Harvia Q4 2023: Revenue back to growth with strong profitability
and cash flow
Harvia Plc, Financial statements bulletin, 8 February 2024 at
9:00 a.m. EET
This release is a summary of Harvia Plc’s Financial statements
bulletin 2023. 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
October–December 2023:
- Revenue increased by 3.4% to EUR 39.4 million (38.1). At
comparable exchange rates, revenue increased by 5.2% to EUR 40.1
million. Organic revenue growth was 5.2%.
- Operating profit was EUR 9.2 million (6.6), making up 23.4%
(17.2) of the revenue.
- Adjusted operating profit reached EUR 9.5 million (7.9), making
up 24.2% (20.8) of the revenue. At comparable exchange rates, the
adjusted operating profit was EUR 9.8 million (24.5% of the
revenue).
- Operating free cash flow amounted to EUR 15.5 million (15.1)
and cash conversion was 138.9% (158.9).
January–December 2023:
- Revenue decreased by 12.7% to EUR 150.5 million (172.4). At
comparable exchange rates, revenue decreased by 11.7% to EUR 152.2
million. Organic revenue growth was -9.4%.
- Operating profit was EUR 33.0 million (34.7), making up 21.9%
(20.1) of the revenue.
- Adjusted operating profit reached EUR 33.7 million (36.5),
making up 22.4% (21.1) of the revenue. At comparable exchange
rates, the adjusted operating profit was EUR 34.4 million (22.6% of
the revenue).
- Operating free cash flow amounted to EUR 44.6 million (34.0)
and cash conversion was 111.7% (79.1). The change in net working
capital increased the operating free cash flow and cash
conversion.
- Net debt amounted to EUR 37.6 million (54.5) and leverage,
calculated as net debt divided by 12 months’ adjusted EBITDA, was
0.9 (1.3).
- Equity ratio was 51.0% (47.3).
- Earnings per share were EUR 1.25 (1.45).
- The Board of Directors’ dividend proposal is EUR 0.68 (0.64)
per share in total, to be paid in two instalments.
- On 28 March 2023, the Board of Directors of Harvia plc
appointed Matias Järnefelt as Harvia’s CEO. Järnefelt started in
his position on 1 June 2023.
Key figures
|
EUR million |
10-12/2023 |
10-12/2022 |
Change |
1-12/2023 |
1-12/2022 |
Change |
| Revenue |
39.4 |
38.1 |
3.4% |
150.5 |
172.4 |
-12.7% |
| EBITDA |
10.8 |
8.2 |
32.8% |
39.3 |
41.2 |
-4.6% |
| % of
revenue |
27.5% |
21.4% |
|
26.1% |
23.9% |
|
| Items affecting
comparability * |
0.3 |
1.4 |
-78.0% |
0.6 |
1.8 |
-64.7% |
| Adjusted EBITDA
** |
11.1 |
9.5 |
16.9% |
39.9 |
42.9 |
-7.0% |
| % of
revenue |
28.3% |
25.0% |
|
26.5% |
24.9% |
|
| Operating
profit |
9.2 |
6.6 |
40.5% |
33.0 |
34.7 |
-4.7% |
| % of
revenue |
23.4% |
17.2% |
|
21.9% |
20.1% |
|
| Adjusted
operating profit ** |
9.5 |
7.9 |
20.1% |
33.7 |
36.5 |
-7.6% |
| % of
revenue |
24.2 % |
20.8% |
|
22.4% |
21.1% |
|
| Basic EPS
(EUR) |
0.39 |
0.22 |
78.3% |
1.25 |
1.45 |
-14.1% |
| Operating free
cash flow |
15.5 |
15.1 |
2.2% |
44.6 |
34.0 |
31.2% |
| Cash
conversion |
138.9% |
158.9% |
|
111.7% |
79.1% |
|
| Investments in
tangible and intangible assets |
-1.4 |
-0.7 |
104.2% |
-3.1 |
-3.6 |
-12.9% |
| Net debt |
37.6 |
54.5 |
-31.1% |
37.6 |
54.5 |
-31.1% |
| Leverage |
0.9 |
1.3 |
|
0.9 |
1.3 |
|
| Net working
capital |
36.1 |
45.3 |
-20.3% |
36.1 |
45.3 |
-20.3% |
| Adjusted return
on capital employed (ROCE) |
44.2% |
54.5% |
|
44.2% |
54.5% |
|
| Equity
ratio |
51.0% |
47.3% |
|
51.0% |
47.3 % |
|
| Number of
employees at end of period |
605 |
633 |
-4.4% |
605 |
633 |
-4.4% |
* 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 fourth quarter of 2023, Harvia’s revenue returned to
growth while we continued to deliver strong profitability and
strengthen the foundations for future growth.
