Harvia’s Interim Report 1 January – 31 March 2024
Harvia Plc, Interim report 3 May 2024 at 9.00 a.m. EEST
Harvia Q1 2024: Strong profitability − good growth
outside Europe
This release is a summary of Harvia Plc’s Interim Report
January–March 2024. The complete report is attached to this release
as a pdf file. It is also available on Harvia’s website at
https://harviagroup.com/.
Highlights of the review period
January–March 2024:
- Revenue increased by 2.3% to EUR 42.4 million (41.4). At
comparable exchange rates, revenue increased by 2.7% to EUR 42.5
million. Organic revenue growth was 1.4%.
- Operating profit was EUR 9.9 million (9.2), making up 23.3%
(22.2) of the revenue.
- Adjusted operating profit reached EUR 10.1 million (9.3),
making up 23.8% (22.4) of the revenue. At comparable exchange
rates, the adjusted operating profit was EUR 10.2 million (24.0% of
the revenue).
- Operating free cash flow amounted to EUR 11.1 million (11.6)
and cash conversion was 95.0% (107.6).
- Net debt amounted to EUR 26.5 million (45.8) and leverage,
calculated as net debt divided by 12 months’ adjusted EBITDA, was
0.6 (1.1).
- Equity ratio was 52.4% (49.3).
- Earnings per share were EUR 0.40 (0.34).
Key figures
|
EUR million |
1–3/2024 |
1–3/2023 |
Change % |
1–12/2023 |
| Revenue |
42.4 |
41.4 |
2.3% |
150.5 |
| EBITDA |
11.5 |
10.7 |
6.6% |
39.3 |
| % of
revenue |
27.0% |
26.0% |
|
26.1% |
| Items
affecting comparability * |
0.2 |
0.1 |
193.3% |
0.6 |
| Adjusted
EBITDA ** |
11.7 |
10.8 |
8.0% |
39.9 |
| % of
revenue |
27.6% |
26.2% |
|
26.5% |
| Operating
profit |
9.9 |
9.2 |
7.1% |
33.0 |
| % of
revenue |
23.3% |
22.2% |
|
21.9% |
| Adjusted
operating profit ** |
10.1 |
9.3 |
8.7% |
33.7 |
| % of
revenue |
23.8% |
22.4% |
|
22.4% |
| Basic EPS
(EUR) |
0.40 |
0.34 |
19.4% |
1.25 |
| Operating free
cash flow |
11.1 |
11.6 |
-4.6% |
44.6 |
| Cash
conversion |
95.0% |
107.6% |
|
111.7% |
| Investments in
tangible and intangible assets |
-2.2 |
-0.3 |
657.9% |
-3.1 |
| Net debt |
26.5 |
45.8 |
-42.2% |
37.6 |
| Leverage |
0.6 |
1.1 |
|
0.9 |
| Net working
capital |
34.9 |
43.6 |
-19.9% |
36.1 |
| Adjusted
return on capital employed (ROCE) |
47.1% |
49.3% |
|
44.2% |
| Equity
ratio |
52.4% |
49.3% |
|
51.0% |
| Number of
employees at end of period |
625 |
624 |
0.2% |
605 |
* Consists of items outside the ordinary course of business,
relating to the Group’s strategic development projects,
acquisitions, business divestments, restructuring and loss on sale
of fixed assets, and affecting comparability.
** Adjusted by items affecting comparability.
Financial targets and outlook
The company has set long-term targets related to growth,
profitability and leverage. Harvia targets an average annual
revenue growth of more than 5%, an adjusted operating profit margin
exceeding 20% and a net debt/adjusted EBITDA between 1.5x−2.5x in
the long term. The future impacts of changes in IFRS accounting
standards have been excluded from the net debt/adjusted EBITDA
ratio target.
Harvia does not publish a short-term outlook.
Harvia’s dividend policy is to pay a regularly increasing
dividend with a bi-annual payout.
