Harvia Q1'26: A strong start to the year

Added: 2026-05-25

[00:00:02]Hello and welcome to Ind TV. Today I'm in the studio with analyst Riua and we are talking about Haravia.

[00:00:08]>> Hi Roly.

[00:00:09]>> Hia.

[00:00:14]>> So let's start with uh the Q1 revenue estimates. Hara clearly exceeded them >> and growth was entirely organic. What what happened? How did this happen?

[00:00:24]>> Yeah. Well, obviously they are generally on on a good good growth track, but u for Q1 specifically the the the company had commented that we we knew that in in North America in particular that there was quite good comparison figures. So so so we kind of thought I think generally in the market there was a thought that and also actually the yeah the currency had declined. So it was kind of the last quarter which which had a clear negative impact from the USD. But those two combined uh led to to kind of from the most analysts expecting that the US growth in in euros would be quite modest but it wasn't. So so they were able to grow quite quite nicely and and and and then continue also basically growth growth in all all other areas as well.

[00:01:11]So also in in uh northern Europe and uh and uh Asia Asia Pacific area they they exceeded the expectations. So it was a broad-based good good road basically.

[00:01:24]>> Okay. So like you said um Apak and Mia Vu the fastest with 30% growth >> and our expectation was around 20.

[00:01:33]>> Y >> um even though the deliveries in the Middle East were slightly disrupted due to the war of course >> um couldn't do you expect that the numbers could have been higher without the war?

[00:01:45]>> Yeah they they they could have been a bit bit higher. That's not a huge impact also. We were talking about like a few hundreds of thousands. So Harvardian group level that's that's a minor minor thing. And also the company said that in total the Middle East area is like 2% of their business. So so and they have not lost all of it now. So there's just some some deliveries they couldn't make. So overall it's it's not a huge huge impact to the company. But it it definitely did did show and will show probably kind of in Q2 as well somewhat >> in the growth but it's it's seems seems not to be hampering too much.

[00:02:23]>> Yeah. Nothing nothing to be concerned about. I mean since the share is so small I suppose.

[00:02:28]>> Uh Hara commented that the ITM process modernization at the m plant would temporarily at least to some extent delay deliveries.

[00:02:38]what conse what other consequences or how would this affect the company?

[00:02:42]>> Yeah. Yeah. They you know they typically don't don't really give guidance or forward comments but now now they they they told that uh that there will be a shift of sales for for a few millions I think three to five if I remember correctly was the wording. So the from Q2 to Q3 because they they they they kind of can't deliver when they they do the change and they uh ramp down the factory which is their biggest biggest one in in well in in in all but especially for the heaters it's the it's the biggest biggest factory and and during that time when they are producing they actually still have the costs for related to that because people are working there and doing the change. So, so that will hit quite clearly the the profitability of to Q2 and there might be even some extra cost related to the change but but maybe the biggest thing is that they are not selling and they are still having the cost. So that's why we are expecting Q2 earnings will be clearly weaker than Q1. Last year Q2 actually was also a quite weak quarter.

[00:03:44]So it's not a huge drop compared to that but it it will be soft one which will be then partly compensated in Q3 but not not completely because there is this kind of a cost cost impact.

[00:03:56]>> Yeah. So basically it'll cause softness at least in Q2 and possibly somewhat in Q3 as well.

[00:04:01]>> Yeah.

[00:04:01]>> Yeah.

[00:04:03]uh hardware is now shifting it strategy towards what what it sells it calls holistic son experiences >> instead of just selling the heaters >> if you look at margins is this a risk for an opportunity can they maintain the plus 20% EBIT with these holistic solutions >> yeah it well short yes but it depends a bit what what what we are talking about that they have been obviously in this path for already a uh well at least since the IPO 8 years ago, they have kind of been aiming to increase the average purchase and kind of get get their share of the of the market and and they have so far mostly done it by going into the complete sonar rooms instead of just heaters and that is that is their main business in the US and hence it has been growing quite quite well and and there the margin is uh was before I think like a bit weaker but they have been able to get it roughly to the they don't publish it but my understanding is that it's roughly at roughly on par with the overall group and and yeah and and when we're talking about holistic experience that basically just means that they they will want to go more into the also the steam which they have already in the portfolio and then maybe further on infrared also more more pronouncely uh instead of just a traditional sona and and the margin profile and or the opportunity should should be pretty pretty equal in those. So no no big big things. So I I I don't I don't think that that should be a a big thing for the for the marches and such.

[00:05:45]>> Yeah. Well, when we discuss how we always talk about M&As. We can't avoid it. Um so the balance sheet certainly would allow for a transaction.

[00:05:55]>> When would you expect one maybe and what what what could it be?

[00:05:59]>> Yeah. Well, it I think we've talked about this before, but the obvious target now is like I mentioned that they they would like to go uh more into the infrared sound business, which is kind of the the last of the three main sound types. They are they are lacking or they they have something, but they they don't really have the the knowhow in the in the company at the moment. So if they would would find a suitable target uh in the infrared market that would definitely be and uh or is the probably the main main thing they are looking for. And when will that happen? Of course no no one knows in terms of timing. It's now two years in the summer since they they bought this termol steam steam company and like you said the balance sheet is already quite strong. So in in in that sense I think the the organization would be ready to do it maybe after this big change in Murame in the summer but they have that that kind of behind them they they but they they they should be able to to kind of easily cope another integration project. So, so hopefully they will find something and the company indicated in uh the previous quarter after the Q4 they they kind of hinted that something might be cooking but but uh but then now now after Q1 they they didn't didn't give a similar signal. So maybe there was something going on which didn't materialize. I don't know but there there is definitely we know that there's always plans and discussions going on in the MA. So let's wait and see when something materializes.

[00:07:36]>> Yeah. So if we had a c crystal ball I guess >> yeah it can be of course something smaller as well in the in the meantime and some some bolt on things but this this infer thing would would be kind of the main strategic and maybe a bit more transformational but still more meaningful for the long-term grow >> and then to wrap it all up what about our valuation and recommendation >> yeah the the valuation went a bit up obviously with the share share price increasing quite quite nicely in the uh earnings dates what is P22 and something now for for this year. So it's definitely not cheap but uh given the the double digit uh earnings growth we are expecting and very very good quality and and returns on capital of the of the company. uh we think that it's it's definitely in the acceptable range and then you then you get a quite nice quite nice and expected return from from kind of purely from the uh earnings growth and and a small small part of dividends. So we we came down from from the buy by rating to accumulate with as the share appreciated a bit but definitely continue to see positively the the company as as well as the share going forward.

[00:08:47]>> Okay. Thank you.

[00:08:48]>> Thanks.

[00:08:49]>> You can read more about Harvia at indest.se. SE and if you have any questions you can go to our forum and ask them directly from RA