Harvia Q4'24 preview: A strong growth outlook also for this year

Translation: Original published in Finnish on 02/11/2025 at 07:00 am EET

Harvia will report its Q4 result 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 to nearly 20%. We expect relative profitability to remain strong, albeit to weaken from the comparison period. We expect Harvia’s growth outlook to remain good this year as well.

Revenue is expected to continue growing clearly

We expect organic revenue growth of 10% in Q4 and, supported by the ThermaSol acquisition, nearly 20% growth as the acquisition is included in the figures for a full quarter for the first time. As usual, we expect growth to come mainly from outside Europe. We expect the APAC&MEA region to grow by over 40% fully organically and North America by 50% supported by the acquisition, but also with strong organic growth. In Northern Europe, we still expect a slight decline in revenue, but in continental Europe, we expect growth, turning the whole of Europe slightly positive.

We expect margin levels to remain strong

Harvia has continued its strong profitability this year despite cost increases as its material margin and volumes have increased. We expect Q4’s adjusted EBIT margin to decrease from the comparison period, but remain at around 22%. The integration of ThermaSol into the Group should cause a slight margin decline in the initial phase, although this was not visible in the Q3 figures. In absolute terms, we expect the result to improve, driven by revenue growth and an improved material margin. We expect Harvia to raise its dividend to EUR 0.72. Harvia could pay larger dividends, but it has emphasized its desire to keep its balance sheet strong for acquisitions.

No guidance from Harvia, outlook likely to remain positive

Harvia has not issued any guidance during its stock market history and does not make 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’s growth outlook to remain good this year as well. This is supported by continued strong organic growth outside Europe, in addition to which growth is supported by the acquisition made in the US last summer. We also forecast European revenue to return to growth after three years of decline, helped by easier comparison figures and a gradual recovery in consumer demand. In Finland (about 15% of revenue), demand can be supported by the amendment to the Building Act, which enables freer construction of sauna buildings from the beginning of this year. We expect the company's margin to remain strong. Thanks to the very strong gross margin in recent quarters, it even has the potential to further improve its EBIT margin if the increase in fixed costs eases.

Trump causes some uncertainty but also offers support

In the company's largest market, the US, Trump's potential moves regarding tariffs cause some uncertainty. Harvia is generally better protected from tariffs than its competitors, as most of its products sold in the US are produced within the country. However, Harvia also imports sauna heaters to the US either from China or Finland (if necessary, they can be imported only from Finland) and, in addition to the US, it procures wood raw material also from Canada. Harvia is therefore not fully protected from potential tariffs, but we believe that the company will be able to adapt if necessary, e.g., by raising prices. On the positive side, Trump's proposed corporate tax cut would support Harvia's earnings in the US.