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Neova Group 1 January–31 December 2022, Interim report and full-year financial statements

Reasonable result in a challenging market

September–December 2022 in brief:

  • Group turnover in September–December 2022 was EUR 153.4 million (EUR 144.6 million in September–December 2021).
  • The operating margin (EBITDA) was EUR -1.7 million (EUR 11.6 million), or -1.1% (8.0%) of turnover
  • Comparable EBITDA was EUR 1.5 million (EUR 13.2 million). EBITDA includes non-recurring items totalling EUR -3.2 million (EUR -1.6 million)
  • The operating result (EBIT) was EUR 1.1 million (EUR -16.5 million)
  • Comparable EBIT excluding non-recurring items was EUR -7.7 million (EUR 3.4 million). The operating result includes non-recurring items totalling EUR +8.8 million (EUR -19.9 million), consisting mainly of the cancellation of write-downs of energy peat assets totalling EUR 12.1 million and restructuring costs.
  • Free cash flow before taxes was EUR -12.2 million (EUR -4.2 million).
  • Investments amounted to EUR 51.5 million (EUR 18.9 million).

January-December 2022 in brief:

  • Group turnover in January–December 2022 was EUR 544.9 million (EUR 514.6 million in January–December 2021).
  • The operating margin (EBITDA) was EUR 46.8 million (EUR 562.8 million), or 8.6% (109.4%) of turnover. EBITDA includes non-recurring items totalling EUR -5.4 million (EUR +510.8 million).
  • Comparable EBITDA excluding non-recurring items and divested businesses was EUR 52.1 million (EUR 52.0 million).
  • The operating result (EBIT) was EUR 29.2 million (EUR 511.2 million). The operating result includes non-recurring items totalling EUR +8.8 million (EUR +488.4 million), consisting mainly of the cancellation of write-downs of energy peat assets totalling EUR 12.1 million and restructuring costs.
  • Comparable EBIT excluding non-recurring items and divested businesses was EUR 20.5 million (EUR 22.8 million).
  • Earnings per share were EUR 487 (EUR 16,638)
  • The pre-tax return on invested capital (pre-tax ROIC) was 6.4% (72.8%).
  • Free cash flow before taxes was EUR -41.5 million (EUR 434.0 million).
  • Investments amounted to EUR 167.5 million (EUR 84.6 million).
  • The equity ratio on 31 December 2022 was 38.7% (55.2%)
  • Interest-bearing net liabilities as at 31 December 2022 were EUR 140.0 million (EUR 11.2 million).
  • The ratio of interest-bearing net debt to operating margin (net debt/operating margin) on 31 December 2022 was 3.0 (0.0)

The figures in brackets refer to the corresponding period in 2021, unless otherwise indicated.

The financial year in figures1 January–31 December 20221 January–31 December 20211 January–31 December 2020
Turnover, EUR million544.9514.6544.9
Operating margin/EBITDA, EUR million46.8562.853.8
Operating result/EBIT, EUR million29.2511.2-95.3
Comparable operating profit excluding one-off items and the effect of divested businesses, EUR million20.522.820.9
Profit/loss for the period, EUR million18.6501.5-108.1
Earnings per share, EUR48716,638-3,712
Pre-tax return on invested capital, %6.473.1-14.0
Free cash flow before taxes, EUR million-41.5434.039.6
Equity ratio %38.755.227.9
Interest-bearing net debt/operating margin3.00.06.1
Energy peat deliveries (TWh)
Wood fuel deliveries (TWh)
Accident frequency*

*) Accident frequency = number of accidents requiring a visit to occupational health services/million working hours

Neova in brief

Neova is an international conglomerate whose businesses promote clean, local and water-conserving food production and supply local fuels. Neova Group also develops new products for the purification of contaminated environments, prepares wind and solar power projects and creates well-being by providing jobs, recycling and by creating comfortable living environments.

Neova Group also includes the subgroup Kekkilä-BVB, which is the European market leader in growing media products. The company produces growing media, mulches and fertilisers for professional growers, consumers and landscapers in Finland under the Kekkilä brand, in Sweden under the Hasselfors Garden brand and in the Netherlands under the BVB Substrates brand.

Neova is also a leading bioenergy company in Finland, Sweden and Estonia. The product and service selection developed for Neova’s energy customers consists of local fuels, such as pellets and energy peat. Neova is an important part of the local energy infrastructure in all of its markets.

Neova Group’s New Businesses division develops new business solutions based on the strengths of the Group companies. The Group’s latest higher added value business is Activated Carbons, which aims to enter the growing international market for technical carbons. The new higher added value businesses currently in development by the Group also include the Innovation unit, which focuses on developing new raw materials and separating other useful minerals from peat before its use in growing media and activated carbon products.

Neova Group had an average of 958 employees during the financial year. The company also employs hundreds of local contractors in its production and supply chains.

More information about the company: www.neova-group.com

CEO’s review Vesa Tempakka

Europe’s energy crisis, accelerating inflation and rising interest rates significantly changed the operating environment and profitability of different businesses

The increase in energy, fertiliser, interest and logistics costs, as well as the return of demand to pre-COVID19 levels, clearly weakened the demand for the Grow&Care division’s products and overall profitability. Correspondingly, increased demand through the security of energy supply for fuels significantly improved the profitability of the Fuels&Real Estate Development division.

In Kekkilä-BVB’s operating environment, the most significant change was the decrease in demand in the entire gardening market. Demand for consumer goods started to decline in all European markets. The reasons for this included the return of the additional demand brought by the pandemic to pre-pandemic levels, when consumers were able to travel again in their leisure time. At the same time, accelerated inflation, rising interest rates and energy costs cut consumers’ purchasing power. In an increasingly competitive environment, the consumer side was not able to pass on all of the increased costs to the prices of end products quickly enough, which reduced the profitability of the business.

In professional growing media, Kekkilä-BVB’s customers have suffered significantly from rising energy costs. The most significant cost items in greenhouses are heating, fertilising and lighting. Many garden entrepreneurs decided that at this cost level, in the coldest and darkest months, they would either not cultivate at all or slow down growth with less heat and light. This is directly reflected in the fall in demand for growing media in the professional growing media sector.

We were able to react quite well to the increased costs in professional growing media products, but we were not able to fully pass on all additional costs to customer prices, which reduced our relative profitability. However, a more significant reason for the decrease in profitability was that we were prepared for higher demand than actually materialised. In order to improve our profitability, we need to accept that the market is currently in decline and we need to adjust our operations.

Even though the volumes we delivered were clearly lower than in the previous year, active pricing allowed us to increase our turnover by 13% compared to the previous year. However, the lower volumes led to an increase in the unit cost of production and a decrease in profitability. Restoring profitability to a much higher level is one of the main targets for 2023, in addition to the development of new sustainable raw materials.

Horticultural peat production was successful in the summer of 2022, especially in Sweden and Estonia, and we managed to raise enough raw material for our own plants in addition to expanding the sustainable raw material base.

Position as Europe’s leading company strengthened

Already when established in 2018, Kekkilä-BVB was the leading company in the European growing media market. During the COVID-19 pandemic, consumers across Europe, in particular, bought more and more products related to home cultivation and gardening year by year. The pandemic also taught us that locally produced fresh food plays a very important role, which also increased professional farmers’ purchases from Kekkilä-BVB.

