Q2 2026 Harvia Oyj Earnings Call

August 6, 2026

Speaker #1: There is a very special place for the body, mind, and spirit. And it's easy to reach. It can be hot, it can be cold.

Operator: There is a very special place for the body, mind, and spirit. It's easy to reach. It can be hot. It can be cold. It can be pleasantly warm and smoothly cool. Outside and in. It elevates you and all around you. It feels and does good, like no other place can. We know this place. We come from this place. We have our own very old word for it. It's the same in every language. We invite the whole world to explore, embrace, and enjoy it, always in your own very special way. Let's sauna. For the body, mind, and spirit.

Speaker #1: It can be pleasantly warm, and smoothly cool. Outside and in, it elevates you and all around you; it feels and does good, like no other place can.

Speaker #1: We know this place. We come from this place. We have our own very old word for it. It's the same in every language. So, we invite the whole world to explore, embrace, and enjoy it.

Speaker #1: Always in your own very special way. Let's sauna. For the body, mind, and spirit.

Operator: [Break]

Speaker #2: Hello everyone, and welcome to Harvia's second quarter 26 earnings webcast. My name is Matias Jarnefelt. I am the CEO of the company, and with me I have Ari Vesterinen, our Chief Financial Officer.

Matias Järnefelt: Hello, everyone. Welcome to Harvia's Q2 2026 Earnings Webcast. My name is Matias Järnefelt. I am the CEO of the company. With me I have Ari Vesterinen, our Chief Financial Officer.

Speaker #3: Hello, welcome.

Ari Vesterinen: Hello. Welcome.

Speaker #2: Today, we'll start with our presentation, as usual, and I will be covering the highlights of the second quarter business events and key financial numbers.

Matias Järnefelt: Today, we'll start by our presentation as usual. I will be covering the highlights of the Q2 business events and key financial numbers. I will also briefly touch our strategy implementation. After me, Ari will be then going through the financial performance in more detail. During the time we present, you are welcome to send your questions via the chat. We will be more than happy to answer your questions after the presentation. Let's get started. Q2 highlights, starting with the top line. We're very happy to report that we delivered double-digit revenue growth, which mainly was driven by very strong performance in North America. Our revenue increased by nearly 12% to EUR 52.8 million. All of this growth was organic. North America really was the highlight out of our regions, driving nearly 40% revenue increase during the quarter.

Speaker #2: I will also briefly touch our strategy implementation. After me, Ari will be then going through the financial performance through in more detail. During the time we present, you are welcome to send your questions by the chat, and we will be more than happy to answer your questions after the presentation.

Speaker #2: So let's get started. Quarter 2 highlights, starting with the top line. We're very happy to report that we delivered double-digit revenue growth, which mainly was driven by very strong performance in North America.

Speaker #2: Our revenue increased by nearly 12%, to €52.8 million, and all of this growth was organic. North America really was the highlight among our regions, driving nearly a 40% revenue increase during the quarter.

Speaker #2: This also boosted the sauna and Scandinavian hot tub product category, as that represents a large share of our business in the North American continent.

Matias Järnefelt: This also boosted then the sauna and Scandinavian hot tub product category as that represents a large share of our business in the North American continent. This is also a very special quarter for us because we went through a significant IT and process upgrade program during the quarter. The background to this is that Harvia, over the past years, has grown significantly, and we strongly believe that in the coming years, there is plenty of growth opportunities for Harvia to seize. We want to prepare the company for significant scaling, and scaling that we can do in a very productive way. That includes, for example, increasing the level of automatization in our operational key processes. Because of this, we have now modernized our IT systems.

Speaker #2: This was also a very special quarter for us because we went through a significant IT and process upgrade program during the quarter. The background to this is that Harvia, over the past years, has grown significantly.

Speaker #2: And we strongly believe that in the coming years, there's plenty of growth opportunities for Harvia to seize. And we want to prepare the company for significant scaling and scaling that we can do in a very productive way.

Speaker #2: That includes, for example, increasing the level of optimization in our operational key processes. And because of this, we have now modernized our IT systems.

Speaker #2: Last year, we implemented this in our Lewisburg, U.S. sauna cabin factory. And this year, during the second quarter, we implemented that in our main heater factory at our headquarters in Muurame, Finland.

Matias Järnefelt: Last year, we implemented this in our Lewisburg, US sauna cabin factory, and this year, during Q2, we implemented that in our main heater factory in our headquarters in Muurame, Finland. While this will be supporting our strategy implementation and growth ambitions going forward, it had a temporary short-term negative impact on both top line and bottom line. We estimate that approximately EUR 4 million worth of deliveries that would have otherwise happened already during this quarter were postponed to a later phase. We expect that majority of this EUR 4 million will be then realized in our Q3 numbers. Now, because of this Muurame IT and process transition, it had a significant impact on regions that are heavily dependent on technical products as part of the portfolio they sell, mainly the heating products.

Speaker #2: While this will be supporting our strategy implementation and growth ambitions going forward, it had a temporary, short-term negative impact on both the top line and bottom line.

Speaker #2: And we estimate that approximately €4 million worth of deliveries that would have otherwise happened already during this quarter were postponed to a later phase.

Speaker #2: We expect that the majority of this €4 million will then be realized in our Q3 numbers. Now, because of this Muurame IT and process transition, it had a significant impact on regions that are heavily dependent on technical products as part of the portfolio they sell, mainly the heating products.

Speaker #2: And this touches special regions like Northern Europe, which is very much a heater region for us, also strongly continental Europe, and APAC and Middle East areas.

Matias Järnefelt: This touches special regions like Northern Europe, which is very much a heater region for us, also strongly continental Europe and Asia Pacific and Middle East areas. This is visible in the numbers that you have seen. Asia Pacific and Middle East and Africa was also affected by the continued war and uncertainty in Persian Gulf region. However, the Gulf region represents rather small share of our total revenue. Last year, it was around 2% of the total revenue, representing roughly EUR 4 million. Out of this, our current estimate that up to half is at risk, which potentially could be 1% impact on our growth during this year. Profitability was impacted by postponed deliveries. Adjusting operating profit was EUR 8.6 million, and that represents 16.2% of revenue, which, compared to our usual levels, is of course, on a low level.

Speaker #2: And this is visible in the numbers that you have seen. APAC and Middle East and Africa were also affected by the continued war and uncertainty in the Persian Gulf region.

Speaker #2: However, the region, Gulf region, represents rather small share of our total revenue. Last year, it was around 2% of the total revenue, representing roughly 4 million euros.

Speaker #2: And out of this, our current estimate is that up to half is at risk, which potentially could have a 1% impact on our growth during this year.

Speaker #2: Profitability was impacted by postponed deliveries. Adjusted operating profit was €8.6 million, and that represents 16.2% of revenue, which compared to our usual levels is, of course, at a low level.

Speaker #2: The main impact to profitability came really from the postponed deliveries, as we are in a high gross margin product business. There were also some one-off costs related to the upgrade, such as additional IT support needed, some overtime, et cetera.

Matias Järnefelt: Main impact to profitability came really from the postponed deliveries, as we are in high-gross margin product business. There was also some one-off cost related to the upgrades, such as additional IT support needed, some overtime, et cetera, but majority of the impact indeed came from the postponed sales. There was some impact also for the gross margin from the product and channel mix, mainly because so much of the growth came from our sauna cabin business in North America. Typically, the sauna cabins have a slightly lower gross margin compared to our technical equipment side of the product portfolio. Overall, we feel that the gross margin we delivered was on a good, healthy level, and we also managed to have rather smooth transition and cost management in the company during the time of the Muurame go live project. We always estimate our progress with two lenses.

Speaker #2: But the majority of the impact indeed came from the postponed sales. There was some impact also on the gross margin from the product and channel mix, mainly because so much of the growth came from our sauna cabin business in North America.

Speaker #2: And typically, the sauna cabins have a slightly lower gross margin compared to our technical equipment side of the product portfolio. But overall, we feel that the gross margin we delivered was at a good, healthy level, and we also managed to have a rather smooth transition and cost at the time of the Muurame go-live project.

Speaker #2: We always estimate our progress with two lenses. One is the financial results that we deliver continuously. The other is the progress we make on our strategic initiatives to make the company stronger for the future and lay stronger foundations for long-term growth and profitability.

Matias Järnefelt: One is the financial results that we deliver continuously. The other is, what is the progress we make on our strategic initiatives to make the company stronger for the future, lay stronger foundations for long-term growth and profitability. This was a very busy and a good quarter in that sense. The Muurame process and IT upgrade was a very significant undertaking for us, involving a lot of Harvia people, and I'm very thankful for the hard work and commitment of Harvia team delivering the transition as planned. We understand that when you have a significant IT upgrades, that always comes with some risk, and I'm very happy to report that we returned very close to normal operational capability by the end of Q2, and we expect that we are in full operational capacity during this ongoing Q3.

Speaker #2: And this was a very busy and good quarter in that sense. The Muurame project process and IT upgrade was a very significant undertaking for us, involving a lot of Harvia people, and I'm very thankful for the hard work and commitment of Harvia team delivering the transition as planned.

Speaker #2: And we understand that when you have significant IT upgrades, they always come with some risk. I'm very happy to report that we returned very close to normal operational capability by the end of Q2, and we expect that we are at full operational capacity during this ongoing Q3.

Speaker #2: Also, we've been continuing investments to drive growth, especially in facilities like expanding our Lewisburg factory in northwest West Virginia, to support our North American continued growth.

Matias Järnefelt: Also, we've been continuing on investments to drive growth, especially in facilities like expanding our Lewisburg factory in West Virginia to support our North American continued growth. We've also invested in machinery in other factories, now investing in IT infrastructure that supports scaling of the business, and we've continued our investments in R&D and product innovation. We feel that Harvia is very well positioned to shape and lead the global sauna market as it continues to grow. We do it through multiple means such as product innovation, commercial excellence, operational excellence, and also by becoming what we think is possible, the ambassador of the whole category. As part of that, we are pursuing activities to increase the awareness of the health benefits of sauna.

Speaker #2: We've also invested in machinery in other factories, now investing in IT infrastructure that supports scaling of the business. And we've continued our investments in R&D and product innovation.

Speaker #2: We feel that Harvia is very well positioned to shape and lead the global sauna market as it continues to grow. We do this through multiple means, such as product innovation, commercial excellence, operational excellence, and also by becoming, what we think is possible, the ambassador of the whole category.

Speaker #2: And as part of that, we are pursuing activities to increase the awareness of the health benefits of sauna. There are some examples that are tangible already now in Q2, such as we've collaborated with the University of Jyväskylä here in Finland and the High Performance Athlete Research Academy to advance. Also, another example of our increasing digital and design leadership is that Harvia Phoenix, our mid-range touch panel, was introduced around a year ago.