During the fourth quarter, our revenue reached EUR 39.4 million,
an increase of 3.4% compared to the previous year. This was driven
by the strong growth in North America and improving sales
performance in Central Europe. Organic growth was 5.2%. The exit
from Russia in 2022 and some exchange rate developments, mainly due
to USD to EUR exchange rate changes, impacted our revenue
negatively.
The market conditions continued to differ also in the fourth
quarter, with the European markets generally weaker than the
markets outside Europe. However, Central Europe started to show
some signs of stabilization after a long, weak period. The sales
channel inventory levels were decreasing to a normal level and our
B2B customers were more confident in ordering products. However,
the market conditions were tough in Finland and Scandinavia, where
high interest rates, low consumer confidence and challenges in the
construction sector still continued to have a negative impact on
sales in all product groups.
Outside Europe, Harvia maintained and even accelerated its
already strong growth. The North American market continued to grow
at a fast pace, which supported our excellent sales performance in
the region. The majority of our business in North America comes
from selling complete solutions to customers rather than selling
only heaters. This is visible in the increasing share of sauna
rooms of our total sales. Our sales efforts were successful also in
Asia-Pacific, where our sales developed very favorably and
according to plan. Excluding sales in Russia in 2022, the revenue
of the “Other countries” market area grew by 33% in the fourth
quarter, driven by the Asia-Pacific countries.
The fourth quarter’s adjusted operating profit reached EUR 9.5
million, increasing by 20.1% from the comparison period and
amounting to 24.2% of revenue. Our profitability was supported by
the increased revenue, but it also reflects the systematic work we
have done to adjust pricing, improve supply chain efficiency and
optimize our operations. Additionally, inflationary cost pressures
have eased in some of our key materials and components. Harvia’s
operating cash flow was again strong at EUR 15.5 million. We also
managed to further reduce our inventories, which is visible in the
unusually high cash conversion of 138.9%. I would like to thank the
entire team Harvia and our partners for their great work in the
fourth quarter and the full year 2023.
Harvia continues to work systematically to strengthen the
foundations for the company’s future profitable growth. Ensuring
continued strong sales performance in North America is very
important for us. Moreover, we continue to actively drive growth in
Japan and more widely in Asia-Pacific. We will also be working hard
to maximize opportunities in our home markets in Europe. While we
drive top-line activities, we are also focusing on maintaining our
very good operative performance, a key competitive advantage of
Harvia. We are also increasing our level of ambition in delivering
exciting innovations to the market. Our new organizational
structure, supporting the implementation of our strategy, came into
effect on 1 January 2024. In addition, we have continued to work
determinedly to further develop the sustainability of Harvia’s
products and operations and prepare for the upcoming EU
sustainability reporting requirements.
For Harvia, year 2023 was characterized by achieving strong
profitability and cash flow in a mixed market environment. Our
growth was strong in North America throughout the year, and it
became our largest reported market area in 2023. Towards the end of
the year, our sales development in North America and our improving
sales performance in Central Europe helped us to turn our revenue
back to growth. Looking at the future, the sauna and spa industry
continues to offer several opportunities for Harvia in both short
and long term. We continue to advance industry consolidation and
seek growth opportunities actively also on the M&A front.
Harvia is well positioned to strengthen its standing as industry
leader.
Press conference on financial results
Harvia will hold a webcast for analysts, investors and media on
8 February 2024 at 11:00 a.m. EET. 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/q4-2023.
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-Financial Statements Bulletin-2023-ENG
Grafico Azioni Harvia (TG:G1U)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Harvia (TG:G1U)
Storico
Da Dic 2023 a Dic 2024