Kekkilä-BVB implemented its growth strategy in 2022 by completing three separate projects. During the year, Neova acquired a 30 per cent minority shareholding in Kekkilä-BVB, and now Kekkilä-BVB Oy is a wholly-owned subsidiary of Neova Oy. During the year, Kekkilä-BVB integrated into its business the Brill companies acquired from Germany at the beginning of the year, including a growing media factory, its own port and a sales company in France. The integration has now been completed, and the Brill entity increased Kekkilä-BVB’s turnover by approximately EUR 26 million and improved the company’s competitiveness in both supply and sales capacity in the important Central European markets. The third project was the acquisition of Algomin AB in Sweden in the autumn of 2022. The transaction provided significant new market share in Sweden in the field of garden fertilisers for consumers.

The energy crisis pushes up fuel prices and demand

Russia’s invasion of Ukraine in February 2022 had a significant impact on the Neova Group. As a result of the war, energy imports from Russia to Finland nearly ceased in spring 2022. This was immediately reflected in significant price increases in the electricity and fuel markets. Despite record-high prices for emission allowances, Neova’s energy peat stockpiles from previous years were now more in demand than supply. The cessation of imports of energy chips, pellets and sawdust into Finland and the Baltic countries increased the demand for all fuel wood and caused an outright shortage of wood pellets on the market.

In the new situation created by the war, Neova reversed its decision made the previous autumn to discontinue the production of energy milling peat in Finland in March. In the summer of 2022, due to bad weather conditions and the late start of production, energy peat production was only slightly more than a million cubic metres, but with the help of the old stockpiles, Neova was able to meet the needs of its large customers during the current heating season and also deliver energy peat to security of supply stockpiles.

In 2022, Neova completed a transaction in which its fuel wood business and Biowatti Oy, owned by Lassila & Tikanoja, merged to form Laania Oy, of which Neova owns 45 per cent.

The changes seen in the energy market led to clearly better-than-expected results in the Neova Group’s fuel businesses, outperforming the previous year. However, the improvement in sales and financial performance was based on old stockpiles, so we do not see similar energy fuel volumes in the current and future years.

Neova plans to produce energy peat next summer as well, but this does not mean a change in the long-term strategy. We will produce energy peat for our customers and security of supply stockpiles against pre-orders. We will continue to do this for as long as it is necessary for the functioning of our energy customers. Our view is that the change in the energy market caused by the war extended the role of energy peat as part of Finland’s energy mix for a few years, but by 2030, the use of energy peat in Finland will be very limited.

Neova’s strategic priorities are the profitable growth of Kekkilä-BVB in the international growing media market and the development and production of new high added-value products from peat and other natural materials. A good example of this is Novactor’s activated carbon production plant.

In order to enable Neova to operate efficiently and reliably in different markets and in different roles, the company reorganised its business operations at the end of the year. Vapo Terra Oy was established, and sales of energy peat, all commitments and agreements related to Finland’s security of supply, the operation of energy pellet plants and sales of energy pellets were transferred at the end of the year. Vapo Terra will continue real estate development activities, in which key actions include increasing the value of land assets by developing, alone and with partners, wind and solar power projects, among others, as well as the realisation of land assets that the Group does not need.

New business activities

The Group proceeded as planned with regard to new businesses. The warranty repair of Novactor’s activated carbon plant in Ilomantsi was carried out both on schedule and financially according to plan. The trial operation of the plant began in January 2023 and it is scheduled to be in full production in the second quarter of the year.

Good progress has been made in the development of growth promoters, that is, biostimulants. The results of cultivation experiments in Finland, Europe and Africa have been encouraging. It will be decided this year whether we will invest in a new production plant and start the industrial production of biostimulants.

The rise in interest rates was already clearly visible in the real estate market in autumn 2022. The realisation of land assets will decrease, and the focus will be on our own real estate development projects. We believe that licensing wind and solar power to areas taken out of peat production will be the best way to increase the value of our land assets in the future.

Sustainability as a priority now and in the future

Neova Group’s aim is to create net positive green growth through its products and services. In practice, this means that the added value created by our products and services for our customers and society as a whole always outweighs the environmental impact of their production.

Sustainability is strongly integrated into the management and continuous development of our business operations, in accordance with the changes in our business environment and the expectations of our stakeholders. Sustainability is part of our day-to-day work and we want it to be reflected in all of our teams and in everything we do. Engaging the commitment and participation of employees is vital, and sustainability is part of the incentive system for all of the Group’s personnel.

During 2022, we implemented comprehensive and systematic measures to promote the medium-term (2025) and long-term (2030) targets of our revised sustainability strategy in the areas of both environmental and social responsibility.

Our environmental responsibility targets are focused on greenhouse gas emissions, biodiversity, the circular economy and water. With regard to greenhouse gas emissions, we are three years ahead of our target of halving the CO2 emissions of our own operations by 2025 (compared to the baseline in 2018). Sustainable peat production is a precondition for our operations. We only establish peat production sites at previously ditched peatlands. We comply with the requirements of the RPP (Responsibly Produced Peat) standard in all of our production countries, and we promote biodiversity by transferring peat production areas taken out of production to subsequent land use and by taking restoration measures through wetlands and reforestation at select sites. During 2022, we launched a strategically important and extensive programme to increase the volume of recyclable raw materials, especially in our Kekkilä-BVB product portfolio.

With regard to social responsibility, our key priorities include promoting occupational safety, creating an excellent workplace, looking after employee well-being and ensuring the sustainability of sourcing. We are very serious about improving occupational safety in all of our operating countries, and our systematic work is yielding results. During 2022, we did not have any lost-time accidents in Finland or Estonia, and accidents in the Netherlands decreased by 40 per cent. In order to promote AN occupational safety culture and practices, the scope of ISO 45001 Occupational Health and Safety Certification was expanded throughout the Group. Our work to create an excellent employee experience and build a trust-based corporate culture and a good workplace continued. We organised, for example, a significant amount of training related to the development of leadership, diversity, equality and inclusion. Neova has received the Great Place to Work® certification in four of our operating countries (Finland, Sweden, Estonia and the Netherlands) as proof of our comprehensive development of personnel.

The third pillar of our sustainability strategy is economic responsibility. Our goal is to be a profitable company and to bear our economic responsibility as a successful company and a good corporate citizen. During 2022, the importance of our social responsibility was emphasised following the onset of the war in Ukraine. We discontinued all of our operations related to Russia, reversed our decision to discontinue energy peat production in Finland and ensured our ability to use energy peat as a fuel to ensure the security of supply.

It is necessary to adapt to changes in the operating environment

This year’s focus is especially on improving Kekkilä-BVB’s profitability. When the entire industry is in a downturn, we need to align our cost structure and product portfolio with the prevailing market situation.

Peat will continue to be an important raw material for us, but we have launched a multi-year project at Kekkilä-BVB to accelerate the growth of recyclable and renewable raw materials in our products. Currently, the share of renewable and recyclable raw materials is 27 per cent, and the aim is to double the volume of renewable raw materials by 2027.

