1,000	EUR	2023	2022
Finland		192,710	197,750
Scandinavia		51,673	43,391
Baltic countries		269	238
Other European countries		255	344
Other countries		223	566
Total		245,130	242,289

The non-current assets include all other assets except for deferred tax assets. Assets of geographical regions are pre-

sented as per location of the assets.

WORKING CAPITAL

Working capital, as defined by Aspo, includes inventories, accounts receivable, accounts payable and advances received.

Aspo emphasizes the efficiency of working capital and aims to permanently decrease its working capital.

■

WORKING CAPITAL

1,000	EUR	Note	2023	2022
Inventories		4.4	59,242	69,900
Accounts receivable		4.5	48,784	47,279
Accounts payable		4.6	-37,234	-38,805
Advances received		4.6	-1,531	-1,481
Total			69,261	76,893

The Group’s working capital decreased by EUR 7.6 (0.7) million. The cash flow impact of change in working capital was

EUR 4.4 (-6.7) million. The positive cash impact was caused by a decrease in inventories driven by a decline in market

prices and proactive operational management actions, especially in the Telko segment.

In 2022, it was confirmed that ESL Shipping will establish a Green Coaster pool. As a result, AtoBatC Shipping AB has

ordered six next-generation electric hybrid vessels from the Chowgule & Company Private Limited in India, in addition to

the six vessels mentioned above. These vessels will be sold to a company formed by a group of investors. Every other

vessel by Chowgule & Company Private Limited will be produced for AtoBatC Shipping AB, and every other will be sold to

the Green Coaster pool. Advance payments for the vessels to be sold further have been recognized in inventories. At the

end of the financial year, inventories include EUR 15.1 (10.2) million of Green Coaster advance payments.

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ASPO’S YEAR 2023

■

TANGIBLE ASSETS 2023

							Work in
				Machinery		Other	progress
				and		tangible	and advance
1,000	EUR	Land	Buildings	equipment	Vessels	assets	payments	Total
Acquisition cost, Jan 1		4,945	16,999	16,207	309,228	756	10,669	358,804
Translation differences		2	-166	-305				-469
Additions, business combinations				27				27
Additions			2	415	2,044		18,485	20,946
Decreases		-4,945	-10,189	-3,063	-4,672	-5		-22,874
Transfers between classes			97	23	3,457		-3,577	0
Acquisition cost, Dec 31		2	6,743	13,304	310,057	751	25,577	356,434
Accumulated depreciation, Jan 1			-8,514	-13,878	-157,494	-464		-180,350
Translation differences			112	237				349
Accumulated depreciation, business combinations				-8				-8
Accumulated depreciation of decreases			3,621	2,707	4,672	1		11,001
Transfers between classes				-1				-1
Depreciation for the period, continuing operations			-455	-720	-17,223	-17		-18,415
Depreciation for the period, discontinued operations			-9	-29				-38
Accumulated depreciation, Dec 31			-5,245	-11,692	-170,045	-480		-187,462
Carrying amount, Dec 31		2	1,498	1,612	140,012	271	25,577	168,972

The decreases in land and buildings were mainly caused by the sale and leaseback transactions carried out in the Leipurin segment, which are explained in more detail in Note 2.5 Leases.

The share of the sold Telko OOO of the decreases of machinery and equipment was EUR 1.0 million, and the accumulated depreciation of the decreases was EUR 0.9 million.

4.1 Tangible assets

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ASPO’S YEAR 2023

■

TANGIBLE ASSETS 2022

							Work in
				Machinery		Other	progress
				and		tangible	and advance
1,000	EUR	Land	Buildings	equipment	Vessels	assets	payments	Total
Acquisition cost, Jan 1		54	6,578	7,739	305,256	726	6,787	327,140
Translation differences		-228	-477	-387				-1,092
Additions, business combinations		5,119	10,904	8,210				24,233
Additions			13	828	4,590	30	11,368	16,829
Assets classified as held for sale			-19	-20				-39
Decreases			0	-289	-5,783	0	-2,195	-8,267
Transfers between classes				126	5,165		-5,291	0
Acquisition cost, Dec 31		4,945	16,999	16,207	309,228	756	10,669	358,804
Accumulated depreciation, Jan 1			-4,955	-6,109	-146,743	-447		-158,254
Translation differences			147	336				483
Accumulated depreciation, business combinations			-3,224	-7,282				-10,506
Accumulated depreciation, assets held for sale			19	20				39
Accumulated depreciation of decreases			0	235	5,685			5,920
Depreciation and impairment losses for the period			-501	-1,078	-16,436	-17		-18,032
Accumulated depreciation, Dec 31			-8,514	-13,878	-157,494	-464		-180,350
Carrying amount, Dec 31		4,945	8,485	2,329	151,734	292	10,669	178,454

An impairment loss of EUR 0.3 million was recognized on the tangible assets of the eastern operations held for sale during the 2022 financial year.

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

Estimates of the useful life and residual value, and

the selection of depreciation method require manage-

ment’s significant judgement and are subject to a con-

stant review. Vessels comprise the most significant

fixed asset item on the balance sheet, and their depre-

ciation periods range from 17 to 30 years, based on

the useful life of each vessel.

Estimates are also made in conjunction with busi-

ness combinations when determining the fair values

and remaining useful lives of the acquired tangible

assets.

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105

ASPO’S YEAR 2023

TANGIBLE ASSETS

Tangible assets are recognized at cost net of cumula-

tive depreciation less any impairment losses. For new

construction of vessels, financial expenses arising dur-

ing the construction are capitalized as part of the cost

and depreciated over the useful life of the asset. The

depreciation period of dockages is based on an esti-

mate of the dockage interval.

Depreciation is calculated on a straight-line basis

over the estimated useful life as follows:

• Vessels 17–30 years

• Pushers 18 years

• Dockings 2–3 years

• Buildings and structures 15–40 years

• Machinery and equipment 3–10 years

• Piping 5–20 years

• Refurbishment costs from premises 5–10 years

• Other tangible assets 3–40 years

Land is not depreciated, but the carrying amounts are

reviewed annually.

Gains and losses arising from the discontinued use

and disposal of tangible assets are included in other

operating income and expenses.

The carrying amounts of individual tangible and

intangible assets are reviewed at the end of each

reporting period to identify events or circumstances

that could indicate their impairment. An asset’s carry-

ing amount is written down immediately to its recover-

able amount if the asset’s carrying amount is greater

than its estimated recoverable amount. The impair-

ment loss is recognized in profit and loss. After the rec-

ognition of an impairment loss, the asset’s useful life

is reassessed. A previously recognized impairment loss

is reversed if the estimates used in the determination

of the recoverable amount change. Carrying amount

increased due to the reversal of an impairment loss

may not exceed the carrying amount that would have

been defined for the asset if no impairment loss had

been recognized in previous years.

SUBSIDIES

Government subsidies granted to compensate for

expenses incurred are recognized in the statement

of comprehensive income in the periods in which

the expenses related to the object of the subsidy

are expensed. Subsidies received are presented as

net deductions from generated expenses. Subsidies

related to the acquisition of tangible assets have been

recognized as adjustments to their cost. Subsidies are

recognized as income during the period of use of the

asset in the form of smaller depreciation expense.

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ASPO’S YEAR 2023

■

INTANGIBLE ASSETS

				2023
				Other
			Intangible	intangible	Advance
1,000	EUR	Goodwill	rights	assets	payments	Total
Acquisition cost, Jan 1		47,392	7,123	14,567	808	69,890
Translation differences		-13	10	232	851	1,080
Additions, business combinations		1,745	141	3,103		4,989
Additions			28			28
Decreases		-1,519	-472			-1,991
Transfers between classes			635	12	-647	0
Acquisition cost, Dec 31		47,605	7,465	17,914	1,012	73,996
Accumulated amortization and impairment, Jan 1		-10,524	-1,650	-10,933		-23,107
Translation differences		5	-6	-98		-99
Accumulated amortization and impairment of decreases		1,368	473			1,841
Amortization for the period, continuing operations			-231	-689		-920
Amortization for the period, discontinued operations			-1			-1
Accumulated amortization and impairment, Dec 31		-9,151	-1,415	-11,720		-22,286
Carrying amount, Dec 31		38,454	6,050	6,194	1,012	51,710

The share of the goodwill decreases of the sold Telko OOO was EUR 0.4 million, and the goodwill reduction resulting

from the deconsolidation of Leipuri’s eastern companies was EUR 1.0 million. Full impairment loss had already been rec-

ognized on these goodwill balances in 2022.

				2022
				Other
			Intangible	intangible	Advance
1,000	EUR	Goodwill	rights	assets	payments	Total
Acquisition cost, Jan 1		51,273	7,147	16,483		74,903
Translation differences		7,947	178	-215		7,910
Additions, business combinations		1,412		1,554		2,966
Additions			19	191	808	1,018
Assets classified as held for sale			-3			-3
Decreases		-13,240	-218	-3,446		-16,904
Acquisition cost, Dec 31		47,392	7,123	14,567	808	69,890
Accumulated amortization and impairment, Jan 1		-14,149	-1,623	-13,286		-29,058
Translation differences		-6,992	-148	103		-7,037
Accumulated amortization, business combinations				-756		-756
Accumulated amortization, assets held for sale			3			3
Accumulated amortization of decreases		11,985	183	3,405		15,573
Amortization and impairment for the period		-1,368	-65	-399		-1,832
Accumulated amortization and impairment, Dec 31		-10,524	-1,650	-10,933		-23,107
Carrying amount, Dec 31		36,868	5,473	3,634	808	46,783

An impairment loss of EUR 1.4 million was recognized on the intangible assets of the eastern operations held for sale

during the 2022 financial year, which was mainly allocated to consolidated goodwill.

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

Estimates of the useful life and residual value, and the

selection of depreciation method require the manage-

ment’s significant judgement and are subject to a con-

stant review.

Estimates are also made in conjunction with busi-

ness combinations when determining the fair values

and remaining useful lives of the acquired intangible

assets. The value on the acquisition date is determined

using discounted cash flows.

The most significant intangible asset is goodwill. Intangible rights primarily consist of brands. Other intangible assets

include software and associated licenses, as well as principal and customer relationships acquired in business combina-

tions.

4.2 Intangible assets

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ASPO’S YEAR 2023

GOODWILL AND BRANDS

Goodwill and brands with indefinite useful life arising

from business combinations are not amortized, instead

they are tested for impairment at least annually by

using value in use calculations. Cash flow-based value

in use is determined by calculating the present value of

forecast discounted cash flows. An indication of possi-

ble impairment may trigger the impairment testing also

with shorter time frame.

An impairment loss is recognized in profit and loss

if the carrying amount of the asset is higher than its

recoverable amount. An impairment loss recognized for

assets other than goodwill is reversed if the estimates

used in the determination of the recoverable amount

change to a substantial extent. Carrying amount

increased due to the reversal of an impairment loss

may not exceed the carrying amount that would have

been determined for the asset if no impairment loss

had been recognized in previous years. An impairment

loss recognized from goodwill is not reversed under

any circumstances.

Management reviews the measurement of brands

annually by using a segment-specific value in use calcu-

lation of which more information can be found in Note

4.3 Impairment test of goodwill and brands.

OTHER INTANGIBLE ASSETS

Other intangible assets are measured at cost and

amortized on a straight-line basis over their useful

lives. The amortization periods are:

• Software and associated licenses 3–5 years

• Principal relationships and technology

acquired through business combinations 10 years

• Customer relationships acquired through

business combinations 15 years

Cloud services are recognized as an expense in the

period during which the expense is incurred because

they are not controlled by the company. The account-

ing principles relating to the recognition of impairment

losses are included in Note 4.1 Tangible assets.

RESEARCH AND DEVELOPMENT COSTS

Aspo Group’s R&D focuses, according to the nature

of each segment, on developing the operations, pro-

cedures, and products as part of customer-specific

operations, which means that development inputs are

included without specification in operating expenses,

and they do not meet the recognition criteria for intan-

gible assets.

Goodwill is allocated to the Group’s cash-generating units on the operating segment level. Goodwill is allocated to the

cash-generating units as follows:

■

GOODWILL BY SEGMENT

1,000 EUR	2023	2022
ESL Shipping	6,337	6,337
Telko	10,790	9,058
Leipurin	21,327	21,473
Total	38,454	36,868

■

BRANDS BY SEGMENT

1,000	EUR	2023	2022
Telko		2,155	2,155
Leipurin		3,148	3,148
Total		5,303	5,303

The useful lives of brands included in Telko and Leipurin segments have been estimated to be indefinite. The strong image

and history of these brands support management’s view that these brands will affect cash flow generation over an inde-

finable period. The brands have been tested for impairment together with goodwill.