Matias Järnefelt: There are some examples that are tangible already now in Q2, such as we've collaborated with University of Jyväskylä here in Finland and High Performance Athlete Research Academy to advance the science of sauna. Also, another example of our increasing digital and design leadership is that Harvia Fenix, our kind of a mid-range touch panel that we introduced around a year ago, earlier won iF Design Award and during the second quarter, won a very prestigious Red Dot Design Award. Very well done to the teams behind these initiatives. Summarizing the key figures, revenue at EUR 52.8 million, and that's 11.7% growth year-on-year. At comparable exchange rates, the growth was close to 13%. All of this growth was organic. Adjusted operating profit at EUR 8.6 million, and that represents 16.2% of our revenue.

Speaker #2: Earlier one, IF Design Award, and during the second quarter one, a very prestigious Red Dot Design Award. So very well done to the teams behind these initiatives.

Speaker #2: Then, summarizing the key figures: revenue was €52.8 million, which represents 11.7% growth year on year. At comparable exchange rates, the growth was close to 13%.

Speaker #2: And all of this growth was organic. Adjusted operating profit was €8.6 million, and that represents 16.2% of our revenue. Operating free cash flow was €3.1 million, and this was impacted by a number of factors.

Matias Järnefelt: Operating free cash flow was at EUR 3.1 million, and this was impacted by a number of things. One is we have made quite significant investments during the quarter in expanding the production capacity, especially in North America. Also, cost related to the HOT, basically Harvia Operational Transformation program, which is the nickname we have for our IT and process upgrades. Also, we have taken in material to our Muurame factory and to our Lewisburg factory so that we are well prepared to catch up the delayed deliveries and start building the finished goods inventory as we head towards the high selling season of the winter. H1 key figures here. Revenue at around EUR 111 million, and that's roughly 12% growth.

Speaker #2: One is we have made quite significant investments during the quarter in expanding the production capacity especially in North America. Also, cost related to the hot basically Harvia operational transformation program, which is the nickname we have for our IT and process upgrades.

Speaker #2: Also, we have taken in material to the Muurame factory and to our Lewisburg factory so that we are well prepared to catch up on the delayed deliveries and start building the finished goods inventory as we head towards the high selling season of the winter.

Speaker #2: First half key figures here. So, revenue at around €111 million, and that's roughly 12% growth. At comparable exchange rates, that's nearly 16%, mainly because during the first quarter there was such a significant impact on the currency conversion from USD to euros compared to the situation a year before.

Matias Järnefelt: At comparable exchange rates, that's nearly 16%, mainly because during the first quarter, there was such a significant impact on the currency conversion from USD to EUR compared to the situation a year before. Adjusted operating profit at EUR 21 million, and that's 19.3% of revenue. Operating free cash flow at EUR 15.1 million, and that's nearly a 60% cash conversion. When we look at the revenue distribution geographically, the picture is obviously quite striking. All of the growth coming from one single region, North America, growing at nearly 40%, and actually above 40% in local currencies, and all of that organic. We see the impact of the heating production stop during the transition to the new systems in Muurame, in that we were under-delivering the heater products during this quarter to Northern Europe, Continental Europe, and APAC.

Speaker #2: Adjusted operating profit at €21 million, and that's 19.3% of revenue. And operating free cash flow at €15.1 million, which is nearly 60% cash conversion.

Speaker #2: Then when we look at the revenue distribution geographically, the picture is obviously quite striking. So all of the growth coming from one single region, North America, growing at nearly 40%.

Speaker #2: And actually, above 40% in local currencies and all of that organic. And then we see the impact of the heating production stop during the kind of the transition to the new systems in Muurame, in that we were kind of underdelivering the heater products during this quarter to Northern Europe continental Europe and APAC.

Speaker #2: Much of that, as said, we expect to then be recouped during Q3. APAC and Middle East were also impacted by the geopolitical situation in the region, as I mentioned when I opened the presentation.

Matias Järnefelt: Much of that, as I said, we expect to be then recouped during Q3. APAC and Middle East was also impacted by the geopolitical situation in the region, as I mentioned when I opened the presentation. Northern Europe, slight decline, standing now at 21% of our total revenue. When you assess this, you really should have in your mind that Northern Europe is very much heaters-only region for us. Muurame production stop and ramp-up had a significant impact on the reported revenues now during Q2. In Continental Europe, the story is the same. What I'm happy to say is that when we look at the interest to our category in Europe, not just Continental Europe, but also Northern Europe, we see the actual interest continuing on a very positive path.

Speaker #2: Northern Europe, slight decline, standing now at 21% of our total revenue. But when you assess this, you really should have in your mind that Northern Europe is very much a heaters-only region for us.

Speaker #2: So, the Muurame production stop and ramp-up had a significant impact on the reported revenues now during the second quarter. In continental Europe, the story is the same.

Speaker #2: And what I'm happy to say is that, when we look at the interest in our category in Europe—not just continental Europe, but also Northern Europe—we see that actually interest continued on a very positive path.

Speaker #2: So, our expectations for the future of Europe are that it does provide us with good growth opportunities in the years to come. North America, obviously the shining star of the quarter, grew 39% in euros and approximately 42%–43% in USD.

Matias Järnefelt: Our expectations for the future of Europe is that it does provide us good growth opportunities in the years to come. North America, obviously the shining star of the quarter, growing 39% in EUR and approximately 43%, 42% in USD. That already being the biggest of our reported region obviously had a very positive impact to the group-reported revenue. During this quarter, North America represented already 44% of our revenue. If we actually combine then the non-European region, so include APAC, in Q2, we had 55%. Majority of our revenue coming from outside Europe. The main driver for growth in North America was very strong performance of our sauna cabin business, which came from both the key account channel that we have, but also very strong growth in our own direct-to-consumer web store.

Speaker #2: And that, already being the biggest of our reported regions, obviously had a very positive impact on the group’s reported revenue. During this quarter, North America represented 44% of our revenue.

Speaker #2: And if we actually combine the non-European region, including APAC, in Q2 we had 55%. So, the majority of our revenue is coming from outside.

Speaker #2: Outside Europe, the main driver for growth in North America was very strong performance of our sauna cabin business, which came from both the key account channel that we have, but also very strong growth in our own direct-to-consumer web store.

Speaker #2: So I'm very happy to report that across our sauna cabin channels, we saw very, very positive steps forward. Here, APAC and Middle East declined by nearly 5%, now representing 11% of our revenue.

Matias Järnefelt: I'm very happy to report that across our sauna cabin channels, we saw very positive steps forward. Here, APAC and Middle East, decline of nearly 5%, representing now 11% of our revenue. Here there's a couple of remarks. The region grew by over 50% a year ago in the comparison period. Also, this region is prone to project deliveries, especially in the Gulf region. If you think about Harvia's business portfolio, actually the only place where we have meaningful project business is in Middle East. This business is impacted by the current situation. There have been issues with actually getting deliveries to the sites, and also quite a few of the projects that were supposed to be completed during H2 of this year have been postponed.

Speaker #2: But here, there are a couple of remarks. The region grew by over 50% a year ago in the comparison period. Also, this region is prone to project deliveries, especially in the Gulf region.

Speaker #2: And if we think about Harvia's business portfolio, actually the only place where we have meaningful project business is in the Middle East. And this business is impacted by the current situation.

Speaker #2: There have been kind of issues with actually getting deliveries to the sites, and also quite a few of the projects that were supposed to be completed during the second half of this year have been postponed.

Speaker #2: So, as I said, we would expect that potentially, at the whole group level, the Gulf situation could have around a 1% impact on our reported revenue.

Matias Järnefelt: As I said, we would expect that potentially for the whole group level, the Gulf situation could have around 1% impact on our reported revenue. I am also very happy to say that when I look outside the Gulf region, I see continued positive momentum. For us, there are significant countries in the region that we have been developing systematically, like China, Japan, Australia, and those all continue to perform in a good way. Looking at the product portfolio that we sell, heating equipment shed declined below 50%, impacted by the Muurame factory transition. Saunas and Scandinavian hot tubs increased to 30%, fueled by significant growth of sauna cabin business in North America. Steam products came down a couple of percentage points, impacted by two things. One is that steam business we mainly have in two regions.

Speaker #2: But I’m also very happy to say that when I look outside the Gulf region, I see continued positive momentum, and for us, there are significant countries in the region that we have been developing systematically, like China, Japan, and Australia. All of those continue to perform in a good way.

Speaker #2: So then looking at the product portfolio that we sell heating equipment, shared declined below 50% impacted by the Muurame. Factory transition, saunas in Scandinavian hot tubs increased to 30%, fueled by significant growth of sauna cabin business in North America.

Speaker #2: Steam products came down a couple of percentage points, impacted by two things. One is that the steam business we mainly have in two regions: the Middle East and North America.

Matias Järnefelt: It is Middle East and North America, and we had issues in both. Middle East projects were impacted by the Gulf war. In North America, we see that the steam category has been growing significantly more slowly than the traditional sauna category or infrared sauna category, which get a lot of boost from social media. The other thing is that there are also some internal improvement opportunities that we are working through, and our expectation is that those will have impact during H2 of this year. Here, again, the picture. Saunas, the shining star, growing by 44%. All of the others growing, but impacted heating equipment impacted by Muurame and Steam products unsatisfactory performance for the reasons I mentioned. Harvia is strategically very interestingly positioned. We are the global leader of a market that is growing from a niche to volume health and wellness market.

Speaker #2: And we had issues in both. Middle East projects were impacted by the Gulf War. And in North America, we see that the steam category has been growing significantly more slowly than the traditional sauna category or the infrared sauna category, which get a lot of boost from social media.

Speaker #2: And the other thing is that there are also some internal improvement opportunities that we are working through, and our expectation is that those will have an impact during the second half of this year.

Speaker #2: So here again, the picture: saunas, the shining star, growing by 44%. All of the others are growing, but heating equipment was impacted by Muurame, and steam products had unsatisfactory performance for the reasons I mentioned.

Speaker #2: Harvia is strategically very interestingly positioned. We are the global leader of a market that is growing from a niche to a volume health and wellness market.

Speaker #2: And in this transition, our strategic ambition is clear. We want to continue to lead and shape the global sauna markets as they continue to evolve and grow, and we want to provide everyone reasons to experience sauna and join the global sauna family.

Matias Järnefelt: In this transition, our strategic ambition is clear. We want to continue to lead and shape this global sauna market as it continues to evolve and grow, and we want to provide everyone reasons to experience sauna and join the global sauna family. We drive towards this ambition through implementing four strategic focus areas, answering questions what, where, to whom, and how. What is really related to product and portfolio leadership and being more of a solution business than just an individual component provider. Where refers to us winning the countries that matter the most for the future of sauna business. To whom, it is marketing and sales excellence and channel management excellence so that we have the strongest position in the channels that matter.

Speaker #2: And we drive towards this ambition through implementing four strategic focus areas, answering the questions: what, where, to whom, and how. 'What' is really related to product and portfolio leadership and being more of a solution business than just an individual component provider.

Speaker #2: Where refers to us winning the countries that matter the most for the future of sauna business. To whom its marketing and sales excellence and channel management excellence.

Speaker #2: So that we have the strongest position in the channels that matter. And also, 'how' is very important—very much related to the ability to grow, to build capacity, to do it in a productive way, and to drive new competencies as the sauna business continues to move from a product business to increasingly a wellness and lifestyle business.