In fuels, we will produce pellets to the extent that we can get raw material from the market. There have been and will be challenges here, as there is clear overdemand for wood, sawdust and cutter chips on the market. According to a study published in February 2023 (Afry), the demand for solid fuels in Finland will exceed the supply in the next few years. There is a risk of wood ending up being incinerated. For this reason, we produce as much milled energy peat as weather conditions and the production area of approximately 20,000 hectares in Finland allow.

In real estate development, the focus is no longer on the realisation of land assets, but on projects aimed at increasing the value of land. Such examples include the licensing or leasing of areas for wind and solar farms, the growing of renewable growing media materials in old production areas, and planting of commercial or carbon sequestration forests. In the field of new products, decisions will be made this year on possible additional investments in the production of activated carbon and biostimulants.

This year, the planning of operations will be under pressure from high inflation and interest rates, which anticipate at least some kind of recession in Europe, as well as increasing regulation and uncertainty in the ongoing legislative projects concerning peat in the EU.  The most important thing to keep an eye on in 2023 is the sphere of the finance taxonomy and the EU’s Fit for 55 legislative reform package. Even though the EU Sustainable Finance Taxonomy Regulation has hardly progressed at all yet, and peat is not classified as non-harmful or harmful, there are signs in the financial sector that it is becoming more difficult to finance companies that use peat.

Despite the challenges of the operating environment, we want to continue to play a role in enabling the production of healthy local food, especially in the growing European markets, and to be a company that contributes to ensuring the security of supply and delivery reliability of the Finnish energy sector.

Board of Directors’ report 1 January–31 December 2022

Operating environment

Predicting the changes in the operating environment in 2022 in advance was an impossible task. The budgets made at the end of the previous year, the forecasts of interest rates and inflation, as well as the whole view of the democratic world order, became irrelevant after Russia’s invasion of Ukraine.

The war and the ensuing sanctions and embargoes significantly changed the entire European energy system. The exit and withdrawal of Russian energy from the European energy market had a huge impact on the economy. This was most clearly reflected in the rise in the prices of transport fuels and freight, rising gas and oil prices and even the scarcity of gas and oil, and, above all, the significant rise in the price of electricity and increasing price volatility.

In the big picture, Russia’s invasion of Ukraine turned the long-running economic growth in Europe into a recession, raised the level of market interest rates by more than three percentage points, and triggered almost flat inflation to rise to nearly 10 per cent a year.

The Group’s freight costs increased significantly already in 2021, and in 2022 by an additional EUR 25 million. The prices of raw materials, such as fertilisers and packaging plastics, which are particularly affected by the rise in energy prices, also rose by up to several dozen per cent.

In spite of the price of emission allowances remaining at a record level of up to EUR 90 per tonne of carbon, the demand for all fuels available increased. The prices of chips, pellets and milled peat increased significantly, as demand on the fuel market exceeded supply when imports from Russia ceased.

The demand for growing media started to decline. This was due to the fact that after the end of the pandemic, consumers were able to travel again and amateur gardening returned to pre-pandemic levels. During the year, consumers’ purchasing power weakened significantly due to, among other things, higher interest rates, higher energy prices and general price development caused by inflation. Among professional farmers in Europe, purchasing power declined mainly due to energy prices and higher fertiliser prices. The pandemic of the previous years substantially increased the demand for products aimed at amateur gardeners. In the course of 2022, this demand decreased almost to pre-pandemic levels.

Prices of emissions allowances and electricity at record-high levels

Emissions trading is aimed at shifting energy production from fossil fuels to renewables. In district heating production, all heating plants in excess of 20 MW have to buy emission rights on the market if they burn non-renewable fuels. During 2022, the prices of emissions allowances were nearly EUR 100 per tonne of carbon in August, and they remained clearly higher than in previous years throughout the year.

The war in Ukraine as a whole, and in particular the explosion of the Nord Stream gas pipeline in September, gave rise to fears of a shortage of natural gas in Europe. This was directly reflected in the price of natural gas and, as a consequence, in the price of electricity and electricity futures.

During the year, electricity prices in Central Europe and the Nordic countries rose to record-high levels, and the fluctuation of electricity prices has been exceptionally strong. On windy days, the price has even been negative, but on windless days, electricity has cost many times more than the record levels of previous years.

In the Nordic countries, the price of electricity has also been affected by the delay in the start-up of the Olkiluoto nuclear power plant.  In addition, there have been failures in Swedish nuclear power plants and the water situation in Norway and Sweden was poor. However, the most significant reason was the end of electricity imports from Russia to Finland and the Baltic countries. In addition, transmission lines opened from Norway to Central Europe and the UK have increased the price of electricity in the Nordic countries.

Shipping and raw material costs increased

The cost of road shipping increased by nearly 30 per cent during the year, mainly due to higher fuel prices. Neova had hedged the prices of bulk sea shipping by means of annual agreements, which kept prices stable in 2022. This turned out to be highly advantageous, as the sea shipping volumes of horticultural peat to Europe grew considerably.

The prices of packaging materials continued to rise; for example, the prices of packaging plastics as much as doubled in 2021 and continued to rise in 2022. The higher costs of shipping and raw materials, with the combined increase exceeding EUR 60 million, could not be fully passed to the customer prices of products during the year under review.

Finance taxonomy

In August 2021, the EU started a project on expanding the finance taxonomy to potentially apply to peat production and the use of peat for purposes such as growing media and animal bedding. If all uses of peat were to be classified as non-sustainable, it would complicate the availability of financing for the industry as a whole and lead to higher financing costs.

Decisions on the extension of the taxonomy were expected during 2022, but the preparation of this delegated regulation made little progress during 2022. Neova Group is making every effort to inform the parliaments of various EU countries and EU officials with the aim of having the future of peat as growing media, animal bedding and as raw material for new high value-added products classified as sustainable going forward. The justification for this view is that the advantages of peat – in enabling food production, for example – are significantly greater than its disadvantages.

Unfortunately, several financial institutions have started to anticipate the treatment of peat in the taxonomy and have tightened or stopped lending to peat companies based on the ongoing reform of the finance taxonomy.

Neova Group

The Group’s profit for the financial year 1 January–31 December 2022 weakened clearly year-on-year and amounted to EUR 18.6 million (EUR 501.5 million). The profit for the comparison period was improved by a significant non-recurring gain of approximately EUR 507 million from the sale of Nevel.

The Group’s reported turnover grew by approximately six per cent year-on-year and amounted to EUR 544.9 million (EUR 514.6 million). The increase in turnover was mainly due to inflationary price increases related to the Grow&Care division and acquisitions. Turnover growth in the Grow&Care division was approximately 13 per cent.

The Group’s operating result was EUR 29.2 million. The comparable result decreased from the previous year’s level to EUR 20.5 million (EUR 22.8 million). The development of the comparable result was influenced by the strong demand for energy fuel products and the continued efficiency improvement measures taken throughout the Group. The result was negatively impacted by the decrease in the demand for Kekkilä-BVB products and the increased freight transport and material costs.