4.3 Impairment test of goodwill and brands

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ASPO’S YEAR 2023

IMPAIRMENT TESTING

The recoverable amount of the cash-generating units is determined by a value in use calculation. Cash flow-based value in

use is determined by calculating the present value of forecast discounted cash flows. The cash flows include for example

estimates of future sales, profitability and maintenance investments. The cash flow projections are based on the budget

for 2024 and the financial plans for 2025-2027 approved by the Board of Directors. In testing, the cash flow projections

are prepared for a five-year period, with the final year being the terminal year. The terminal value has been calculated by

using a growth assumption of 2% (2%).

When estimating net sales, the assumption is that current operations can be maintained, and net sales will grow in a

controlled manner at the rate estimated in financial plans. The sales margin is estimated to follow net sales growth. It is

estimated that costs will increase slowly as a result of continuous cost management. Fixed costs are expected to grow

at the rate of inflation.

The discount rate is determined for each segment by using the weighted average cost of capital (WACC) that depicts

the overall costs of equity and liabilities, considering the particular risks related to the assets and location of operations.

The WACC is on the same level as in 2022 in the Leipurin segment. In the Telko and ESL Shipping segments, the WACC

is higher than in the comparison period. The most significant change is in the Telko segment, where the change has been

affected by the increase in beta, and especially by the growth in the proportion of net sales in Ukraine, Poland and China

and the impact of the weight of the WACCs in these countries on the overall WACC level in Telko. Ukraine’s credit rating

has decreased during the year, so its market risk premium has also increased significantly.

■

POST-TAX WACC BY CASH GENERATING UNIT

	2023	2022
ESL Shipping	8.57%	8.13%
Telko	12.34%	10.93%
Leipurin	9.28%	9.34%

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

The carrying amount of goodwill and brands with an

indefinite useful life are tested for impairment by using

value in use calculations, which include estimates. Dif-

ferent assumptions in the value in use calculations

could have a significant impact on the amounts of

goodwill and brands reported in the consolidated finan-

cial statements.

Uncertainties in economic development, changes

in exchange rates and strong fluctuations in the oper-

ating environment make it difficult to prepare the

estimates used in the impairment testing, especially

regarding future cash flows and profit levels.

According to management’s view the estimates of

future cash flows and the tying-up rate of capital used

in testing are likely. The assumptions used in the cal-

culations may, however, change along with changes

in financial and business conditions. Therefore, future

cash flows may differ from the estimated future dis-

counted cash flows, which may lead to the recognition

of impairment losses in coming periods.

RESULTS OF THE IMPAIRMENT TESTS AND SENSITIVITY ANALYSIS

Continuing operations

The Leipurin, Telko and ESL Shipping segments underwent the annual goodwill impairment testing in December.

The recoverable amount indicated by the impairment tests conducted for Telko and ESL Shipping clearly exceeded the

carrying amount of the cash generating unit for each operating segment, and the carrying amounts are therefore consid-

ered to be justified.

The impairment test conducted for the Leipurin also showed that the recoverable amount exceeded the carry-

ing amount of the cash generating unit. In the Leipurin segment, a decrease of one percentage point in the estimated

EBITDA would cause a need to recognize an impairment loss.

Discontinued operation and eastern operations held for sale in 2022

In 2022, an impairment loss of EUR 1.3 million was recognized on the goodwill of the Kauko operating segment as

based on the purchase offers received, it became apparent that Kauko’s fair value was lower than its carrying amount.

The impairment loss of Kauko operating segment is presented in the consolidated income statement as part of the profit

from discontinued operations.

Telko’s and Leipuri’s eastern business operations were classified as held for sale at the end of 2022, and in connection

with the classification as held for sale, the net assets of the business operations were measured at fair value less cost to

sell, being lower than the carrying amount. Also, part of Telko and Leipurin segment’s goodwill was allocated to the east-

ern operations held for sale in proportion to fair values. The impairment losses of EUR 1.4 million are presented as part of

the profit from discontinued operations. More information about result of the discontinued operations is available in Note

1.3 Discontinued operations.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

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ASPO’S YEAR 2023

■

INVENTORIES

1,000 EUR	2023	2022
Materials and supplies	6,174	5,832
Finished goods	37,522	53,609
Other inventories	15,546	10,459
Total	59,242	69,900

■

INVENTORIES BY SEGMENT

1,000	EUR	2023	2022
ESL Shipping		19,583	15,116
Telko		25,222	38,849
Leipurin		14,437	15,787
Other operations			148
Total		59,242	69,900

ESL Shipping’s inventories include the fuels of vessels and advance payments for the Green Coaster vessels to be sold

to the members of the vessel pool. Leipurin’s inventories consist of raw materials for the bakery and food industries and,

to a lesser extent, of various packaging and other supplies. Telko has plastic and chemical raw materials and lubricants in

stock.

In 2022, ESL Shipping established a Green Coaster pool. As a result, AtoBatC Shipping AB has ordered twelve ves-

sels from the Chowgule & Company Private Limited shipyard in India. Every other vessel in the series of twelve next-gen-

eration electric hybrid vessels will be sold to a company formed by a group of investors. Advance payments for the

Green Coaster vessels to be sold further have been recognized in inventories. At the end of the financial year, inventories

included EUR 15.1 (10.2) million in advance payments for the Green Coaster vessels.

An expense of EUR -1.0 (-0.3) million was recognized in the result of the continuing operations during the financial year

for a write down of inventories to net realizable value.

4.4 Inventories

INVENTORIES

Inventories are measured at cost or at net realizable

value, if lower. The cost is determined using the FIFO

(first-in, first-out) principle. Net realizable value is the

actual sales price in the ordinary course of business

less the costs of completion and sale.

In normal operating conditions Aspo Group recog-

nizes a 100% allowance for slow-moving inventories

of more than 12 months. Exception is made for such

inventory, which relates to a binding sales agreement.

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

For inventories the estimation uncertainty relates

mainly to the recoverability and measurement of

slow-moving inventories. Uncertainties over demand

for products increase as products become older, and

some products also become outdated. According to

the management’s estimate, the value of inventories

of more than one year should be set to zero.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

110

ASPO’S YEAR 2023

4.5 Accounts receivable and other receivables

■

ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

1,000	EUR	2023	2022
Accounts receivable		48,784	47,279
Refund from the Ministry of Transport and Communications		5,887	6,131
Advance payments		4,123	4,582
VAT receivable		1,691	1,266
Loan receivables		1,336	448
Other deferred receivables		11,884	9,289
Total		73,705	68,995

■

AGEING ANALYSIS OF ACCOUNTS RECEIVABLE

2023		Accounts	Allowance for	Carrying
1,000	EUR	receivable	credit losses	amount
Not matured		45,431	-31	45,400
Matured 1–30 days ago		3,104	-9	3,095
Matured 31–60 days ago		123	-1	122
Matured 61–90 days ago		70		70
Matured 91–180 days ago		112	-30	82
Matured more than 181 days ago		1,180	-1,165	15
Total		50,020	-1,236	48,784
2022		Accounts	Allowance for	Carrying
1,000	EUR	receivable	credit losses	amount
Not matured		41,636	-32	41,604
Matured 1–30 days ago		5,064	-20	5,044
Matured 31–60 days ago		479	-1	478
Matured 61–90 days ago		39	-1	38
Matured 91–180 days ago		50	-9	41
Matured more than 181 days ago		1,804	-1,730	74
Total		49,072	-1,793	47,279

According to management’s judgement accounts receivable do not involve significant credit loss risks. During the year, a

total of EUR 0.5 (0.7) million was recognized as credit losses from accounts receivable. The amount includes the change

in the expected credit loss allowance.

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

The recoverability of accounts receivable always

involves the risk that the counterparty becomes insol-

vent and is unable to pay its debts. See also “Credit

and counterparty risks” in Note 5.1 Financial risks and

the management of financial risks.

Businesses make sales- and customer-specific

assessment based on the nature of sales and the

credit rating of customers, as well as their service his-

tory, to define to whom products and services are sold,

and which payment terms are used. If necessary, an

advance payment is used as the payment term. Allow-

ance for expected credit losses is recognized proac-

tively based on each segment’s credit loss history.

Considerable uncertainties are associated with the sol-

vency of Ukrainian customers due the war in Ukraine.

Consequently advance payment is used as the pay-

ment term for Ukrainian customers.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

111

ASPO’S YEAR 2023

■

ACCOUNTS PAYABLE AND OTHER LIABILITIES

1,000	EUR	2023	2022
Accounts payable		37,234	38,805
Advances received		1,531	1,481
Salaries and social security contributions		8,384	11,203
Employer contributions		1,436	1,415
Accrued interest		2,733	2,181
VAT liability		3,659	3,612
Other current liabilities		1,842	550
Other current deferred liabilities		8,848	11,858
Total		65,667	71,105

4.6 Accounts payable and other liabilities

ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

Accounts receivable and other receivables are meas-

ured at amortized cost. When measuring accounts

receivable, Aspo applies the simplified segment-specific

model to determine expected credit losses, as permit-

ted by IFRS 9 standard. The Group estimates expected

credit losses using an experience-based matrix which

takes into account the age structure of receivables,

each segment’s credit loss history from previous years,

the market area and the customer base.

Accounts receivable and contract assets are

derecognized as final credit losses when it is deter-

mined that it is reasonably certain that no payment will

be obtained due to for example the bankruptcy of the

client. Credit losses are included in operating profit on

net basis. If subsequently payments relating to final

credit losses are received, they are credited from the

same profit and loss account.

■

NON-CURRENT PROVISIONS

1,000 EUR

Tax

		Restoration	Pension
	provisions	provisions	provisions	Total
December 31, 2022	19	466	101	586
Change in provisions	9			9
December 31, 2023	28	466	101	595

■

CURRENT PROVISIONS

1,000 EUR	Other provisions
December 31, 2022	58
Change in provisions	99
December 31, 2023	157

Non-current provisions include a restoration provision relating to the Rauma terminal area and are reported in the Telko

segment. Rauma Terminal Services Oy, a company belonging to Aspo Group, is obligated to restore the land areas leased

from the Town of Rauma, so that they are in the same condition as before the lease. The obligation is expected to be

realized in 2030, when the land lease agreement ends. The pension provisions relate to direct pension liabilities granted

by the Group. The current other provisions relate mainly to the discontinuation of Telko’s operations in Azerbaijan and to

Kobia AB’s onerous sales agreement.

4.7 Provisions

PROVISIONS

A provision is recognized in the balance sheet if the

Group has, as a result of a past event, a present legal

or constructive obligation that will probably have to be

settled, and the amount of the obligation can be relia-

bly estimated. The amount recognized as a provision

is the present value of the costs that are expected to

occur when settling the obligation.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

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ASPO’S YEAR 2023

■

DEFERRED TAX ASSETS

1,000	EUR	2023	2022
Leases		195	74
Employee benefits		7	24
Allowance for credit losses		46	102
Other provisions		202	93
Losses carried forward
Other temporary differences		91	37
Total		541	330

■

CHANGES IN DEFERRED TAX ASSETS

1,000	EUR	2023	2022
Deferred tax assets, Jan 1		330	645
Items recognized in the statement of comprehensive income
Leases		121	-13
Employee benefits		-17	3
Allowance for credit losses		-56	-6
Other provisions		109	-7
Losses carried forward			-73
Other temporary differences		54	55
Impairment, operations in east			-256
Divestments			-18
Deferred tax assets, Dec 31		541	330

4.8 Deferred taxes

During the 2023 financial year, the most significant change in deferred tax assets related to provisions and lease agree-

ments. In 2022, the most significant change related to impairment losses of deferred tax assets recognized in conjunc-

tion with the classification of the eastern operations as held for sale.

No deferred tax assets have been recognized on the taxable losses carried forward in Aspo Group because there is

no assurance that the companies that accumulated the losses will be able to utilize them before they expire. The Finnish

companies’ taxable losses were EUR 54.8 (52.7) million and foreign companies taxable losses amounted to EUR 2.3 (0.0)

million. The loss expiry period varies from one country to another, while some losses do not expire within the scope of

the current legislation. In Finland, the period of utilization of tax losses is ten years. In Aspo Group, tax losses expire and

emerge each year.

