Earnings Call: Q4 2020

Feb 11, 2021

Hello, and welcome on board for Harvea's 2020 Financial Review. My name is Tapio Paio Hario. I'm the CEO. Next to me, we have Ari Vesterinen, our CFO. Hello, welcome. We'll run the show today. I'll try to entertain more on the operational issues What we've been doing and achieving on the marketplace, then Adi will have a deep dive on the financial as we speak. And after the presentation, we'll have opportunity to Review of the 2020, I think you realized that the saunas have been hot, so has been Harvaya's Operational Machinery and Equipment. And it's been a very, very strong year on top line. Of Publicity. And sauna trend as well as the health and well-being trend is boosting this general knowledge of the sauna and spa and the impacts of that. During the year, we've been improving our capacity. But as you realized, it's not been Especially on the sauna market, we've been having some limitations for the capacity in the Central European marketplace as well as on the U. S. But on the heater and componentry, we've been expanding in China. We've been expanding in Finland. Later stage. And also regarding the Muramme facility, we are entertaining opportunities to expand the capacity over there, but that's still a bit premature to say what we tell what we are exactly going to do and I will keep you up to date at the later stage of this year. Integration with the EOS team, happy to say that we have a good and professional team on board. We've been able to do most of the things we agreed to do on the integration, but we've been able to do that on the 70% as a total number and the organic growth close to 40%. On the currencies, we got bit of a headwind. You can imagine that both the Russian ruble as well as the U. S. Dollar took a bit of a step back and that had an impact both on the top line as well as a slight dip on the profitability. But even with this unfavorable impact, it's been a very good top line and very good bottom line. Operating profit both on the adjusted format as well as in absolute terms, good numbers in that respect. Earnings per share Going nicely up on operational cash flow, very good, exceeding €10,000,000 for the last quarter. So I think the Harivya team has done a very good job of Socotelli. Full year numbers still good, slightly down from the last quarter, excellent numbers, but almost 50 percent top line growth and organic close to 30%. And I think the long term historical growth rate in the sauna and spa industry has been slightly shy of 5%. So this is clearly a different magnitude in that respect. With this one, we can say that the sauna market has been growing faster than in history. But at the same token, very happy to say that Harve has been gaining share. And we've been really gaining share in all of the markets where we are present. We don't know the exact numbers of our peers, But I think it's fair to say that we used to be on the top 3 on the podium, but on the bronze medal position. Today, we are either on the number 1 or share number 1. Hard to say. Klaus is the historical leader in the industry. We are exactly at par or slightly ahead. No one knows what that is, but when we know, we'll share the final information. Adjusted profitability, an excellent, excellent improvement, EUR 24,400,000 And exceeding our long term target quite nicely at 22.4% on relative terms. And then with the comparable exchange rate slightly better in that run. Earnings per share for the full year growing nicely Then I think within the team, we are always saying that the sale of a complete sauna room is maybe the best of market and also in the U. S. But I think the Central European market has been an area where we've been gaining speed and we've also been gaining The EOS team, even though I have to say that like the Cusatek, which is the gas driven heaters due to the COVID-nineteen installation and service has not been maybe easy to implement and execute. But we've been gaining baby steps over there. Asia, unfortunately, the COVID-nineteen has had a bit of a drawback for our And in all of the terms, a great job done over there. Central European sauna sales, amazingly good in Germany, Also in Austria, Switzerland and the neighboring markets, solid performance. And then I think even though it's And even though not mentioned over here, on the domestic marketplace Finnish team also been doing good. And even though the growth numbers are not Markets where the pandemic has had an impact, Cell at the earlier part of the year we've been implementing and executing, but to get new business on board has been bit of a Tedious work and not so easy. Russia on and off. And as you can imagine, Russian market is never Boring, and we had good moments over there. But as a totality, the market has been hurt quite bad with the pandemic in that respect. But altogether, I think the EOS team and the Harivya team, a solid work in Russia even though it's not visible fully on the numbers. Then on the productivity, that's an area where I think a and it's good to remember that we are still a very traditional of company. We basically design, develop and manufacture everything we sell. And so we've been ramping up our supply 3% to 6% growth and now experiencing 30 plus percent growth, not the job, which is very easy and Manpower, for sure, we've been adding Manpower over the operations both in Finland, Romania, U. S. And China. We also be working long hours. So excellent, excellent agility and flexibility in that respect. New machinery, we've been installing in the China operation In the Romanian marketplace for the Sona manufacturing, a bit in the Finnish marketplace. But some of