Mar 10, 2022
Proventia Group Corporation's Financial Statements Release Jan–Dec 2021
Net sales and operating profit increased
January–December 2021 in brief
- The Group’s net sales increased by 18.3% from the previous year to EUR 46.6 (39.4) million.
- Operating profit was EUR 4.0 (2.6) million.
- Profit for the period was EUR 3.2 (1.8) million.
- The group had 163 (142) employees at the end of December. Of these, 130 worked in Finland, 31 in the Czech Republic and 2 in the UK.
October–December 2021 in brief
- The group’s net sales decreased by 4.1% from the previous year to EUR 11.5 (12.0) million.
- Operating profit was EUR 0.5 (0.9) million.
- Profit for the period was EUR 0.4 (0.9) million.
(The figures in brackets refer to the same period in the previous year.)
President and CEO Jari Lotvonen:
“We grew strongly in 2021. Our net sales increased by 18.3% from the previous year, as a result of which our operating profit increased to EUR 4.0 million. Global challenges in the availability of components and extended delivery times cast a shadow over our growth. They caused bottlenecks in our customers’ production activities, decelerating Proventia’s deliveries. The shortage of components did not cause any significant disruptions in our production. We had prepared for the problems in the availability of components by increasing our stock levels, and we were able to complete all orders within the agreed schedule. In October–December, our net sales decreased by 4.1% from the corresponding period in the previous year. This decrease resulted from normal fluctuations in project activities and the lower customer demand due to the shortage of components.
Demand for our test solutions rose significantly, and net sales of our test solutions business grew by 23.5% from the previous year. Last year, we received several new orders regarding R&D and test solutions for electric vehicles and their batteries. Our customers included both vehicle manufacturers and companies operating in the battery industry. One of the largest projects in 2021 was the delivery of an electric vehicle R&D centre for Intertek in the UK. The testing centre was deployed during the final quarter of the year. We signed a cooperation agreement with Keysight Technologies Inc., a US-based manufacturer of testing equipment, during the final quarter. Our partnership includes the development of a battery testing solution into a standard product and provides the product with a global sales channel. Proventia’s recognition as a test solution supplier has increased significantly, and we had a record-high number of projects in progress at the end of the year.
Net sales of the Powertrain Systems and Components business area increased by 17.1%. We agreed a number of significant design and manufacturing agreements on emission control systems with leading global engine and non-road machine manufacturers. Product development for the new projects already started in 2021, and the projects will reach the serial production phase from 2023.
In the R&D of emission control systems, we have focused on improving the performance of selective catalytic reduction (SCR) system and started the development of smart control systems that help to optimise the operation of emission control systems even better than before. In addition, we have increased the use of simulation tools in R&D which shortens turnaround times in R&D projects.
As a result of new emission control projects and energy efficiency requirements, demand for thermal insulation solutions has also increased. During the final quarter, we entered into a cooperation agreement with German C2M Global on the marketing and sale of our thermal insulation components in Germany, Austria and Switzerland.
In electric powertrain products, we have focused on the R&D of batteries for hybrid non-road machinery. At the end of last year, we launched our first product on the market, the Proventia ePRO48 battery. We believe that the use of hybrid systems will also increase in non-road machinery in the next few years. The use of hybrid systems will improve the usability of non-road machinery and reduce carbon dioxide emissions.
Last year, we expanded our production in the Czech Republic by moving into larger production facilities. The manifold increase in the production capacity in the Czech Republic strengthens the company’s delivery capability and improves its competitive position in the non-road machinery markets.
EAB Private Equity becoming Proventia’s shareholder with its shareholding of approximately 20% alongside Head Invest, the main owner, marked a significant change in the company’s ownership. The solid foundation built by two strong owners enables Proventia to develop and grow in global vehicle and non-road machinery markets. This also boosts the development of our responsibility work in line with our strategy. We understand how important responsibility is for our business and we are committed to developing our operations following the principles of sustainable development.
Our company’s markets are expected to develop positively. Challenges in the availability of components are expected to continue and decelerate growth in 2022. Long-term opportunities for growth remain strong. Growth is supported by international carbon neutrality goals for transport and stricter global emission restrictions for non-road machines, as well as their hybridisation.”
Key figures
Outlook
The company’s markets are expected to develop positively. Challenges in the availability of components are expected to continue and decelerate growth in 2022. The company has strong opportunities for long-term growth in both Test Solutions and Powertrain Systems and Components business areas. Growth is supported by international carbon neutrality goals for transport and stricter global emission restrictions for non-road machines, as well as their hybridisation.
The need to test new technologies and power sources continues to increase in test solutions markets. Proventia will continue to develop the solutions required in the R&D and testing of electric vehicles, their powertrains and batteries.
In the Powertrain Systems and Components business area, demand for emission control systems will continue to grow. In non-road machinery, the combustion engine technology will remain the primary power source far into the future. Renewable fuels, combined with effective emission control, will increase. Europe leads the way in emissions regulations, with the rest of the world being a few years behind. Emissions regulations will become even stricter globally.
The development of hybrid systems will improve the energy efficiency of non-road machines and reduce their carbon dioxide emissions. Proventia will be actively involved in their development, and alongside the current ePRO48 battery, it has started the development of the high-voltage ePRO500+ battery for hybrid non-road machines.
In 2022 net sales is expected to increase and operating profit is expected to remain at the 2021 level. In 2021, net sales were EUR 46.6 million, and operating profit was EUR 4.0 million. However, it is still difficult to make estimates, and the current market conditions are increasing uncertainties over the future.
Attachment: Financial statements release (PDF)
More information:
Jari Lotvonen
CEO, Proventia Group Oyj
puh. 0400 68 4072
jari.lotvonen(at)proventia.com
Proventia Group is an internationally operating Finnish technology company, which provides solutions and services in the engine, machine and vehicle industries to combat climate change and to solve the air pollution problem. Proventia develops and manufactures modular test centres for the product development of electric and hybrid vehicles as well as systems and components that increase the energy efficiency of powertrains for non-road machines. Proventia takes people, the environment and future generations into account in all of its operations, with zero emissions being the company's vision.
The company employs approximately 170 industry professionals in Finland, the Czech Republic, and the UK. www.proventia.com