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113

ASPO’S YEAR 2023

■

DEFERRED TAX LIABILITIES

1,000	EUR	2023	2022
Depreciation in excess of plan and Swedish tax reserves		1,319	1,434
Tangible and intangible assets		3,065	4,417
Retained earnings of foreign subsidiaries		1,046	1,069
Other temporary differences		78	26
Total		5,508	6,946

■

CHANGES IN DEFERRED TAX LIABILITIES

1,000	EUR	2023	2022
Deferred tax liabilities, Jan 1		6,946	5,241
Items recognized in the statement of comprehensive income
Depreciation in excess of plan and Swedish tax reserves		-115	-122
Tangible and intangible assets		-1,940	-390
Retained earnings of foreign subsidiaries		-23	27
Other temporary differences		52	661
Acquisitions		588	2,202
Transfer to liabilities held for sale, operations in east			-673
Deferred tax liabilities, Dec 31		5,508	6,946

During the financial year, a deferred tax liability of EUR 1.0 (1.1) million in total was recognized based on the retained

earnings of the Estonian subsidiaries of Telko and Leipurin. A deferred tax liability of EUR 0.8 (1.8) million has not been

recognized based on the retained earnings of other foreign subsidiaries because the funds are permanently invested in

the countries in question.

Aspo Group has adopted the amendment to IAS 12 related to the recognition of deferred taxes on assets and liabil-

ities arising from the same transaction. The amendment has an impact on the application of IFRS 16 Leases when rec-

ognizing a lease liability and the leased asset at the start of the lease. The amendment entered into force on January

1, 2023, and has been applied retrospectively. Deferred tax assets and liabilities arising from leases are presented on a

gross basis in the next table.

DEFERRED TAXES

Deferred tax assets and liabilities are calculated from

temporary differences between accounting and taxa-

tion by applying the applicable tax rate at the report-

ing date or by using a future substantively enacted tax

rate. Temporary differences arise e.g., from provisions,

differences in depreciation and from taxable losses car-

ried forward. Deferred tax assets are recognized from

taxable losses carried forward and other temporary dif-

ferences only to the extent that it is likely that they can

be utilized in the future.

ACCOUNTING ESTIMATES AND

MANAGEMENT JUDGEMENT

The recognition of deferred tax assets involves esti-

mates because their realization during upcoming years

requires taxable income, against which the benefit can

be used. On each closing date, the Group estimates

whether taxable income against which deferred tax

assets can be used will be accumulated in the future

at a sufficient probability. The estimate is based on

a long-term plan and profit forecast prepared by the

management. The realization of the tax benefit and the

recognition of deferred tax assets are affected by the

future profitability of the Group’s business operations

and any changes in the tax legislation. Deferred tax

assets have not been recognized for tax losses, the

use of which involves uncertainties.

Deferred tax liabilities have not been recognized

from the undistributed profits of the Finnish Group

companies, because this profit can be distributed with-

out any tax consequences. Furthermore, the Group

does not recognize deferred tax liabilities from the

undistributed profit of its foreign subsidiaries, insofar

as it is not probable that the temporary difference is

dissolved in the foreseeable future.

■

DEFERRED TAXES ON LEASE AGREEMENTS

1,000	EUR	2023	2022
Leased assets		2,143	1,515
Lease liabilities		-1,948	-1,441
Total		195	74

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114

ASPO’S YEAR 2023

FINANCIAL RISK MANAGEMENT PRINCIPLES AND ORGANIZATION

The purpose of Aspo Group’s financial risk management is to protect the operating margin and cash flows, and effectively

manage fund-raising and liquidity. The Group aims to develop the predictability of the results, future cash flows, and capi-

tal structure, and continuously adapt its operations to changes in the operating environment.

Financial risk management is based on the treasury policy approved by the Board of Directors, which defines the main

principles for financial risk management in Aspo Group. The treasury policy defines general risk management objectives,

the relationship between the Group’s parent company and business units, the division of responsibility, and risk manage-

ment-related reporting requirements. The treasury policy also defines the operating principles related to the management

of currency risks, interest rate risks, as well as liquidity and refinancing risks.

Together with the Chief Financial Officer, Aspo’s CEO is responsible for the implementation of financial risk manage-

ment in accordance with the treasury policy approved by the Board of Directors. The business units are responsible

for recognizing their own financial risks and managing them together with the parent company in accordance with the

Group’s treasury policy and instructions provided by the parent company.

Information about liquidity and refinancing risk can be found in Note 2.4 Maturity.

CAPITAL MANAGEMENT

Capital is managed by monitoring the key figures for indebtedness and solvency (gearing and equity ratio) and by adjust-

ing the components of capital in a way that targets relating to the key figures are met. In addition to Aspo’s own targets,

certain loans include external requirements for the levels of capital. They are monitored and reported to Aspo’s manage-

ment, and to the providers of the loans concerned. The solvency of the subsidiaries is monitored, and capital is trans-

ferred within the Group as permitted by regulations.

Covenants

Under the terms of its financial facilities, the group is required to comply with the following financial covenants at the end

of each annual and interim reporting period:

• Term loans total of the carrying amounts of EUR 146.6 million: the Equity Ratio must exceed 25 % and out of these

loans a total of the carrying amount of EUR 92.6 million: the Ratio of Net Debt to EBITDA must not be more than 4.5.

• A bond with a carrying amount of EUR 15 million: the Equity Ratio must exceed 25 %

Similar covenants may be used for committed but unused financial facilities for Aspo.

If Aspo or its subsidiaries has given pledges or mortgages as guarantee of any loan, the Loan to Value Ratio must

exceed the defined ratio as agreed.

The group has complied with these covenants throughout the reporting period. As at 31 December 2023, the Equity

Ratio was 34 % (35 %) and Net Debt to EBITDA Ratio was 3.8 (2.4). There are no indications that Aspo may have difficul-

ties complying with the covenants when they will be next tested as at the 31 March 2024 interim reporting date.

MARKET RISKS

Currency risk

Aspo Group has businesses in 13 countries, and the operations take place in many different currencies. The Group’s cur-

rency risk consists of foreign currency-denominated internal and external receivables and liabilities, estimated currency

flows, derivative contracts and translation risks related to results and capital. The target of Aspo Group is to decrease the

uncertainty related to fluctuations in results, cash flows and balance sheet items.

At the business unit level, currency risk mainly occurs when a unit sells products and services with its domestic cur-

rency, but the costs are realized in a foreign currency. In Aspo Group, a significant part of the net sales of Telko and Leipu-

rin have come from Scandinavia and especially from Sweden. Aspo’s most significant translation risk concerns the Swed-

ish krona (SEK). If the krona weakens against the euro, the net sales of the Telko and Leipurin segments generated in

Sweden decrease. If the krona strengthens, net sales of Aspo Group increases. The Swedish krona weakened against the

euro in 2023.

At the reporting date, Aspo Group’s currency position mainly consisted of internal and external interest-free and inter-

est-bearing receivables and liabilities denominated in foreign currencies. Interest-bearing external liabilities are mainly

denominated in euro.

■

LOANS AND OVERDRAFT FACILITIES IN USE BY CURRENCY

1,000	EUR	2023	2022
EUR		171,531	171,179
USD		902	947
PLN		6
Total		172,439	172,126

5.1 Financial risks and the management of financial risks

OTHER NOTES

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ASPO’S YEAR 2023

■

ACCOUNTS RECEIVABLE BY CURRENCY

1,000	EUR	2023	2022
EUR		36,837	34,660
SEK		5,438	5,304
DKK		1,596	2,532
PLN		541	471
UAH		438	140
USD		1,105	1,965
Other		2,829	2,207
Total		48,784	47,279

■

ACCOUNTS PAYABLE AND ADVANCES RECEIVED BY CURRENCY

1,000	EUR	2023	2022
EUR		28,745	30,236
SEK		5,120	4,413
DKK		367	519
PLN		90	48
UAH		562	256
USD		1,954	2,599
Other		1,927	2,215
Total		38,765	40,286

Most of Aspo Group’s accounts receivable are denominated in euro. The accounts receivable denominated in the Swedish

and Danish krona comprise the next largest items. The share of accounts receivable and accounts payable denominated

in USD is also significant, especially in the Telko segment, because part of raw materials are purchased in USD. In addi-

tion, part of ESL Shipping’s transactions is carried out in USD, and certain fuel purchases are denominated in USD. ESL

Shipping’s new electric hybrid vessel investments and upcoming sales are denominated in euro.

■

EQUITY OF FOREIGN SUBSIDIARIES BY CURRENCY

		Equity	Equity
1,000	EUR	2023	2022
EUR		36,040	31,345
SEK		21,034	11,639
DKK		9,657	8,228
RUB			20,500
NOK		-161	71
UAH		1,325	408
PLN		5,593	3,647
BYN			741
CNY		2,615	2,050
KZT		-786	818
AZN		-472	-419
IRR			-187
UZS		-483	392
RON		-376	-287
Total		73,986	78,946

Aspo Group has made investments in foreign subsidiaries. In addition to direct investments, the equity of the foreign sub-

sidiaries changes based on their business results. The table shows the Group’s share of the subsidiaries’ equity by cur-

rency. The total equity of the Group’s foreign subsidiaries at the reporting date was EUR 74.0 (78.9) million. The largest

foreign currency-denominated investments in 2023 were SEK-denominated investments in subsidiaries operating in Swe-

den, totaling EUR 21.0 (11.6) million. In 2022, the Ruble-denominated investments of EUR (20.5) million in subsidiaries

operating in Russia were the biggest foreign currency investment. Despite the significant share of equity being denomi-

nated in the SEK and DKK, the Group deems that diversification is at a sufficient level, and there is no need to hedge the

translation position associated with the equities of its foreign subsidiaries.

The Group’s internal non-current loan receivables from Telko’s Belarusian, Ukrainian and Kazakhstani subsidiaries have

initially been classified as non-current net investments in foreign operations in accordance with IAS 21 standard. The

treatment of the Ukrainian loan of EUR 3.4 million as a net investment in a foreign operation ended in 2021 as a result

of repayments, but the translation differences related to the loan that had accumulated until the reclassification of the

loan have not been reversed, and they are still included in the translation differences. The Belarusian company paid off its

entire debt balance of EUR 0.8 million in 2022, and the related translation differences were reclassified through profit or

loss during the reporting period when the company was placed in liquidation and its consolidation into Aspo Group ended.

The loan receivable from Telko Kazakhstan of EUR 1.8 million continues to be treated as a net investment in a foreign

operation.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

116

ASPO’S YEAR 2023

Interest rate risk

To finance its operations, Aspo Group uses both fixed-rate and floating-rate borrowings the latter of which causes an

interest rate risk in Aspo Group’s cash flow and profit when changes in the interest rate level take place. In addition to

fixed-rate borrowings, Aspo Group may use interest rate derivatives to decrease a possible growth in future cash out-

flows caused by an increase in short-term market interest rates. On December 31, 2023, the Group’s interest-bearing lia-

bilities totaled EUR 195.9 (189.3) million and cash and cash equivalents stood at EUR 30.7 (33.6) million. The figures

of the comparative year also include the cash and cash equivalents and interest-bearing liabilities classified as held for

sale. The share of lease liabilities included in the amount of interest-bearing liabilities was EUR 23.5 (17.1) million. Aspo

Group’s debt portfolio is reviewed with regard to average interest rate, the duration of interest rate position and average

loan maturity. On the balance sheet date, the average interest rate on interest-bearing liabilities, excluding lease liabilities,

was 5.3% (3.3%), the duration of interest rate position was 0.4 years (0.6), the average loan maturity was 3.9 years (2.7).

SENSITIVITY TO MARKET RISKS

Aspo Group is exposed to interest rate and currency risks via financial assets and liabilities, in the balance sheet on the

reporting date. Market risks may also have an impact on Aspo Group through items other than financial instruments.

The oil price has an impact on Aspo Group’s financial performance through transportation costs. The Group has hedged

against this risk by means of contractual clauses. The fluctuations in raw material prices for chemicals and food also

affect the Group’s financial performance.

Aspo Group has not identified material transaction risks related to any single currency since the disposal of its Rus-

sian business operations. However, Aspo Group has internal euro-denominated loans in the Telko segment’s companies in

Norway, Ukraine and Kazakhstan, which generate foreign exchange gains and losses for the Group. Currency differences

in internal loans affect the Group’s result because they are not eliminated in consolidation. If the currency of Kazakh-

stan weakened by 10 percentage points, it would result in an exchange rate loss of EUR 0.3 million for the Group, and if

the currency of Ukraine weakened against the euro, it would result in an exchange rate loss of EUR 0.4 million calculated

based on the loan capital on the balance sheet date. If the currencies strengthened by ten percentage points, the impact

would be positive to the same extent and would be reported as exchange rate gains in financial items.