Matias Järnefelt: Also how is very important, very much related to ability to grow, to build capacity, to do it in a productive way, and driving new competencies as the sauna business continues to move from product business to increasingly a wellness and lifestyle business. I am happy that during Q2, we did take significant steps forward in terms of product competitiveness, which is visible in our performance in the sauna cabin business. North America, I think we have very competitive range there now, ranging from the entry-level price point to also higher price points. Continued strong demand for our heating equipment, which is our core. One of the evidence is that we have been recently getting actually quite many design awards for our products, and Harvia Fenix, one of the highlights, and it continues to sell very, very well.

Speaker #2: I'm happy that during the second quarter, we took significant steps forward in terms of product competitiveness, which is visible in our performance in the sauna cabin business in North America.

Speaker #2: I think we have a very competitive range there now, ranging from the entry-level price point to higher price points. There is continued strong demand for our heating equipment, which is our core.

Speaker #2: And one of the pieces of evidence is that we have recently been receiving quite a few design awards for our products. And Harvia Phoenix is one of the highlights, and it continues to sell very, very well.

Speaker #2: So, really hitting a sweet spot in the market with design, functionality, and price point. In winning the strategically important market, it really is about winning the key countries that matter.

Matias Järnefelt: Really hitting a sweet spot in the market with design, functionality, and price point. In winning the strategically important market, it really is about winning the key countries that matter. I'm very happy to say that while there is now obviously quite striking difference between growth of North America and declines in all the other regions, it's basically due to the production transition that we've talked about and the demand signals we have in the large countries across the world where we focus continues to be very positive. Leading in key channels, so channel expansion and being more competitive, sharper, more interesting, inspiring across our channel landscape continues to bear fruit, and North American performance reflects this.

Speaker #2: And I'm very happy to say that, while there is now obviously quite a striking difference between the growth of North America and declines in all the other regions, it's basically due to the production transition that we've talked about.

Speaker #2: And the demand signals we have in the large countries across the world where we focus continue to be very positive. Leading in key channels—so channel expansion and being more competitive, sharper, more interesting, and inspiring across our channel landscape—continues to bear fruit.

Speaker #2: And through it, our North American performance reflects this. Also, I think that we've been able to do margin management pretty well over the past year after the tariffs and the currency changes, in particular related to the US, which impacted our business quite a lot.

Matias Järnefelt: Also, I think that we've been able to do margin management pretty well over the past kind of a year after the tariffs and the currency changes, in particular related to US, impacted quite a lot our business. We continue to be very well on top of things and are well-positioned for the future as we keep ramping the production of Muurame up. One of the examples of our channel development initiatives is that we want to do more of what works. What clearly works very well for us is our own direct-to-consumer web store in North America, and we've recently brought that to the German-speaking continental Europe, and the ramp-up is progressing as planned. One of the biggest challenges we as a company have is actually keep up with the growth.

Speaker #2: We continue to be very well on top of things and are well positioned for the future as we keep ramping the production of Muurame up.

Speaker #2: One of the examples of our channel development initiatives is that we want to do more of what works. What clearly works very well for us is our own direct-to-consumer web store in North America.

Speaker #2: And we've recently brought that to the German-speaking continental Europe, and the ramp-up is progressing as planned. One of the biggest challenges we as a company have is actually keeping up with the growth.

Speaker #2: Demand for our products seems to be at a very good level. The ability to keep growing significant numbers and do so in a productive manner is one of the key priorities of management.

Matias Järnefelt: Demand for our products seems to be on a very good level, and ability to keep growing significant numbers and do it in a productive manner is one of the key priorities of the management. As we already covered, this IT and process upgrade in Muurame was a significant step for us, and I'm very happy to report that it went as planned. As I mentioned in the beginning, we've already gone through the same in US. Now we have our biggest factories in the new era, what comes to the way Harvia works and the IT landscape that we utilize in our business. We continue to invest in building capacity. The biggest priority for us, obviously, is in US, as we can see that already for multiple years, we've grown tens of percentages per annum.

Speaker #2: And as we already covered, this IT and process upgrade in Muurame was a significant step for us, and I'm very happy to report that it went as planned.

Speaker #2: And as I mentioned in the beginning, we've already gone through the same in the US. So now we have our biggest factories in the new era, when it comes to the way Harvia works and the IT landscape that we utilize in our business.

Speaker #2: And we continue to invest in building capacity. The biggest priority for us, obviously, is in the US. As we can see, already for multiple years we've grown by tens of percentages per annum.

Speaker #2: And it was easier to grow when you grew, let's say, 40% on €10 million. But when you grow 40% on €100 million, just the absolute steps, obviously, are much bigger.

Matias Järnefelt: It was easier to grow when you grew, let's say, 40% on EUR 10 million, but when you grow 40% on EUR 100 million, just the absolute steps, obviously, are much bigger. This requires a lot of attention from us, and also, we need to move ahead of the curve so that we don't hit the ceiling and can capitalize on the opportunities we have. The investments and development activities that we've implemented, we believe will enhance our capacity to grow scalability, productive scalability of the business, operational resilience, and transparency, so business steering through data. We're very happy that we've now been able to take this step. A couple of practical examples that I thought I'd mention. One is that we think Harvia could truly become the category leader of thermal wellness, sauna wellness worldwide.

Speaker #2: So this requires a lot of attention from us and also we need to move ahead of the curve so that we don't hit the ceiling and can capitalize on the opportunities we have.

Speaker #2: So the investments and development activities that we've implemented, we believe will enhance our capacity to grow, scalability, productive scalability of the business, operational resilience, and also transparency.

Speaker #2: So, business steering through data. So we're very happy that we've now been able to take this step. A couple of practical examples that I thought I'd mention.

Speaker #2: One is that we think Harvia could truly become the category leader of thermal wellness, sauna wellness worldwide. And part of that is that we want to advance what I would call the science of sauna.

Matias Järnefelt: Part of that is that we want to advance what I would call the science of sauna. There's been quite a lot of research done on, in particular, traditional sauna, the Finnish sauna, but there are also some blind spots. Harvia partnered with the University of Jyväskylä, which is known for its sports science department, and also the Finnish Institute of High Performance Sport, KIHU, to keep studying and understanding more. One of the things that was not really studied was what's the impact of humidity for the biological response of a person who is in the sauna? There's been research on the temperature and the duration, how long you stay in the sauna, but not really about the humidity, which is very important part of both traditional sauna experience, so the water on the stone, what we call löyly, and also steam sauna category.

Speaker #2: And there's been quite a lot of research done on, in particular, traditional sauna—the Finnish sauna. But there are also some blind spots. Harvia partnered with the University of Jyväskylä, which is known for its sports science department, and also the Finnish High Performance Athlete Research Institute, KIHU, to keep studying and understanding more.

Speaker #2: And one of the things that was not really studied was the impact of humidity on the biological response of a person who is in the sauna.

Speaker #2: There's been research on the temperature and the duration—how long you stay in the sauna—but not really about the humidity, which is a very important part of the traditional sauna experience.

Speaker #2: So the water on the stone, what we call löyly, and also steam sauna category. And it turns out that the impact of löyly is actually very important.

Matias Järnefelt: It turns out that the impact of löyly is actually very important because we were really measuring very precisely the environment in the sauna. Plus, we had 50 adults. They were actually, for example, swallowing a temperature sensor pill so we could measure accurately their core temperature. We were measuring skin temperature. We were measuring their heart rates. We can see that roughly 25% of the heartbeat increase and core temperature increase are actually due to the humidity, which means that you can have clearly a lower temperature sauna as long as you use steam or water enough and get same response as in a hotter but drier sauna. This helps us design what I would call sauna wellness programs that are very pleasant and kind of just what the person needs and wants.

Speaker #2: Because we were really measuring very precisely the environment in the sauna, plus we had 50 adults. They were actually, for example, swallowing a temperature sensor pill.

Speaker #2: So we could measure accurately their core temperature. We were measuring skin temperature, we were measuring their heart rates, and we could see that roughly 25% of the heartbeat increase and core temperature increase was actually due to the humidity.

Speaker #2: Which means that you can have a clearly lower temperature sauna as long as you use enough steam or water, and get the same response as in a hotter but drier sauna.

Speaker #2: And this helps us design what I would call sauna wellness programs that are very pleasant, and kind of just what the person needs and wants.

Speaker #2: So, wellness in a pleasant way, and wellness longevity in a pleasant and relaxing way, is a value proposition that resonates extremely well across the world.

Matias Järnefelt: Wellness in a pleasant way, and wellness longevity in a pleasant and relaxing way is a value proposition that resonates extremely well across the world. This is an example that Harvia has an opportunity to truly become the ambassador of this category. The other example I wanted to mention is that we won, as mentioned, the Red Dot Design Award for the touchscreen control panel, Harvia Fenix, which I said hits really the sweet spot of working really nicely in a hot and humid environment through a gentle touch user interface, connected to the internet, over-the-air software updates, et cetera, hitting the right price points, and the sales response from the market has been very good for this product. Now we go to the financials more in detail. Ari?

Speaker #2: And this is an example that Harvia has an opportunity to truly become the ambassador of this category. The other example I wanted to mention is that we won, as mentioned, the Red Dot Design Award for the touchscreen control panel Harvia Phoenix, which, as said, really hits the sweet spot of working nicely in a hot and humid environment through gentle touch, user interface, connected to the internet, over-the-air software updates, et cetera.

Speaker #2: Hitting the right price points and the sales response from the market has been very, very good for this product. So now we go to the financials in more detail.

Speaker #2: So Ari.

Speaker #1: Okay, thank you. Yeah, here we see again the seasonality of our business over the first couple of years backwards. Typically, Q4 or Q1 have been the highest quarters, and last winter Q1 was clearly higher than Q4.

Ari Vesterinen: Thank you. Here we see again, the seasonality of our business first, a couple of years backwards. Typically, Q4 or Q1 have been the highest quarters, and last winter, Q1 was clearly higher than Q4. Typically, the net sales go a bit lower during the summer months or Q2 and Q3. That trend has changed probably a little. Sauna is not necessarily anymore so much of the just winter product in the biggest markets, but it's also selling well during the Q2 and Q3. Despite of that, we had really the delay of the net sales in Q2 of approximately EUR 4 million, and since that came from the production of sauna heaters, we have actually quite high operational leverage there. It had also a substantial effect on the relative profitability of that part of the business.

Speaker #1: And typically, the net sales go a bit lower during the summer months, or Q2 and Q3. But that trend has changed probably a little. Sauna is not necessarily anymore so much of just a winter product in the biggest markets.

Speaker #1: But it's also selling well during Q2 and Q3. But despite that, we had the delay of the net sales in Q2 of approximately €4 million.

Speaker #1: And since that came from the production of sauna heaters, we have actually quite high operational leverage there. It also had a substantial effect on the relative profitability of that part of the business.

Speaker #1: So without that delay we would have had substantially better Q2 figures. But we are happy also with this situation since the most important thing is really that we have passed the most important part of the project and the capacity is close to normal.

