Harvia’s Half-year financial review 1 January – 30 June 2022

Stock Exchange Release | 11 August 2022

Harvia Plc, Half-year financial review 11 August 2022 at 9.00 a.m. EEST


Strategy implementation led to market share increase, normalizing demand and war in Ukraine impacted sales and profitability

This release is a summary of Harvia Plc’s Half-year financial review January–June 2022. 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

April–June 2022:

  • Revenue decreased by 1.7% to EUR 46.0 million (46.8). At comparable exchange rates, revenue decreased by 5.4% to EUR 44.3 million. Organic revenue fell by 9.3% compared to April−June 2021.
  • The share of international business was EUR 35.6 million (36.7), making up 77.4% (78.4) of the revenue.
  • Operating profit was EUR 8.7 million (12.9), making up 19.0% (27.5) of the revenue.
  • Adjusted operating profit reached EUR 8.8 million (13.2), making up 19.1% (28.3) of the revenue. At comparable exchange rates, the adjusted operating profit was EUR 8.2 million (18.5% of the revenue).
  • Operating free cash flow amounted to EUR 2.1 million (4.0) and cash conversion was 19.8% (27.6). The change in net working capital decreased the operating free cash flow and cash conversion.

January–June 2022:

  • Revenue increased by 12.0% to EUR 96.8 million (86.5). At comparable exchange rates, revenue increased by 9.1% to EUR 94.3 million. Organic revenue growth reached 3.2%.
  • The share of international business was EUR 74.8 million (68.1), making up 77.2% (78.8) of the revenue.
  • Operating profit was EUR 20.8 million (23.9), making up 21.5% (27.7) of the revenue.
  • Adjusted operating profit reached EUR 20.9 million (24.4), making up 21.6% (28.2) of the revenue. At comparable exchange rates, the adjusted operating profit was EUR 19.9 million (21.1% of the revenue).
  • Operating free cash flow amounted to EUR 9.1 million (12.2) and cash conversion was 37.5% (45.2). The change in net working capital decreased the operating free cash flow and cash conversion.
  • Net debt amounted to EUR 47.2 million (38.4) and leverage was 0.9 (0.9).
  • Equity ratio was 44.4% (39.3).
  • Earnings per share was EUR 0.89 (0.93).

Key figures

EUR million4-6/
% of revenue22.5%30.5% 24.9%30.7% 29.3%
Items affecting comparability *0.10.3-80.8%0.10.4-83.3%0.6
Adjusted EBITDA **10.414.6-28.6%24.127.0-10.5%53.1
% of revenue22.7%31.2% 24.9%31.2% 29.7%
Operating profit8.712.9-32.3%20.823.9-13.1%46.6
% of revenue19.0%27.5% 21.5%27.7% 26.0%
Adjusted operating profit **8.813.2-33.5%20.924.4-14.3%47.3
% of revenue19.1%28.3% 21.6%28.2% 26.4%
Basic EPS (EUR)0.400.49-18.2%0.890.93-3.5%1.80
Operating free cash flow2.14.0-48.7%9.112.2-25.7%20.4
Cash conversion19.8%27.6% 37.5%45.2% 38.5%
Investments in tangible and intangible assets-1.2-4.1-71.3%-2.1-5.5-61.8%-11.8
Net debt47.238.422.9%47.238.422.9%43.8
Leverage0.90.9 0.90.9 0.8
Net working capital55.829.589.0%55.829.589.0%41.9
Adjusted return on capital employed (ROCE)80.9%103.4% 80.9%103.4% 112.6%
Equity ratio44.4%39.3% 44.4%39.3% 42.4%
Number of employees at end of period821822-0.1%821822-0.1%824


* Consists of items outside the ordinary course of business, relating to the Group’s strategic development projects, acquisitions, restructuring expenses and loss on sale of fixed assets, and affecting comparability.

** Adjusted by items affecting comparability.

Financial targets and outlook

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 reporting standards have been excluded in the net debt/adjusted EBITDA ratio target.

The company has set long-term targets related to growth, profitability and leverage. The company’s management estimates that due to the special circumstances caused by the COVID-19 pandemic, the sauna and spa market experienced exceptionally high demand. The ending of advance demand is not expected to have an impact on the long-term growth expectations of the sauna and spa market, nor on Harvia’s long-term financial targets.

