CEO’s review

CEO Matias Järnefelt:

Harvia’s performance in the first quarter of 2025 was strong with record-high sales. We grew in all regions, with clearly the highest growth in North America. At the same time, Harvia delivered strong profitability and advanced key strategic initiatives and investments to support long-term success.

Harvia’s revenue in the first quarter totaled EUR 52.0 million, representing an increase of 22.7% compared to the same period last year. North America contributed over 80% of our total revenue growth. As in the previous two quarters, the acquisition of ThermaSol supported our overall sales as expected. Organic revenue growth was 14.1%.

Harvia delivered strong profitability in the first quarter. Sales grew in all regions.

Overall uncertainty arising from the global economy and trade policies increased in the first quarter, but this had only a limited impact on the sauna market conditions and Harvia’s performance. In North America, market demand remained strong as the high-demand winter season progressed. Compared to the fourth quarter of 2024, promotions and campaigns had a smaller role in our sales in the region. We also implemented pricing actions to reflect changes in material costs. The integration of ThermaSol continued to progress well, contributing positively to sales and the realization of planned cost synergies. All this had a positive impact on Harvia’s global EBIT margin.

In the APAC & MEA region, we continued to grow while driving strategic initiatives to support future success in the key countries. Compared to Harvia’s other sales regions, the revenue from APAC & MEA is still small and fluctuates more easily, especially due to large individual deliveries and project sales. These factors contributed to the excellent Q4 2024 sales performance in the region but resulted in lower growth in the first quarter of 2025.

Market conditions in Europe and Harvia’s sales performance in the region saw only minor changes during the first quarter. While the European sauna market has shown gradual positive development over the past several quarters, the conditions remained challenging – particularly in Northern Europe. The recovery was slowest in Finland, where consumer confidence and construction sector activity remained at a low level.

Adjusted operating profit for the first quarter reached EUR 11.9 million, up by 18.1% year-on-year, and accounted for 22.9% of the revenue. During the same period, Harvia’s operating free cash flow totaled EUR 10.2 million, with a cash conversion rate of 73.7%. Our successful actions in the supply chain, pricing and net working capital management contributed positively to Harvia’s strong profitability and cash flow. In addition, our profitability was supported by increased sales volumes and a reduced proportion of promotional sales at lower price levels. Our financial performance during the quarter was strong, and I want to express my sincere appreciation to the entire Team Harvia and our partners for their outstanding efforts.

In addition to delivering solid short-term results, we have continued to invest systematically in our innovation and portfolio development, brand building, commercial execution, and developing our people and organization to strengthen the foundations for profitable long-term growth. To highlight a few initiatives from the quarter, we upgraded our key digital U.S. sales channel, almostheaven.com, and refreshed the ThermaSol brand. I am also pleased that one of our key innovations from 2024, the woodburning version of our top selling Cilindro heater, has gained strong traction in the market and achieved significant sales already in its first quarter on the market.

The key drivers supporting Harvia’s long-term growth are solid. Global interest in saunas and their health benefits continues to rise, and the sauna market offers both organic and inorganic growth opportunities for Harvia. We are well positioned to shape the sauna market so that everyone has a reason to experience sauna. In the short-term, the high pace and unpredictability of shifts in global economic conditions and especially U.S. tariffs may pose occasional challenges to Harvia. However, compared to many of our key competitors, Harvia’s position is relatively strong. For example, approximately 70% of the products we sell in North America are manufactured locally in the United States, reducing our exposure to tariffs. In addition, our ten production facilities in Europe, Asia and the U.S. increase our flexibility to react to changing market dynamics and supply chain conditions.

Overall, Harvia is well on track towards continued success as the global sauna market leader. Our 75th anniversary year has started on a strong note.