ITEMS DENOMINATED IN FOREIGN CURRENCIES

Transactions denominated in foreign currencies are

recorded at the exchange rates at the transaction

dates. Receivables and liabilities denominated in for-

eign currencies, outstanding at the end of the finan-

cial year are translated using the exchange rates at the

reporting date. The gains and losses arisen from for-

eign currency denominated transactions and the trans-

lation of monetary items are recognized in profit and

loss. Foreign exchange gains and losses related to

business operations are included in the corresponding

items in operating profit. Foreign exchange gains and

losses arisen from loans denominated in foreign curren-

cies are included in financial income and expenses.

Aspo has internal non-current loans to subsidiaries,

which have been classified as net investments in for-

eign operations, in accordance with IAS 21 standard.

The unrealized foreign exchange gains and losses aris-

ing from these net investments are recognized in other

comprehensive income.

The sensitivity calculation resulting from changes in interest rates is based on the following assumptions:

• The interest level changes by one percentage point.

• The position includes floating-rate interest-bearing financial liabilities and assets.

• The calculation is based on balance sheet values on the reporting date, and changes in capital during the year are not

taken into account.

■

SENSITIVITY ANALYSIS FOR INTEREST RATE RISK

		Profit and loss	Profit and loss
1,000	EUR	2023	2022
Interest rate risk
Change of +100 basic points in the market interest rates		-1,559	-1,559
Change of -100 basic points in the market interest rates		1,572	1,564

CREDIT AND COUNTERPARTY RISKS

The Group has credit risk from accounts receivable. Telko and Leipurin segments have an international and highly diver-

sified customer base, and no considerable customer risk concentrations exist. However, accounts receivable in Ukraine

carry a higher risk due to Russia’s invasion, and preparations have been made for any insolvency among customers

through credit loss allowance. ESL Shipping’s accounts receivable derive from long-term customer relationships with cred-

itworthy companies. The turnover rate of its accounts receivable is high. All segments hedge against credit risks by using,

when necessary, payment terms based on advance payments and bank guarantees.

Aspo Group aims to have a low cash and cash equivalents balance. The counterparty risk is managed by select-

ing well-known and financially solvent domestic and international banks as counterparties. Excess funds are invested in

bank deposits and short-term money market instruments. The derivative contract-based counterparty risk is managed by

selecting well-known and solvent Nordic banks as counterparties.

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5.2 Derivative contracts

■

DERIVATIVE CONTRACTS

		Nominal value	Fair value, net
1,000	EUR	2023	2023
Forwards
Foreign currency forwards		11,290	-59

At the end of the 2023 financial year, Aspo had a forward contract of SEK 125 million, the fair value of which at the time

of reporting was EUR -59 thousand. The forward contract is subject to hedge accounting. The forward contract expires in

May and has been made to hedge the SEK-denominated purchase price of a potential future acquisition.

The forward contract is used to hedge against the strengthening of the Swedish krona. If the Swedish krona strength-

ened by ten percentage points against the euro compared with the valuation rate on the balance sheet date, the impact

would be EUR 1.2 million on the fair value of the forward contract and EUR 1.0 million on equity. If the Swedish krona

weakened by ten percentage points against the euro, the impact would be EUR -1.0 million on the fair value of the for-

ward contract and EUR -0.8 million on equity.

DERIVATIVES

Derivatives are initially recognized at fair value on the

day the Group becomes a contractual counterparty and

are subsequently measured at fair value. Fair value of

derivatives is determined on the basis of quoted mar-

ket prices and rates, the discounting of cash flows and

option valuation models. The fair value of currency for-

wards is calculated by discounting the predicted cash

flows from the agreements in accordance with interest

rates of the currencies sold, translating the discounted

cash flows at the exchange rates at the reporting date,

and calculating the difference between the discounted

values.

The change in the fair value of the effective por-

tion of hedging is recognized in other comprehensive

income and presented in the hedging reserve included

in the fair value reserve under equity.

When applying hedge accounting, the relation

between the hedging instruments and hedged items

is documented at the start of hedging, as well as the

risk management targets and strategies used as guide-

lines when launching different hedging actions. At the

start of hedging and continuously after this action, the

Group prepares an estimate whether the derivatives

used in hedging effectively abolish the changes in fair

values or cash flows of the hedged objects. The gain or

loss relating to an inefficient portion is immediately rec-

ognized in the statement of comprehensive income as

financial items. When the hedging instrument expires

or is sold or when hedging does not meet the criteria

of hedge accounting, the accumulated gains and losses

retained in equity at that time remain in equity and are

reclassified to the statement of comprehensive income

only after the forecast transaction affects profit or

loss. If the forecast transaction is no longer expected

to occur, the accumulated gain or loss retained under

equity is immediately reclassified to the statement of

comprehensive income as financial items.

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5.3 Related parties and management compensation

RELATED PARTIES

The subsidiaries and associated companies, which are related parties of Aspo Group are presented in Note 1.1 Group

structure, and further information about associated companies can be found in Note 3.3 Associated companies. The

related parties also include key management personnel i.e., members of the Board of Directors and the Group Executive

Committee and their close family members as well as any entities under their control. Information about the members of

the Board and the Group Executive Committee is available in the Governance section, where also information on Aspo’s

hybrid bond subscribed by the related parties is presented. No material transactions with Aspo’s related parties or enti-

ties controlled by them were identified during the financial year.

KEY MANAGEMENT COMPENSATION

■

EXPENSES FOR KEY MANAGEMENT COMPENSATION

1,000	EUR	2023	2022
Salaries and other short-term employee benefits		2,831	2,574
Post-employment benefits		556	503
Termination benefits			461
Share-based payments		723	1,059
Total		4,110	4,597

Pension benefits include both statutory and voluntary pension payments. Aki Ojanen was Aspo Group’s CEO until August

15, 2021. In February 2022, the Board of Directors granted share-based payments of EUR 0.5 million to Ojanen that

were recognized in 2022 and are presented as termination benefits in the table above.

■

SALARIES AND BENEFITS OF BOARD MEMBERS AND CEO

1,000	EUR	2023	2022
Chief Executive Officer compensation
CEO Jansson Rolf, salaries		443	437
CEO Jansson Rolf, pensions		102	87
CEO Jansson Rolf, bonuses		175	78
CEO Jansson Rolf, share-based payments		522	152
CEO Ojanen Aki, termination benefits			461
Total		1,242	1,215

Aspo’s CEO is entitled to a statutory pension, and the retirement age is determined according to the statutory earn-

ings-related pension scheme. The period of notice applied to the employment relationship of the CEO is six months. If

notice is given by the company, a severance pay corresponding to six months’ salary will be paid in addition to the salary

for the notice period.

1,000	EUR	2023	2022
Board of Directors compensation
Westerlund Heikki, Chairman of the Board		73	69
Kaario Mammu, Vice Chairman of the Board*		13	54
Laine Mikael, Vice Chairman of the Board**		51	38
Allam Patricia		37	38
Kolunsarka Tapio***		37	27
Pöyry Salla		37	37
Ståhlberg Kaarina****		31
Vehmas Tatu		41	42
Total		320	305
*Vice Chairman of the Board until April 4, 2023
**Vice Chairman of the Board since April 4, 2023
***Member of the Board since April 6, 2022
****Member of the Board since April 4, 2023

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5.4 Share-based payments

■

SHARE-BASED PAYMENT EXPENSES RECOGNIZED

1000 €	2023	2022
Recognized in employee benefit expenses	1,114	1,829

Aspo has share-based incentive schemes the expenses of which are normally recognized during a period of three years. In

February 2022, the Board of Directors granted share-based payments of EUR 0.5 million to Aspo’s previous CEO Aki Oja-

nen that were recognized in 2022.

Share-based incentive plan 2023–2025

On February 15, 2023, Aspo Plc’s Board of Directors approved a new incentive plan for the Group’s key employees by

establishing a Performance Share Plan 2023–2025. The aim of the plan is to combine the objectives of the shareholders

and the key employees in order to increase the value of the Company in the long-term, to retain the key employees at the

Company, and to offer them competitive reward plan based on earning and accumulating the Company´s shares.

Rewards earned from each of the three performance periods of the Performance Share Plan will be based on the

Group’s Earnings per Share (EPS) and two criteria based on sustainability targets. The prerequisite for participation in the

plan and for receipt of reward on the basis of the program is that a key person holds the Company’s shares or acquires

the Company’s shares, up to the number predetermined by the Board of Directors.

The potential reward will be paid partly in the Company´s shares and partly in cash in 2024, 2025 and 2026. The

cash proportion is intended to cover taxes and tax-related costs arising from the reward to a key employee. As a rule,

no reward will be paid if a key employee´s employment or service ends before the reward payment. The shares paid as

reward may not be transferred during the restriction period. As a rule, if a key employee´s employment contract or direc-

tor contract terminates during the restriction period, he or she must gratuitously return the shares earned as reward.

The Performance Share Plan 2023–2025 is directed to a maximum of 30 participants, including the members of the

Group Executive Committee. The rewards to be paid on the basis of the plan correspond to the value of a maximum total

of 320,000 Aspo Plc shares including also the proportion to be paid in cash.

For the 2023 earnings period, the targets were met at 10% overall.

Share-based incentive plan 2022–2024

On February 16, 2022, Aspo Plc’s Board of Directors decided to establish a share-based incentive plan for 2022–2024.

The aim of the plan is to combine the objectives of the shareholders and key employees in order to increase the value

of the company in the long term, to retain key employees in the company, and to offer them a competitive reward plan

based on earning and accumulating the company’s shares.

The share-based incentive plan consists of three earnings periods, with the earned reward being based on the Group’s

earnings per share (EPS) and two sustainability indicators. Participation in the scheme and obtaining rewards require that

participants allocate the freely transferable company shares they hold to the plan or acquire the company’s shares up to

the quantity determined by the Board of Directors.

The share-based incentive plan is directed at a maximum of 30 people, including the members of the Group Executive

Committee. The potential reward will be paid partly in the company’s shares and partly in cash in 2023, 2024 and 2025.

The rewards payable based on the plan correspond to a maximum total value of 400,000 Aspo Plc shares, also including

the proportion to be paid in cash.

For the 2022 earnings period, the targets were met at 90% overall. On March 29, 2023, Aspo Plc granted 76,050

treasury shares to employees included in the plan. The transfer was based on the share issue authorization of the Annual

Shareholders’ Meeting held on April 6, 2022.

For the 2023 earnings period, the targets were met at 30% overall.

Share-based incentive plan 2021–2023

On February 11, 2021, Aspo’s Board of Directors decided to continue the share-based incentive plan for the Group’s

key personnel by establishing a share-based incentive plan for 2021–2023. The aim of the plan is to combine the objec-

tives of the shareholders and key employees in order to increase the value of the company in the long term, to retain key

employees in the company, and to offer them a competitive reward plan based on earning and accumulating the compa-

ny’s shares. The share-based incentive plan is directed at around 20 people, including the members of the Group Execu-

tive Committee.

The EPS target, acting as an earnings criterion for the share-based incentive plan, was fully met during the 2021 finan-

cial year. In March 2022, based on the share-based incentive plan, a total of 89,400 treasury shares were transferred,

and an amount equaling the value of the shares was paid in cash to cover taxes. Shares paid as a reward may not be

transferred during the restriction period, which ends on December 31, 2023. The expense of the share-based incentive

plan is recognized in the years 2021–2023.

Share-based incentive plan 2020

In June 2022, Aspo’s Board of Directors granted 20,000 Aspo shares to Aspo’s CEO Rolf Jansson based on the share-

based incentive plan for 2020 and the conditions of the CEO’s contract of service. 10,000 of the shares and an amount

of cash equaling their value to cover taxes were transferred in June and at the same time, Jansson acquired 10,000

shares from the markets at his own expense in accordance with the contract. A second transfer to the company’s CEO of

equal quantity took place in June 2023.

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■

SHARE-BASED INCENTIVE PLAN

	Board			Number of	Share price on	Share price on
	decision date	Grant date	Transfer date	shares granted	grant date, EUR	transfer date, EUR
Restricted share plan 2020	17.6.2020	14.6.2022	16.6.2022	10,000	7.83	7.59
	17.6.2020	14.6.2022	22.6.2023	10,000	7.83	7.04
Share-based incentive plan 2021-2023	11.2.2021	1.4.2021	23.3.2022	67,100	8.99	6.72
	16.2.2022	16.2.2022	23.3.2022	22,300	10.34	6.72
Share-based incentive plan 2022-2024	16.2.2022	30.5.2022	28.3.2023	76,050	7.48	8.46
Share-based incentive plan 2023-2025	15.2.2023	6.6.2023			6.95

SHARE-BASED PAYMENTS

The Group has share-based management incentive

plans, where part of the reward is settled in shares

and part in cash. These plans include net payment fea-

tures for meeting withholding tax obligations. Assigned

shares are measured at fair value at the time of assign-

ment and recognized in the statement of compre-

hensive income as costs over the vesting period of

the incentive plan. Other than market-based condi-

tions (e.g. profitability and profit growth target) are not

included in the fair value but taken into account when

determining the number of shares to which a right is

assumed to be generated by the end of the vesting

period. For the portion settled in shares the expense

is recognized as an employee benefits expense, with a

corresponding increase in equity. Also the portion paid

in cash is classified as equity settled and recognized in

equity at the grant date market value.