the ones which are now sailing in late due to the logistic challenge outbound of Asia, they are delayed. They will be installed And as said, we will consider further expansion on the capacity both on the sauna Professional Precaution and Activity with our team, we've been almost immune to the impacts in that respect. On the certain markets, we see positive favorable impacts. And I think on the Scandinavia, partially Finland, bit on the But at certain stage during the improvement project, bathroom and the related spaces will be on the agenda. We realized that the health and well-being trend is helping us to sell the sauna easier for the new beginners in And Russia, it depends on the region and depends on the not even the month, more on the week how they are performing. So with volatility over there. But overall, Harvia and Harvia team a good job done. We've been able to keep up a safe, healthy and strong and fully operational during the 2020. And the same continues this year. Then when having a look on the regional distribution of the top line, especially for the last quarter, half of the business, then 1 third of the business. Now on the last quarter 18%, meaning that A bit surprising that even though we've been growing so fast, still European markets together with Germany are so dominant that we foresee quite a bit of Further opportunities and leeway on the North American marketplace going forward. Historically, Harvea has been a heater company. Half of the business is heater related. On the other hand, sauna is growing quite fast. Control units, Thanks to Harvia, Sentioteq and especially EOS taking a big jump forward. And then the only one where we've been struggling, And that's mainly due to the geography Russia, Arabic countries and Asia steam steam where we have lost Share of sales, but we have not lost market share. So we estimate that we'll be maintaining roughly the market share. Marketplace. And I think the reason for this team why it's hurt by the COVID, It's mainly install base and the people who are installing their plumbers and electricians. So they've not been able to travel and go to the Full year picture, not much different, roughly the same. But on a full year basis, the share of Finland is clearly higher, 25%. Rest of the allocation by the market follows the same pattern. And the full year share of the heaters is slightly exceeding the 50%. Then having a look on the last quarter market by market. As said, Finland, even though it's not leading the pack on the growth, still clearly ahead of the market and we've been gaining share both on the professional as well as on the residential channel. Scandinavia, amazing numbers. And I will Keep in mind that we have a fairly small but professional sales team of 2 people doing excellent job over there, Gaining speed in Sweden, gaining speed in Norway and gradually improving situation in Denmark, and we still have a lot to do over there. Germany, where we've been able to improve our physical presence with the showrooms and then adding the EOS offering on top of the one we had. And that in conjunction with the sauna sales, amazingly good numbers over there. Rest of the European market Place following the same pattern. Russia altogether, even though it's been a tough, tough journey and keeping in mind the devaluation of the Russian ruble. And I think the end of the year, it's finished with 90 something. We started with something clearly different than that number, Altogether with Harvia and EOS, a good job done on a steady growth. And keeping that in mind, we also been doing Consolidation in our distribution platform and in the Harvia distribution platform, we've been going down from 3 distributors into 2 gradually by January, we are ready for the 2 distributors on the Hario. So we'll be skipping and focusing more on that one. North America, excellent job on the heaters and componentry and that topped with the performance of almost Hem and Sauna. You get the nice numbers. And I think here we've been challenged a bit with the capacity limitations. And then some of you've been maybe monitoring How our web store has been able or not able to offer press for the consumers, we've been unfortunately We'll maybe raise up the excellent American performers and then the solid performers on the Centaur Europe with both EOS team and Anarvia and Sentiatek team doing a good job. And then full year Biggest upside on this respect. Some rooms even though we've been delivering with the full speed Then on the profile of the revenue on the quarterly base, I think it's good to remember that during the Q1 of this year, We did not have the EOS offering and team on board. We still believe that the quarter number 1 and the quarter number 4 are the strongest for the sauna and power market. And then we have 2 bit of a mediocre quarters in between. And then the same applies roughly for the profitability profile of the company. So I think one could expect that the A pattern would follow. When we become more international, the pattern will slightly change and will be more Evenly spread, but as we speak, that's roughly the profile going forward. Ultimate mission is to offer people the opportunity to experience sauna and to experience the Healing Power of the Heat, that's what we are doing day in, day out. And I think our When you combine that to the physical well-being results, I think that's a Medical Journal. But the ones who've been experiencing it know it and the word-of-mouth is spreading the word quite fast on the markets and we are the ones who are enjoying that. I think on the Traditional sauna, hydrovia is stronger than ever. Still on the infrared, we are