Matias Järnefelt, CEO:
In the first quarter of 2024, Harvia achieved once again strong
profitability. Growth outside Europe in our strategically important
markets was strong, whereas the overall growth was modest. At the
same time, we took steps forward with our actions to support future
growth.
Our revenue was EUR 42.4 million, increasing by 2.3% from the
comparison period. Our performance was supported by very good
growth in North America and in Asia-Pacific, whereas in Northern
Europe our sales were weakened by the challenging market
conditions. The political strikes taking place in Finland during
the quarter had a negative impact on Harvia’s Q1 sales, as we had
to postpone some deliveries from March to April. Organic growth was
1.4%.
The market conditions in the first quarter remained largely
similar to the latter part of 2023. Our key markets outside Europe,
most importantly North America, continued to develop favorably in
several product categories. At the Group level, we continued to
increase the share of sauna rooms of our total sales, driven by our
success in North America where the majority of our revenue comes
from full sauna room solutions versus equipment such as heaters. I
am also pleased with our sales growth in many key markets in
Asia-Pacific and the Middle East.
In Central Europe, the market demand continued to stabilize but
still has significant growth potential to meet its normal long-term
level. Our most challenging market was Northern Europe, where
continuing low consumer demand and the downturn in the construction
sector were reflected in the revenue. Low demand in Northern Europe
impacted our total revenue growth as well as sales performance of
certain product groups, especially wood-burning heaters, for which
Northern Europe is the most important market area. The revenue from
accessories and heater stones developed well. This was driven by
our successful actions in sales and pricing as well as several
large orders.
The first quarter’s adjusted operating profit was EUR 10.1
million, increasing by 8.7% from the comparison period and
corresponding to 23.8% of revenue. Harvia’s strong profitability
and cash flow continue to demonstrate the excellent work done in
pricing, management of net working capital and operations as a
whole. They were also supported by the decreasing inflation in key
materials and components in some market areas. Our operating free
cash flow amounted to EUR 11.1 million and cash conversion was
95.0%.
To strengthen the foundations for future growth, we made a
long-term investment to support our North American business by
acquiring more land around our production facility in Lewisburg,
West Virginia. We are working on improving our performance and
position as the industry leader also in Europe. Our key priority is
to accelerate growth while maintaining strong profitability and
operative performance. Our new organizational structure, which came
into effect on 1 January 2024, is fully operational and will
support us in delivering our ambitions for growth, profitability
and operative performance.
The sauna and spa market remains attractive and continues to
offer Harvia exciting organic and inorganic growth opportunities.
As industry leader, we aim to continue inspiring the market and
delivering exciting innovations and more sustainable solutions.
Industry consolidation is also part of our strategy, and we are
ready to move when the right moment and opportunity arises. I want
to express my gratitude to the entire team Harvia and our partners
for the continuing good work.
Press conference on financial results
Harvia will hold a webcast for analysts, investors and media on
3 May 2024 at 11:00 a.m. EEST. The conference will be held in
English. Harvia’s CEO Matias Järnefelt and CFO Ari Vesterinen will
host the event. The webcast can be followed at
https://harvia.videosync.fi/q1-2024
A recording of the webcast will be available after the event on
the company’s website
https://harviagroup.com/investor-relations/.
For more information, please contact:
Matias Järnefelt, CEO, tel. +358 40 5056 080 Ari Vesterinen,
CFO, tel. +358 40 5050 440
Harvia is one of the leading companies operating in the sauna
and spa market globally, as measured by revenue. Harvia’s brands
and product portfolio are well known in the market, and the
company’s comprehensive product portfolio strives to meet the needs
of the international sauna and spa market of both private and
professional customers.
Harvia’s revenue totaled EUR 150.5 million in 2023. Harvia Group
employs approximately 600 professionals in Finland, Germany, United
States, Romania, China and Hong Kong, Austria, Italy, Estonia, and
Sweden. The company is headquartered in Muurame, Finland, adjacent
to its largest sauna and sauna component manufacturing
facility.
Read more: https://harviagroup.com
- Harvia-Plc-Interim Report-Q1-2024-ENG
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