Operating cash flow (free cash flow before financial items and taxes) amounted to EUR -41.5 million (EUR 434.0 million) for the financial year. The cash flow was significantly affected by the redemption of minority interests in Kekkilä-BVB and investments in Finland, Germany and Sweden.  The Group’s equity ratio stood at 38.7 per cent (55.2 per cent) at the end of the financial year, while the ratio of net debt to operating margin was 3.0 (6.1).

As the demand for energy peat increased, Neova re-measured the energy peat fixed assets, the positive impact of which, EUR 12.1 million, is presented in the reported operating result for the financial year 2022 as a positive item affecting comparability.

Neova Group’s Grow&Care division had a strong year in terms of sales. The division’s turnover totalled EUR 382 million, representing year-on-year growth of 13 per cent. The majority of organic volume growth came from professional growing media products outside Europe.

The division’s operating margin decreased from the previous year, as did its relative profitability. As a result of the decrease in demand, unit production costs increased and not all of the higher production and logistics costs could be fully passed on to end product prices, in spite of price increases.

Right at the beginning of 2022, Kekkilä-BVB acquired the German companies Brill-Substrate and Brill Logistics. The acquisition strengthened Kekkilä-BVB’s market position in the major European markets of Germany, Italy and France. The turnover of the acquired businesses is approximately EUR 25 million. The acquisition included a company-owned port and terminal area in Papenburg, Germany. The strategically significant acquisition strengthens Kekkilä-BVB’s position as a leading player in its industry in Europe.

Neova announced another strategic transaction in December 2021, which will see its fuel wood business consolidated with Lassila & Tikanoja’s Biowatti Oy. The new company’s turnover will be approximately EUR 100 million. Approximately EUR 50 million in turnover and about 40 people were transferred to the company from Neova. Neova owns 45 per cent of the new company, with Lassila & Tikanoja owning 55 per cent. The transaction was subject to approval by the competition authorities, and the transaction was completed on 1 July 2022.

In the new businesses, Novactor’s activated carbon production plant was completed in Ilomantsi during 2021–2022 and industrial operations will start in early 2023. There is still strong demand in the market for activated carbon, and customer feedback indicated that the activated carbon produced by the plant was of good quality.

In addition to activated carbon, Neova has researched the production of biostimulants from peat for several years now. Biostimulants improve plant growth and plant resilience in outdoor cultivation and make arable crops more resilient against drought, for example. Neova’s biostimulants have been tested at experimental plantations in Finland and Italy. The aim is to make a decision on the industrial production of biostimulants by the end of 2023.

Developments by business segment

Neova’s segment structure changed on 1 January 2022. The Group changed the composition of its reporting segments by transferring the business activities of Nevel, which was sold in January 2021, to the other activities segment on 1 January 2022, and by forming a new reporting segment that comprises the Group’s fuel businesses, the management and optimisation of the Group’s land and real estate assets, and the business functions responsible for wind and solar power projects.

The reporting segments comprise the Group’s divisions in accordance with Neova’s management model. Neova Group’s reporting segments are Grow&Care, Fuels&Real Estate Development, New Businesses and other activities.


The Grow&Care division’s Kekkilä-BVB is Europe’s leading and most versatile growing media operator in the professional grower, landscaping and consumer segments. Kekkilä-BVB specialises in the sustainable development, production and marketing of high-quality growing media, mulches and fertilisers for landscapers, professional growers, distributors and home gardeners. Peat is also supplied as bedding peat to horse farms, cattle farms, pig farms and poultry producers and for use as raw material in further processing.

The division’s well-known brands, Kekkilä Garden and Hasselfors Garden, offer products to home gardeners and landscapers in the Nordic countries and the Baltic countries. In Central European markets, our business includes private label products as well as the Jardino and Florentus brands, for example. In the professional growing media business, the BVB Substrates and Kekkilä Professional brands serve not only the domestic markets but also the global markets with exports to more than 100 countries.

Turnover in the final third of the financial year was EUR 88.7 million (EUR 86.2 million). The operating margin was EUR -1.9 million (EUR 3.8 million) and the operating profit was EUR -10.9 million (EUR -3.8 million). Gross investments were EUR 29.1 million (EUR 20.0 million).

Turnover for the full financial year was EUR 381.2 million (EUR 338.6 million). The operating margin was EUR 26.6 million (EUR 32.2 million) and the operating profit was EUR 2.6 million (EUR 11.0 million). The operating result included non-recurring items in the amount of EUR -1.2 million (EUR -0.9 million). Gross investments were EUR 65.6 million (EUR 37.5 million).

The Grow&Care division implemented its growth strategy by completing two significant acquisitions in 2022: Brill Substrate and Brill Papenburg Logistics in the early part of the year and Algomin in the late part of the year. The division’s turnover continued to grow year-on-year, but the division’s business as a whole did not meet expectations in 2022, as its volumes began to decrease.

In 2022, demand for growing media products for professional farmers and consumers returned to pre-pandemic levels. Over the past two years, many raw material costs and, above all, logistics costs have risen by several dozen per cent. Russia’s invasion of Ukraine significantly raised the price of energy throughout Europe, which contributed to the rise in inflation. All these factors have affected the costs for professional farmers and have weakened the purchasing power of consumers in all of Kekkilä-BVB’s European markets. Kekkilä-BVB increased product prices during 2021 and 2022, which partly compensated for the increase in logistics costs and raw material prices. The sufficiency of the division’s horticultural peat has been secured as horticultural peat production has succeeded well, especially in Sweden and Estonia.


9–12/20229–12/2021Change1/2022–12/20221/2021–12/2021Change1/2020- 12/2020
Turnover (EUR million)
Operating margin (EUR million)-1.93.8604.326.632.2-17.4%32.3
Operating profit (EUR million)-10.9-3.8-197.2%2.611.0-76.3%14.0
Investments (EUR million)

Fuels&Real Estate Development

The Fuels&Real Estate Development division is responsible for the energy and fuel solutions provided by Neova Group in Finland, Sweden and Estonia. The division provides energy producers with peat, wood and pellet fuels. In addition to operating in the fuel business, the division develops land owned by Neova for subsequent land uses, such as wind and solar power.

The Fuels&Real Estate Development division’s current business units correspond to different types of fuel: pellet, energy peat and wind and solar power. Slightly under one half of the division’s turnover was derived from renewable biofuels in 2022.

Turnover in the final third of the financial year (September–December) was EUR 62.9 million (EUR 58.6 million). The operating margin for the reporting period was EUR 14.2 million (EUR 10.2 million) and the operating profit was EUR 24.9 million (EUR -9.4 million). Gross investments were EUR -14.5 million (EUR -5.1 million).

Turnover for the full financial year was EUR 162.3 million (EUR 161.6 million). The operating margin for the full financial year was EUR 37.6 million (EUR 10.6 million) and the operating result was EUR 43.7 million (EUR 2.0 million). The operating result included non-recurring items in the amount of EUR +15.0 million (EUR -17.8 million). The significant non-recurring items mainly consisted of cancellations of value impairments of energy peat production areas due to the continuation of energy peat production. Gross investments were EUR 3.0 million (EUR -1.0 million).