not Exactly where we would like to be and we still have a lot of room to improve. And the same applies for steam. Harivya together with EOS are rather good And I'm okay for the residential team. For the professionals team, we still have work to do and especially when Considering the full complete project work for this team, we have a lot to do on that arena. We'll not do a major deviation on our strategic paths And then the Asian market when the pandemic is gradually evading and we all get vaccinated, we can go back to traveling, meeting with the customers. I feel very sure that we can do good improvements over there. And even though Australia also and in not a big marketplace, still see an opportunity over there. And with the productivity improvement and with the capacity enhancement over there, I think we have a good game plan how to take us of the Next Level Over There. So next, I will pass to Ari. Thank you, and I will come back when we enter the Hariu, floor is yours. Thanks. Yes. You certainly noticed already from the previous Pictures that actually the growth accelerated a little during Q4. Q4 is really the strongest Quarter for Central Europe as we see from the German figures and other European figures and also in Northern America. And business there is pretty profitable and that we can see also in the profitability of of Q4 in Financials. So the EBITDA adjusted EBITDA Improved actually 5% compared to last year from 24% to 28% roughly During Q4 and it improved also the complete year quite much. You see we also exceeded our financial Targets in the adjusted operating profit, and that's nice. And that reflects, of course, then the Earnings per share and many other key figures. What as a financial guy, I'm especially delighted is that we were able to improve our cash flow. So actually, the Operative free cash flow or cash conversion rate, it was Quite exactly 100% of the EBITDA. So we were able to finance actually our Investments during 2020 are the reduction of the relative Networking capital. So the networking capital management went pretty well actually during that year. And that helps also helped also us to improve the cash situation towards the end of the year. Some other key figures. The adjusted return on capital employed, it's really, really high 73%. One has to remember that we have deducted the goodwill out of the Employed Capital, so that's the way how we calculate it. But it's that figure has been improving a lot during of 2020. And we have got a lot of new colleagues from roughly 400 of persons over 600 during the year. And biggest part of the increase comes from of EOS Group. But we had also a lot of recruitments, especially in Finland and the heater production. So that I was one page late. Now let's go to the financial deeper. The net Debt was able to go down quite clearly during the year, and the leverage actually Went under our long term targets. The targets are between 1.5 to 2.5. Now we are at 1.1, and that enables, of course, us the Investments to be paid out of the cash flow and pay also quite nicely the dividends, which I'll come back to a bit later. On the right side picture, you see our net financial costs. And actually, the dotted line is The level of costs which we have quarterly cash based, so that what we actually get in and pay out interests And the other deviations from that gas based interest cost, they are more or less like IFRS related valuations And things of financial instruments or discounting Interests for the redemption liability of minority and so forth. So more the calculatory items. But the dotted line shows actually what we are paying out and what we are getting in. That's Just for analysts if they follow this. Okay. We increased the level of investments at the end of The year, as Tapio already told. And in some masonry investments, we are still a bit Late that we can increase more the capacity what we've been able to do now. But this A bit higher level of investments goes on now in the beginning of 2020 of 1 and throughout the whole year. And actually, the Because the current investment we just decided is this new factory building in U. S, Where we have, well, 2.5 times as much space as in our current facilities, Which have been also improved lately with machinery and repairs. But this gives us Much more options and opportunities to grow in future. Probably you can add. No, not much to add. But I think our team in the U. S. Have done a good job and we were very lucky to find a premise very close to the existing The building is in an excellent shape. I don't know whether we can disclose, but it's an ex ABB building. So it's in a very good shape. And it's an all in one level. So and then flooring and everything is perfect. And then I think in the first go and if Take a bit of a step back in the history. When we acquired almost 7 saunas, they were on the 3000 to 5000 saunas On a given year, we now lifted up the capacity roughly to 7,500 and with the new premise with rather marginal capital expenditure and potentially doubling the capacity of the U. S. Facility. Fully into the infrared business as we speak. We are considering options how to potentially do that and then also steam Due diligence, and I think the only one which could potentially kill is the environmental, but we have the first results, it looks good. So the closing of this investment final closing is planned end of April, beginning of May. And we will Move the part of the production to this building during the summertime to be prepared then for the next year May season in September and beyond. Okay. Then the Harvea's shareholder situation. Now the share of the nominal registered