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5.5 Contingent assets and liabilities, and other commitments

OTHER COMMITMENTS

Collaterals and commitments

As part of their ordinary business activities, Aspo and some of its subsidiaries sign different kinds of agreements under

which guarantees are offered to third parties on behalf of these subsidiaries. Such agreements are primarily made in

order to support or improve Group companies’ creditworthiness and facilitate the availability of sufficient financing.

■

COLLATERAL FOR OWN DEBT AND OTHER COMMITMENTS

1,000	EUR	2023	2022
Mortgages given		127,000	127,000
Guarantees		20,734	7,455
Total		147,734	134,455
Other commitments		23,480	26,762

The mortgages given are associated with loan agreements to finance certain vessel investments of ESL Shipping, and

they represent the amount of mortgages as at the loan agreements’ signing date. On the closing date, the corresponding

loan capital was EUR 66.0 (51.6) million. Other commitments consist mainly of commitments relating to temporary mari-

time personnel of time-chartered vessels.

CONTINGENT ASSETS AND LIABILITIES

Contingent liability related to the divestment of Kauko

Based on the agreement on the sale of Kauko Oy’s shares Aspo is responsible for an old debt established in 2016–

2018 to Chinese companies that have not invoiced their receivables. Kauko has aimed to contribute to the collection of

the debt, but to no avail. In the company’s view, it is not likely that the counterparty will require the company to repay its

debt, and the liability of EUR 0.5 million has not been recognized on Aspo’s balance sheet.

Tax positions

Due to local tax audits or clarification requests, Aspo has some uncertain tax positions, as the tax authority has sum-

moned the company’s claims for deductible items in tax returns. Concerning each case, Aspo has assessed whether the

tax authority’s interpretations are justified and, if necessary, adjusted the recognized amounts to correspond with the

expected payable amounts. Although management believes that these cases will not result in any significant additional

recognitions in addition to previously recognized amounts, the final amounts may differ from the estimated amounts.

Legal proceedings

Aspo Group companies are parties to some legal proceedings and disputes associated with regular business operations.

The financial impact of these proceedings and disputes cannot be estimated for certain but, on the basis of the informa-

tion available and taking into account the existing insurance cover and provisions made, Aspo management believes that

they do not have any material adverse impact on the Group’s financial position.

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5.7 Changes in IFRS standards

NEW AND AMENDED STANDARDS ADOPTED DURING THE FINANCIAL YEAR

No new standards have been adopted by the Group for the first time in the annual reporting period commencing January

1, 2023. The following amendments to standards have been applied for the first time in the accounting period commenc-

ing January 1, 2023.

• Amendments to IAS 12 Deferred Tax related to Assets and Liabilities Arising from a Single Transaction. Under

the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal

taxable and deductible temporary differences. The amendment has impact on the consolidated financial statements

upon recognition of a lease liability and the corresponding right-of-use asset in accordance with IFRS 16 at the

commencement date of a lease. The amendments are effective on January 1, 2023. Deferred tax receivables and

deferred tax liabilities arising from lease agreements are presented gross in Note 4.8 Deferred taxes.

• Classification of Liabilities as Current or Non-Current – Amendment to IAS 1, which will become effective on January

1, 2024. The amendment clarifies that the classification of loans as current or non-current should be based on rights

that are in existence at the end of the reporting period and that the classification is unaffected by management’s

expectations or events after the reporting date. The amendment had no material effect on the classification of Aspo’s

loans as current and non-current.

• Non-current Liabilities with Covenants – Amendment to IAS 1, which will become effective on January 1, 2024.

The amendments specify that only covenants that an entity is required to comply with on or before the end of the

reporting period affect the entity’s right to defer settlement of a liability for at least twelve months after the reporting

date (and therefore must be considered in assessing the classification of the liability as current or noncurrent). The

IASB also specifies that the right to defer settlement of a liability for at least twelve months after the reporting date

is not affected if an entity only has to comply with a covenant after the reporting period. However, if the entity’s right

to defer settlement of a liability is subject to the entity complying with covenants within twelve months after the

reporting period, an entity discloses information that enables users of financial statements to understand the risk of

the liabilities becoming repayable within twelve months after the reporting period. Aspo has added information related

to covenants to these consolidated financial statements in Note 5.1 Financial risks and the management of financial

risks.

5.6 Events after the financial year

On January 2, 2024, Aspo signed a revolving credit facility agreement amounting to EUR 20 million. The credit is being

granted by Nordea Bank Abp. The maturity of the revolving credit facility agreement is two years plus an option for one

additional year. The agreement will replace a prior revolving credit facility agreement of the same amount which had

remained unused.

On February 8, 2024, Aspo announced that Varma Mutual Pension Insurance Company has agreed to co-invest EUR

15 million alongside OP Finland Infrastructure LP in Aspo’s subsidiary ESL Shipping. As a result, the combined investment

into ESL Shipping managed by OP Finland Infrastructure LP rises to total of EUR 45 million at the closing of the transac-

tion. The combined EUR 45 million investment managed by OP Finland Infrastructure LP will be made against issuance of

new shares in ESL Shipping with an agreed pre-money equity valuation of EUR 165 million, corresponding to a 21.43%

ownership stake in ESL Shipping.

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CHANGES IN IFRS STANDARDS AND IFRIC INTERPRETATIONS, THAT BECOME EFFECTIVE EARLIEST IN THE NEXT

FINANCIAL YEAR

The Group will adopt the following changes in standards when they become effective:

• Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its Associate or Joint

Venture. The amendments to IFRS 10 and IAS 28 deal with situations where there is a sale or contribution of assets

between an investor and its associate or joint venture. The effective date of the amendments has yet to be set by the

IASB. Management expects that the adoption of the amendments may have an impact on the consolidated financial

statements in future financial years, if such transactions occur.

• Amendments to IFRS 16 Leases—Lease Liability in a Sale and Leaseback. The amendments clarify how a seller-lessee

subsequently measures sale and leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for

as a sale. These amendments require a seller-lessee to subsequently measure lease liabilities arising from a leaseback

in a way that it does not recognise any amount of the gain or loss that relates to the right of use it retains. The new

requirements do not prevent a seller-lessee from recognising in profit or loss any gain or loss relating to the partial or

full termination of a lease. The amendments are effective for annual reporting periods beginning on or after 1 January

2024. Earlier application is permitted. Management expects that the adoption of the amendments may have an

impact on the consolidated financial statements in future financial years, if such transactions occur.

• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures—Supplier Finance

Arrangements. The amendments add a disclosure objective to IAS 7 stating that an entity is required to disclose

information about its supplier finance arrangements that enables users of financial statements to assess the effects

of those arrangements on the entity’s liabilities and cash flows. In addition, IFRS 7 was amended to add supplier

finance arrangements as an example within the requirements to disclose information about an entity’s exposure to

concentration of liquidity risk. To meet the disclosure objective, an entity will be required to disclose in aggregate

for its supplier finance arrangements regarding supplier finance arrangements and liquidity risk information. The

amendments are applicable for the annual reporting period beginning on 1 January 2024. The company’s management

anticipates that the application of these changes could possibly affect the consolidated financial statements in the

coming periods, even though the group does not have significant financing arrangements with suppliers or service

providers.

• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability. The amendments

specify when a currency is exchangeable into another currency and when it is not. A currency is exchangeable when

an entity is able to exchange that currency for the other currency through markets or exchange mechanisms that

create enforceable rights and obligations without undue delay at the measurement date and for a specified purpose.

A currency is not exchangeable into the other currency if an entity can only obtain an insignificant amount of the other

currency. When a currency is not exchangeable at the measurement date, an entity estimates the spot exchange

rate as the rate that would have applied to an orderly transaction between market participants at the measurement

date and that would faithfully reflect the economic conditions prevailing. Following the amendments, the group is

required to disclose information that would enable users of its financial statements to evaluate how a currency’s

lack of exchangeability affects, or is expected to affect, its financial performance, financial position and cash flows.

The amendments are effective for the annual reporting period beginning on 1 January 2025. Earlier application is

permitted. The company’s management anticipates that the application of these amendments may have an impact on

the group’s consolidated financial statements in future periods.