The operating margin of the division’s Fuels&Real Estate Development businesses for the final third of the financial year improved year-on-year. Occasionally high electricity prices and the previously made derivative price hedging improved profitability. The high price of emissions allowances reduced the demand for energy peat. The importation of wood chips from Russia became subject to sanctions after Russia attacked Ukraine, which increased the significance of the security of supply and the use of domestic fuels in the production of heating energy and electricity, which partially mitigated the decline in the demand for energy peat. Customers replaced wood with energy peat due to the disruptions in the availability of imported wood fuels.

The poor peat production summer in Finland, cost increases caused by rapidly rising inflation both in raw material sourcing and in the production and supply chain weakened profitability. Due to the increased demand for energy peat in the second and third thirds of the year, total comparable full-year fuel deliveries (including the wood fuels transferred to Laania Oy until 30 June 2022) grew by three per cent year-on-year. In real estate development, the development of decommissioned peat production sites into wind and solar farms progressed according to the project plans.

The energy peat business in Finland was transferred to a separate subsidiary, Vapo Oy, in early 2022. The divestment of the holding in Scandbio AB, a joint venture owned by the pellet business in Sweden, was completed during the financial year. The wood fuel businesses in Finland and Estonia were merged with L&T Biowatti Oy to establish the joint venture Laania Oy, which began its operations on 1 July 2022. At the beginning of 2023, the Fuels&Real Estate Development businesses in Finland were transferred to Vapo Terra Oy, a subsidiary owned by Neova Oy.

Fuels&Real Estate Developmet

9–12/20229–12/2021Change1/2022–12/20221/2021–12/2021Change1/2020- 12/2020
Turnover (EUR million)62.958.67.3%162.3161.60.4%245.9
Operating margin (EUR million)
Operating profit (EUR million)24.9-9.4364.9%43.72.02,085.3%-90.6
Investments (EUR million)-14.5-5.1-184.0 %3.0-1.0420.2%7.9
Energy sales, peat (GWh)3,3461,87278.7%9,7085,51576.0%6,992
Energy sales, other fuels (GWh)2771,417-80.5%3,6913,6062.4%3,161

New Businesses

The New Businesses division works together with customers and ecosystems to develop solutions to global challenges that secure the world’s food production, promote healthy living environments and promote the purification of air and water. The aim is to refine organic wetland biomass and other organic natural materials into high-added-value products for the international markets.

The area in which the most progress has been made consists of biostimulants isolated from organic wetland biomass. These are used in greenhouse and outdoor cultivation to improve plants’ nutrient absorption and the efficiency of nutrient use. Biostimulants also help plants adapt to changing conditions related to climate change. In accordance with the Neova Refinery concept, raw materials and side stream products are comprehensively utilised in adherence to the circular economy principle while minimising energy consumption and emissions.

In the Activated Carbons business, construction began in spring 2019 on a strategically significant production facility in Ilomantsi to process activated carbon. After the new activated carbon production facility was completed in 2021, defects were detected in the masonry structures, which made it necessary to rebuild the activation furnace. The demolition work was started at the beginning of 2022 and the reconstruction started in June 2022; the cold testing phase of the commissioning began at the beginning of September. Commercial production is expected to start in spring 2023. Production output from the first commissioning phase has been successfully delivered to end customers, and customer feedback on product quality has been very positive. The employment effect of the construction stage has exceeded 100 person-years, and the constant employment effect of the first stage of the facility, including the supply and production chain, is roughly 50 persons. Neova’s activated carbons are sold under the Novactor brand.

The operating loss for the final third of the financial year was EUR -2.4 million (EUR -1.7 million). Gross investments were EUR 21.4 million (EUR 1.2 million). The operating loss for the full financial year was EUR -5.1 million (EUR -5.1 million). The operating result for the financial year includes non-recurring items of EUR 0.0 million (EUR -0.1 million). Gross investments were EUR 25.0 million (EUR 10.4 million). Until the sales of the Ilomantsi plant’s own production output begin, the turnover of the New Businesses division consists mainly of the sale of activated carbon raw material in the value chain.

New Businesses

Turnover (EUR million)
Operating margin (EUR million)-2.0-1.5-31.5%-4.1-4.58.6%-2.9
Operating profit (EUR million)-2.4-1.7-35.2%-5.1-5.10.2%-3.3
Investments (EUR million)21.41.21,714.6%25.010.4140.8%28.0

Other activities

The Other activities segment consists of costs that are not allocated to the Neova Group’s business units. These costs are related to the Group’s administrative and strategic activities, as well as support functions.

The other activities segment’s effect on the operating result for the final third of the financial year (September–December) was EUR -7.5 million (EUR -1.5 million). The other activities segment’s effect on the operating result for the full financial year was EUR -12.1 million (EUR 501.6 million). The segment’s operating result included non-recurring items, mainly restructuring costs, totalling EUR -5.0 million (EUR +507.9 million). The figures for the comparison year were significantly affected by the non-recurring recognition of income related to the sale of the subsidiary Nevel. Most of the costs associated with the transaction were presented in the financial statements for the final third of 2021.


Turnover (EUR million)-0.10.0-865.0%0.215.9-98.7%93.8
Operating profit (EUR million)-7.5-1.5-398.3%-12.1503.0-102.4%8.3
Investments (EUR million)1.41.6-11.5%74.739.091.5%18.8

Cash flow, investments and financing

The Group’s free cash flow before taxes in the financial year 1 January–31 December 2022 amounted to EUR -41.5 million (EUR 434.0 million). The comparison year was affected by the sale of Nevel Oy’s shares in early 2021, which had a significant positive effect on the Group’s cash flow.  The change in working capital affected cash flow by EUR 36.3 million (EUR -50.2 million).

Gross investments in the financial year were EUR 167.5 million (EUR 84.6 million), or 830.7 per cent (239.9 per cent) of the amount of depreciation. The most significant investments during the financial period concerned the Activated Carbons business. Investments were also made in Kekkilä-BVB’s capacity expansion and security investments, as well as environmental protection and field maintenance in peat production. Net investments (gross investments – asset sales) totalled EUR 136.7 million (EUR 77.7 million).

The Group’s liquidity was strong. The aim of liquidity management is to maintain the Group’s liquidity so that the Group can finance its normal business operations while taking into account maturing debt and other short-term payment and financing obligations (<12 months). Liquidity risk is managed by maintaining sufficient cash assets, short-term investments and available credit commitments. At the end of 2022, the Group’s liquidity reserves consisted of cash assets, short-term investments in fixed income funds and commercial papers totalling EUR 215 million. Of the EUR 50 million revolving credit facility (in force until 2025), EUR 20 million was drawn down by the turn of the year.

The Group’s refinancing risk is managed by spreading the maturities of the loans sufficiently over the coming years. Long-term interest-bearing loans maturing over the next 12 months amounted to EUR 12 million, with lease liabilities representing EUR 8.5 million of that total. Thereafter, the next significant loans will fall due in 2024 (EUR 110 million).

Interest-bearing net debt at the end of the financial year amounted to EUR 140.0 million (EUR 11.2 million). The ratio of interest-bearing net debt to operating margin (net debt/EBITDA) on 31 December 2022 was 3.0 (0.0).  Short-term interest-bearing debt amounted to EUR 93.2 million (EUR 19.4 million). The equity ratio at the end of the financial year was 38.7 per cent (55.2%). At the balance sheet date, Neova met the covenants and other terms and conditions related to its financing agreements. The average interest rate of interest-bearing long-term loans was 3.0 per cent (2.6%), excluding lease liabilities recognised in the balance sheet.