Ari Vesterinen: Without that delay, we would have had substantially better Q2 figures. We are happy also with this situation, since the most important thing is really that we have passed the most important part of the project, and the capacity is close to normal. Here are the main financial numbers, and actually, there is not very much deviation from the last year. A couple of things I would like to mention. Actually, the number of employees, it has increased about 64 employees, and 59 of those came into the group in US. We have been actually employing quite much new people in US for the production, for the sales support, and so forth. The operations are growing very nicely there.

Speaker #1: Here are the main financial numbers, and actually there is not very much deviation from last year. A couple of things I would like to mention: actually, the number of employees has increased by about 64, and 59 of those came into the group in the US.

Speaker #1: So we have actually been employing quite a lot of new people in the US for production, for sales support, and so forth. So the operations are growing very nicely there.

Ari Vesterinen: The networking capital was still on a, well, rather high level, the fact is really that we had not reduced the inventory, but we had increased it practically, especially in Finland, to be prepared after the more peaceful Q2 production for the deliveries. We had end of Q2, plenty of materials and work in process prepared for the future sales in Finland. During that quarter, we also had some extra costs, as Matias mentioned, for the transition. We had a downtime of the production about three weeks. We were not shipping, not producing. During that time, on the other hand, we also let people take their extra holidays and so forth in the production.

Speaker #1: The net working capital was still on a rather high level, and the fact is really that we had not reduced the inventory, but we had increased it practically.

Speaker #1: Especially in Finland, we prepared after the more peaceful Q2 production for the deliveries. So we had, at the end of Q2, plenty of materials and work in process prepared for the future sales in Finland.

Speaker #1: During that quarter, we also had some extra costs, as Matias mentioned, for the transition. We had a downtime of the production of about three weeks.

Speaker #1: We were not shipping, not producing, and during that time, on the other hand, we also let people take their extra holidays and so forth in the production.

Speaker #1: So in fact if you compare the Q2 in 25 and 26 our share of the direct or our share of the labor in total actually didn't increase and at the same time also the other operative costs they were managed quite well during Q2.

Ari Vesterinen: In fact, if you compare the Q2 in 2025 and 2026, our share of the labor in total actually didn't increase, at the same time, also the other operative costs, they were managed quite well during Q2. They were also relatively lower than a year ago. Also, due to the slightly unfavorable sales mix, more sauna cabins, less equipment. The material percentage of the sales increased slightly, it belongs really to this restructuring or the pause of the heater and similar shipments. Okay, here we see the seasonality of our operative free cash flow and cash conversion. Typically, after the Q2, Q1, we go down with the free cash flow. Now we had, again, lower cash flow in Q2, and typically it increases rapidly during Q3 and Q4 when we turn the higher inventories to money, and so forth.

Speaker #1: They were also relatively lower than a year ago. Also, due to the slightly unfavorable sales mix—more sauna cabins, less equipment—the material percentage of the sales increased slightly.

Speaker #1: But it really belongs to this restructuring, or the pause of the heater and similar shipments. Okay. Here we see the seasonality of our operative free cash flow and cash conversion. Typically, after Q1 and Q2, we go down with free cash flow, and now we had again lower cash flow in Q2. Typically, it increases rapidly during Q3 and Q4 when we turn the higher inventories into money.

Speaker #1: And so forth. The leverage is on a rather low level. We have plenty of room, even to our financial long-term targets—2.5—to take more debt if we want, for some restructuring, M&A, or so.

Ari Vesterinen: The leverage is on a rather low level. We have plenty of room, even to our financial long-term targets, 2.5, to take more debt if we want for some restructuring, M&A or so. We could also temporarily exceed even this 2.5. It's not the upper limit, but it requires, of course, discussion and separate information if we exceed this 2.5. There is really firepower for acquisitions available. The net financial items, okay, they vary sometimes based on the IFRS valuation of certain items. Really the cash finance expenses paid in cash, they stayed quite stable also in Q2. Here we see the quarterly investments, and as Matias told, we have had investments in IT infrastructure, expanding the Lewisburg facility, and product development.

Speaker #1: Or we could also temporarily exceed even this 2.5. So it's not an upper limit, but it requires, of course, discussion and separate information if we exceed this 2.5.

Speaker #1: But so there is really firepower for acquisitions available. The net financial items—okay, they vary sometimes based on the IFRS valuation of certain items, but really, the cash finance expenses paid in cash, they stayed quite stable also in Q2.

Speaker #1: Here we see the quarterly investments and, as Matias told, we have had investments in IT infrastructure, expanding the Lewisburg facility, and product development.

Speaker #1: But we have also invested in real production machinery both in Finland and in US and also some solar power equipment and so forth. So the Harvia's long-term financial targets just to repeat they haven't changed we target 10% or more average annual revenue growth rate.

Ari Vesterinen: We have also invested in real production machinery, both in Finland and in US, and also some solar power equipment and so forth. The Harvia's long-term financial targets, just to repeat, they haven't changed. We target 10% or more average annual revenue growth rate and the profitability, adjusted operating profit margin over 20%, and the leverage really under 2.5. We pay twice a year the dividends. This time, the annual general meeting accepted the board of directors' proposal to pay EUR 0.77 dividends for last year's results, and the first installment was paid in April, EUR 0.39, and the rest is planned to be paid in 26 October. Now it's time for questions. We have got plenty of questions, and quite much related to North America. Understandable, but also for other regions and different product groups.

Speaker #1: And the profitability-adjusted operating profit margin is over 20%, and the leverage is really under 2.5. We pay dividends twice a year. So this time, the Annual General Meeting accepted the Board of Directors' proposal to pay €0.77 dividends for last year's results.

Speaker #1: And the first installment was paid in April, €0.39, and the rest is planned to be paid in October 26th. So now it's time for questions.

Speaker #1: We have got plenty of questions and quite much related to the North America understandable but also for other regions and different product groups. So let's start and Matias will answer most of the business questions and if there are anything finance related I will answer them more.

Ari Vesterinen: Let's start, and Matias will answer most of the business questions, and if there are anything finance-related, I will answer them more. Q2 sales included EUR 4 million sales shift into Q3. Can you confirm that the 4 million of delayed Q2 deliveries is now fully secured within the Q3 order book? Is there any remaining risk of volume shipping into Q4?

Speaker #1: So, Q2 sales included a €4 million sales shift into Q3. Can you confirm that the €4 million of delayed Q2 deliveries is now fully secured within the Q3 order book?

Speaker #1: Is there any remaining risk of volume shipping into Q4?

Speaker #2: The answer is that I can't guarantee it. But I'm highly confident that maturity of it will be delivered in Q3. But there might be still some slippage.

Matias Järnefelt: The answer is that I can't guarantee it, but I'm highly confident that majority of it will be delivered in Q3, but there might be still some slippage. Overall, I'm very happy with how the transition went. It was very significant undertaking for us, involving many teams, et cetera. Of course, when something like that happens in the core of your business, also the CEO gets a little bit butterflies in the stomach. Now seeing how the factory works, how the processes have now settled, I'm very happy. I think we're in a positive situation where at the same time we are catching up from last year and experiencing strong demand from the market.

Speaker #2: Overall, I'm very happy with how the transition went. It was a very significant undertaking for us, involving many teams, etc. And of course, you know, when something like that happens in the core of your business, also the CEO gets a little bit of butterflies in the stomach. Now, seeing how the factory works, how the processes have now settled, I'm very happy.

Speaker #2: I think we are in a positive situation where at the same time we are catching up from last year and experiencing strong demand from the market.

Speaker #1: North America grew close to 40% in Q2, and you highlighted the expansion of sauna cabin distribution as one of the key drivers. Could you explain this in more detail?

Ari Vesterinen: North America grew close to 40% in Q2. You highlighted the expansion of sauna cabin distribution as one of the key drivers. Could you explain this in more detail? Additionally, how did sauna cabin sales develop among your existing distributors versus the newly added distributors' channels?

Speaker #1: Additionally, how did sauna cabin sales develop among your existing distributors versus the newly added distributor channels?

Speaker #2: Yeah. For sauna cabins we have two main sales channels in the US. Especially when we talk about the high volume categories easy to buy easy to install products like the barrel sauna.

Matias Järnefelt: Yeah. For sauna cabins, we have two main sales channels in the US, especially when we talk about the high-volume categories, easy-to-buy, easy-to-install products like the barrel sauna, or also what I would call entry-level sauna cabins for the indoors. They mainly go through two channels, our own direct-to-consumer, and also we would call the big box retailers, so mass merchants in the US. We're actually taking steps in multiple ways, and one of them is that we have very significant growth in our own D2C. I think we've hit the sweet spot in how we market, how we drive traffic to the store. We've made, over the past quarters, also improvements like having really nice 3D modelings where you can design your own product based on the available options, see all the time how the price changes, fast deliveries, et cetera.

Speaker #2: Also, what I would call entry-level sauna cabins for indoors, they mainly go through two channels: our own direct-to-consumer and also what we would call the big box retailers, so mass merchants in the US.

Speaker #2: And we've actually taken steps in multiple ways. And one of them is that we have very significant growth in our own D2C. I think we've hiked the sweet spot in how we market how we drive traffic to the store.

Speaker #2: We've made, over the past quarters, also improvements like having really nice 3D modelings where you can kind of design your own product based on the available options.

Speaker #2: You see all the time how the price changes, fast deliveries, etc., and just the portfolio seems to be fitting very nicely. So, what I would call product-market fit.

Matias Järnefelt: As the portfolio seems to be fitting very nicely there, so what I would call product market fit for the products we make in Lewisburg seems to be very, very good, and one of the great channels is our own D2C. Having said that, we want to grow in all channels, and I'm pleased to say that the partners that we have are very happy with Harvia. They also see the growth opportunities that the category represents. They see that we have a highly competitive portfolio that they can sell. They see that we have a track record of scaling and having the opportunity to scale with our partners. There is also expansion activities, having basically stronger focus among our existing customers and also some that are new opportunities as customers for us.

Speaker #2: For the products we make in Lewisburg, seems to be very, very good. And one of the D2C. Having said that, we want to grow in all channels.

Speaker #2: And I'm pleased to say that the partners that we have are very happy with Harvia. They also see the growth opportunities the category represents.

Speaker #2: They see that we have highly competitive portfolio that they can sell. They see that we have track record of scaling and having the opportunity to scale with our partners.

Speaker #2: So, there is also expansion activity, having basically a stronger focus among our existing customers, and also some that are new opportunities as customers for us.

Speaker #1: Okay. Then there is a similar twofold question. Probably answered already the first part, but I’ll ask it anyway. How much of the North American growth came from the distribution channel expansion?

Ari Vesterinen: Okay, there is a similar twofold question, probably answered already the first part, but I ask it anyhow. How much of the North American growth came from the distribution channel expansion? That was the first part. Is it right to assume that this had a weakening mix effect?

Speaker #1: That was the first part. Is it right to assume that this had a weakening mix effect?

