Hello, everyone, and welcome to Harvia's January to December 2023 earnings webcast. My name is Matias Järnefelt. I'm the CEO of Harvia, and with me, I have Ari Vesterinen. He's the Chief Financial Officer of Harvia.
Hello.
I will first cover the key developments during the year, focusing mostly on Q4. Then Ari will be covering the numbers in more detail, and after the presentation, we would be happy to take your questions. Let me first summarize the developments, especially during Q4. In Q4, we returned back to growth after six consecutive quarters of sales decline. Our revenue increased by 3.4%. We still had some impact from our exit from Russian market during 2023, 2022, and organic growth was 5.2%. This return to growth was driven very much by excellent performance in North America that has continued, and also strong growth in Asia Pacific.
In terms of Europe, we also saw some change in the dynamics as Central Europe was stronger than it has been in the past. In Finland and Scandinavia, so Northern Europe, we felt very tough market conditions still during Q4. Profitability and cash flow remained on a very strong level. Q4 adjusted operating profit was strong at 24.2% of our revenue, and this profitability was supported by many means. One is the revenue growth. The other was our success in managing pricing. Also, we've been working on our supply chain and sourcing, as well as overall cost competitiveness of our operations. Cash flow continued to be on a very good level. This was supported by further reduction of inventory levels. We have also worked very much on our future growth potential.
We continue to see biggest growth opportunities in the coming years outside Europe, especially in North America and Asia Pacific. Of course, we also see opportunities in Europe, and that being an important market for us, still roughly 60% of our revenue comes from Europe. We also focused on utilizing all opportunities we see in our home continent. We are also raising the ambition level for delivering exciting innovation to the market, and we have implemented a new organization model, which has become effective since the beginning of the year, which we believe will support customer orientation, stronger organic growth, provides a good platform for further M&A activity, and helps us drive more productivity out of the organization. Q4.
As discussed, revenue turned back to growth, increased by 3.4% to EUR 39.4 million compared to the last quarter of 2022. At comparable exchange rates, revenue increase would have been 5.2%. This was impacted by mainly U.S. dollar and euro exchange rate developments, and organic revenue growth in the quarter was 5.2%. Here, we still had roughly EUR 900,000 impact from our exit from Russia. Operating profit was EUR 9.2 million, rather significantly more than year before, making up 23.4% of our revenue. Adjusted operating profit was EUR 9.5 million, which is 24.2% of our revenue. Earnings per share at EUR 0.39, up from EUR 0.22 a year ago.
Strong operating free cash flow at EUR 15.5 million, net debt at EUR 37.6 million, which means that our leverage was 0.9. This obviously is below our long-term targets of 1.5-2.5. Here we are preparing for further consolidation in our industry. Equity ratio was 51%. Looking then at the full year, while in Q4, our revenue increased, for the full year, revenue still decreased. It decreased by roughly 13% to EUR 150 million compared to the last year. When we look at the dynamics within the year, we could see that in our first half of the year was still tough, and we had quarters of roughly -20% sales decline.
Q3 started to ease, and then Q4, as discussed, has turned to growth. Adjusted operating profit at EUR 33.7 million, which is 22.4% of the revenue. At comparable exchange rates, the adjusted operating profit was EUR 34.4 million, which is 22.6% of the revenue. Full year earnings per share, EUR 1.25, down from EUR 1.45 last year. Operating free cash flow increased from last year at EUR 44.6 million. Net debt, we discussed an equity ratio as well. We have been focusing on executing the key pillars of our strategy throughout the year. One of the key pillars is increasing the value of the average purchase. We want to get more money out of each sauna built in the world.
Overall, our strong performance in North America supported this, since in North America, majority of our business is selling full solutions, sauna cabins, sauna rooms, as opposed to selling just equipment like the heater. In Central Europe, we have been successful in driving demand to higher price point products, and here, key focus area for us continues to be innovation. We want to give good reasons for consumers and professional customers to invest in better equipment. Also, the geographical expansion that continued, especially outside Europe, continued to support the value of average purchase, as in many emerging markets where sauna penetration is still lower than, for example, in North Europe, typically, the consumers and customers invest in higher priced products. Geographical expansion is a cornerstone of our strategy.
While Europe continues to be very strong, very important part of our business, we are investing heavily in driving growth in what we call the overseas markets, which means markets outside Europe. In particular, we are investing in North America and key countries in Asia Pacific. As part of this strategy, we have been further taking forward our Harvia Japan Limited joint venture with our partner, and the legal company is existing, and we are ramping up its operations. We are also improving and, you know, shortening the lead times to introduce new models to key overseas markets. In particular, North America is very much in the heart of our future R&D work, where we hope to bring even quicker, exciting innovation to that market.