The consolidated balance sheet total was EUR 810.3 million (EUR 780.9 million). The Group’s net financing items were EUR -10.6 million (EUR -7.2 million), or -1.9 (-1.4) per cent of turnover. Net gearing was 45.0 (2.6) per cent.

Natural seasonal fluctuation in activities

The Grow&Care division’s growing media business is also sensitive to seasonal fluctuations, with demand peaking at the start of the cultivation season, from late spring to early summer. In September–December, sales are mostly focused on year-round sales to professional growers, while the retail channels play a larger role in the spring and summer season. Growing media raw material sales are more stable throughout the year.

The Group’s business is cyclical to a significant extent also due to seasonal variation in the demand for heating. During the financial year under review, temperatures were relatively cold during the cold months, which had a substantial positive effect on fuel sales both in the early part of the year and late in the year. The final third of the year, from September to December, is usually a significant heating season in our operating countries.

Notable risks and uncertainty factors

Risks related to horticultural peat

With respect to horticultural peat, there are signs of political moves in Europe towards tighter regulation. The most significant threats to the agricultural peat business include restrictions on the use of peat in growing media, unexpected changes in legislation concerning peat, and more negative attitudes towards the use of peat in the retail sector.

To manage these risks, it is essential to provide transparent information on the environmental impacts of the use of peat and for the industry to actively produce and share objective information and emphasise peat’s role in greenhouse farming and global food production. The active promotion of recycling solutions and responsible peat production methods, as well as the restoration of peat production areas, play a very important role in the general acceptability of the use of peat.

The most important thing to keep an eye on in 2023 is to advocate for the interests of our industry in the sphere of the finance taxonomy and the EU’s Fit for 55 legislative reform package.


The total consumption of energy peat in Finland amounted to 15,640 TWh in 2019. The Government Programme sets out a goal of halving the use of energy peat by 2030. Based on a demand forecast collected by Neova Oy from its customers, this halving happened already in 2022. In 2025, energy peat consumption is estimated to be only 4.0 TWh, which would put peat consumption at only about 25 per cent of the volume seen in 2019.

Neova’s energy peat sales totalled approximately EUR 87 million in 2022. After three consecutive years of decline of about -20 per cent, the war in Ukraine caused a correction of about +10 per cent in 2022, which is an increase from the previous year. Energy peat has been primarily replaced by wood. At the current tax levels and prevailing prices of emission rights, energy peat is a substantially more expensive fuel for customers than wood chips, pulp wood and roundwood.

Risks in the activated carbon business

The most significant risk related to the activated carbon business concerns the successful commissioning of the first production facility in Ilomantsi in early 2023. This involves a mechanical functional risk as well as an end product quality risk. The functional risk was partially realised in autumn 2021, as quality defects were detected in the construction materials, making it necessary to practically rebuild the production plant in 2022.

Neova’s peat-based raw material for activated carbon, sold under the Novactor brand, also involves an approval risk related to the non-fossil requirement. However, the production facility in Ilomantsi is designed to have the capacity to use other raw materials for the production of activated carbon, if necessary.

Market risks

Neova’s businesses are subject to significant market risks related to end product demand, as well as the prices and availability of raw materials.

The demand for wood-based raw materials has grown significantly in the international markets as customers seek environmentally friendly alternatives. Imports of wood-based raw materials from outside of Europe have also increased. As the market grows, the availability of appropriately priced raw material in relation to the price of the end product plays a key role in ensuring competitiveness. The potential expansion of the situation in Ukraine would have impacts in the form of not only higher energy prices and the availability of energy but also the availability of wood-based and peat-based raw materials. The crisis could also have a significant impact on sea shipping in terms of both availability and cost.

Weather risks

Weather is a risk that has extensive effects on Neova’s business. In winter, the temperature affects the customers’ fuel requirements. In spring, the weather conditions also determine the timing of the peak season in the gardening trade, which affects the profit performance for the full year. During summer, the effects of the weather concern the production volumes and quality of wood fuels and environmental products.

In summer 2022, peat production went as planned in Sweden and Estonia. Correspondingly, Finland fell slightly short of the production targets set.

Damage risks

Damage risks include occupational safety risk, property risk, interruption risk and environmental risk. Vapo aims to prevent damage risks through proactive risk management measures and by reacting quickly to any observed hazards. Risks that cannot be managed by the company’s own actions are insured where possible. The goal is to continuously promote a positive culture of occupational safety and asset protection throughout the organisation. Extensive investments in changing the organisation’s safety culture are already being reflected in a reduced number of accidents and lower accident frequency, as well as an increase in safety observations and related improvement measures throughout Neova Group.

Financing and commodity risks

The company manages its financing risk and maintains liquidity by balancing the proportional share of short-term and long-term loans and the repayment schedules of long-term loans. In addition, the risk related to the availability and price of financing is managed by diversifying fundraising between different banks and financial instruments.

The company’s main financial risks are currency risk, interest rate risk and liquidity risk. The Group treasury, guided by the financial policy ratified by the Board of Directors, is responsible for identifying and managing financial risks. The Group’s risk management tools include currency derivatives, currency swaps, foreign currency loans and commodity derivatives.

Research and development

The Group’s research and development investments during the financial year 1 January–31 December 2022 amounted to EUR 9.4 million (EUR 16.3 million), which corresponds to 1.7 per cent of turnover (3.2%). Research and development activities were focused on supporting the company’s strategic renewal in all of the Neova Group companies.

New Businesses – The New Businesses division works together with customers and ecosystems to develop solutions to global challenges that secure the world’s food production, promote healthy living environments and promote the purification of air and water. The aim is to refine organic wetland biomass and other organic natural materials into high-added-value products for the international markets.

Under the Neova Refinery concept, raw materials and side streams are comprehensively utilised in accordance with the circular economy principle. High value-added products made of biomass and side streams carry enormous future potential because of the worldwide need for new ways to promote sustainable food production and water and air purification, as well as to replace harmful chemicals, oil-based products and plastics.

The Group’s innovation and IPR strategy is geared towards the Group’s goal of developing its existing businesses and creating new business. The strategy also governs the management and protection of tangible and intellectual property developed by the Group. The key measures include developing the competence of the personnel, fostering a culture of innovation and taking proactive measures to protect intellectual property.

Environmental responsibility

Neova Group is committed to continuously improving its operations and developing its environmental efforts. We want to be recognised as a responsible and sustainable company wherever we operate. During 2022, we implemented comprehensive and systematic measures to promote the medium-term (2025) and long-term (2030) targets of Neova Group’s revised sustainability strategy in the areas of both environmental and social responsibility.

Our environmental targets are focused on greenhouse gas emissions, biodiversity, the circular economy and water. As part of our efforts in this area, we started the implementation of the Green Factory concept in our growing media, peat, moss, pellet, wood and activated carbon businesses. In 2022, we focused on external and internal communications concerning our environmental actions, reducing emissions into waterways and the climate, especially by transferring old peat production areas to subsequent land uses, restoration measures promoting biodiversity through wetlands and reforestation at select sites. In addition, we continued our work to increase the recyclability of packaging materials and reduce waste load and wastage.

