Harvia Q1 2024: Revenue Up 2.3%, Margin Holds at 23.8%

Harvia Plc published its Q1 2024 interim report on 3 May 2024, reporting revenue of EUR 42.4 million, up 2.3% year over year, with adjusted operating profit of EUR 10.1 million representing 23.8% of revenue. The print extended the margin strength that emerged in Q4 2023, though the modest headline revenue growth disappointed investors who had been modeling a stronger acceleration off the prior year's base. (Next: H1 2024 results. Full investor coverage: Harvia News hub.)

The Finnish Strike Complication

Management spent material time on the call explaining why Q1 revenue growth was only 2.3% when the Q4 2023 pattern had suggested a faster reacceleration. The answer was Finnish industrial action. Political strikes in Finland during February and March disrupted logistics at Finnish ports and delayed some customer shipments that would otherwise have fallen into Q1. Those shipments rolled into Q2. The impact was not quantified precisely, but CFO Ari Vesterinen indicated it was several million euros of revenue timing.

The key priority continues to be accelerating growth while maintaining strong profitability. Q1 demonstrates that we can do both simultaneously, and we expect the strike-related timing to reverse in the second quarter.

Regional Performance

North America grew at a double-digit clip on continued Almost Heaven momentum and specialty dealer expansion. APAC & MEA posted strong growth, continuing its multi-year trajectory with particular strength in Japan and Australia. Continental Europe showed signs of gradual recovery, though year-over-year comparisons remained mixed market by market. Northern Europe was the laggard: Finnish consumer demand was soft, the construction slowdown weighed on new installations, and the strike added insult to injury.

Q1 2024 key figures: Revenue EUR 42.4M (+2.3% YoY). Operating profit EUR 9.9M (23.3% margin). Adjusted operating profit EUR 10.1M (23.8% margin). EPS EUR 0.40 (+11.1% YoY). Operating free cash flow EUR 11.1M. Net debt EUR 32.6M. Leverage 0.8x.

Margin Walk

The 23.8% adjusted operating margin was the highest Q1 margin Harvia had reported since its IPO. Price mix was positive, raw material costs remained benign, and the company's Q4 2023 cost-side discipline continued to flow through the P&L. Management flagged that they were also investing in sales and marketing to support future growth, which would have a modest impact on margin trajectory through the rest of the year.

Analyst Q&A Themes

On the webcast, three topics dominated: (1) the Finnish strike impact and how much Q2 catch-up to expect; (2) whether North American growth was sustainable; (3) M&A activity and balance sheet capacity. Management quantified the strike roughly (pushing several million euros into Q2) and was optimistic about catch-up. North American growth was described as broad-based and durable. On M&A, CEO Järnefelt said Harvia was active in evaluating opportunities, particularly in North America and adjacent categories, but declined to comment on specific targets. That commentary would become relevant 11 weeks later when the ThermaSol announcement landed.

Stock Reaction

Harvia shares traded essentially flat on the print, reflecting the mixed signal: strong margin but soft revenue growth. Inderes kept its rating unchanged. Some sell-side analysts reduced Q2 revenue estimates slightly to reflect the strike catch-up, while raising margin estimates to reflect the Q1 print.

Management set expectations that Q2 would benefit from strike-related catch-up and continued North American momentum. Europe recovery was described as gradual. The H1 2024 half-year financial review was scheduled for early August 2024.

Q1 2024 was the first quarter where Harvia's margin profile genuinely looked structural rather than cyclical. Revenue growth disappointed, but the cause was transitory and the underlying regional pattern (North America and APAC pulling; Northern Europe dragging) was consistent with the long-term thesis. Investors looking past the strike noise were rewarded; those who took the headline at face value missed the setup for the H1 beat that came in August.