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, despite increased investments in commercial, R&D, and sales capabilities.

• 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 U.S. steam solutions provider ThermaSol completed in July 2024 for $30.4 million, strengthening North American presence and steam solutions offering.

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; Q2 EPS: EUR 0.31 (+10.5%).

• Q2 operating free cash flow: EUR 5.5 million (down from EUR 9.1 million year-over-year), impacted by increased inventories and receivables.

• H1 adjusted operating profit: EUR 19.5 million (22.8% margin); H1 EPS: EUR 0.71 (+15.3%).

• Net debt at end of June: EUR 32.6 million, leverage at 0.8; post-ThermaSol, net debt near EUR 60 million and leverage at 1.4x.

• Cash conversion: 50% in Q2, 73% for H1; equity ratio: 49.8% at end of June.

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 continued growth, with further CapEx planned for logistics expansion in the US in H2.

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

• Market growth outlook revised upward, with expectations for mid-term market growth above the historical 5% annual rate.