Responsibly Produced Peat (RPP) certification was expanded in Neova Group (Finland, Sweden, Estonia) from 4,195 hectares (areas covered by environmental permits) to 5,600 hectares in response to the needs of Kekkilä-BVB’s customers.

Neova Group’s active peat production areas (Finland, Sweden, Estonia) in summer 2022 totalled approximately 24,420 (21,162) hectares, with Finland accounting for 17,596 (14,654) hectares of the total, including stacking areas. A total of 44 (296) hectares of new peatlands became ready for production in Finland, and 221 (4,696) hectares were released from production by the end of the financial year. A total of 125 (9) hectares were released from production in Sweden and 57 (1,284) hectares in Estonia.

With the onset of the war in Ukraine, we cancelled the decision to discontinue energy peat production in Finland and ensured sufficient peat production capacity. At the same time, we continued to adapt energy peat production capacity in Finland, and the closure of production areas was one of the key projects in the Group’s peat operations in 2022. The closure of peatlands means ending peat production at the area in question and transitioning to the aftercare stage of the production area’s life-cycle and the process of voiding the environmental permit. At the end of the financial year, a total of 120 peat production areas were in the post-production aftercare stage. Environmental permits for peat production include aftercare obligations, which is why it is important for aftercare to be carried out responsibly and in line with the provisions of the environmental permit. Centres for Economic Development, Transport and the Environment (ELY Centres) conducted altogether 125 on-site inspections at Neova’s peat production areas in 2022. Of these, 43 were decommissioning inspections, 70 were regular inspections in accordance with the monitoring plan and 12 were other inspections.

A total of 3,149 (4,185) hectares of areas owned by the company were transferred to other land use methods from peat production operations in Finland during the financial year. A total of 2,906 (3,559) hectares were assigned for reforestation and 243 (626) hectares for building wetlands. In addition, a significant amount of land was sold, with the new owner deciding on the subsequent use. A total of 1,355 (2,062) hectares of land was returned to land owners. The company prepares for the subsequent maintenance of cutaway areas by means of an environmental provision that covers the costs associated with post-production obligations.

In accordance with its environmental permit application principles, the Group only applies for new production permits for ditched peatlands. Neova Group’s (Finland, Sweden, Estonia) environmental investments in peat production areas in 2022 amounted to EUR 0.4 million (EUR 0.9 million) and were primarily related to improving and building water treatment structures at peat production sites. Excluding input from the company’s own personnel, environmental protection costs for the financial year amounted to EUR 10.8 million (EUR 14.3 million). The costs primarily consisted of the maintenance of water treatment structures in peat production and impact monitoring.

General Meetings

The Annual General Meeting of Neova Oy was held on 29 March 2022. The AGM adopted the financial statements and consolidated financial statements for the financial year 1 January 2021–31 December 2021 and discharged the members of the Supervisory Board, the Board of Directors and the CEO from liability. The AGM resolved to pay a dividend of EUR 2,000 per share for the financial year that ended on 31 December 2021, corresponding to a total of EUR 60,000,000.

The AGM confirmed the number of members of the Supervisory Board as ten. Juha Sipilä was re-elected as Chairman, with Heikki Miilumäki as Vice Chairman. Antti Häkkänen, Eero Kubin, Esko Kurvinen, Mauri Peltokangas, Jenni Pitko and Piritta Rantanen were re-elected as members. Harri Hietala and Mika Venäläinen were elected as new members of the Supervisory Board.

The AGM approved the re-election of Stefan Damlin, Tuomas Hyyryläinen, Kirsi Puntila, Panu Routila and Markus Tykkyläinen as members of the Board of Directors. Eeva-Liisa Virkkunen and Jari-Pekka Punkari were elected as new members of the Board of Directors. Panu Routila was the Chairman of the Board of Directors, with Markus Tykkyläinen as Vice Chairman.

The audit firm PricewaterhouseCoopers Oy was elected as auditor, with Panu Vänskä, Authorised Public Accountant, appointed as the principal auditor.

The AGM resolved to establish a Nomination Committee of the Board of Directors, with Pekka Hurtola and Rami Vuola appointed as members.


The Group employed an average of 927 (896) persons in the final third of the financial year. The average number of employees for the full financial year was 958 (922). 

Employees by segment, average

Fuels&Real Estate Development215234
New Businesses3128
Other activities6891

The codetermination committees of Neova Oy and Kekkilä Oy met twice, as planned, during the financial year to discuss current topics. Employees are also represented on Neova’s Supervisory Board. The Supervisory Board met three times during the financial year.

Occupational safety

Neova Group’s safety team manages and develops our “safety first!” culture to prevent safety deviations and accidents through effective risk assessment, training of the personnel and provision of support to the business functions. In 2022, we carried out approximately 200 different risk assessments, safety inspections and walks.

In 2022, the Group’s accident frequency (LTA1f: lost-time accidents per million working hours) decreased considerably compared to the previous year and was 4.5 (7.2).

We achieved our zero accidents target for all of our operations in Finland for the second time. In Estonian operations, the year 2022 was also accident-free. Kekkilä-BVB implemented a comprehensive six-point action plan to improve safety. Particularly for Dutch operations, the effect was significant, decreasing the LTA1f frequency by 10.6 (18.7).

Most of our accidents – and serious accidents in particular – took place in production operations. During the past three years, 12 per cent of the incidents were classified as serious accidents or serious near misses: 9 incidents out of 75. However, none of these came close to being a fatal accident, and 57 per cent (54%) of the total number of accidents did not lead to lost time.

To improve and harmonise our safety culture, we started ISO 45001 Occupational Health and Safety certification audits in 2022 in all our operations, focusing on our plants. We conducted a safety pulse survey on the level of our safety culture on a scale of 1 to 12, with a relatively good result of 9.2. In the same survey, we surveyed the training needs of our personnel relating to safety and well-being at work.

We paid special attention to fire and personal safety. We conducted a total of 48 (72) fire and chemical risk assessments at peat production areas. The number of fires in peat production decreased by 44 per cent compared to the previous year.

We also monitored accidents involving contractors in our operations and conducted accident investigations in cooperation with them. Due to the travel restrictions and restrictions of visits to our plants introduced in response to the COVID-19 pandemic, the number of safety observations decreased by 11 per cent from the previous year. The number of safety observations made totalled 2,585 (2,963).

Neova Group has zero tolerance for inappropriate conduct and discrimination, and all six incidents reported during the year were reviewed without delay. Local zero-tolerance training was held for both staff and supervisors in all of our operating countries, with a total of 165 participants. As part of our social responsibility strategy, we have decided on measures that will sharpen our approach with regard to diversity, equity and inclusion, and the way we talk about these topics. Our key message is that we aim to operate in a more proactive manner, and we actively seek ways to increase diversity, equity and inclusion (DEI) in our operations. 