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ASPO’S YEAR 2023

EUR Note Jan 1–Dec 31, 2023 Jan 1–Dec 31, 2022

Net sales 1.1 673,144.42 628,666.56

Other operating income 1.2 573,680.99 698,117.32

Employee benefit expenses 1.3 -2,133,482.37 -2,982,759.80

Depreciation and amortization 1.4 -39,972.32 -30,117.42

Other operating expenses 1.5 -3,856,496.94 -3,487,439.99

Operating loss -4,783,126.22 -5,173,533.33

Financial income and expenses 1.6 4,702,033.67 10,217,916.42

Profit before appropriations and taxes -81,092.55 5,044,383.09

Appropriations 1.7 1,550,000.00 2,500,000.00

Profit for the period 1,468,907.45 7,544,383.09

Parent company’s income statement

Parent company’s financial statements

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ASPO’S YEAR 2023

Parent company’s balance sheet

ASSETS

EUR Note Dec 31, 2023 Dec 31, 2022

Non-current assets

Intangible assets 2.1 56,122.14 29,382.32

Tangible assets 2.1 103,427.53 106,538.75

Investments 2.2 81,818,131.57 81,818,131.57

Total non-current assets 81,977,681.24 81,954,052.64

Current assets

Receivables from Group companies, non-current 2.3 104,092,786.00 102,773,786.00

Receivables from Group companies, current 2.3 7,812,027.55 15,696,075.74

Other current receivables 2.3 223,377.72 384,580.49

Cash and cash equivalents 13,750,585.05 9,437,636.18

Total current assets 125,878,776.32 128,292,078.41

Total assets 207,856,457.56 210,246,131.05

EQUITY AND LIABILITIES

EUR Note Dec 31, 2023 Dec 31, 2022

Equity

Share capital 2.4 17,691,729.57 17,691,729.57

Share premium reserve 2.4 4,351,173.64 4,351,173.64

Invested unrestricted equity reserve 2.4 21,150,592.47 21,370,305.29

Retained earnings 2.4 7,742,502.38 14,429,524.05

Profit for the period 1,468,907.45 7,544,383.09

Total equity 52,404,905.51 65,387,115.64

Provisions 2.5 57,342.94 318,262.50

Liabilities

Non-current liabilities

Bonds 2.6 14,982,968.75

Hybrid bond 2.6 30,000,000.00 30,000,000.00

Loans from financial institutions 2.6 70,000,000.00 72,500,000.00

Total non-current liabilities 100,000,000.00 117,482,968.75

Current liabilities

Liabilities to Group companies 2.7 24,997,410.28 11,803,547.40

Bonds 2.7 14,992,778.75

Loans from financial institutions 2.7 12,500,000.00 12,500,000.00

Accounts payable 99,487.30 32,355.69

Other liabilities 79,730.45 67,580.94

Deferred liabilities 2.7 2,724,802.33 2,654,300.13

Total current liabilities 55,394,209.11 27,057,784.16

Total liabilities 155,394,209.11 144,540,752.91

Total equity and liabilities 207,856,457.56 210,246,131.05

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

126

ASPO’S YEAR 2023

Parent company’s cash flow statement

EUR Jan 1–Dec 31, 2023 Jan 1–Dec 31, 2022

Cash flows from/used in operating activities

Operating loss -4,783,126.22 -5,173,533.33

Adjustments to operating loss -220,947.24 95,051.92

Change in working capital -503,635.03 -999,185.97

Interest paid -7,558,673.66 -4,708,376.29

Interest received 5,234,524.57 1,778,131.91

Dividends received 14,000,000.00 12,000,000.00

Net cash from operating activities 6,168,142.42 2,992,088.24

Cash flows from/used in investing activities

Investments in tangible and intangible assets -65,858.50 -30,558.63

Aineellisten ja aineettomien hyödykkeiden luovutustulot 2,257.58

Proceeds from sale of subsidiary shares -968,600.00

Loans granted -38,000,000.00 -48,200,000.00

Proceeds from loans 36,681,000.00 47,465,000.00

Net cash used in investing activities -1,382,600.92 -1,734,158.63

EUR Jan 1–Dec 31, 2023 Jan 1–Dec 31, 2022

Cash flows from/used in financing activities

Repayment of non-current loans from Group companies -854,000.00

Proceeds from non-current loans 30,000,000.00

Repayment of non-current loans -32,500,000.00 -2,500,000.00

Change in current receivables from Group companies 763,990.17 3,470,711.37

Change in current liabilities to Group companies 13,214,534.78 -2,199,993.67

Proceeds from current loans 10,000,000.00

Proceeds from issuance of commercial papers 30,000,000.00

Repayment of commercial papers -35,000,000.00

Proceeds from Hybrid bond issue 30,000,000.00

Repayment of Hybrid bond -20,000,000.00

Group contributions received 2,500,000.00 3,030,000.00

Dividends paid -14,444,211.60 -14,108,588.05

Omien osakkeiden hankinta -308,100.66

Proceeds from sale of treasury shares 301,194.68 301,100.80

Net cash used in financing activities -472,592.63 2,139,230.45

Change in cash and cash equivalents 4,312,948.87 3,397,160.06

Cash and cash equivalents Jan 1 9,437,636.18 6,040,476.12

Cash and cash equivalents at year-end 13,750,585.05 9,437,636.18

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

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ASPO’S YEAR 2023

Notes to the parent company’s financial statements

ACCOUNTING PRINCIPLES

Basis of accounting

Aspo Plc’s financial statements have been compiled in

accordance with Finnish Accounting Standards (FAS). The

accounting principles have not changed from the previous

year. Aspo Plc is the parent company of Aspo Group. All

figures in the financial statements are presented in full val-

ues. When appropriate, the financial statements of Aspo

Plc comply with the Group’s accounting principles based

on IFRS. Below are described those accounting princi-

ples in which the financial statements of Aspo Plc differ

from the accounting principles of the Group. The account-

ing principles for the consolidated financial statements are

presented in the notes to the consolidated financial state-

ments. When compiling the financial statements, the man-

agement of the company must, in accordance with valid

regulations and good accounting practice, make estimates

and assumptions that affect the measurement and accru-

ing of financial statement items. The outcome may differ

from the estimates.

Investments

Subsidiary shares and other shares and participations

included in non-current investments are measured at the

lower of the acquisition cost or the fair value.

Leasing

Lease payments are recognized as rent expenses during

the lease period and included in other operating expenses.

Provisions

Provisions include items that are either based on contracts

or otherwise binding obligations but have not yet realized.

Changes in provisions are recognized in the income state-

ment.

Share-based payments

In the parent company’s financial statements, share-based

payment expenses are recognized as expenses for the

financial year, during which the obligation to pay remu-

nerations is generated. Share-based payment expenses

are recognized as provisions if the shares have not been

transferred yet. The right to tax deductibility is established

when the shares are transferred. The reward is settled

partly in shares of the company and partly in cash, with

cash being paid to fulfil the withholding tax obligation. The

settlement of the reward in the company’s own shares

does not give rise to an accounting transaction.

Income taxes

The income taxes in the income statement include taxes

calculated on profit for the period based on Finnish tax

legislation and considering losses carried forward, as well

as adjustment of taxes from previous financial years.

Hybrid bond

The hybrid bond is presented in the parent company’s bal-

ance sheet as liabilities and the related interest is pre-

sented as financial expenses in the income statement.

Cash pool arrangement

The Group has a cash pool arrangement, to facilitate an

efficient liquid asset management between the parent and

its subsidiaries. The cash pool balances of the subsidiaries

are presented in the parent company’s balance sheet as

either cash pool receivables or liabilities.

Measurement of financial instruments

Fair value measurement compliant with Chapter 5, sec-

tion 2a of the Accounting Act is applied to the accounting

treatment of financial derivatives, and changes in their fair

value are entered in the income statement. Financial deriv-

atives are measured at the market prices at the balance

sheet date.

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ASPO’S YEAR 2023

1.3 Information about personnel and management

■

EMPLOYEE BENEFIT EXPENSES

EUR 2023 2022

Wages and salaries -1,572,569.76 -1,983,249.77

Share-based payments -129,326.74 -440,562.11

Profit bonus paid to the personnel fund -27,516.73 -19,202.64

Pension expenses -430,695.50 -462,829.23

Other social security expenses 26,626.36 -76,916.05

Total -2,133,482.37 -2,982,759.80

■

MANAGEMENT COMPENSATION

EUR 2023 2022

CEOs, salaries 442,764.60 437,308.08

CEO, share-based payments 521,613.50 151,854.00

CEO, bonuses 174,903.00 78,246.00

Members of the Board of Directors, remunerations 319,616.65 304,673.68

Total 1,458,897.75 972,081.76

The CEO is entitled to a statutory pension, and the retirement age is determined according to the statutory earnings-re-

lated pension scheme.

■

AVERAGE NUMBER OF PERSONNEL DURING THE FINANCIAL YEAR

2023 2022

Office staff 8 9

1.1 Net sales

1.2 Other operating income

■

NET SALES

EUR 2023 2022

Net sales 673,144.42 628,666.56

Distribution of net sales by market area %

Finland 100 100

■

OTHER OPERATING INCOME

EUR 2023 2022

Rental income from Group companies 524,932.10 627,386.21

Other operating income 48,748.89 70,731.11

Total 573,680.99 698,117.32

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ASPO’S YEAR 2023

■

OTHER OPERATING EXPENSES

EUR 2023 2022

Rents -844,061.31 -867,178.28

Administration and consultancy services -2,323,314.22 -2,000,091.65

Other expenses -689,121.41 -620,170.06

Total -3,856,496.94 -3,487,439.99

■

AUDITOR’S FEES

EUR 2023 2022

Audit fees 50,000.00 73,863.33

Other services 56,550.00 20,840.50

Total 106,550.00 94,703.83

The authorized public accountant firm Deloitte Oy is the company’s auditor. The audit fee was EUR 50 (74) thousand.

1.5 Other operating expenses

■

DEPRECIATION AND AMORTIZATION

EUR 2023 2022

Amortization, other long-term expenditure -39,118.68 -25,946.76

Depreciation, machinery and equipment -853.64 -4,170.66

Total -39,972.32 -30,117.42

1.4 Depreciation and amortization

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ASPO’S YEAR 2023

■

FINANCIAL INCOME AND EXPENSES

EUR 2023 2022

Financial income

Dividend income

From Group companies 7,600,000.00 16,000,000.00

Total 7,600,000.00 16,000,000.00

Other interest and financial income

From Group companies 4,816,994.16 1,798,242.55

Guarantee service fee 117,730.60

Exchange rate gains 5,213.41 576.08

From others 290,169.96 24,820.92

Total 5,230,108.13 1,823,639.55

Total financial income 12,830,108.13 17,823,639.55

Financial expenses

Interest expenses and other financial expenses

To Group companies -403,003.21 -34,429.08

To others -7,725,071.25 -7,571,294.05

Total -8,128,074.46 -7,605,723.13

Total financial expenses -8,128,074.46 -7,605,723.13

Total financial income and expenses 4,702,033.67 10,217,916.42

Kauko Oy’s sales loss of EUR 3.0 million is included in financial expenses in 2022.

1.6 Financial income and expenses

■

APPROPRIATIONS

EUR 2023 2022

Group contributions received 1,550,000.00 2,500,000.00

Total 1,550,000.00 2,500,000.00

1.7 Appropriations

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ASPO’S YEAR 2023

■

INTANGIBLE AND TANGIBLE ASSETS 2023

EUR Intangible rights

Other long-term

expenditure

Total

intangibles Land Buildings

Machinery and

equipment

Other

tangible assets

Total

tangibles

Acquisition cost, Jan. 1 201,058.04 135,459.44 336,517.48 1,907.55 12,142.02 170,841.18 103,136.46 288,027.21

Additions 1,530.00 1,530.00

Transfers between classes 64,328.50 64,328.50

Decreases -124,008.84 -124,008.84 -145,817.62 -2,257.58 -148,075.20

Acquisition cost, Dec. 31 201,058.04 77,309.10 278,367.14 1,907.55 12,142.02 25,023.56 100,878.88 139,952.01

Accumulated depreciation, Jan. 1 -201,058.04 -106,077.12 -307,135.16 -12,142.02 -169,346.44 -181,488.46

Accumulated depreciation of decreases 124,008.84 124,008.84 145,817.62 145,817.62

Depreciation and amortization for the period -39,118.68 -39,118.68 -853.64 -853.64

Accumulated depreciation, Dec. 31 -201,058.04 -21,186.96 -222,245.00 -12,142.02 -24,382.46 -36,524.48

Carrying amount, Dec. 31, 2023 0.00 56,122.14 56,122.14 1,907.55 0.00 641.10 100,878.88 103,427.53

■

INTANGIBLE AND TANGIBLE ASSETS 2022

EUR Intangible rights

Other long-term

expenditure

Total

intangibles Land Buildings

Machinery and

equipment

Other

tangible assets

Total

tangibles

Acquisition cost, Jan. 1 201,058.04 135,459.44 336,517.48 1,387.55 12,142.02 170,841.18 73,097.83 257,468.58

Additions 520.00 30,038.63 30,558.63

Acquisition cost, Dec. 31 201,058.04 135,459.44 336,517.48 1,907.55 12,142.02 170,841.18 103,136.46 288,027.21

Accumulated depreciation, Jan. 1 -201,058.04 -80,130.36 -281,188.40 -12,142.02 -165,175.78 -177,317.80

Depreciation and amortization for the period -25,946.76 -25,946.76 -4,170.66 -4,170.66

Accumulated depreciation, Dec. 31 -201,058.04 -106,077.12 -307,135.16 -12,142.02 -169,346.44 -181,488.46

Carrying amount, Dec. 31, 2022 0.00 29,382.32 29,382.32 1,907.55 0.00 1,494.74 103,136.46 106,538.75

2.1 Intangible and tangible assets

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ASPO’S YEAR 2023

■

INVESTMENTS

EUR

Subsidiary

Other

shares Total

Carrying amount, Jan. 1 81,657,131.12 161,000.45 81,818,131.57

Carrying amount, Dec. 31, 2023 81,657,131.12 161,000.45 81,818,131.57

Carrying amount, Jan. 1 83,243,469.45 161,000.45 83,404,469.90

Lisäykset/myynnit -1,586,338.33 -1,586,338.33

Carrying amount, Dec. 31, 2022 81,657,131.12 161,000.45 81,818,131.57

Kauko Oy’s shares were sold during the 2022 financial year.

Subsidiaries of Aspo Oyj Share

ESL Shipping Ltd, Helsinki 100%

Telko Ltd, Espoo 100%

SuHi- Suomalainen Hiili Oy, Helsinki 100%

Leipurin Plc, Helsinki 100%

Aspo Services Ltd, Helsinki 100%

2.2 Investments

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ASPO’S YEAR 2023

■

NON-CURRENT RECEIVABLES

EUR 2023 2022

Receivables from Group companies

Loan receivables 104,092,786.00 102,773,786.00

Total non-current receivables 104,092,786.00 102,773,786.00

■

CURRENT RECEIVABLES

EUR 2023 2022

Receivables from Group companies

Interest receivables 47,583.56 52,000.00

Dividend receivables 5,600,000.00 12,000,000.00

Group contribution receivables 1,550,000.00 2,500,000.00

Cash pool receivables 380,085.57 1,144,075.74

Accounts receivables 234,358.42

Total 7,812,027.55 15,696,075.74

Other receivables 15,707.84 138,437.28

Deferred receivables

Personnel costs 3,002.80

Other deferred receivables 207,669.88 243,140.41

Total other current receivables 223,377.72 384,580.49

Total current receivables 8,035,405.27 16,080,656.23

2.3 Receivables

2.4 Equity

■

EQUITY

EUR 2023 2022

Share capital, Jan. 1 17,691,729.57 17,691,729.57

Share capital, Dec. 31 17,691,729.57 17,691,729.57

Share premium reserve, Jan. 1 4,351,173.64 4,351,173.64

Share premium reserve, Dec. 31 4,351,173.64 4,351,173.64

Invested unrestricted equity reserve, Jan. 1 21,370,305.29 21,324,170.25

Share-based payments, gain on sale of treasury shares 88,387.84 46,135.04

Purchase of own shares -308,100.66

Invested unrestricted equity reserve, Dec. 31 21,150,592.47 21,370,305.29

Retained earnings, Jan. 1 21,973,907.14 28,283,146.34

Share-based payments 212,806.84 254,965.76

Dividend distribution -14,444,211.60 -14,108,588.05

Retained earnings, Dec. 31 7,742,502.38 14,429,524.05

Profit for the period 1,468,907.45 7,544,383.09

Total equity 52,404,905.51 65,387,115.64

■

CALCULATION REGARDING DISTRIBUTABLE EQUITY

EUR 2023 2022

Invested unrestricted equity reserve 21,150,592.47 21,370,305.29

Retained earnings 7,742,502.38 14,429,524.05

Profit for the period 1,468,907.45 7,544,383.09

Total 30,362,002.30 43,344,212.43

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ASPO’S YEAR 2023

2.5 Provisions

■

PROVISIONS

EUR 2023 2022

Share based incentive plan 57,342.94 318,262.50

Total 57,342.94 318,262.50

■

NON-CURRENT LIABILITIES

EUR 2023 2022

Bonds 14,982,968.75

Hybrid bond 30,000,000.00 30,000,000.00

Loans from financial institutions 70,000,000.00 72,500,000.00

Yhteensä 100,000,000.00 117,482,968.75

Total non-current liabilities 100,000,000.00 117,482,968.75

In the reporting period Aspo signed a loan agreement of EUR 30 million for a three-year loan period extending the matu-

rity of Aspo’s loan portfolio. The loan was taken for general corporate purposes and for refinancing a loan of similar value.