Matias Järnefelt: I think majority of the growth came from our existing channels. I guess that's also a good sign that we've been able to scale our own channels and also business with existing partners, and there is also some element with new accounts. The mix element had an impact on the profitability, in particular, the share of materials of our revenue, the reason being that the sauna cabins tend to have a slightly lower gross margin compared to our technical products like the sauna heaters, the control panels, et cetera. That side of the business was now particularly significantly impacted by essentially the ERP program that went live and process improvement program that went live in our biggest technical equipment factory here in Finland.

Speaker #2: I think we can maturity of the growth came from our existing channels. And I guess that's also a good sign that we've been able to scale our own channels and also existing business with existing partners.

Speaker #2: And there is also some element with new accounts. The mix element had an impact on the profitability, in particular the share of materials of our revenue.

Speaker #2: The reason being that the sauna cabins tend to have a slightly lower gross margin compared to our technical products like the sauna heaters or control panels etc.

Speaker #2: And that side of the business was now particularly significantly impacted by the ERP program that went live and the process improvement program that went live in our biggest technical equipment factory here in Finland.

Speaker #1: Sales of the steam products were down 14% year over year in Q2. Has the Thermosol acquisition disappointed you? Why have you not been able to achieve the sales synergies?

Ari Vesterinen: Sales of the steam products were down 14% year to year in Q2. Has ThermaSol acquisition disappointed you? Why you have not been able to get out the sales synergies?

Matias Järnefelt: Yeah, when we look at the steam, there's a few things to bear in mind. One is that before we acquired ThermaSol, practically our business in steam was in Middle East, in particular the Gulf region. The reason is that steam saunas, Turkish saunas, hammams, they are very strongly part of the culture in that part of the world. Then ThermaSol really added more like the steam element for North America. Actually, we had some hiccups when it comes to both. What you see in the report, the figures, is not only ThermaSol, but it's actually a combined impact on basically significant project-based business being disrupted in the Gulf region. At the same time, it is fair to say that we're not fully satisfied with the pace that we've been able to scale the steam business in North America.

Speaker #2: Yeah. When we look at the steam, there's, you know, a few things to bear in mind. One is that, before we acquired Thermosol, practically our business in steam was in the Middle East, and the Middle East, and particularly the Gulf region.

Speaker #2: And the reason is that steam saunas Turkish saunas hamams they are very strongly part of the culture in that part of the world. And then thermosol really added more like the steam element for North America.

Speaker #2: And actually, we had some hiccups when it comes to both. So what you see in the report—the figures—it's not only Thermosol, but it actually combines the impact on basically significant project-based business being disrupted in the Gulf region.

Speaker #2: But at the same time it is fair to say that we're not fully satisfied with the pace that we've been able to scale the steam business in North America.

Speaker #2: Multiple actions are underway. As I mentioned, I hope that we can report a positive trend change during even the second half of this year, relating to the channel, the account management, and also some activity related to portfolio development.

Matias Järnefelt: Multiple actions are underway, and as I mentioned, I would hope that we can report a positive trend change during even the H2 of this year relating to the channel, the account management, and also some activities related to portfolio development. Now, when it comes to ThermaSol, steam was one of the key reasons why we bought them. As a global leader of the sauna category and kind of owner of thermal wellness, we feel that we need to have a portfolio that covers traditional sauna, infrared sauna, steam sauna, and cold wellness products. Of course, strategically adding steam has been something we wanted to do, but it was not the only reason. Also, we got some of the leading digital capabilities when we acquired ThermaSol.

Speaker #2: Now, what comes to Thermosol, steam was one of the key reasons why we bought them. So, as a global leader of the sauna category and kind of owner of thermal wellness, we feel that we need to have a portfolio that covers traditional sauna, infrared sauna, steam sauna, and cold wellness products.

Speaker #2: So, of course, strategically adding steam has been something we wanted to do. But it was not the only reason. Also, we got some of the leading digital capabilities when we acquired Thermosol.

Speaker #2: So when we bought them they had beautiful Android based kind of full size tablet sized control panels to be used in showers and steam saunas.

Matias Järnefelt: When we bought them, they had beautiful Android-based kind of full-size, tablet-sized control panels to be used in showers and steam saunas, really optimized for wet and hot environment, and that's something we are utilizing across the Harvia group now. The other thing was opportunities to sell more high-end products from Harvia group portfolio through ThermaSol channel, and that's also actually progressing pretty well. We can't have too narrow kind of focus when assessing the performance of the acquisition. Of course, we would have wanted to gain some more, but we feel that there continues to be strong potential in the acquisition that we made, which we plan to get into outputs, business outcomes in the coming years.

Speaker #2: So really optimized for wet and hot environment. And that's something we are utilizing across the Harvia group now. And the other thing was opportunities to sell more high end products from Harvia group portfolio through thermosol channel.

Speaker #2: And that's also actually progressing pretty well. So we can't have too narrow a focus when assessing the performance of the acquisition. Of course, we would have wanted to gain some more, but we feel that there continues to be strong potential in the acquisition that we made, which we plan to get through, get into outputs, business outcomes in the coming years.

Speaker #1: Once the new capacity comes online, should we expect a step up in growth and mainly improved delivery capabilities and shorter lead times?

Ari Vesterinen: Once the new capacity comes online, should we expect a step up in growth and mainly improved delivery capabilities and shorter lead times?

Speaker #2: The answer is yes. And basically, it relates to both Lewisburg, where there are mainly two different, I would say, development initiatives that have been going on.

Matias Järnefelt: The answer is yes, basically, it relates to both Lewisburg, there's two different, I would say, development initiatives that have been going on. One is expanding physically the Lewisburg factory, basically, the current expansion phase is expected to be completed actually next month, so in the month of September. Already helping us for Q4 and Q1 kind of winter season that is coming. It is clear that we are preparing quite a lot additional products, finished goods, as we approach that selling season, as we hope that we can continue to deliver solid growth also during this winter season. As I said, just the absolute jumps as the growth percentages are quite high, actually quite significant as we keep growing strong double digits already on a clearly elevated base compared to where we were even some years ago.

Speaker #2: One is expanding physically the Lewisburg factory, and basically the current expansion phase is expected to be completed actually next month, so in the month of September.

Speaker #2: Already helping us for the fourth quarter (Q4) and first quarter (Q1)—the kind of winter season that is coming. And it is clear that we are preparing quite a lot of additional products, finished goods, as we approach that selling season.

Speaker #2: As we hope that we can continue to deliver solid growth also during this winter season. And as I said, just the absolute jumps, as the growth percentages, are quite high—actually quite significant—as we keep growing strong double digits already on a clearly elevated base compared to where we were even some years ago.

Speaker #2: And that's Lewisburg, and we should have clearly more capacity for the high-selling winter season. And also, we believe that Muurame will already have more capacity in Q3 than in Q2.

Matias Järnefelt: That's Lewisburg, we should have clearly more capacity for the high selling winter season. Also, we believe that Muurame will have already more capacity in Q3 than Q2 and even more in Q4 as a result of the system and IT renewal. It's much more scalable, streamlined, automated, helps scale. Previously, we have been very much dependent on manual labor for scaling, now we can automize, utilize more, for example, AI-driven smart business processes, et cetera. We're very much looking forward to the productivity and scalability benefits from the project.

Speaker #2: And even more in quarter four as a result of the kind of system and IT renewal. It's much more scalable, streamlined, automated, helps scale.

Speaker #2: Previously, we have been very much dependent on manual labor for scaling, and now we can automate and utilize more—for example, AI-driven smart business processes, etc.

Speaker #2: So we're very much looking forward to the productivity and scalability benefits from the project.

Speaker #1: On the APAC and MEAR weaknesses could you quantify in euro terms the total impact from the customer project postponed and delivery delays related to the Muurame factory upgrade during the quarter?

Ari Vesterinen: On the APAC and MEA weaknesses, could you quantify in EUR terms the total impact from the customer project postponed and delivery delays related to the Muurame factory upgrade during the quarter?

Speaker #2: What we can say is that the Gulf region represents roughly 2% of our revenue. So, in 2025 figures, it means roughly €4 million in a year.

Matias Järnefelt: Well, what we can say is that the Gulf region represents roughly 2% of our revenue. In 2025 figures, it means roughly EUR 4 million in a year, EUR 1 million per quarter. Half of that is at risk for this year. Roughly speaking, EUR 2 million for the full year with, I would say, weighting now to more the H2. When we put things in perspective, that represents roughly a 1% impact for our full year growth on a group level. We don't separate now in our reporting specific kind of impact from the Gulf situation to our MEA numbers. As said, overall in the APAC region, we are performing well.

Speaker #2: One million per quarter, and half of that is at risk for this year. So, roughly speaking, two million for the full year, with—I would say—weighting now more to the second half of the year.

Speaker #2: When we put things in perspective, that represents roughly a 1% impact for our full-year growth on a group level. And we don't separate now in our reporting a specific kind of impact from the Gulf situation to our MEAR numbers.

Speaker #2: But, as said, overall in the APAC region, we are performing well.

Speaker #1: Still continuing with the same topic. Based on your comments that the Iran conflict is expected to continue affecting APAC and MEAR in the second half of the year, should we interpret this as implying that regional sales are likely to decline year-on-year in H2 as well?

Ari Vesterinen: Still continuing the same topic. Based on your comments that the Iran conflict is expected to continue affecting APAC and MEA in H2, should we interpret this is implying that regional sales are likely to decline year on year in H2 as well?

Speaker #2: Well, I just gave you the guidance and you do the math.

Matias Järnefelt: Well, I just gave you the guidance, you do the math.

Speaker #1: Yeah. How did sales develop in other key APAC MEAR countries, like China and Japan?

Ari Vesterinen: Yeah. How did sales develop in other key APAC, MEA countries like China and Japan?

Speaker #2: Well okay.

Matias Järnefelt: Well.

Ari Vesterinen: Okay. What was the estimated Q2 impact from higher raw materials, freight, and energy cost related to the Iran conflict? How do you expect those cost pressures to evolve in H2? Have you implemented any price increases to offset the higher input costs?

Speaker #1: What was the estimated Q2 impact from higher raw materials, freight, and energy costs related to the Iran conflict? How do you expect those cost pressures to evolve in H2, and have you implemented any price increases to offset the higher input costs?

Matias Järnefelt: Mm-hmm. Yeah. When we look at the crisis in the Middle East, we've been looking at it from multiple angles. One is impact on the global economy that could then impact consumer confidence, that then could impact our business. So far in the key markets, when we look at the demand picture, it continues to stay positive, which is the main thing for us. Everything else we feel we can manage reasonably well. Of course, as a company that has truly global supply network, we have two factories in the US, a factory in China, multiple factories in Europe, also multiple suppliers of components. We've been optimizing our supply chain to take into account the situation in the Gulf. What comes to core supply chain processes, we think we can manage them without significant impact on the margins.

Speaker #2: Yeah, when we look at the crisis in the Middle East, we've been looking at it from multiple angles. One is the impact on the global economy, which could then impact customer and consumer confidence and then could impact our business.

Speaker #2: But so far in the key markets, when you look at the demand picture, it continues to stay positive, which is the main thing for us.