Harvia does not publish a short-term outlook.

Harvia’s dividend policy is to pay a regularly increasing dividend with a bi-annual payout.

Tapio Pajuharju, CEO:

In the second quarter of 2022, the direct and indirect impacts of the Russian invasion of Ukraine were felt in both the top line and profitability. The awareness, popularity and usage of saunas continued to increase, yet the advance demand Harvia has enjoyed did fade away and we are returning to more normal market dynamics.

Importantly, as a result of systematic implementation of our strategy, Harvia has continued to strengthen its market share. Sauna is a global business, and we are very pleased with the strong performance in the United States, Scandinavia and other markets, where Asia, Japan, Arabian markets and number of small markets did continue the strong progress. Our strategic investments in USA have been paying off, and we continued our strong performance in sauna sales and operations. Overall, team Harvia and our partners have done good work in the very challenging environment.

In the second quarter of 2022, Harvia’s revenue reached EUR 46.0 million, declining 1.7% from the record-breaking second quarter of 2021.

The unfavorable sales development was mainly driven by the market slowdown in Germany and adjacent markets. The main driver has been a slowdown at our major e-commerce clients who are very focused on the entry-level offering. At the same time, the premium market is solid and professional customers are coming back strong. 

In Russia, Harvia has suspended its operations and EOS Russia is finishing the strong base of ongoing and prepaid projects. As planned, the focus of our sales efforts previously set on Russia was successfully directed to other market areas. 

The second quarter’s operating profit reached EUR 8.7 million, a decrease from the record high EUR 12.9 million a year before. Combined with softer-than-expected top line, our relative profitability was weakened by an unfavorable sales mix. Strategically important sauna sales performed very well compared to heater and equipment sales. The absolute margin we book on sauna sales is good, yet the relative margin is substantially lower than what we have on heater and equipment sales. In addition, the slower rotation of Russia-related trade receivables resulted in increased provision for potential future write-downs. Our actions to ensure high material availability and service level in the prevailing environment were visible in the increased net working capital, which had a negative effect on our cash conversion.

Global high inflation has left very few costs unaffected, and some basic raw material and especially logistics-related costs continued to beat previous record levels. We have taken systematic and prompt actions in addressing the pricing to the full, yet the entire impact will be visible during H2. In order to mitigate the rising costs and net working capital increase, we have actions in place and we remain extremely agile to boost them further if needed. Our good buffer stock levels and operational planning have kept our customer service on a very good level, yet the availability issues are not entirely over.

The changing market environment does not affect Harvia’s strategic cornerstones or long-term financial targets. We continue to have full focus on our strategic cornerstones of geographical expansion, increasing the value of average purchase, and improving our productivity. The intention of seeking opportunities for growth also via M&A remains unchanged. Our innovation pipeline continues to deliver excellent products to the market as planned.

The sauna and spa market has traditionally been very resilient during economically challenging times, and the positive long-term growth outlook for sauna awareness and the sauna and spa market as a whole is intact.


Press conference on financial results

Harvia will hold a webcast for analysts, investors and media on 11 August 2022 at 11:00 a.m. EET. The conference will be held in English. Harvia’s CEO Tapio Pajuharju and CFO Ari Vesterinen will host the event. The webcast can be followed at https://harvia.videosync.fi/2022-q2-results/

You can also participate in the conference by calling:

Finland: +358 981 710 310
Sweden: +46 856 642 651
UK: +44 333 300 0804
US: +1 631 913 1422

PIN: 71569480#

A recording of the webcast will be available later at the company’s website https://harviagroup.com/investor-relations/.

For more information, please contact:

Tapio Pajuharju, CEO, tel. +358 50 5774 200
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 179.1 million in 2021, of which 79% came from outside Finland. Harvia Group employs more than 800 professionals in Finland, China and Hong Kong, Romania, Austria, United States, Germany, Estonia and Russia. The company is headquartered in Muurame, Finland, adjacent to its largest sauna and sauna component manufacturing facility.

Read more: https://harviagroup.com