The loan will be paid back at the end of the loan period.

During 2022, Aspo restructured a bilateral bank loan of EUR 20 million, about to mature in 2023, with a new bilateral

revolving credit facility which will mature in 2025. The loan agreement also includes two options for a one-year extension.

In June 2022, Aspo issued a new EUR 30 million hybrid bond, with a coupon rate of 8.75% per annum. The hybrid

bond has no maturity, but the company may exercise an early redemption option in June 2025 at the earliest. Aspo’s ear-

lier hybrid bond of EUR 20 million was redeemed on May 2, 2022.

2.6 Non-current liabilities

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ASPO’S YEAR 2023

2.7 Current liabilities

■

CURRENT LIABILITIES

EUR 2023 2022

Loans from financial institutions

Loans from financial institutions 12,500,000.00 12,500,000.00

Bonds 14,992,778.75

Total 27,492,778.75 12,500,000.00

On September 25, 2019, Aspo Plc issued a EUR 15 million unsecured private placement bond as part of the group bond

of EUR 40 million guaranteed by Garantia Insurance Company. The bond pays fixed interest rate and matures on Septem-

ber 25, 2024.

EUR 2023 2022

Liabilities to Group companies

Cash pool accounts 24,997,364.15 11,782,829.37

Accounts payable 46.13 20,718.03

Total 24,997,410.28 11,803,547.40

Deferred liabilities

Interest 2,194,951.13 1,635,360.33

Personnel expenses 422,175.63 917,058.18

Other 107,675.57 101,881.62

Total 2,724,802.33 2,654,300.13

2.8 Guarantees and contingent liabilities

■

LEASE LIABILITIES

EUR 2023 2022

Payable within one year 1,035,556.90 1,008,918.84

Payable later 2,737,718.48 276,626.72

Total 3,773,275.38 1,285,545.56

■

GUARANTEES ON OWN BEHALF

EUR 2023 2022

Guarantees 117,439.40 94,911.34

Total 117,439.40 94,911.34

■

GUARANTEES ON BEHALF OF GROUP COMPANIES

EUR 2023 2022

Guarantees 86,643,167.89 78,467,668.35

Total 86,643,167.89 78,467,668.35

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136

ASPO’S YEAR 2023

Signature of the Financial Statements and the Management Report

Helsinki, February 15, 2024

Heikki Westerlund Patricia Allam

Chairman of the Board Board member

Tapio Kolunsarka Mikael Laine

Board member Board member

Salla Pöyry Kaarina Ståhlberg

Board member Board member

Tatu Vehmas

Board member

Rolf Jansson

CEO

The Auditor’s note

Our auditor’s report has been issued today.

Helsinki, 15 February 2024

Deloitte Oy

Authorised public accountants

Jukka Vattulainen

APA

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT INVESTOR INFORMATIONFINANCIAL STATEMENTS

137

ASPO’S YEAR 2023

(Translation from the Finnish original)

Auditor’s report

To the Annual General Meeting of Aspo Oyj

REPORT ON THE AUDIT OF FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of Aspo Oyj

(business identity code 1547798-7) for the year ended 31

December 2023. The financial statements comprise the

consolidated statement of financial position, statement of

comprehensive income, statement of changes in equity,

statement of cash flows and notes, including a summary

of material accounting policies, as well as the parent com-

pany’s balance sheet, income statement, cash flow state-

ment and notes to the financial statements.

In our opinion

• the consolidated financial statements give a true and

fair view of the group’s financial performance, financial

position and cashflows in accordance with International

Financial Reporting Standards as adopted by the EU;

and

• the financial statements give a true and fair view of the

parent company’s financial performance and financial

position in accordance with the laws and regulations

governing the preparation of financial statements in

Finland and comply with statutory requirements.

Our opinion is consistent with the additional report sub-

mitted to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with good auditing

practice in Finland. Our responsibilities under good audit-

ing practice are further described in the Auditor’s Respon-

sibilities for the Audit of Financial Statements section of

our report.

We are independent of the parent company and of the

group companies in accordance with the ethical require-

ments that are applicable in Finland and are relevant to

our audit, and we have fulfilled our other ethical responsi-

bilities in accordance with these requirements.

According to our best knowledge and understanding all

services other than the statutory audit we have provided

for parent company and group companies comply with

regulations governing the services other than the statu-

tory audit in Finland. We have not provided any prohibited

non-audit services re-ferred to in Article 5(1) of regulation

(EU) 537/2014. All services other than the statutory audit

which we have provided have been disclosed in note 3.5.

to the consolidated financial statements and in note 1.5

to the parent company’s financial statements.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opin-

ion.

Key audit matters

Key audit matters are those matters that, in our profes-

sional judgment, were of most significance in our audit of

the financial statements of the current period. These mat-

ters were addressed in the context of our audit of the

financial statements as a whole, and in forming our opin-

ion thereon, and we do not provide a separate opinion on

these matters.

We have also addressed the risk of management override

of internal controls. This includes consideration of whether

there was evidence of management bias that represented

a risk of material misstatement due to fraud.

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138

ASPO’S YEAR 2023

Key audit matter How our audit addressed the key audit matter

Discontinued Operations

Refer to the Aspo Oyj’s consolidated financial statements’ note 1.3.

In the beginning of the year 2023, Aspo established

a new reporting segment called Non-core businesses

which consists of Telko Russia and Belarus as well as

Kauko GmbH previously reported in the Telko segment,

Leipurin Russia, Belarus and Kazakhstan previously

reported in the Leipurin segments well as SEL Ship-

ping Russia previously reported In the ESL Shipping seg-

ment.

Telko’s subsidiary in Russia, which was part of the Non-

core segment, was sold in April 2023 and operations of

Telko’s subsidiary located in Belarus were discontinued

and was no longer consolidated to Aspo Group from

31.8.2023 onwards.

In addition, due to the current circumstances, Aspo has

concluded that it has lost the control in accordance with

IFRS 10 over Leipurin Russia, Belarus and Kazakhstan

entities as per 31.12.2023.

Negative impact on profit and loss for the financial year

1.1.-31.12.2023 resulting from sales and loss of con-

trol described above was EUR 14.5 million, which is dis-

closed as part of result from discontinued operations.

Changes in group structure and accounting treatment

of discontinued operations is a key audit matter due to

the substantial management judgement required, and

significant impact on the consolidated financial state-

ments resulting from accounting treatment of changes

in group structure in accordance with IFRS 10 and clas-

sification of discontinued operations and assets held for

sale in accordance with IFRS 5.

Our audit procedures have consisted e.g. the following

amongst others:

• We gained an understanding of the group’s

accounting principles related to divestments and loss

of control;

• Regarding the major divested and discontinues busi-

nesses, we assessed how the management has app-

lied accounting principles and assumptions related to

accounting principles with relation to requirements of

IFRS 10;

• Regarding the major divested and discontinued busi-

nesses, we tested the sales result determined by the

management and the effect of the transaction on

goodwill and translation differences on consolidated

financial statements; and

• We evaluate the appropriate presentation of disconti-

nued operations in the financial statements in accor-

dance with IFRS 5.

Key audit matter How our audit addressed the key audit matter

Goodwill impairment testing

Refer to the Aspo Oyj’s consolidated financial statements’ note 4.3.

Consolidated financial statements as of 31.12.2023

includes Goodwill amounting to EUR 38,9 million (EUR

36,9 million). Management has conducted goodwill

impairment testing and as a result of the testing con-

ducted has not accounted for impairment over goodwill

during financial year 1.1.-31.12.2023.

Goodwill impairment testing requires substantial man-

agement judgment over the recoverable amounts which

are for example associated to following assumptions

and estimates:

• Estimations over the projected future cash flow of

the cash generating units;

• Long term growth assumptions; and

• Applied discount rate.

For further details over the goodwill impairment testing

conducted by the management is presented in the note

4.3. within the consolidated financial statements.

As part of our audit procedures, we have critically eval-

uated the estimates over the future recoverable cash

flows and we have compared, that the forecasts used in

the impairment tests are based on approved long-term

forecast and budgets approved. We have assessed

appropriateness of impairment testing calculations.

We have assessed the impairment testing of goodwill

booked to the consolidated financial statements as at

31.12.2023 by:

• Evaluating the key assumptions applied per segment

applied;

• Assessing the growth estimates and comparing

them to historical performance;

• Comparing applied discount rates to independent

third- party sources;

• Assessing the sensitivity analysis over the long-term

assumptions and discount rate; and

• We have used Deloitte’s fair value specialist to

ensure that the discount rates and long-term growth

assumptions are in line with the market information.

We have also assessed the sensitivity analysis, which is

disclosed in the consolidated financial statements note

4.3. for the factors where a reasonably possible change

in certain variables could lead to significant impairment.

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139

ASPO’S YEAR 2023

Responsibilities of the Board of Directors and the

Chief Executive Officer for the financial statements

The Board of Directors and the Chief Executive Officer

are responsible for the preparation of consolidated finan-

cial statements that give a true and fair view in accor-

dance with International Financial Reporting Standards as

adopted by the EU, and of financial statements that give

a true and fair view in accordance with the laws and regu-

lations governing the preparation of financial statements

in Finland an comply with statutory requirements. The

Board of Directors and the Chief Executive Officer are also

responsible for such internal control as they determine

is necessary to enable the preparation of financial state-

ments that are free from material misstatement, whether

due to fraud or error.

In preparing the financial statements, the Board of Direc-

tors and the Chief Executive Officer are responsible for

assessing the parent company’s and the group’s ability to

continue as going concern, disclosing, as applicable, mat-

ters relating to going concern and using the going con-

cern basis of accounting. The financial statements are pre-

pared using the going concern basis of accounting unless

there is an intention to liquidate the parent company or

the group or cease operations, or there is no realistic alter-

native but to do so.

Auditor’s responsibilities in the audit

of financial statements

Our objectives are to obtain reasonable assurance on

whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and

to issue an auditor’s report that includes our opinion. Rea-

sonable assurance is a high level of assurance, but is not

a guarantee that an audit conducted in accordance with

good auditing practice will always detect a material miss-

tatement when it exists. Misstatements can arise from

fraud or error and are considered material if, individually

or in aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the

basis of the financial statements.

As part of an audit in accordance with good auditing prac-

tice, we exercise professional judgment and maintain pro-

fessional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement

of the financial statements, whether due to fraud or

error, design and perform audit procedures responsive

to those risks, and obtain audit evidence that is suffi-

cient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resul-

ting from fraud is higher than for one resulting from

error, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of inter-

nal control.

• Obtain an understanding of internal control relevant to

the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the pur-

pose of expressing an opinion on the effectiveness of

the parent company’s or the group’s internal control.

• Evaluate the appropriateness of accounting policies

used and the reasonableness of accounting estimates

and related disclosures made by management.

• Conclude on the appropriateness of the Board of Dire-

ctors’ and the Chief Executive Officer use of the going

concern basis of accounting and based on the audit evi-

dence obtained, whether a material uncertainty exists

related to events or conditions that may cast signifi-

cant doubt on the parent company’s or the group’s abi-

lity to continue as a going concern. If we conclude that

a material uncertainty exists, we are required to draw

attention in our auditor’s report to the related disclos-

ures in the financial statements or, if such disclosures

are inadequate, to modify our opinion. Our conclusions

are based on the audit evidence obtained up to the

date of our auditor’s report. However, future events or

Key audit matter How our audit addressed the key audit matter

Revenue recognition (continuing operations)

Refer to consolidated financial statements’ note 3.1.