Speaker #2: Then everything else we feel we can manage reasonably well. Of course, as a company that has a truly global supply network, we have two factories in the US, a factory in China, and multiple factories in Europe.

Speaker #2: Also, multiple suppliers of components. We've been optimizing our supply chain to take into account the situation in the Gulf. So when it comes to the core supply chain process, we think we can manage it without significant impact on the margins.

Speaker #2: One element that is important for us is logistics costs, because typically when we think about, for example, a sauna cabin, it's a big and bulky product from a logistics point of view.

Matias Järnefelt: One element that is important for us is logistics cost, because when we think about, for example, a sauna cabin, it's a big and bulky product from logistics point of view. There's some price increase pressure there, but overall, we've shown during the last 12 months that we can actually react, I would say, reasonably quickly to even very significant swings. For us, it was much bigger deal to deal with tariff fluctuation and tariff increases at the same time when the USD was dropping significantly during the earlier part of last year. Putting things in perspective, this is a much smaller thing for us.

Speaker #2: There's some price increase pressure there, but overall, we've shown during the last 12 months that we can actually react, I would say, reasonably quickly to even very significant swings.

Speaker #2: And for us, it was a much bigger deal to deal with tariff fluctuation and tariff increases at the same time when the USD was dropping significantly during the earlier part of last year.

Speaker #2: So, putting things in perspective, this is a much smaller thing for us.

Speaker #1: Yeah, there is sometimes strong volatility in the freight costs, but we have to also mention that quite a big part of those direct sales were sold with Ex Works conditions.

Ari Vesterinen: Yeah. There is sometimes strong volatility in the freight costs. We have to also mention that quite a big part of that direction sales were sold with Ex Works conditions. Actually the customers organize the freight by themselves and we don't carry the cost necessarily. It's also mitigating that risk a little. Where do you think the softness in steam market demand stems from? Are you seeing any market share losses?

Speaker #1: So actually, the customers organize the freight by themselves, and we don't carry the cost necessarily. So it's also mitigating that risk a little. Where do you think the softness in steam market demand stems from?

Speaker #1: Are you seeing any market share losses?

Matias Järnefelt: Mm-hmm. One of the key things that drives demand for saunas is the awareness and excitement around the category. We do actually a lot of analytics on what happens in the digital space, Google search trends, social media kind of assessments, et cetera. What is quite clear is that there's a lot of activity in social media around the traditional sauna and infrared sauna, and significantly less, for some reason, for the steam sauna category. There is clearly more tailwind for traditional and infrared saunas than for steam. Basically, the way we see the market is that out of these three sauna types, steam is the slowest growing. That's now been impacted globally, in one of the heartlands of steam sauna, i.e. the Gulf region because of the situation we already talked about.

Speaker #2: One of the key things that drives demand for saunas is the awareness and excitement around the category. And when we do actually a lot of analytics on what happens in the digital space you know Google search trends.

Speaker #2: Social media kind of assessments etc. And what is quite clear is that there's a lot of activity in social media around the traditional sauna and inferred sauna and significantly less for some reason for the steam sauna category.

Speaker #2: So there is clearly more tailwind for traditional and inferred saunas than for steam. So basically the way we see the market is that out of these three sauna types steam is the slowest growing.

Speaker #2: And that's now been impacted globally, in one of the heartlands of steam sauna, i.e. the Gulf region, because of the situation we already talked about.

Speaker #2: Having said that, when we've assessed our situation, we think that there is also an element of competitive pressure which we need to react to through account management, channel development, and also continued product development.

Matias Järnefelt: Having said that, when we've assessed our situation, we think that there is also an element of competitive pressure, which we need to react to through account management, channel development, and also continued product development. We have a quite comprehensive multipoint action plan that we are implementing with our steam team. I'm very much looking forward to seeing the trend improve clearly. Right now my estimate would be that we could see that already during the H2. Of course, it heavily is dependent actually on the Middle East, Gulf situation. Overall in the US, I think the trend change is doable within this year.

Speaker #2: And we have a quite comprehensive multi-point action plan that we are implementing with our steam team, and I'm very much looking forward to seeing the trend improve clearly. Right now, my estimate would be that we could see that already during the second half.

Speaker #2: Of course, it is heavily dependent actually on the Middle East Gulf situation, but overall in the US, I think the trend change is doable within this year.

Speaker #1: Can you comment on the sales mix in North America? How big share of the sales went to third party retailers in Q2? Is the retail margin closer to Harvia's average margin or how would you describe margin in retail channel?

Ari Vesterinen: Can you comment on the sales mix in North America? How big share of the sales went to third-party retailers in Q2? Is the retail margin closer to Harvia's average margin, or how would you describe margin in retail channel?

Matias Järnefelt: Mm-hmm. We think about our channel landscape in North America, it could be summarized in 4. 1, our own direct-to-consumer D2C. 2 is the big box retailers. 3 is what I would call sauna, pool, spa, and wellness dealers. 4 is other sauna cabin manufacturers who need a heater inside their solution. The big box retail is the biggest. Our own D2C is the 2, the dealers 3, and the sauna cabin is 4. All of them have a meaningful role. There are some margin differences across the channels, but mainly it comes from the product mix. Typically, the sauna cabin as a product has a slightly lower margin than the more, I would say, complicated technical product with electrics, digital, et cetera, embedded in them, like the sauna heaters and the control panels.

Speaker #2: When we think about our channel landscape in North America, it could be summarized in four. One, our own direct-to-consumer, D2C. The second is the big box retailers.

Speaker #2: Then third is what I call sauna, pool, spa, and wellness dealers. And fourth is other sauna cabin manufacturers who need a heater inside their solution.

Speaker #2: And the big box retail is the biggest. Our own D2C is the second, the dealers third, and the sauna cabin is fourth. But all of them have a meaningful role.

Speaker #2: And there are some margin differences across the channels, but mainly it comes from the product mix. So typically, the sauna cabin as a product has a slightly lower margin than the more, I would say, complicated technical products with electrics, digital, etc.

Speaker #2: embedded in them, like the sauna heaters and the control panels.

Ari Vesterinen: Yeah. Back to Persian Gulf region. What was the negative impact of the Persian Gulf region in Q2, and what run rate should we expect from the situation going forward? I think we answered that.

Speaker #1: Back to the Persian Gulf region. What was the negative impact of the Persian Gulf region in Q2, and what run rate should we expect from the situation going forward?

Speaker #1: I think we answered that, but you repeated $2 million on the annual level.

Matias Järnefelt: Yeah.

Ari Vesterinen: If it's EUR 2 million on the annual level.

Matias Järnefelt: Yeah, exactly.

Speaker #2: Yeah exactly.

Speaker #1: Yeah. Overall, are you content with the sales mix you achieved in Q2, or do you see room to improve?

Ari Vesterinen: Yeah. Overall, are you content with the sales mix you achieved in Q2, or do you see room to improve?

Speaker #2: There are two answers to this. On one hand, yes, because I think that we really performed very well with the products where we had availability.

Matias Järnefelt: There's two answers to this. On one hand, yes, because I think that we really performed very well with the products where we had availability. On the other hand, no, because this Muurame go live had a, obviously, quite significant impact on the, what I would call, on the highest margin products we make in this company. That obviously is visible. Whether that could have been managed somehow differently, I don't know. I think we did pretty good job. What comes to the gross margin development, as we now have ramped up the production in Muurame and continue to increase output, keep driving growth, I think you should expect basically positive outlook for the gross margin development.

Speaker #2: And on the other hand, no, because there's more of a go-live had a, obviously, quite significant impact on what I would call the highest margin products we make in this company.

Speaker #2: So, that obviously is visible. Whether that could have been managed somehow differently, I don't know. I think we did a pretty good job. And what comes to the gross margin development, as we now have ramped up the production and more of a continue to increase output, keep driving growth, I think you should expect a basically positive outlook for the gross margin development.

Speaker #1: How much inventory remains elevated due to the IT implementation, and how much working capital release should we expect in H2? We don’t, well, release this so exactly, but I have to say that, for instance, in more of Finland, the increase of the inventory value during Q2 was multiple millions.

Ari Vesterinen: How much inventory remains elevated due to the IT implementation, and how much working capital release should we expect in H2? We don't, well, release this so exactly, but I have to say that, for instance, in Muurame, Finland, the increase of the inventory value during Q2 was multiple EUR millions. We are now really well prepared to start the sales for Q3 and going forward. As you can see from our seasonality of the business and the cash flow, this tells also that typically, the networking capital goes every year down during Q4. This will certainly happen also this year, but we can't give so exact numbers for that. That's.

Speaker #1: And we are now really well prepared to start the sales for Q3 and going forward. And as you can see from our seasonality of the business and the cash flow, this tells also that typically the net working capital goes every year down during Q4.

Speaker #1: So this will certainly happen also this year, but we can't give such exact numbers for that. That's the same phenomenon every year. Regarding acquisition targets, what kind of valuation levels are you seeing at the moment?

Ari Vesterinen: The same phenomenon every year. Regarding acquisition targets, what kind of valuation levels are you seeing at the moment?

Matias Järnefelt: The valuation levels change quite dramatically depending on what kind of target we are talking about. If we are talking about market leaders for high growth categories in the US, there the multiples are clearly higher. If we talk about maybe a smaller player in a more kind of traditional sauna category, let's say in Europe, basically less. At the same time, they would add less into our business strategically and business-wise. Now, of course, I understand it's taking a while since previous meaningful sized acquisition, but it is also something that is quite sensitive to both macro environment and also sell side circumstances and sometimes also buy side circumstances. If you think about, for example, last year, there was significant disruption to the M&A market due to the Liberation Day.

Speaker #2: The valuation levels change quite dramatically depending on what kind of target we are talking about. If we are talking about market leaders for high-growth categories in the US, their multiples are clearly higher.

Speaker #2: If we talk about maybe a smaller player in the more traditional sauna category, let's say in Europe, there is clearly less. At the same time, they would add less into our business strategically and business-wise.

Speaker #2: Now, of course, I understand that it's taking a while since the previous meaningful-sized acquisition, but it is also something that is quite sensitive to both the macro environment and also sell-side circumstances, and sometimes also buy-side circumstances.

Speaker #2: And if we think about, for example, last year, there was significant disruption to the M&A market due to Deliberation Day, the tariffs, the dollar. Many of the infra players import a significant portion of what they sell from China and the Far East.

Matias Järnefelt: The tariffs, the dollar, many of the infra players import significant portion of what they sell from China and the Far East, so there was a lot of uncertainty around what happens to that. Also, during that time, on our side, our management was also very busy in managing pricing, et cetera, and adjustments to the kind of fast changing situation. There are, of course, multiple discussions going on, but as there are multiple variables, sell side expectations, sell side changes in business trends, buy side circumstances, it's very hard to give you an exact date when we could report something concrete, but we continue to work. We are very well aware of the target universe and also generally where the multiples are. Typically, we would be looking at always accepting lower multiples than Harvia.

Speaker #2: So there was a lot of uncertainty around what happens to that. Also, during that time, on our side, our management was also very busy in managing pricing, etc.

