Harvia (HARVIA) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 20.7% year-over-year to EUR 43.2 million, with strong growth in all regions, especially North America and APAC & MEA.

• Adjusted operating profit reached EUR 9.4 million (21.8% margin), up 18.2% year-over-year, with increased investments in commercial teams, R&D, and portfolio development.

• H1 2024 revenue was EUR 85.5 million, up 10.9% year-over-year, with organic growth at 10.4%.

• Updated long-term strategy and financial targets announced, aiming for 10% average annual revenue growth and adjusted operating profit margin above 20%.

• Acquisition of US-based ThermaSol for $30.4 million completed, strengthening North American presence and steam solutions segment.

Financial highlights

• Q2 adjusted operating profit: EUR 9.4 million (21.8% margin), up 18.2% year-over-year; adjusted EBITDA: EUR 11.0 million (25.6% margin).

• Q2 EPS: EUR 0.31 (+10.5% year-over-year); H1 EPS: EUR 0.71 (+15.3%).

• Operating free cash flow: EUR 5.5 million in Q2 (down from EUR 9.1 million), H1 EUR 16.6 million (73.2% cash conversion).

• Net debt at EUR 32.6 million, down 28.8% year-over-year; leverage at 0.8 pre-ThermaSol, rising to 1.4 post-acquisition; equity ratio at 49.8%.

• Cash conversion: 50% in Q2, impacted by inventory build-up in Finland, the US, and Japan.

Outlook and guidance

• Long-term targets: average annual revenue growth of 10%, adjusted operating profit margin above 20%, net debt/adjusted EBITDA below 2.5x.

• Management expects gradual market recovery in Europe and continued strong growth in North America and APAC & MEA.

• CapEx expected to increase slightly in H2, mainly for logistics expansion in the US.

• Dividend policy: regularly increasing, bi-annual payout.