Neova’s half-year report January-June 2025
Growing media business continued to develop positively
April-June 2025 in brief:
- The Group’s net sales amounted to EUR 142.9 million (EUR 137.6 million).
- EBITDA was EUR 15.2 million (EUR 15.9 million), or 10.7 % (11.5 %) of net sales
- Comparable EBITDA was EUR 15.3 million (15.6). EBITDA included a total of non-recurring items EUR -0.1 million (EUR 0.4 million).
- Operating profit was EUR 6.6 million (EUR 5.7 million), or 4.6 % (4.1 %) of net sales, including EUR -0.3 million (EUR 0.4 million) in non-recurring items.
- Free cash flow before taxes was EUR 18.3 million (EUR 21.0 million).
January-June 2025 in brief:
- The Group’s net sales amounted to EUR 286.5 million (EUR 292.9 million).
- EBITDA was EUR 39.8 million (EUR 42.8 million), or 13.9% (14.6%) of net sales. EBITDA included a total of EUR -0.3 million (EUR -1.0 million) of non-recurring items relating to efficiency improvement measures.
- Comparable EBITDA was EUR 40.2 million (EUR 43.8 million).
- Operating profit was EUR 24.5 million (EUR 27.0 million), or 8.6% (9.2%) of net sales, including EUR -0.5 million (EUR -1.0 million) in non-recurring items relating to efficiency improvement measures.
- Free cash flow before taxes was EUR 3.3 million (EUR 43.9 million).
- Gross investments totalled EUR 14.0 million (EUR 15.5 million).
- Earnings per share were EUR 639.54 (EUR 702.02).
- The ratio of interest-bearing net debt to EBITDA was 3.1 (2.4)
- Return on invested capital (%, previous 12 months): 2.6 (2.8)
Figures in brackets to the corresponding period in 2024 unless otherwise stated.
Pekka Tennilä, CEO, comments:
“Neova’s net sales and operating profit increased in the second quarter of the year. However, Neova’s result for the first half of the year fell short of the comparison period, as the mild winter reduced the demand for fuels during the first months of the year.
The growth of the Group’s larger division, Kekkilä-BVB, accelerated from the first quarter, and also its operating profit improved. In addition to the increase in net sales, this was driven by the cost-saving programs we implemented in previous years. Kekkilä-BVB’s net sales grew especially in Materials business area, as well as in Central Europe and Sweden.
In the first half of the year, we took big steps in increasing the amount of circular raw materials in our portfolio. In January, we introduced the reed canary grass to the market, which we cultivate in old peat production areas in Finland. In June, we opened our first wood fibre production line at our Grubbenvorst production facility in the Netherlands. With the help of wood fibre, we can, for example, increase the air capacity of our substrates and at the same time reduce the amount of peat.
As expected, Neova Terra’s net sales fell short of the first half of last year due to declining demand for energy peat. The mild winter also had a negative impact on the demand for wood pellets. In addition, we closed the Vilppula pellet plant in the spring. On the other hand, the demand for horticultural peat in the export markets remained strong and increased compared to the comparison period. The decline in net sales reduced operating profit.
Neova Terra’s new businesses are developing according to plan. The maintenance break of the Ilomantsi activated carbon plant started in June. Thanks to the investments made during the break, the nitrogen emissions of the plant will reduce even further going forward. Successful product testing of biostimulants in cooperation with farmers continued in South America, among others.
The development of solar and wind power projects continued, and we expect to receive the first project-specific building permits after the summer holiday season. In addition, we announced in June that we had started planning for a solar power plant with a nominal output of approximately 240 megawatts in the former Ropolansuo peat production area in Mikkeli.
Due to the rainy early summer, the season’s peat harvesting started slowly, but the long hot spell in the middle of summer has helped us to increase the pace of harvesting.
Uncertainties in the global economy will continue to affect the outlook in the second half of the year, which makes it difficult to predict the development of the market environment. Although situations can change quickly, I believe that the positive development of the growing media business will continue in the second half of the year and the Group’s result will improve compared to last year.
And while looking ahead to the second half of the year, we need to strengthen our safety culture even further. I am not satisfied with the current trend in our safety statistics, so we must pay closer attention to our processes at every stage to ensure a safe workplace for everyone.”
Events after the revies period
There were no significant events after the review period.
Outlook for 2025
The megatrends of urbanisation, climate change and sustainable production are in many ways beneficial for Neova, and the company believes them to support positive development of the company’s businesses.
During the current financial period, Kekkilä-BVB will focus on sales growth as well as improving profitability. The efficiency programs of the past two years have created a good foundation for improving profitability and competitiveness of Kekkilä-BVB.
For Neova Terra, the demand for energy peat as a fuel is expected to continue to decrease. The demand for horticultural peat is expected grow along the growing media market itself. The company will continue the commercialisation of new businesses, and the commercialisation of the first new peat-based innovations is proceeding as planned.
Key uncertainty factors affecting the outlook include the success of the grow media sales season and peat production season. International conflicts and unstable world politics also cause uncertainty in the operating environment. These factors may have an indirect effect on demand and financial development.
Consolidated key figures
| EUR million | 4-6/ 2025 | 4-6/ 2024 | 1-6/ 2025 | 1-6/ 2024 | 1-12/ 2024 |
| Net sales | 142.9 | 137.6 | 286.5 | 292.9 | 469.0 |
| Operating profit (EBIT) | 6.6 | 5.7 | 24.5 | 27.0 | 14.0 |
| % of net sales | 4.6 | 4.1 | 8.6 | 9.2 | 3.0 |
| Operating profit (EBIT) before impairment | 6.8 | 6.3 | 24.7 | 27.7 | 16.9 |
| % of net sales | 4.7 | 4.6 | 8.6 | 9.4 | 3.6 |
| Result for the period | 4.2 | 1.0 | 19.2 | 21.0 | 8.8 |
| EBITDA | 15.2 | 15.9 | 39.8 | 42.8 | 48.8 |
| +/- Change in working capital | 6.6 | 14.7 | -27.5 | 13.7 | 23.3 |
| -net investments | 3.6 | 9.6 | 9.0 | 12.7 | 27.1 |
| Free cash flow before taxes | 18.3 | 21.0 | 3.3 | 43.9 | 45.1 |
| Gross investments | 5.4 | 9.8 | 14.0 | 15.5 | 38.7 |
| Return on invested capital %* | 2.6 | 2.8 | 3.2 | ||
| Return on invested capital % before impairment | 2.0 | 2.4 | 2.6 | ||
| Return on equity %* | 2.4 | 2.9 | 2.9 | ||
| Total assets | 584.4 | 713.8 | 599.7 | ||
| Total equity | 281.6 | 309.4 | 296.6 | ||
| Interest-bearing net debt | 144.0 | 107.3 | 129.0 | ||
| Equity-to-assets ratio % | 48.5 | 43.5 | 49.8 | ||
| Interest-bearing net debt/EBITDA | 3.1 | 2.4 | 2.6 | ||
| Gearing % | 51.1 | 34.7 | 43.5 | ||
| Average number of employees | 787 | 839 | 817 | ||
| *) Previous 12 months |
For further information, please contact:
- Pekka Tennilä, CEO, Neova, tel. +358 40 821 5302
- Hannu Nyman, CFO, Neova, tel. +358 50 306 9913
- Susanna Inkinen, Chief Communications & Sustainability Officer, Neova, tel. +358 50 530 6245