Speaker #2: and adjustments to the kind of fast changing situation. There are of course multiple like multiple discussions going on but as there are multiple variables sell side expectations sell size changes in business trends buy side circumstances it's very hard to give you an exact date when we could report something concrete but we continue to work and we are very well aware of the target universe and also generally kind of where the multiples are.

Speaker #2: Typically, we would be looking at always kind of accepting lower multiples than Harvia. I think Harvia has, through its kind of multi-year journey in the stock market as a publicly listed company, through transparency, through growth, through profitability, through resilience, justified multiples that are higher than the targets that typically would be privately owned companies.

Matias Järnefelt: I think Harvia has, through its multi-year journey in the stock market as a publicly listed company, through transparency, through growth, through profitability, through resilience, justified multiples that are higher than the targets that typically would be a privately owned company. That's the way we look at things.

Speaker #2: So, that's the way we look at things.

Speaker #1: Could you give us an update on the high-end sauna rooms launched under ThermaSol?

Ari Vesterinen: Could you give us an update on the high-end sauna rooms launched under ThermaSol?

Matias Järnefelt: Multiple design awards win. Great exposure in interior design and architectural magazines in North America. Basically, start is pretty good. Of course, it takes time to catch up as the, what I would call the standard volume cabinet mix is so significant. Part of what we see in North America, there's also contribution from us playing also now more strongly a higher-end game than in the past.

Speaker #2: Multiple design awards win great exposure in interior design and architectural magazines in North America, so basically, the start is pretty good. Of course, it takes time to catch up, as what I would call the standard volume can be missed; it is so significant. But part of what we see in North America, there is also contribution from us playing now more strongly a higher-end game than in the past.

Ari Vesterinen: US business. Are you now starting to see strong replacement demand you did not have before acquiring Almost Heaven Saunas?

Speaker #1: In the US business, are you now starting to see strong replacement demand that you did not have before acquiring Almost Heaven Saunas?

Speaker #2: Well, the way we look at things is that, roughly speaking, a replacement cycle for a sauna heater that's in private use would be maybe seven to ten years.

Matias Järnefelt: Well, the way we look at things is that roughly speaking, a replacement cycle for a sauna heater that's in private use would be maybe 7 to 10 years. Our journey in North America, if you think about just seven years back, we talk about basically 2018, 2019. 2018, we had EUR 3 million business on an annual level. In 2019, we had a little bit more than EUR 10 million because we had acquired Almost Heaven Saunas. The base in North America is rather small, but it will come. For the sauna cabins, there's also a replacement cycle, probably somewhat above 10 years, that's part of the Harvia's long-term value creation plan, that there is also replacement sales. There's also upgrade sales.

Speaker #2: And our journey in North America—and if you think about just, you know, seven years back—we talk about basically 2018, 2019. In 2018, we had €3 million in business on an annual level.

Speaker #2: Then in 2019, we had a little bit more than ten million because we had acquired almost seven saunas. Actually, the base in North America is rather small, but it will come.

Speaker #2: It will come. For the sauna campus, there's also a replacement cycle, probably somewhat above ten years, but that's part of Harvia's long-term value creation plan. There is also replacement sales, there's also upgrade sales, so we also take an assumption that if somebody has entered the world of sauna through an entry price point product, they might be then willing to invest in an even better experience when it's time to renew.

Matias Järnefelt: We also take an assumption that if somebody has entered the world of sauna through entry price point product, they might be then willing to invest in an even better experience when it's time to renew. That's something we actually see in many of the mature markets, that kind of dynamics. We are working on digital leadership, digital solutions for thermal wellness and sauna, we also see a future where digital subscription, digital service sales could also have a meaningful part of our revenue and our profit profile.

Speaker #2: And that's something we actually see in many of the matured markets—that kind of dynamics. Also, we are working on digital leadership, digital solutions for thermal wellness and sauna, and we also see a future where digital subscription, digital kind of service sales could also have a meaningful part of our revenue and profit profile.

Speaker #1: Excluding the special items, such as delivery shifts and tariff impact in Q1 '25, your revenue growth has accelerated a lot, while consumer confidence and interest rates haven't changed much.

Ari Vesterinen: Excluding the special items such as delivery shifts and tariff impact in Q1 2025, your revenue growth has accelerated a lot while the consumer confidence interest rates haven't changed much. Is this reflective of outside market share gains following the growth OpEx started in Q2 2024? Or do you feel that your initiatives have yet to generate meaningful returns?

Speaker #1: Is this a reflection of, or reflective of, outside market share gains following the growth OPEX that started in Q2 2024, or do you feel that your initiatives have yet to generate meaningful returns?

Speaker #2: I think Harvia is probably the most exciting company in this space, for many reasons. One of them is our product innovation, where we put more effort some years back, and the pinnacle is visible now through products like the Harvia Phoenix, and also a much more competitive digital offering that we have.

Matias Järnefelt: I think Harvia is probably the most exciting company in this space for many reasons. One of them is our product innovation, where we put more effort some years back and the pinnacle is visible now through products like the Harvia Fenix and also much more competitive digital offering that we have. Some really great design products, actually, like the one in the background. We had this particular product line called Harvia Cilindro only available as an electric heater version, and now it's available in beautiful wood burning version as well. When we look at the portfolio, what we have right now and what we had a couple of years ago, I think there's clear step up. If you think about traditionally the core sources of competitiveness of Harvia, we have been very much a product and production company. Good products manufactured and distributed in effective way.

Speaker #2: Some really great design products—actually, like the one in the background. We had this particular product line called Harvia Cylinder, only available as an electric heater version, and now it's available in a beautiful wood-burning version as well.

Speaker #2: So kind of, when we look at the portfolio—what we have right now and what we had a couple of years ago—I think there's a clear step up.

Speaker #2: If we think about, traditionally, the core sources of competitiveness for Harvia, we have been very much a product and production company.

Speaker #2: So, good products manufactured and distributed in an effective way. And we have also added, I think, more excitement in our marketing—more collaborations with social media influencers, more actually quite groundbreaking and novel content, like the sauna research that I talked about.

Matias Järnefelt: We have also added, I think, more excitement in our marketing, more collaborations with social media influencers, more actually quite groundbreaking and novel content like the sauna research that I talked about. If you look at the social media, there's a lot of repeating of the old studies. What we now see is that when Harvia, together with the research academies and universities, and also Toyota Motor Corporation was also part of the research team. They have a high-performance rally team in the region where we also have our head office, so we actually collaborate with Toyota on multiple areas. That research outcome has actually caught fire in the social media because something new, and this is exactly what we want to do. We want to be the most inspiring, distinct player in this business with the highest brand awareness and brand preference.

Speaker #2: If you look at the social media there's a lot of repeating of the old studies and what we now see is that when Harvia together with the research unit kind of research academies and universities and also Toyota Motor Company actually was part of the Toyota company was also part of the research team they have high performance rally team in the region where we also have our head office so we actually collaborate with Toyota on multiple areas.

Speaker #2: That research outcome has actually caught fire on social media because it’s something new, and this is exactly what we want to do. We want to be the most inspiring, distinct player in this business with the highest brand awareness and brand preference. I think the work is progressing, and obviously, we're still early on in that journey; there’s still much more potential for the coming years, but the direction is good.

Matias Järnefelt: I think the work is progressing, and obviously we're still early on in that journey. There's still much more potential for the coming years, but the direction is good.

Speaker #1: In the report, you mentioned the expansion of the facility in Louisbourg, West Virginia. Progress continued during the period and it will be completed in late 2026.

Ari Vesterinen: In the report, you mentioned the expansion of the facility in Lewisburg, West Virginia, progressed during the period and will be completed in late 2026. This seems to be far ahead of expectations, what's going to be the impact? On a similar note, you have dramatically increased your headcount.

Speaker #1: This seems to be far ahead of expectations, and what's going to be the impact? On a similar note, you have dramatically increased your headcount.

Matias Järnefelt: Yeah, basically, I could paint you a picture, which basically is a chart of Harvia's revenue growth in North America from 2018, which was EUR 3 million, to last year, which is roughly $90 million. With this trend, assuming there's no massive disruption in the world, I think it's safe to assume it will be significantly over EUR 100 million this year. We continue to grow double digits. The absolute steps, as I mentioned, are getting much bigger. What we've done is that around one and a half years ago, we bought around eight hectares of land. What is it in acres?

Speaker #2: Yeah, basically, if you— I could paint you a picture, which basically is a chart of Harvia's revenue growth in North America from 2018, which was three million euros, to last year, which was roughly $90 million. And with this trend, you know, assuming now there's no massive disruption in the world, I think it's safe to assume it will be significantly over $100 million this year.

Speaker #2: And we continue to grow double-digit. The absolute steps, as I mentioned, are getting much bigger, and what we've done is that around one and a half years ago, we bought around eight hectares of land.

Speaker #2: What is it in acres? Twenty acres of land around the Louisbourg factory to have options to grow. The next thing was we developed a site plan.

Ari Vesterinen: 20.

Matias Järnefelt: 20 acres of land around our Lewisburg factory to have options to grow. The next thing was we developed a site plan. What would it look like if we would be making multiples, not just 2x, not just 3x, but multiple Xs more sauna units in that site? Then we basically made a plan backwards from that grand site vision. What are then the first meaningful steps, first bottlenecks we are hitting? This particular phase that we're now completing relates to mainly warehousing and shipping. Warehousing because we need to prepare, again, a bigger finished goods inventory as we go into the winter season than last year to be able to deliver what we hope is going to be a good demand season. The other thing is that actually the yard has been very busy with lorries or trucks.

Speaker #2: What would it look like if we would be making multiples not just two X not just three X but multiple X is more. Sauna units in that site.

Speaker #2: And then we basically made a plan backwards from that grand site vision, and what are then the first meaningful steps, the first bottlenecks we are hitting.

Speaker #2: And this particular phase that we are now completing relates mainly to warehousing and shipping, and warehousing because we need to prepare again a bigger finished goods inventory as we go into the winter season than last year, to be able to deliver what we hope is going to be a good demand season.

Speaker #2: And the other thing is that actually the yard has been very busy with lorries or trucks. So, we now have more shipment slots for trucks.

Matias Järnefelt: We have now more shipment slots for trucks. The next step is we're actually, of course already it's very much in our minds, the next step would be also increasing the production floor space. It's a kind of multi-year journey where we try to kind of, on one hand, anticipate and move a little bit ahead of demand so that we don't hit the ceiling, but not take two big jumps at the same time. Kind of grow as you go, but still lean a little bit forward. That's the approach.

Speaker #2: The next step is—we're actually, you know, of course, already, it's very much in our minds—the next step would be also increasing the production floor space.

Speaker #2: But it's a kind of multi-year journey where we try to, on one hand, anticipate and move a little bit ahead of demand so that we don't hit the ceiling, but not take too big jumps at the same time.

Speaker #2: So, kind of grow as you go, but still lean a little bit forward. That's the approach.

Speaker #1: Another note: this person has been observing us quite closely. Eos has been hiring quite a few new employees over the past two months—about 6%, as is my estimate.

