Harvia Oyj: Harvia updates its strategy and long-term financial targets

Harvia Plc, Stock Exchange Release, 29 May 2024 at 9:00 a.m. EEST

Harvia Plc is organizing its Capital Markets Day event today 29 May 2024 at 10:30 a.m. EEST. In the event, the company will present a strategy update and adjusted long-term financial targets.

Harvia is the leading player in the global sauna market, which is estimated at approximately EUR 3.5 billion in value. Since its initial public offering in 2018, Harvia has over doubled its size in revenue to EUR 150.5 million in 2023, while delivering consistently strong profitability. To further accelerate growth, the company is updating its strategic focus areas and defining its strategic role in the industry as "shaping the global sauna market so that everyone has a reason to experience sauna".

Updated long-term financial targets

Harvia's long-term financial targets have been adjusted to reflect the company's growth ambitions. The new long-term financial targets are:

• Revenue: Average annual revenue growth of 10% (before: average annual revenue growth of more than 5%)
• Profitability: Adjusted operating profit margin¹⁾ exceeding 20% (unchanged)
• Leverage: Net debt/adjusted EBITDA²⁾ below 2.5x (before: net debt/adjusted EBITDA 1.5x-2.5x in the long term)

1) Adjusted operating profit is operating profit before items affecting comparability.
2) Excluding the future impacts of changes in IFRS reporting standards.

Harvia's dividend policy stays unchanged: the company will continue to pay a regularly increasing dividend with a bi-annual payout.

Updated strategic focus areas

Harvia's updated strategic focus areas are:

1. Delivering the full sauna experience
2. Winning in strategically important markets
3. Leading in key channels
4. Best-in-class operations & great people

Delivering the full sauna experience

Harvia aims to make sauna a broader experience, offering a complete portfolio of all sauna types, cold plunges, hot tubs, and other sauna related extensions, and constantly bringing new, exciting innovations to the market with a winning design, the best user experience and great digital solutions.

To support its growth ambition, Harvia focuses on increasing the sales of comprehensive systems and solutions. Harvia also aims to make steam and infrared saunas a more sizeable part of Harvia's business, both organically and through M&A.

Winning in strategically important markets

Harvia continues to drive growth especially in strategically important markets outside Europe. In North America, the company aims to maintain strong growth across price points, categories, and channels, supported by investments in expanding the operations at the Lewisburg factory, among others. In the APAC & MEA region, Harvia continues to develop the market actively in selected high-potential countries such as Japan. In the established, traditional sauna markets in Europe, the company focuses on further strengthening its position and capturing growth also in the short term as the markets recover.

Another key objective for Harvia is to take an active consolidator role in the industry through M&A.

Leading in key channels

Harvia's markets have different sauna cultures and product mixes and therefore also different sales channels and networks. An important part of accelerating Harvia's growth is further developing Harvia's channel strategy and the Group-level sales and customer service capabilities to drive synergies and cross-sell opportunities. To capture the full market potential efficiently, Harvia puts significant focus on developing its long-term B2B customer relationships. In addition, the company will strengthen the role of its direct-to-consumer channel.

Best-in-class operations & great people

Efficient operations provide a significant competitive advantage for Harvia, and continuously improving productivity to ensure profitability remains a key focus area of Harvia's strategy. This is sought by scaling up and automating operations while expanding capacity in the strongly growing regions, such as North America. The company also focuses on deepening integration within Harvia Group to drive productivity and growth.

"The strategy update reflects Harvia's plans to take a bold, strategic role in shaping the global sauna market and giving everyone a reason to experience sauna. We want to be an active market maker to grow the sauna market and create exciting innovations in sauna solutions, products, accessories, and digital services to deliver great sauna experiences," says Matias Järnefelt, CEO of Harvia Plc. "The global sauna market is attractive. We also aim to accelerate our growth by driving M&As as a market consolidator, focusing on scalable business opportunities with appropriate profit potential and fit to our competences. While not losing sight of maintaining our strong profitability and operative performance, with our updated strategic focus areas, we are well positioned for future growth and success."

Capital Markets Day

Harvia's Capital Markets Day, starting today at 10:30 a.m. EEST, can also be followed as a live webcast at https://harvia.videosync.fi/2024-05-29-cmd. Questions for the speakers can be submitted via the webcast platform. A recording of the webcast and the presentation materials will be available at www.harviagroup.com after the event. The event will be held in English.

HARVIA PLC
Board of Directors

For more information, please contact:

Matias Järnefelt, CEO, tel. [phone]
Ari Vesterinen, CFO, tel. [phone]

Harvia is one of the leading companies operating in the sauna market globally, as measured by revenue. Harvia's brands and product portfolio are well known in the market, and the company's comprehensive product portfolio strives to meet the needs of the international sauna market of both private and professional customers.

Harvia's revenue totaled EUR 150.5 million in 2023. Harvia Group employs approximately 600 professionals in Finland, Germany, United States, Romania, China and Hong Kong, Austria, Italy, Estonia, and Sweden. The company is headquartered in Muurame, Finland, adjacent to its largest sauna and sauna component manufacturing facility.

Read more: https://harviagroup.com