or non Finnish shareholders is 45%. We have our anchor shareholder from the end of 2019 on West OY with 12.3%. And we have got plenty of new household and private Shareholders, as you see from the picture on the right side. So especially during Q4, we I've got a lot of new members in the Shareholder Club, so to say thank you for joining us. And this has delighted us a lot. Then the financial targets, As we published them, they are still the same in but this plus 5% is excluding, Of course, acquisitions and special situations, advanced demand and so forth. But in the long term, Our market intelligence says that global sauna market may grow plus 5% annually Or something like that. And profitability, we target, of course, over 20% EBIT level. And now we reached and exceeded it quite nicely. And leverage that has been discussed already earlier, we Try to keep somewhere in between 1.5 to 2.5, but we can also be sometime Outside of that range and when making some acquisitions or whatever of Investments. And the dividend policy has been that we target at least 60% of the group net income In total, to be paid out as dividends annually, and we pay dividends twice a year, the total amount. So the dividend proposal of our Board of Directors is Really saw that we have now the base dividend €0.39 per share Paid in 2 installments and then an additional Harvia 70 year celebration dividend of 0.12 Euro cents. So in total, we if accepted by the Annual General Meeting, we will pay out €0.51 per share, that's €9,600,000 in total roughly and it is exactly 60% of the group results net results. So that is the board proposal currently. So if you have any questions, we are ready to answer. Please, Floor is yours. Our first question is from Maria Vikstrom of Danske Bank. Please go ahead. Your line is open. Perfect. And Just checking in. Yes, this is well, it might be difficult for you as well, I mean, to answer. But Maybe if I start that, I mean, if you could describe a little bit on the trends in the heater market in the beginning of the And you said that you've seen that the demand, especially in Finland, Scandinavia and Central Europe have been They have been growing partly as some people have been investing in their homes during these COVID times. That how do you see, I mean, the market to normalize? Or do you like how we should Look at the demand pattern during 2021. Thank you, Maria. Maybe on the first How the demand will be shaping in the coming 3 to 5 years. And I think no one knows exactly How that's going to play out? But I think the analogy and psychology when people are upgrading their homes, when they upgrade their 2nd home, so they acquire new homes or new holiday homes. Usually most of the people, I'll at least try to find us on a sustainable way. The time for the things when they go to from a kitchen to the living room and to the bathroom Will take time, and I think it's a multiyear program in that respect. Don't expect any Fast change in that respect. Travel will come back when people are traveling. They will maybe travel more Capabilities of entertaining people, I think that will continue. And then I think the sauna trend and the health and well-being trend in general We'll be helping not only Haraway but everyone in the industry a bit. But what is the totality and the total impact all of these Very difficult to say, but I don't foresee any sudden changes in that respect. This helps, Ivetta. It's not a complete answer. Yes. So what is the situation on the availability? And then just if I look at the screen prices, I mean, They have been skyrocketing for the sea freight. And if I understood correctly, I mean, quite some of the low price Eaters are transported from the Chinese factory. So how do you, I mean, see this affecting the profitability? And are you able to And the availability is still not guaranteed even though one would be prepared to pay a sky high price. We are in a fairly Good sustainable situation. Most of the ones we are exporting out of China, Customers are paying for the freight. And the ones where customer is not paying for the freight, we've been able to adjust and will be able to adjust The prices going forward, we expect the situation to last for some time, maybe even still a bit after the Chinese New Year. But then I think everyone is, 1st of all, forecasting and also hoping that to be settling down. But if not, then I think we have the ability to act on the pricing in that respect. So don't expect any major hiccup or Hertz into profitability for this reason. Thank you. And then my final question is, I mean, you've been executing, I mean, very successful in M and A strategy. And now lately, I mean, we've seen Private Equity interested also in the SAUNA assets, Which I would read that I mean it's quite likely that I mean some of the prices of the acquired assets will go up. And now at the same time, Ami, you went with an organic path in the North America expanding the factory capacity. So if you could discuss a little bit that has the like the dynamic change and has the organic growth options has become more Attractive if I mean there are more people more parties interested in the available Growth and investing on that, I think that's in a way a necessity. We've been facing a demand, which with the current asset base we cannot fully cope with. And we need to be able to comply with the increased demand. And that's why we've taken that step. And that's an area we know. We know how to make it. We know how to produce, how to market the merchandise, our offering. So that's a safe choice. And I think as Sari indicated on the CapEx for the 2021 will most likely see a bit of an unusual