CEO's review

Our journey into a comprehensive one-stop shop operator in the sauna and spa market is proceeding as planned.

Tapio Pajuharju, CEO

STRONG AND PROFITABLE GROWTH CONTINUED

Harvia’s growth during 2019 was strong in all product groups and in almost all our key markets. We achieved a revenue of EUR 74.1 million, growing 19.6 percent year on year. Growth was especially strong during the final quarter, and revenue increased to EUR 20.7 million, growing 27.8 percent year on year.

Our journey into a comprehensive one-stop shop operator in the sauna and spa market is proceeding as planned. During the financial period, revenue growth was especially strong in Finland, other Scandinavian countries, North America and other markets, such as France, Switzerland, the UK, Benelux countries, Poland and Arab countries. The sales of all our product groups increased, but growth in the sauna rooms product group was especially accelerated by the North American and Central European markets. The sauna rooms product group experienced an excellent 124 percent growth. In addition to sauna rooms, the sauna heater product group experienced strong growth both in professional and consumer channels, resulting in 18.2 percent growth in the final quarter. The demand in steam generators was also favorable, and the product group grew by 31.6 percent year on year.

Harvia’s personnel has done an excellent work, together with our key customers and partners. I have all the reasons to be especially pleased with the outcome, where we have, on top of the strong growth, been able to improve the profitability of our business. In 2019, the adjusted operating profit amounted to EUR 13.9 million (10.9). The adjusted operating profit for the fourth quarter increased by 46.0 percent year on year, amounting to EUR 4.2 million (2.9). Our relative profitability has also had a positive trend.

Demand in the domestic market remained steady, and we have been able to strengthen our position both in professional and consumer markets. Our recently launched new products and solutions have enjoyed a positive reception in the market. In other Scandinavian countries, we have succeeded in improving the quality and amount of our distribution together with our partners. This is well reflected in our increasing sales. The Central European market developed as planned, even though the German market has not yet reached its fully normal growth rate. The performance in the German market is also partially reflected in control unit sales. The Russian market remained relatively stable, but the volatility of the market continued throughout the year. Demand in the US market accelerated towards the end of the year in sauna heaters, components and especially in the sauna rooms category. In the sauna rooms market we have updated and complemented our Almost Heave Saunas product offering and further expanded our distribution.

During 2019, the continuous improvement of productivity proceeded as planned in all our factories. The continuous improvement of productivity has succeeded especially well in our sauna heater and equipment factory in Muurame, Finland as well as in our Guangzhou factory in China. The integration of the business operations in the US has proceeded ahead of plans, and we have taken measures at the Renick factory to further improve productivity.

The year 2019 is an excellent example of how determined and systematic cooperation with our key customers, strategic partners and Harvia’s truly professional team works. Together we have further developed the sauna and spa market and at the same token we are more than well prepared to take it to the next level during the coming years with our new innovations and concepts that create added value, enhance well-being and truly support the global growth of the sauna and spa market. Sustainable development has for a long time been part of Harvia’s daily operations. Our safe and durable products are manufactured sustainably. During the past year, we have taken steps to further enhance sustainable development. For example, we have prioritized recycling in our raw materials and other materials. Our key partner’s stainless steel, with over 80% recycled material, serves as an example. We have also used recycled fiber as a replacement for plastic and paid more attention to the efficiency and purity of burning, of which we will tell more about during the coming spring. We remain humble but keep our determined focus on the cornerstones of our strategy and its systematic implementation: increasing the value of the average purchase, geographical expansion and continuous improvement of productivity.  In addition to organic growth, we are actively looking into suitable opportunities to grow in the sauna and spa market through business acquisitions.

Our strategy
Our key strategic priorities to achieve our objectives
Read more
Increasing the value of the average purchase
Geographical expansion
Improving productivity