Harvia Q3 2024: ThermaSol Consolidates for the First Time, Revenue Up 14%

Harvia Plc published its Q3 2024 interim report on 7 November 2024. Revenue of EUR 38.7 million was up 14.0% year-over-year, comprising 7.9% organic growth plus the contribution from ThermaSol, consolidated from 31 July, less a small currency drag (growth at comparable exchange rates was 14.9%). Adjusted operating profit of EUR 8.9 million represented 22.9% of revenue, ahead of the roughly 21% Inderes had forecast. Nine-month revenue reached EUR 124.3 million, up 11.8% year-to-date. (Prior: H1 2024. Next: Q4/FY 2024. Full coverage: Harvia News hub.)

First read on ThermaSol

Q3 was the first quarter investors could see ThermaSol inside Harvia’s numbers. The deal closed on 31 July, so Q3 captured two months of operations (August and September). Steam product sales rose 151.7% to EUR 3.2 million, about 8% of group revenue, which Harvia attributed to the acquisition. Harvia does not report ThermaSol’s figures separately. Järnefelt said on the webcast that, as in sauna, the fourth and first quarters have historically been the strongest for steam.

“Already after a few months, I can happily say that the expanded Harvia team in North America is working well together, and we are eager to capture all the growth opportunities and cost synergies that the acquisition is estimated to bring us.” Matias Järnefelt, CEO, Harvia Q3 2024 interim report, 7 November 2024

Organic growth broadens

Excluding ThermaSol, Q3 organic growth was 7.9%. North America continued to lead with broad-based demand across heaters, sauna components, and prefabricated room solutions. Continental Europe grew 7.9%, supported by EOS demand in professional and high-end segments. APAC & MEA delivered solid results on the back of systematic focus in Japan, China, and Australia. Northern Europe remained the weak spot, with revenue down 6.8%. Harvia’s Scandinavian hot tub demand comes mainly from the region, and hot tub sales stayed under pressure through the quarter.

Cash conversion fell to 31.7%

Q3 cash conversion of 31.7% was notably lower than Harvia’s historical profile. Management attributed this to two deliberate decisions: (1) an inventory build, especially in the United States, ahead of the high-demand winter season; and (2) add-on investments in production facilities. Järnefelt said Harvia had probably missed sales the previous winter because lead times on some high-demand products were too long.

Leverage after ThermaSol

Net debt jumped from EUR 32.6 million at H1 to EUR 61.8 million at Q3, reflecting the ThermaSol financing (EUR 20 million bullet loan plus cash consideration). Leverage moved from 0.8x pre-deal to 1.4x post-deal, still comfortably below the 2.5x long-term ceiling. The balance sheet retained room for more M&A, and Järnefelt said Harvia keeps looking for further opportunities to remain an active consolidator of the industry.

Adjusted margin rose to 22.9%

Q3 adjusted operating margin of 22.9% was up from 20.3% a year earlier and comfortably above the 20% long-term target. Harvia credited higher sales volumes, a good sales mix and supply chain management. Inderes put the material margin at almost 70%, against 61% a year earlier, and management pointed to higher sales in North America and APAC, where gross margins run above Europe’s, and to strong sales of technical equipment. ThermaSol pulled the other way: its 2023 adjusted EBITDA margin was 17.2%, against Harvia’s 26.5%, which Järnefelt said meant a small short-term negative impact on relative profitability. Fixed costs also rose as Harvia added sales staff in the US and invested in R&D and IT.

Tariffs led the analyst Q&A

The webcast came two days after the US presidential election, and the first questions were about tariffs. Järnefelt called the outcome a net positive for Harvia: it already builds sauna cabins in West Virginia, ThermaSol has its own factory in Texas, and the heaters it sells in the US come mostly from its factories in Finland, which he expected to face less tariff pressure than China. He put the US installed base at a bit more than 1 million saunas, about 1% household penetration. On ThermaSol, he said Harvia does not disclose its figures separately and called purchasing low-hanging fruit that could pay off quickly. Management gave no numeric guidance for Q4.