Ari Vesterinen: Another note, this person has been observing us quite closely. EOS has been hiring quite a few new employees over the past two months, about 6% is my estimate. How has EOS been performing in the domestic versus foreign markets, and how can its new command control unit drive growth in infrared and steam outside the US?

Speaker #1: How has Eos been performing in the domestic versus foreign markets and how can its youth command control unit drive growth in infrared and steam outside the U.S.?

Matias Järnefelt: Yeah, we basically have two global master brands. We have acquired a lot of companies, and some of them came with a brand, and we decided to discontinue them, but we decided to focus on two brands globally, Harvia and EOS. Harvia is what I would call premium, but mass market, and global market leader for sauna. EOS is luxury, prestigious, both for commercial and residential use. For example, EOS has absolutely beautiful, what I would call Aufguss saunas, sort of experiential saunas, which also include this sort of continental European sauna ritual called Aufguss. We, by the way, have been sponsoring the World Championships of Aufguss last year in Italy, in Verona. This year it's going to be in Berlin, Germany, and the main sponsor is EOS.

Speaker #2: Yeah, we basically have two global master brands. We have acquired a lot of companies, and some of them came with their own brands. We decided to discontinue those, but we chose to focus on two brands globally: Harvia and EOS.

Speaker #2: Harvia is what I would call premium but mass market. And then and global market leader for sauna and Eos is luxury prestigious both for commercial and residential use and for example Eos has absolutely beautiful what I would call Aufguss saunas sort of experiential saunas where which also include this sort of continental European sauna ritual called Aufguss.

Speaker #2: By the way, we have been sponsoring the World Championships of Aufguss. Last year, they were held in Verona, Italy. This year, it's going to be in Berlin, Germany, and the main sponsor is EOS.

Speaker #2: So actually, EOS as a brand is really establishing a very interesting, sort of distinct position in the sauna market. That helps us capture opportunities while also keeping Harvia's core brand kind of focused on what it does best, which is a premium product but at price points that really can drive significant volumes.

Matias Järnefelt: Actually, EOS as a brand is really establishing a very interesting sort of distinct position in the sauna market that helps us capture opportunities while also keeping Harvia's core brand kind of focused in what it does best, which is a premium product, but price points that really can drive significant volumes. Overall, if I'm looking at the multi-year performance of EOS, we're very pleased.

Speaker #2: And overall, if I'm looking at the multi-year performance of Eos, we're very pleased.

Speaker #1: How will the CapEx evolve from here, and what's the capacity or productivity impact from your IT upgrade? Okay. Generally, the CapEx—we have been saying that it's a minimum four to five percent of our annual revenues.

Ari Vesterinen: How will the CapEx evolve from here, and what's the capacity productivity impact for your IT upgrade? Okay, generally, the CapEx, we have been saying that it's at minimum 4% to 5% of our annual revenues. This IT really allows us to be more exact in material management and forecasting and planning the production. To measure it somehow in additional production capacity, it's a bit difficult, but it really takes us to the next level in our operations. How substantial are UK, Japan, and Australia for the revenue mix today? Could you share the demand you are seeing from those markets, such as underlying growth rate and your expectations for the future?

Speaker #1: But this IT really allows us to be more exact in material management and forecasting, and planning the production. To measure it somehow in additional production capacity is a bit difficult.

Speaker #1: But it really takes us to the next level in our operations. How substantial are UK, Japan, and Australia for the revenue mix today? Could you share the demand you are seeing from those markets, such as the underlying growth rate, and your expectations for the future?

Speaker #2: Well, we share our revenue by the four reported regions and profit on a group level, so we don't go into very specific details. By the way, kind of a disclaimer is that while there are a lot of investors on this call, there are also competitors.

Matias Järnefelt: Well, we share our revenue by the full reported region and profit on a group level, so we don't go into very specific details. By the way, kind of a disclaimer is that while there's a lot of investors in this call, there's also our competitors. We are, I would say, the lighthouse of this global sauna market worldwide, and the only pure-play publicly listed company as transparent as we are. We are always balancing between giving relevant information that our shareholders can use to assess the performance and strategy execution of the company while not giving away too much. As said, we know that there are multiple competitors always following our webcast and closely analyzing what we say. This is a reason why we have made the decision to report as we do. All in all of these markets have strong momentum.

Speaker #2: And we are, I would say, the lighthouse of this global sauna market worldwide. And the only pure play public company that is as transparent as we are.

Speaker #2: So we are always balancing between giving relevant information that our shareholders can use to assess the performance and strategy execution of the company, while not giving away too much because, as said, we know that there are multiple competitors always following our webcast and closely analyzing what we say.

Speaker #2: So this is a reason why we have made the decision to report as we do. But all in all, all of these markets have strong momentum.

Speaker #1: Thinking about acquisitions, is infrared now more attractive than steam? Do you think there is less growth in steam structurally, and why?

Ari Vesterinen: Thinking about acquisitions, is infrared now more attractive than steam? Do you think less growth in steam is structural, and why?

Matias Järnefelt: If I'm thinking about the last 5 years, it is clear that infrared grew much faster than the steam. I think the key reason is actually companies in that space doing great marketing, building availability, and the product is very easy to buy and install. There's no water involved, and actually, the power consumption of the infrared panels is less than a heater for traditional sauna. For indoor use, the easiest product you can buy is the infrared sauna. In the other spectrum is what I would call higher-end steam saunas, which is pretty much always a bathroom renovation project or even new build house project where you have steam generators, piping systems, valves, et cetera, behind the walls. I think there is significant impact on this easiness of installation, price points, and also social media exposure to different sauna types.

Speaker #2: If I'm thinking about, like, the last five years, it is clear that infrared grew much faster than steam. I think the key reason is actually companies in that space doing great marketing, building availability, and the product is very easy to buy and install.

Speaker #2: It actually, you know, takes—there's no water involved, and actually the power consumption of the infrared panels is less than a heater for a traditional sauna.

Speaker #2: So, for indoor use, the easiest product you can buy is the infrared sauna. On the other end of the spectrum is what I would call higher-end steam saunas, which pretty much always involve a bathroom renovation project, or even a new-build house project, where you have steam generators, piping systems, valves, etcetera, behind the walls.

Speaker #2: And I think there is significant impact from the ease of installation, price points, and also social media exposure to different sauna types. Now, at the time when we were acquiring Thermosol, it was also a now-or-never type of situation, because actually the steam sauna side had consolidated clearly earlier.

Matias Järnefelt: Now, at the time when we were acquiring ThermaSol, it was also now or never type of a situation, because actually, steam sauna side has consolidated clearly earlier. Many of the smaller steam sauna players had already been acquired by larger companies and practically became unavailable for a buyer like Harvia. We decided that we want to move there to secure a space in that corner of our global sauna market. Infrared is very interesting, that's for sure. There are activities on multiple fronts that we could strengthen our position in the coming years quite substantially.

Speaker #2: So many of the smaller steam sauna players had already been acquired by larger companies and practically became unavailable for a buyer like Harvia. So we decided that we wanted to move there to secure a space in that corner of our global sauna market.

Speaker #2: Infrared is very interesting, that's for sure. And there are activities on multiple fronts that could strengthen our position in the coming years quite substantially.

Speaker #1: If buying infrared in North America, what do we need? Distribution channels, a known brand in North America, or something else? Could you build a sizable infrared business around the Harvia brand in North America?

Ari Vesterinen: If buying infrared in North America, what do we need? Distribution channels, known brand in North America or something else? Could you build a sizable infrared business around Harvia brand in North America?

Speaker #2: I think there are different options. Of course, organic growth is one, and then M&A is another one. And then if you think about that, infrared, out of the three sauna types, is the largest in North America.

Matias Järnefelt: I think there are different options. Of course, organic growth is one, M&A is another one. If you think about that infrared, out of the three sauna types, is the largest in North America. Out of infrared, traditional, and steam, the biggest market in terms of volume and most likely also revenue or value-wise is infrared saunas, and we are already quite big. While we don't have, I would say, a meaningful footprint yet of the infrared sauna, you can imagine that there are actually some players that are actually quite sizable. Us kind of building position from ground up, starting from low levels, we anticipate that even if we would be utilizing our operational capabilities, marketing, et cetera, it still will be a long-term catch-up game.

Speaker #2: Out of infrared, traditional, and steam, the biggest market in terms of volume—and most likely also revenue or value-wise—is infrared saunas. And we are already quite big.

Speaker #2: While we don't have, I would say, a meaningful footprint yet in the infrared sauna, you can imagine that there are actually some players that are quite sizable. And us kind of building a position from the ground up, starting from low levels—you know, we anticipate that even if we would be utilizing our operational capabilities, marketing, et cetera, it still will be a long-term catch-up game.

Speaker #2: So, because of this reason, we feel that there is a need for what I would call a growth platform. I would say a significant step forward doesn't necessarily have to be the biggest player, but has to be a meaningful player in that space that we could use as a clear accelerator, both in terms of market presence, sales competencies, and portfolio. Infrared is actually, in terms of selling, it's almost like it really is the farthest in this, what I would call a wellness game.

Matias Järnefelt: Because of this reason, we feel that there is a need for what I would call growth platform. I would say significant step forward doesn't necessarily have to be the biggest player, but has to be meaningful player in that space that we could use as a clear accelerator, both in terms of market presence, sales competencies, portfolio. Infrared is, actually, in terms of selling, it really is the farthest in this what I would call a wellness game. Basically, the way infrared products impact in these sort of consultative sales sessions where customers book free wellness consultations through online and then get a call from an infrared sauna sales consultant, that is a machine.

Speaker #2: And basically, the way infrared products are impacting these sort of consultative sales sessions is that customers book free wellness consultations online and then get a call from an infrared sauna sales consultant that is a machine.

Speaker #2: We've seen it in actually multiple of the infrared sauna players, and there are opportunities both in the actual portfolio footprint of the market, sales competencies, commercial engine, etcetera, that I think we would benefit from acquiring.

Matias Järnefelt: We've seen it in actually multiple of the infrared sauna players, and there are opportunities both in actually portfolio, footprint of the market, sales competencies, commercial engine, et cetera, that I think we would benefit acquiring.

Speaker #1: And now the last question. When will you get tariff refunds from the US, please? The fact is that we have applied and we are studying these opportunities.

Ari Vesterinen: Now the last question. When will you get tariff refunds from the US, please? The fact is that we have applied, and we are studying these opportunities. We have got small amounts of the tariffs paid last year already back, but it doesn't really change anything essential in our numbers, so just small amounts. There, we study then the future possibilities to get more back. Thank you very much for following.

Speaker #1: We have got small amounts of the tariffs paid last year already back, but it doesn't really change anything essential in our numbers. So, just small amounts, and there we study the future possibilities to get more back.

Speaker #1: So, thank you very much for following!

Speaker #2: Thank you very much, and have a great day. Let's sauna!

Matias Järnefelt: Thank you very much, and have a great day. Let's sauna.

Ari Vesterinen: Yeah, let's sauna.

Browse all earnings call transcripts

Q2 2026 Harvia Oyj Earnings Call

Request TrialDemo

Harvia

Earnings