Harvia Q3'24 preview: Acquisition boosts growth

Translation: Original published in Finnish on 11/5/2024 at 6:30 am EET.

Harvia will report its Q3 results on Thursday at around 9 am EET. We expect the company's revenue to continue its strong organic growth and the ThermaSol acquisition to support growth above 15%. In a seasonally weaker quarter, we expect profitability to improve slightly year-on-year to around 21% at the adjusted EBIT level.

Revenue is expected to continue growing clearly

Harvia's revenue grew by more than 10% in H1, and we expect organic growth in Q3 to be close to the same pace (9%). The benchmark for the Other countries segment is quite high in Q3, which we believe is reflected in slower growth. We expect organic growth of 20% in North America to continue to drive the group's revenue growth. In addition, ThermaSol has been included in Harvia's figures since the beginning of August, which will boost growth in North America and for the group as a whole. We also expect Europe to return to moderate growth in Q3. Overall, we expect Harvia's revenue to grow by just over 15%.

We expect margin levels to remain strong

Q3 is the seasonally weakest quarter for Harvia. The company has made cost investments to support growth, and, for example, the strong revenue growth in H1 was only reflected in a slight margin improvement from the comparison period. The integration of ThermaSol into the group may also slightly erode margins in the initial phase. However, we expect the adj. EBIT margin to improve slightly to around 21% in Q3, compared to a margin of around 20% in the comparison period. In absolute terms, therefore, the result is expected to improve by a good 20% year-on-year

No guidance from Harvia, outlook likely to remain positive

Harvia has not issued any guidance during its stock market history and does not make any concrete comments on the future but only refers to its financial targets, which are a 10% revenue growth and an adjusted EBIT margin of over 20%. We expect Harvia to achieve these targets this year, even organically and especially taking into account the ThermaSol acquisition. The company's outlook should remain good as growth outside Europe continues and as revenue in Europe also returns to growth.