Productivity improvement, we work on the overall profitability through actions in sourcing, in pricing, and operations as a whole. As you can see in the numbers, also very prudent management of inventory levels, while of course, balancing this against good service levels towards customers and availability. A part of our productivity improvement is that we have been optimizing our structure, and I will be covering that a little bit more in detail in the coming slides. Looking at the revenue split by reported area, first of all, as you can see, Europe still is the biggest continent in our business at roughly 60% of our revenue, and roughly 40% is coming from outside Europe. The biggest reported region is North America at 31%, and that's up from 25% a year ago.
The rest of the overseas markets were at 7%, and here we could see overall growth in many important markets for us, for example, in Asia, but this has been flat due to our exit from Russia, which is still in the base figures here. In this revenue by product group, equipment business, which is the red one, 55%, continued to be our largest product group segment, but we are seeing gradual increase in the solution sales, which is represented by the blue part of the pie, and that's the sauna solution sales. Looking at the full year, the picture is largely the same. U.S. and North America, the biggest reported area, as discussed. Here we could see a slightly more decline in the overseas markets outside U.S.
That was 7% versus 10% last year, and this is really driven by our exit from Russia, which was in the base figures from 2022. Here you can see the changes, and in terms of absolute EUR and also percentages. You can see that Q4, we had a very strong momentum in North America with 28% growth. We could also see better dynamics in other European countries and Germany. So Germany had seen very significant drops in the past quarters, was now close to flat at -1.5%, and then the rest of the continental Europe grew by nearly 7%. In Finland and Scandinavia, we clearly felt headwind in the market.
That is mainly driven by, in Finland, consumer confidence, inflation, construction market, and, while roughly 80% of our sales in Finland is replacement sales, that 20% is still coming from new build, and new build has been very much challenged in Finland. In Scandinavia, mainly Sweden, we also faced challenges. Also, there, the construction market is soft, and in addition to that, we saw changes in the channel. Some key partners of ours have changed their retail strategy, and those changes in the retail network have had a short-term impact in our numbers there. And here is the full year picture.
We can see that the only blue region there is North America, which grew by 20%, and everywhere else, we still had a decline, and full year result at EUR 150 million. This is the split by product group for Q4. Here we can see quite a lot of blue, so heating equipment, the core business grew. Also, the solutions business, which is saunas and Scandinavian hot tubs, grew. Steam generators declined, accessories and heater stones increased, and then spare parts and services declined. Here, mainly the decline was driven by our exit from Russia, because in Russia, we had actually meaningful size service business before we exited the market. And this is then the picture for the full year.
Of course, because of the top-line decline, we could see that impacting broadly our product groups as well, but where we can see impact of North America, in particular, is that the solutions business, which is saunas and Scandinavian hot tubs, decreased less than the traditional equipment business. Again, spare parts and services is heavily impacted by our exit from Russia. Now, here you can see our revenue and operating profit development over past few years. Essentially, if you look at the revenue on the gray bars, you can see that during 2020, the sales grew towards the end part of the year. This was very much driven by kind of the home improvement boom that was driven by the COVID pandemic.
Sales remained on a very high level during 2021, so that's the light blue. And then 2022, the dark blue, you can see that the charts start to head downwards. And then for this year, you can see that, you know, in the early part of the year, still the comparison to the previous year is quite significant decline. Then Q3, less decline, and then Q4, as you can see, we are growing. Also, I would draw your attention to the shaping of the past year, so 2023, where you can see actually a very traditional pattern in our business, where Q1 and Q4 are typically our highest quarters, whereas what we would call the summer quarters, Q2 and Q3, are somewhat lower....
In terms of adjusted operating profit, I would like to draw your attention to Q4. At EUR 9.5 million, we were actually not so far away from our even 2022 and 2021 figures. In terms of our strategy, our ambition is to be the global leader for sauna and spa markets. This means that we want to lead all key sauna categories, which is traditional sauna, steam sauna, and infrared. And key part of this is also our geographical investments. As we can see that in Europe, traditional sauna still is the dominant technology or sauna type, whereas especially when we go to North America and Asia, then infrared and steam are now growing in importance. And we are focused on driving our strategy.
I discussed already kind of what we've done during the past year, but the key thing for us in terms of increasing the average purchase value is innovation, so that there's better reasons to invest in better equipment, driving system sales. So for example, for wood burning heaters, not only sell the heater, but also the chimney connection kits, the wall and floor protection panels, safety rails, et cetera. And the most important part of our strategy here is driving solution sales. So ready solutions, easy-to-buy solutions for consumers and also commercial customers. Geographical expansion will continue to be very much in our focus, as will productivity improvement. Next, Ari will be covering the financials in more detail.