In the financial year 2023 Aspo Group’s revenue from

continuing operations amounted to EUR 536,4 million

(EUR 560,7 million), which mainly consists of sale of

goods, but also from services sold to customers.

Revenue from sale of goods is recognized when the

control of the underlying products has been transferred

to the customer. Revenue from services is recognized

after the service has been rendered.

Revenue is Group’s key performance indicator, which

may be an incentive for premature revenue recognition.

We have assessed the internal controls of Aspo Group’s

information technology systems relating to sales pro-

cess and revenue recognition focusing of access con-

trols and change management controls.

We have assessed the design of main controls relating

to major revenue streams and assessed the operating

effectiveness of these controls.

We have assessed of the compliance of company’s

accounting policies over revenue recognition and com-

parison with applicable accounting standards.

We have audited correctness of timing and amounts of

revenue recognized based on samples and substantive

analytical audit procedures and comparison with applica-

ble accounting standards.

As part of our audit of revenue recognition policies we

have compared of sales transactions in the bookkeeping

records against customer contracts and verification of

acceptance of deliveries.

We have assessed appropriateness and adequacy of

consolidated financial statement notes related to reve-

nue.

We have not identified significant risks of material misstatement in accordance with EU Audit Regulation (537/2014)

Article 10 paragraph 2 c in the parent company’s financial statements.

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATION

140

ASPO’S YEAR 2023

conditions may cause the company to cease to conti-

nue as a going concern.

• Evaluate the overall presentation, structure and con-

tent of the financial statements, including the disclosu-

res, and whether the financial statements represent the

underlying transactions and events so that the financial

statements give a true and fair view.

• Obtain sufficient appropriate audit evidence regarding

the financial information of the entities or business acti-

vities within the group to express an opinion on the

consolidated financial statements. We are responsible

for the direction, supervision and performance of the

group audit. We remain solely responsible for our audit

opinion.

We communicate with those charged with governance

regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including

any significant deficiencies in internal control that we iden-

tify during our audit.

We also provide those charged with governance with a

statement that we have complied with relevant ethical

requirements regarding independence and communicate

with them all relationships and other matters that may

reasonably be thought to bear on our independence, and

where applicable, related safeguards.

From the matters communicated with those charged with

governance, we determine those matters that were of

most significance in the audit of the financial statements

of the current period and are therefore the key audit mat-

ters. We describe these matters in our auditor’s report

unless law or regulation precludes public disclosure about

the matter or when, in extremely rare circumstances, we

determine that a matter should not be communicated in

our report because the adverse consequences of doing

so would reasonably be expected to outweigh the public

interest benefits of such communication.

OTHER REPORTING REQUIREMENTS

Information on our audit engagement

We have been appointed as auditors by the Annual Gene-

ral Meeting of Aspo Oyj on 4 May 2020, and our appoint-

ment represents a total period of uninterrupted engage-

ment of 4 years.

Other information

The Board of Directors and the Chief Executive Officer are

responsible for the other information. The other informa-

tion comprises information included in the report of the

Board of Directors and in the Aspo’s Year 2023 publica-

tion but does not include the financial statements and

our report thereon. We obtained the report of the Board

of Directors prior to the date of the auditor’s report, and

the Aspo’s Year 2023 publication is expected to be made

available to us after the date of the auditor’s report.

Our opinion on the financial statements does not cover

the other information.

In connection with our audit of the financial statements,

our responsibility is to read the other information identi-

fied above and, in doing so, consider whether the other

information is materially inconsistent with the finan-

cial statements, or our knowledge obtained in the audit,

or otherwise appears to be materially misstated. With

respect to report of the Board of Directors, our responsi-

bility also includes considering whether the report of the

Board of Directors has been prepared in accordance with

the applicable laws and regulations.

In our opinion, the information in the report of the Board

of Directors is consistent with the information in the infor-

mation in the financial statements and the report of the

Board of Directors has been prepared in accordance with

the applicable laws and regulations.

If, based on the work we have performed, we conclude

that there is a material misstatement in of the informa-

tion included in the report of the Board of Directors, we

are required to report this fact. We have nothing to report

in this regard.

Helsinki, 15 February 2024

Deloitte Oy

Audit Firm

Jukka Vattulainen

Authorised Public Accountant (KHT)

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATION

141

ASPO’S YEAR 2023

Information for investors

ASPO PLC’S INVESTOR RELATIONS

The disclosure policy of Aspo Plc describes the general

principles and procedures that the Company adheres to in

its communication with the capital markets and its main

stakeholders. The disclosure policy can be found on com-

pany’s website.

The key principles of Aspo’s investor communications

are transparency, accuracy and fairness. Aspo meets and

proactively interacts with the capital markets and the

media. The aim of Aspo’s communications is to support

the fair value of the Company’s shares by providing the

capital markets with correct, sufficient and relevant infor-

mation on Aspo’s operations, strategy, targets, opera-

tional environment and financial position.

Aspo’s Investor communications manages the arrange-

ments of the Capital Markets Days and other events for

investors and analysts, and analyzes market information

and investor feedback for the use of Aspo Group’s man-

agement and Board of Directors.

SILENT PERIOD

Aspo has adopted a silent period of 30 days prior to the

publication of results. During this period, no comments on

the financial situation, company’s outlook or estimates will

be made. During this period, the company does not meet

investors, analysts or media in events where these issues

are discussed.

FURTHER INVESTOR INFORMATION

Aspo’s website at www.aspo.com offers also versatile fur-

ther investor information, such as the latest share infor-

mation and consensus estimates based on expectations

and predictions by the analysts following Aspo. At the

web address www.aspo.com it is also possible to order all

stock exchange releases and press releases to your e-mail.

ANNUAL SHAREHOLDERS’ MEETING

The Aspo Plc Annual Shareholders’ Meeting will be held

on Friday, April 12, 2024 at 10 a.m. at Pörssitalo, Helsinki.

A shareholder wishing to participate in the Annual Share-

holders’ Meeting shall register for the Annual Sharehold-

ers’ Meeting and, if applicable, vote in advance no later

than at 4 p.m. Finnish time on April 5, 2024, by which time

the registration and the advance votes shall be received.

More detailed instructions for shareholders will be pro-

vided in the notice of the meeting which will be released

on March 21, 2024. A proxy form and advance voting

form will be available on the company’s website at www.

aspo.com/shareholdersmeeting on March 22, 2024, at the

latest.

DIVIDEND PAYMENTS

The Board of Directors proposes to the Annual Sharehold-

ers’ Meeting to be held on April 12, 2024, that EUR 0.24

per share be distributed in dividends for 2023. In addi-

tion, the Board of Directors proposes that the Annual

Shareholders’ Meeting authorizes the Board of Directors

to decide on a possible distribution of capital from the

invested unrestricted equity fund in the maximum amount

of EUR 0.23 per share on a later date, if aligned with the

growth strategy execution and considering the long term

benefit of Aspo’s shareholders. If the maximum amount is

distributed, a total maximum of EUR 0.47 (0.46) per share

would be distributed in dividends and return of capital for

the 2023 financial year. The authorization would be valid

until the next Annual Shareholders’ Meeting.

The dividend of EUR 0.24 per share would be paid to

shareholders who are registered in the shareholders’ reg-

ister maintained by Euroclear Finland Ltd on the record

date of April 16, 2024. The Board of Directors proposes

that the dividend be paid on April 23, 2024. The Board of

Directors will decide at its meeting scheduled to be held

latest in November 2024, on the possible distribution of

capital from the invested unrestricted equity fund in the

maximum amount of EUR 0.23 per share, which would

be paid in November 2024 to shareholders who are regis-

tered in the shareholders’ register maintained by Euroclear

Finland Ltd on the record date.

FINANCIAL REPORTING IN 2024

• Financial Statement Release was published

on February 16, 2024

• Financial Statements and Sustainability report 2023

were published on March 7, 2024

• Interim Report for January–March

on Tuesday, May 7, 2024

• Half Year Financial Report for January–June

on Wednesday, August 14, 2024

• Interim Report for January–September

on Tuesday, October 29, 2024

Aspo’s financial information is published on the company’s

website at www.aspo.com, including financial statements,

interim reports, half year financial reports and stock

exchange releases in Finnish and in English.

CONTACT INFORMATION

For any further information concerning Aspo’s investor

relations issues, please contact:

Rolf Jansson, CEO

Tel. +358 400 600 264

[email protected]

BASIC SHARE INFORMATION

• Listed on: Nasdaq Helsinki Ltd

• Industry sector: Industrials

• Category: Mid Cap

• Trading code: ASPO

• ISIN code: FI0009008072

ASPO YEAR 2023 GOVERNANCEBUSINESSES SUSTAINABILITY MANAGEMENT REPORT FINANCIAL STATEMENTS INVESTOR INFORMATION

142

ASPO’S YEAR 2023

Independent Auditor’s Report on the ESEF

Consolidated Financial Statements of Aspo Oyj

To the Board of Directors of Aspo Oyj

We have performed a reasonable assurance engagement on

whether the iXBRL tagging of the consolidated financial state-

ments in the ESEF consolidated financial statements (aspoplc-

2023-12-31-fi.zip) of Aspo Oyj (1547798-7) for the financial

year 1.1.–31.12.2023 has been prepared in accordance with

the requirements of Article 4 of Commission Delegated Regu-

lation (EU) 2018/815 (ESEF RTS).

Responsibilities of the Board of Directors

and the Managing Director

The Board of Directors and Group CEO are responsible for the

preparation of the report of the Board of Directors and finan-

cial statements (ESEF financial statements) that comply with

the requirements of ESEF RTS. This responsibility includes

• preparation of ESEF financial statements in XHTML format

in accordance with Article 3 of ESEF RTS

• tagging the consolidated financial statements’ primary

statements, disclosures and identifying information in the

ESEF financial statements with iXBRL tags in accordance

with Article 4 of ESEF RTS, and

• ensuring consistency between ESEF financial statements

and audited financial statements

The Board of Directors and the Group CEO are also responsi-

ble for such internal control as they determine is necessary to

enable the preparation of ESEF financial statements in accord-

ance with the requirements of ESEF RTS.

Auditor’s Independence and Quality Control

We are independent of the company in accordance with the

ethical requirements that are applicable in Finland and are rele-

vant to the engagement we have performed, and we have ful-

filled our other ethical responsibilities in accordance with these

requirements.

The auditor applies International Standard on Quality Man-

agement 1 and, accordingly, an audit firm shall design, imple-

mentand maintain a system of quality control including poli-

cies and procedures regarding compliance with ethical require-

ments, professional standards, and applicable legal and

regulatory requirements.

Auditor’s Responsibilities

In accordance with the engagement letter, we express an opin-

ion on whether the tagging of the consolidated financial state-

ments in the ESEF financial statements has been prepared in

all material respects in accordance with the requirements of

Article 4 of ESEF RTS. We conducted a reasonable assurance

engagement in accordance with International Standard on

Assurance Engagements ISAE 3000.

The engagement includes procedures to obtain evidence on:

• whether the tagging of the consolidated financial state-

ment’s primary statements in the ESEF financial statements

has been prepared in all material respects in accordance

with the requirements of Article 4 of ESEF RTS

• whether the tagging of the consolidated financial state-

ments’ disclosures and identifying information in the ESEF

financial statements has been prepared in all material

respects in accordance with the requirements of Article 4 of

ESEF RTS, and

• whether the ESEF financial statements are consistent with

the audited financial statements.

The nature, timing and extent of the procedures selected

depend on the auditor’s judgment. This includes the assess-

ment of risk of material departures from the requirements set

out in ESEF RTS, whether due to fraud or error.

We believe that the evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the tagging of the consolidated financial state-

ments in the ESEF financial statements (aspoplc-2023-12-

31-fi.zip) of Aspo Oyj for the financial year 1.1.–31.12.2023

has been prepared in all material respects in accordance with

the requirements of Article 4 of ESEF RTS.

Our audit opinion on the consolidated financial statements

of Aspo Oyj for the financial year 1.1 -31.12.2023 has been

expressed in our auditor’s report dated 15.2.2024. In this

report, we do not express an audit opinion or any other assur-

ance conclusion on the consolidated financial statements.

Helsinki, March 7, 2024

Deloitte Oy

Audit Firm

Jukka Vattulainen

APA

(Translation of the

Finnish Original)