CEO’s review

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Profitable growth continued

Harvia’s growth and profitability remained stable and strong in January−June 2019. We achieved a revenue of EUR 36.3 million during the review period, exceeding the revenue of the comparison period by 14.3 percent. Our positive revenue trend continued also during the second quarter.

During the review period, revenue growth was especially strong in the sauna room product group, which grew by 90.4 percent. The growth of sauna heaters exceeded the five percent growth target as well, in both electric and wood-burning heaters. Control units sales improved from the weak demand at the beginning of the year, and during the first half-year, we exceeded the level of last year’s comparison period. The demand for other product groups remained steady.

Revenue development was mainly positive in all our key markets. The US market continued its strong growth, and at the same time we strengthened our position in the Scandinavian countries, France, the Benelux countries and in the UK. The development of revenue in Germany was good in the second quarter, and we were able to achieve a three percent growth in sales after a challenging beginning of the year. In Finland, the very strong first quarter temporarily increased our customers’ stock levels, but the situation normalized in the second quarter. The Russian market has been exceptionally volatile, and the strong beginning of the year turned into a slight decline before summer.

The profitability of business operations remained strong and the adjusted operating profit of the review period grew to EUR 6.8 million, or 18.7 percent of revenue.

The integration of the US-based Almost Heaven Saunas, acquired at the end of 2018, proceeded as planned. The business operations were also profitable. At the same, AHS’s product range has been renewed, its customer base and distribution network have been expanded, and production as well as logistics have been streamlined.

Harvia’s first half of 2019 is a strong demonstration of good cooperation, and I am extremely pleased with the efforts of the Harvia team and our key customers. During the second half of 2019, we will continue the systematic implementation of our strategy, focusing on increasing the value of the average purchase, geographical expansion as well as the continuous improvement of productivity. In addition to organic growth, Harvia is actively looking into possibilities of growth through business acquisitions.