Proventia focuses on its growing Off-road Machinery Systems and Components business and divests its Test Solutions business

January–December 2024 in brief

  • The Group’s net sales decreased by 1.5% from the previous year to EUR 41.9 (42.6) million.
  • The operating profit was EUR 5.2 (7.4) million.
  • The operating profit rate was 12.3% (17.4%).
  • The result for the period was EUR 3.9 (5.7) million.
  • Earnings per share (undiluted) were 0.24 (0.35).
  • The Group had 176 (165) employees at the end of December.

The figures in brackets refer to the same period in the previous year.

Proventia has classified the Test Solutions business as an asset held for sale and reports the Test Solutions business for the year 2024 as discontinued operations in accordance with IFRS reporting practices. Unless otherwise stated, the figures reported in this financial statements release pertain to continuing operations i.e. the Off-road Machinery Systems and Components business area, which will be the group’s only reportable business segment in the future.

President and CEO Jari Lotvonen:

In December 2024, we made a strategic decision to focus on our largest business area, the Off-road Machinery Systems and Components, and initiated measures to divest the Test Solutions business. The synergies of the Test Solutions business with the Off-road Machinery Systems and Components business are minimal, as their customer bases and business models differ significantly from each other. We believe that the Test Solutions can be developed better under outside ownership.

In general, the year 2024 was eventful, and market environment challenging. Despite challenges, the net promoter score (NPS) was excellent and rose from 51 to 71 in the annual customer satisfaction survey.

Although the sales volumes of engines and machines in Proventia’s key customer segment, the global off-road machinery market, decreased, we still managed to achieve net sales close to the previous year’s level. This is thanks to, among other things, our new projects that proceeded from development to production. The net sales were EUR 41.9 million (42.6) and the operating profit was EUR 5.2 million (7.4). The operating profit rate was 12.3% (17.4%) and the result for the period was EUR 3.9 million (5.7).

Off-road Machinery Systems and Components (continuing operations)

Emission Control

In the original equipment manufacturer (OEM) emission control systems, net sales increased from the previous year, even though delivery volumes increased more slowly than expected due to weak end-customer demand for off-road machinery. We estimate, based on key customers’ reporting, that the global off-road machine market decreased by about 20 per cent in 2024, which led also to a decrease in the production volumes of our customers.  The weakened demand was offset by the start of serial production and deliveries of two new products at Proventia’s Czech plant in the autumn of 2024.

Several projects currently in the development phase will proceed to serial production starting in 2025, which will result in significant revenue growth in the coming years.  In addition, we landed new product development projects from new customers, which expand the company’s customer base and will bring predictability to the company’s R&D and production for years to come. These globally operating customers include i.a. the engine manufacturer MAN Engines, and a major off-road machine manufacturer from the USA.

In the Retrofit customer segment, the year 2024 was quiet, and sales remained at a lower level than in the previous year. Due to the structural change in market demand, the importance of the product group for Proventia will continue to decline and our operations will focus more clearly on OEM products.

Thermal Components

In 2024, demand for thermal components remained at the previous year’s level. We started serial production of thermal components at our Czech plant and made progress in using 3D printing in the design and production of tools used in the manufacture of components. We manufacture thermal components for the insulation of engines and engine compartments, as well as for emission control systems, exhaust manifolds and piping. Effective thermal management plays an increasingly important role in improving the performance, safety and ease of use of engines and machines.

Battery packs

The challenges in the off-road machinery market and low sales volumes were also reflected in Proventia’s battery product group. Off-road machine manufacturers focused on cost savings instead of investing in developing new technologies or power sources. During 2024, we invested especially in expanding our battery portfolio. We announced cooperation with the Norwegian battery cell manufacturer Morrow Batteries. The aim of the partnership is to develop a European lithium iron phosphate (LFP) energy battery for heavy off-road machinery suitable for applications characterized by long-lasting continuous loads. Proventia’s LFP batteries will be built as modular battery systems, similar to lithium-titanate (LTO) batteries. The product will be launched at the Bauma trade fair in Germany in the spring of 2025. The expanding battery product range supports growth opportunities in the off-road machinery industry and other industrial sectors with similar electrification demands.  We have planned the expansion of the Oulu Technology Center to include spaces specifically designed for battery product development and commercialization.

Test Solutions (discontinued operations)

The productization of modular test solutions into the EVA product family progressed well in the Test Solutions business, and the business has a lot of potential for development and growth. However, the global challenges in the electric vehicle and battery markets materialized in 2024. The main reason for the weak development was the bankruptcy of a significant customer and the projects that were therefore suspended. As a result, operations produced a loss in 2024. Had the projects continued as planned, net sales and profitability of the Test Solutions business would have also been in line with the targets set.

We are preparing for CSRD sustainability reporting

We have continued our preparations for sustainability reporting in accordance with the CSRD directive. We aim to further reduce the emissions of our own and our customers’ products, and accordingly, in December 2024, we committed to setting emission reduction targets in line with the Science Based Targets initiative (SBTi).

Key figures

EUR 1,00020242023
Net sales41,92742,557
Change in net sales, %-1.5%-17.3%
Operating profit5,1757,421
Operating profit, %12.3%17.4%
Earnings per share (EPS), undiluted, EUR0.240.35
Earnings per share (EPS), diluted, EUR0.230.33
Return on equity (ROE), %5.8%20.9%
Equity ratio, %67.1%62.9%
Return on capital employed (ROCE), %9.1%22.7%
Interest-bearing liabilities3,4194,939
Net debt-1,800-6,394
Investments3,5383,321

Outlook              

Stricter emission regulations, electrification, hydrogen and renewable fuels support Proventia’s long-term strategy and growth. Proventia is actively involved in developing new technologies to improve the energy efficiency of off-road machinery and reduce emissions regardless of the technology used as a power source.

The off-road machinery market is growing, and emission control systems will be applied in an increasing number of engine categories. Fossil fuels will be replaced with renewable fuels and, together with exhaust aftertreatment systems, will also enable the use of internal combustion engines in the future. Proventia invests heavily in its customers and the development of their products, as well as in increasing production capacity at the Czech plant. Several product development projects will continue to proceed to serial production from 2025 onwards, which will result in significant revenue growth in the coming years. In addition, the company won new product development projects from new customers during 2024, which brings predictability to our product development and production for years to come.

The off-road machinery battery market has developed more slowly than previously estimated, but our new battery products will expand our growth opportunities in the market for fully electric off-road machinery and equipment. Proventia continues to invest in the development of its battery technologies.

Guidance (continuing operations)

Net sales and the operating profit are expected to increase in 2025 from the 2024 level. In 2024, net sales were EUR 41.9 million, and the operating profit was EUR 5.2 million.

Attachment: Proventia Group Corporation: Financial Statements Release January-December 2024 (PDF)

More information:

Jari Lotvonen
CEO, Proventia Group Oyj
puh. 0400 68 4072
jari.lotvonen(at)proventia.com

Proventia Group is a technology company operating in global markets. Proventia develops and manufactures systems and components that reduce the emissions of off-road machines and improve their energy efficiency, and modular test centers for the development and testing of batteries and hydrogen fuel cells. Company’s customers include the leading global names of the  off-road machinery and vehicle industry. 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 200 industry professionals in Finland and the Czech Republic.