Harvia’s Interim Report 1 January – 31 March 2024 - Seite 2

** 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.