higher number compared to the historical Capital Needs for the company because the U. Clavs, a Dutch based private equity, Egeria bought them. Don't know the exact valuation, but know roughly. And they paid A fair good price for that. And also in the smaller part, which is maybe not exactly linked with our industry. But in Germany, 3i bought one asset, which is basically on the active backyard living type of a region. And they also had an add on with the Scandinavian player We've been monitoring the assets, good quality assets, never go on a fire sale. They're going to be having a fair valuation. But I think still the valuations are so that we have ability to act if and when a suitable asset is in the radar screen. Yes, we are really active in M and A if needed. But one thing we have to point out also That Harvia's long term competitiveness and profitability level doesn't Come suddenly, it has taken really, really years and centuries time to develop this level of business model and So forth. So we I personally, at least, don't think that it's so very easy to copy that so quickly or to compete With a similar kind of business in short term. I don't know, Mario, We have another question from Maria Vikstrom of Danske Bank. Please go ahead. Yes. Okay. Then one more, if there wasn't anybody else on the queue, which is on The very good profitability that you reached in the I mean throughout the year and especially now in the final quarter, Would you say that the like the biggest driver for the high profitability It's the volume. So you have a good leverage on the system or how would you describe, I mean, Recovery. But on the other hand, what we've been doing in the profitability improvement, I think we can tick most of the boxes in that respect. We've been able to do the upselling. We've been able to do the upgrading. We've been able to Production, but also in supply chain and in our overheads. So it's a continuous process. But I think one thing Most of you may remember who've been longer term with us, we've always been stating that the profitability in the heaters and componentry is It's clearly higher in a different league than the sauna. During the journey, we've been also learning how to make saunas more profitable. They are not Still yet equally profitable, but they've taken a good step forward. Perfect. And if there is I mean, if I have a little bit more time, I'd like to go back to The demand trends in the Scandinavia segment. Now it seems that, I mean, You have a setup in place that enables you to grow in Scandinavia. I mean, that hasn't been your Through a bit of the steps, I mean, the how you can grow the business further from here. Regarding Scandinavia? Yes. I think we've been able to first in the history, if you take 2 years back, Harvea was mainly in a Retail channel, nothing else. Now we've been in the entry level. We've been, 1st of all, expanding our presence in the retail channel. We have now multiple partners, and we've been able to upgrade the offering. We still don't have the super premium heaters available, but we have the Our current coverage of the accessories in Scandinavia is way better than in the Finnish marketplace. And also the demand for the heater related accessories for the Scandinavian marketplace is clearly bigger and more important for the market than in Finland. Father, son and the one type of installators and builders, we've been able to open the professional channel. I offer equipment and solutions which are comparable, maybe even better than the alternative, which is the local player and gradually gaining share and exposure within the community. And I think we continue doing that, and I think we have a Very good inroad into the Scandinavian marketplace. And then still not a single heater sold from EOS. And going forward, We still have plans to introduce EOS for the Scandinavian marketplace as well. And we feel that's going to be a fair competition with the leading brand of the marketplace. Perfect. And then you touched upon the EOS expansion. Is there any news regarding EOS Being sold also in North America. We are still in the approval process, but we are gradually getting models in. But In between, we've been able to have our own members into the standardization committee, so we have Clearly better insight what to do, how to do it, but still it not be speeding up the process. So I think within half a year, 9 months, we're going to see something on that area. And even if we don't disclose the figures of separate companies, I have to say that we are really, really happy to see that the basic business of EOS is growing also currently very, very strongly. Perfect. Thank you so much, gentlemen. I think I have drained all my questions now. Thank you. Thank you, Maria. There are no further questions at this time. So I'll hand back over to our speakers. We have two questions from Harri Valenius from Nordea. How much sales have you missed due to the production capacity limitations? The question was how much sales Have you missed due to production capacity limitations? Very difficult question, and I'm afraid I cannot fully Entertain the magnitude. But as we've been also mitigating the especially for the U. S, we've been Stepping away from any special offers, we've been reducing the number of campaigns of Central Europe. We've been collecting orders. Our order books are thicker than normally. But how much we've been missing sales, I have to say I don't know in India. I've seen any cancellations of the orders, but just the delivery times, they have prolonged. Other one from Harri Valenius. How has the cold Q1 2021 affected sales. Have you experienced a lot of