Yeah. Okay. That's our main spreadsheet of the financials. You have seen already the revenue growth. What is probably most important here is the improvement of the adjusted operating profit. It's actually quite good in money, 20% compared to only 3% net sales increase in Q4. And if you compare the real accounting EBIT or adjusted operating profit from last year, it's even much more clearer. Last year, in 2022, we had some restructuring costs still in Q4, laying off people and having some other restructuring projects. Now, we didn't have that additional cost so much, so we've been also able to improve the profitability in accounting terms, not only in adjusted levels.
The basic earnings per share, they have been increasing even nicer. We have been able to optimize a little our cost structure in taxes and in 2023. That helps also to increase the earnings per share after the good EBIT level. Operating free cash flow has stayed very good, actually improved about EUR 10 million compared to 2022 for the whole year. The fact is that we adjust our costs and net working capital quite much actually, according to the seasonality and also the business situation.
Currently, in 2023, in Q4 and during the whole year, we didn't need as much inventories as during the COVID years, so we were able to reduce the inventories, and that was the biggest factor to reduce also the net working capital, and thus, we had also very strong operating free cash flow. Our level of investments was also rather low. Net debt has been reduced very heavily, about EUR 17 million, during the year, and the leverage is again quite low. So, we have actually plenty of war chest, so to say, or money to invest, make acquisitions, or pay dividends. The equity ratio is actually already rather high for the listed company, 51.1%.
We have had quite stable situation in the number, full-time equivalent number of employees, during the year. We haven't had so quick and big changes in 2023 and the headcount as we had in 2022. Here we see how the operating free cash flow and cash conversion developed over the year. Usually, we have a very strong cash conversion during Q4 for seasonal reasons, but generally speaking, of course, the cash conversion can't be over 100% over a long time. It means that we have been reducing the net working capital and getting more money in than what we actually earn through EBITDA. So, we have been also adjusting the cash situation in relation to the business situation quite heavily.
On the left side of this slide, you see how the net debt has been going down quite rapidly and also the leverage slightly. We had end of 2023, about EUR 40.6 million on our accounts. Year ago, it was EUR 25 million. The net financial items, the cash effect of the interests paid and other financial costs is in the dotted line. It has been quite steady during the whole year 2023, after the EOS acquisition in 2022. But what changes is the accounting financial result. It's dependent on the fair valuation of our swap contracts, but the real money, what we pay out, is in the dotted line.
The 2023 was a year during which we made more investments just to replace or improve our effectiveness in different companies. We had also small ESG-related investments. And we will continue on this way, and we have plenty of capacity in our heater factories. In U.S., we have been also planning probably something new there. The Harvia shareholder structure... At the end of 2023, we had actually about 5% of the shares more in international hands than a year ago. And at the same time, the Finnish households reduced about 5% of the shares.
Thus, we see on the right side of this picture, how the amount of the shareholders declines likely, but we have a really, really big number of shareholders, over 41,000 still. The management and personnel as well as board members are also active shareholders. Our long-term financial targets are the same already quite a long time. We have a growth target over 5% annually. The profitability, the adjusted operating profit margin exceeding 20%, which we did again, quite clearly, and the leverage between 1.5-2.5. We've been quite a long time, actually, under that leverage level, but if we make a substantial acquisition or so, we are quite easily between that range. Harvia's dividend policy stays the same as already quite a while.
We pay regularly increasing dividends, and we pay the dividends twice a year. Probably you say something about this.
So as discussed, on 1st of January this year, our new organizational structure became effective. And essentially what it is, we have essentially integrated the company somewhat more compared to the past. We have made several acquisitions since the IPO of Harvia in 2018. Also, kind of the size of the business has grown, and we thought it was a good time now to optimize the way we are organized to support our future growth. We have four so-called market regions: North Europe, Continental Europe, North America, and Asia Pacific, Middle East and Africa. And here, the idea is that each of these market regions are responsible for the whole customer base that is in that geographical region and are responsible for driving the full portfolio of Harvia's product and solutions offering in that market.
They also will represent the voice of the customers more strongly in our research and development and portfolio decisions. We also have five so-called group functions: marketing and brand, products and solutions, innovation, technology, operations, and support functions. Here, the idea is that we, at the same time, as we want to be very much customer-focused, we also want to deliver synergies and efficiencies, deploy best practices across the company. Also, for example, if we take digital as a key area of innovation and for the future, we want to make sure that, you know, all of our market regions and product areas can benefit from the investments that we are making and will be making in the area.