Neova Group participated in the Great Place to Work personnel survey for the fourth time in 2022. The results indicate that our journey towards being a better place of work has still continued well. The management team has reviewed the results of the survey and open answers and has selected corresponding new common development goals. Teams also come up with development measures together. According to the survey, our employee experience improved by one percentage point in a year as our Trust Index measuring the employee experience was 71 per cent; in 2021 it was 70 per cent. Based on the results of the survey, Neova Group was awarded the Great Place to Work certificate in four countries: Finland, the Netherlands, Sweden and Estonia.

Changes in organisational structure

On 3 January 2022, Kekkilä-BVB completed the acquisition of the German companies Brill Substrate and Brill Papenburg Logistics. The acquisition strengthened Kekkilä-BVB’s market position in the major European markets of Germany, Italy and France. The turnover of the acquired businesses was approximately EUR 25 million. The acquisition included a company-owned port and terminal area in Papenburg, Germany. The strategically significant acquisition strengthened Kekkilä-BVB’s position as a leading player in its industry in Europe.

On 10 February 2022, Neova announced it had signed an agreement concerning the sale of its associated company Scandbio AB. Scandbio AB is a Swedish pellet producer in which Neova held a 50% stake. The buyer was the Swedish company Lantmännen ek. The transaction was finalised on 1 April 2022 after approval by the relevant authorities. The transaction has not had a material impact on Neova Group’s result for the year.

On 21 February 2022, Neova Oy announced it had signed an agreement on acquiring a 30% minority interest in Kekkilä-BVB Oy from Nielson Belegging en Beheer B.V. In connection with the transaction, Juha Mäkinen, CEO of Kekkilä-BVB and a member of Neova’s Management Team, left the company. Vesa Tempakka, CEO of Neova and Chairman of Kekkilä-BVB’s Board of Directors, was appointed as Kekkilä-BVB’s new CEO. At the same time, the company announced that Peter Jan Kuiper, COO of Kekkilä-BVB, was appointed as a member of the Neova Group’s Management Team.  The changes took effect immediately. The transaction was completed on 1 July 2022 after the necessary approvals from the competition authorities were obtained.

On 1 July 2022, Neova Oy merged its fuel wood business with Lassila & Tikanoja Biowatti Oy to establish the joint venture Laania Oy, which will continue the business. Neova Oy owns 45 per cent of the joint venture, with Lassila & Tikanoja owning 55 per cent. Laania Oy is a major bioenergy service company with a nationwide sales and procurement network. Its turnover amounts to approximately EUR 110 million, and it has about 120 employees in Finland and Estonia. Approximately 50 employees were transferred to Laania from Neova’s fuel wood business in Finland, and approximately 10 employees in Estonia.

On 4 October 2022, Neova Oy announced that its Finnish business operations related to the security of supply and real estate development will be centralised in a newly established company named Vapo Terra Oy, which started its operations on 1 January 2023.

Neova Group’s subsidiary Hasselfors Garden AB completed the transaction related to the acquisition of the Swedish Algomin AB and Algomin AS Norge on 10 November 2022. The acquisition will complement its product portfolio and strengthen its market position as the number one gardening brand in Sweden. Algomin’s turnover is slightly over EUR 5 million, and it employs fewer than 10 people.

Board of Directors’ proposal for the distribution of profits

In line with its dividend policy, Neova distributes dividends amounting to an average of 50% of the comparable profit for the year. On 31 December 2022, the parent company’s distributable funds amounted to EUR 226,532,826.17. There have been no substantial changes in the company’s financial position after the end of the financial year. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 300.00 (EUR 2,000.00) per share be paid on the basis of the adopted balance sheet for 2022, making a total of EUR 9.0 million (EUR 60.0 million). The rest of the distributable assets shall be carried forward in retained earnings.

Events after the review period

On 8 February 2023, Neova announced that it would commence efficiency measures at Kekkilä-BVB. The aim is to achieve approximately EUR 10 million in efficiency improvement measures over the next year.

On 9 February 2023, Neova announced the signing of the business of the Italian company Dueemme Marketing Spa. The entire business of the company will be transferred to the new company Kekkilä-BVB Italy Srl.

Future outlook

Neova Group is one of the world’s largest producers of growing media. Nevertheless, political decisions have a material impact on the profitability of nearly all of the company’s businesses and therefore affect the company’s ability to invest in higher-added-value production. The funds obtained from the sale of the heat and power company Nevel give Neova the opportunity to continue its strong transformation from a former conglomerate and energy company into Europe’s leading producer of growing media through Kekkilä-BVB and a facilitator of cleaner water and air through the Novactor activated carbon business.

In the new financial year, the Kekkilä-BVB subgroup will again invest in developing its product selection and the profitable growth of its international sales in the professional, consumer grower and landscaping businesses. The Group intends to expand its distribution network into new markets in line with its strategy while increasing its cooperation with its existing comprehensive network of customers in its home markets in Europe.

Neova will continue to implement measures in line with its strategy to increase the competence of its personnel and achieve market-leading customer service. At the same time, the company will continue to increase the efficiency of its business processes in order to improve profitability. The demand for energy peat as a fuel is expected to continue to decline in spite of the temporary rise caused by the war in Ukraine, while the demand for bioenergy is expected to see strong growth.

Neova will continue the commercialisation of new business operations in the Activated Carbons business, as well as researching further new business initiatives in the Innovation business. Work on rebuilding the furnace at Activated Carbons’ first production facility for manufacturing technical carbons is progressing as planned in Ilomantsi, and the facility is expected to become operational during the first half of 2023. Innovation has a strong focus on cooperation with other industry participants to promote its project as effectively as possible in collaboration with interested partners. 

During the past two financial years, Neova has also been successful in the development of its own wind and solar power projects. Further progress will be made in 2023 on selected projects.

As of the beginning of the financial year 2023, Neova will move to quarterly interim reports, which will be published as follows: Q1 2023 on 30 May 2023, Q2 2023 on 31 August 2023, Q3 2023 on 30 November 2023 and Q4 2023 during the ninth week of 2024.

Consolidated key figures

Operating profit (EBIT)1.1-16.529.2511.2
% of turnover0.7-11.45.499.3
Operating profit (EBIT) before impairment-11.0-0.117.2527.6
% of turnover-7.1-0.13.2102.5
Profit/loss for the period7.8-21.018.6501.5
Operating margin (EBITDA)-1.711.646.8562.8
+/- Change in working capital30.80.448.4-51.1
   – Net investments-41.2-16.2-136.7-77.7
Free cash flow before taxes-12.2-4.2-41.5434.0
Gross investments51.518.9-167.5-84.6
Return on invested capital % *  6.473.1
Return on invested capital % before impairment *  3.875.4
Return on equity % *  5.198.7
Balance sheet total  810.3780.9
Shareholders’ equity  311.2427.9
Interest-bearing net debt  140.011.2
Equity ratio %**  38.755.2
Interest-bearing net debt/operating margin  3.00.0
Gearing %  45.02.6
Average number of employees  958922

*) Previous 12 months
**) In calculating the equity ratio, the capital loan on the balance sheet was calculated as shareholders’ equity

For further information, please contact:

  • Vesa Tempakka, Neova, CEO, tel. +358 400 726 727
  • Jarmo Santala, Neova, CFO, tel. +358 40 801 9191
  • Ahti Martikainen, Neova, Director, Communications and Public Affairs, tel. +358 40 780 4723