excess demand due to the favorable conditions? Oh, that's a good one. And I think we also been having a bit of an understanding of when it's cold. It's summertime. We are in a global business. And even though it's cold over here, we may foresee a bit of an incremental demand and usage. And I think the frequency of using sauna is always good because the more often you use, it's a wear and tear and you need to replace it, but it doesn't have an of Impact immediately. It's going to come during the time. Thanks. Then several questions from Petrik Kajanik From Inderes. You mentioned that sauna and spa market M and A activity has increased during 2020. Could you summarize the most important deals? And did you participate in some negotiations that didn't go through? I think the ones we've been intimately aware and I know I tried to mention the one in Germany, the group is by the name of Gartenhaus. I think they were acquired by 3i. Polo Hoos was the add on Triad bought from Scandinavian and Baltic owners. They are Somewhat reflected in the sauna and spa industry and for the both of the companies, we are supplying equipment and componentry Then clubs, definitely one of the big names in the industry was openly for sale. For sure, we had a look on the numbers. At the end of the day, it ended up with the Dutch private equity. Don't know and they didn't disclose the final valuation, but I bet the new owners paid a good price for that. So the previous owners should be happy. We've been announcing already a few quarters in a row that we are participating actively in And Mette when there is an opportunity. And due to that, we get also interesting opportunities offered from the market. So we have some feeling what's going on there all the time. And if there is a perfect fit to our strategy, we will negotiate seriously. But it really has to fit to our way of doing the business. Thank you. Another from Petrik Agiani. Persona and spa market is growing fast and profits are at very high level, especially Harvijas, do you see this good performance and market growth attracting new competitors to market since the returns on invested Capital seem to be way beyond normal levels. I think Ari tried to already entertain this a bit. And if it will be that easy, we would see a lot of new competitors coming into the business. We don't Experience that for sure there are always, always new companies coming in mainly due to the current owners Aging and I'm trying to find new partners who can take the company on the next journey, but not really new. And within the industry, But still to build the reputation, to build the knowledge and know how of the plumbers and the electricians who have been installing this and that for the Past 20 plus years, not too easy to come into the market. And are the high freight and container prices putting downward pressure on your profitability at the moment? Does this have material effect on the group level profitability? Like I tried to answer, Maria, we Fail and we acknowledge, but we've been able to adjust most of that. And if it's further escalating, we still have ability to I'll just take that into account. So maybe some roundings, but not in a big way at all. Of course, it causes extra work for our sourcing and logistics. But on the other hand, what we see and hear, The other companies may have also in this business the similar challenges in that respect. And you mentioned the strong order backlog. Could you give us More information about that. From which product categories and geographical areas is this order backlog from? And how many weeks or months forward do you see delivering the order backlog? Luckily, I don't have the detailed information. But I think in the past, Harivya used to have a very short order backlog, roughly 2 to 3 weeks. We are now clearly beyond that, number of weeks nor I think the only difference on the categories is that steam is less to keep up the customer satisfaction to certain extent at least. So somehow people Accept it that we have to deliver a bit slower. Yes. And I think we've been yes, that was maybe a bit of an understatement because our customers are I'm rather happy because we have a good dialogue. And I think everyone who's dealing with this type of a category In the bathroom industry, in the kitchen industry, in sauna and spa, especially knows that the lead times are longer than they used to be, Like 2 to 3 months in advance, then you can guarantee a full delivery. Still questions from Petri. You are a very strong player in your home markets here, Nordics, Russia, Central Europe, etcetera. Could you describe the geographical white spots where you still See room for Harveo to penetrate into total in new markets? And is there material addressable markets where you still aren't present? Yes, maybe to start with the North America, both on the U. S. A. And Canada, Even though we are a strong player in the heaters and componentry with the almost 7 saunas, we are still on the early stages of the sauna journey in that respect. We don't offer basically even though in our Web pages you may find a bit of an infrared. We are really not a player in the infrared in the U. S. At all. And the U. S. Team, We are not existing on that one. In the Canadian marketplace, yes, we have a bit better grip on the professional marketplace, but not to the extent we would like to have. And in the Canadian marketplace, we are almost completely out of the residential Gradually cascading down on the Latin America, we are not there in big way. And then the Asian markets, We still have a lot to do over there. But currently, it's not easy to address because traveling, not possible and meeting with people, not possible. Thank you. And then about the infrared market. How big currently is the infrared market Of the total sauna and spa market. How fast is it growing? And who are the top players there? Very difficult question. And if I would have exactly the exact information, I would definitely share it. Lately, we've been monitoring the market quite closely, and I I don't know in full detail, need to check-in more detail. In your Q3 webcast, you said that the yearly CapEx Capital expenditures should land around €2,000,000,000 3,500,000 Now you seem to put the metal to the metal even faster. Is this €2,000,000 to €3,500,000 assumption still valid? I would say that with the current foreseeable demand, We unfortunately or fortunately need to go beyond on that one. Now we have this €2,000,000 investment in the U. S. That's in a way somewhat incremental to the normal. And then I think we still have 1 or 2 more to go. So for this 2021, we're going to be way beyond that. And I cannot give you an exact number, but Take a number between 57,000,000 and that's roughly where we could be. Thank you. Then to Anders Knudsen from SEB. With the brisk growth you have achieved in 2020, what does that mean for Aftermarket revenue in the coming years. And how much of your sales is done via web store? The web store, our own web store basically does very little in the European marketplace, almost next to nothing. Half of the American sales and then what was the other part of the question? What does your growth in 2020 mean for Aftermarket revenue in the coming years? Yes, that's a good question. One can say that on the heater Equipment sales roughly 80% is coming from a replacement. So when we are now And usually in the industry, especially in the case of Hydrovia, our equipment when it's been fully serviced Usually, it's going to be exchanged into a new Hariu and most likely with better features and a higher value. So in that respect, it should be good. Then a question from Kai Alexander from J. M. Finn. My question Is this, when will you start marketing Harvia Sona as health equipment? We have been questioning your sales staff And distributors this year, and they do not know enough about the impact of sauna and longevity, specifically the heat shock protein response. We feel But the company is missing a huge growth driver here. Are there plans for a considerable marketing or educational campaign in this regards? Excellent question, and I think you are spot on the issue. And we've been gradually starting to educate ourselves, Our sales team, like Ono, we had the 70 years anniversary. We didn't have a big party and celebration. But what we did, We organized an open webinar for everyone who's interested. We had 2 excellent professors, 1 medical, Gradually, we are learning. I think like 2 weeks ago, we organized our own kickoff and we were practicing also how to Deliver the message to our partners and partners' partner. So gradually, we are getting there, but we are far from being experts on this arena. So an excellent question. But we'll get there. Bear with us. Thank you. Question from Rainelahtinen from the armchairtrader.com. Do you have any activity in the U. K. Or plans? We have quite a good business for the U. K. Marketplace. We have a number of partners for the Harvia offering. And then we have a different set of partners for the EOS offering over there. And for sure, we have plans. And I think the plans will gradually get implemented. Rainer Lartinen also asked about And may take activity in 2021? I think no major change compared to the latter Sure half of the 2020. So in that respect, market remains somewhat active. Question from Timo. EOS Group has not previously sold products to the U. S. A. Have they now been sold through Harvea there? And what does the future look like For premium heaters in the U. S. On the first half of the question, not have been sold yet. We are still Having pending for the approvals to be sold in the U. S, we're going to use the Harvia platform as a logistics center, but then we will have a separate set of distributors for the airship equipment for the U. S. Marketplace, but it's still too early to say exactly how we're going to be organizing the distribution in the U. S. The second part of the question was about the premium heaters. Yes. There are more and more public spas in the U. S. And in that respect, Polarized, we currently entertain and offer good products for the entry part of the market through almost heaven saunas. But for the premium residential marketplace, we don't have a good offering. And I think in that respect, EOS is filling a gap over there. Together with the premium end of Harivya, I think we have a good match with the market needs. Then for the final questions. Jonas Liegal from Lupus Alpha asked more about the U. S. Expansion plans. What will be the new sales capacity with the new factory in the U. S? And could you share the required investments? And by when you expect start of production? On the new facility, now when we are closing first the deal and then we'll organize the transition of the most of the equipment into the new building, We are commencing operations on the fall of this year. And I tried to I explained we started with 3000 to 4000,000 now ramping up to 7,500 with the new facility 10,000 and beyond And then with the modest CapEx needs, we can basically potentially double the capacity of the new of Turin in that respect. Thank you. These were all the questions from the Message board. Hey, thank you for excellent questions. Thanks for being on board. I wish you an excellent day. All the best. Take care. Bye now. Okay. Bye.