Now, as part of our brand strategy, EOS will play an important role as our superior brand, kind of really targeting kind of the most luxurious saunas, both in private and commercial use. And to support the building of that brand, we also have the brand director directly in the management team of the group. I said this organizational structure has now been effective since 1st of January. We were also very happy to announce some few days ago a key recruitment. We have appointed Jennifer Thayer to lead very much strategically important North America region. She brings great experience for us. She was nearly 20 years working for Lowe's Home Improvement. It's one of the world's largest home improvement retailers.
Jennifer was, for example, responsible for Lowe's Florida business, and also she was responsible for Lowe's North Carolina business. North Carolina is the state where Lowe's corporate headquarters is. Essentially, she was responsible for multi-billion businesses with over 20,000 employees. We are very happy that she chose to join us, and we are looking forward to working together with Jennifer and the management team to continue to drive strategic growth in North America.
... Okay. Since Harvia is a successful company and having its dividend policy to increase the dividends regularly, so the board of directors propose this to the annual general meeting that the company distributes a dividend of EUR 0.68 cents per share. EUR 12.7 million in total dividends and for the financial period of 2023. The proposal will be also that the dividends will be paid in two installments, EUR 0.34 cents beginning of May, and EUR 0.34 cents second half of October. Last year we had this dividend payout, EUR 0.64 cents per share.
Very good. So that was the presentation, and now we would be very glad to take your questions. And you can submit your questions through the text box that you can see in front of your screen.
We have already here some questions, so probably you answer. I ask, and I can add if there's an area for me. How do you see the M&A market at the moment? Are you still evaluating different options? What kind of process do you have when you look at the different options?
Yeah, overall, we see the M&A market very interesting and something we really need to pay close attention to. It is clear that, kind of sauna and spa market is an attractive market because of the fundamental growth drivers for the long term. Market is also fairly fragmented still, so our assumption is that, you know, in the coming years, there will be significant, kind of number of acquisitions taking place. And, of course, from our point of view, you know, we want to be part of that action and be active consolidators, essentially to make sure that, you know, over time, we are for sure one of the winners in the long term also in this business. We are looking at number of different types of opportunities.
One, of course, supporting our growth in the overseas markets, that is outside Europe. So looking at, for example, what are the opportunities for us to strengthen our footprint in North America as well as Asia. Our business generally, you know, is still delivered very much towards the so-called traditional sauna or Scandinavian or Finnish sauna, and we are relatively weaker in infrared and steam in terms of our market presence. So those are, of course, also areas where we are looking at opportunities to accelerate our plans through acquisitions. On the other hand, we also see that in our home markets, many of our traditional competitors have had, I would say, a fairly rough time through the past few years when the European market has been, I would say, under the weather.
That also provides us an opportunities mainly, I would say, from tactical point of view, where when the price is right, you know, we are interested in discussing. We have very systematic process. Essentially, we have identified a number of strategic segments that we follow, as I explained, and we have, you know, long lists, short lists, and, I would say, active dialogues all the time with various companies and stakeholders in the industry to make sure that we know what's going on and can take action when it's appropriate.
There is more precise question also about that. Do you expect to come back to the M&A market during 2024? So will there happen something during 2024? Probably we can't answer that, so-
Yeah, of course, it depends on many, many things. There's one, of course, is the fit of a potential target company to our strategy and our business. Another one is, of course, kind of the willingness of the current owners to sell. There's, of course, always discussions about, you know, kind of matching the price for appropriate win-win for both seller and buyer. You know, it's hard to say exactly when these moves would happen, but rest assured that we are actively in discussions on a continuous basis.
How do you see property market in Germany and Austria this year?
I'm not sure whether I'm the best person to comment on that, but overall, what we see is, when we look at our business, what we see is, as the key driver for the stabilization, that you can also see in the numbers, is that actually our channel partners in Central Europe have actually seen over quarters, I would say, even reasonably okay sellout. Their problem mainly was that they had, you know, too high inventories from the peak periods of the COVID times. Now that they have seen two things, one is that, you know, sellout seems to be going reasonably well, and they have been able to turn their previously too-high inventories into cash.
Now they have the money, and they have the willingness to return their purchases towards us. So that has been mainly the driver for our performance in Q4 in that region.
Yeah. We are actually not so much dependent on the property market in our main areas. The biggest driver or indicator for the sales success is more the consumer confidence and people staying at home and preparing their houses and so forth. We have at least in the past estimated that about 80%, for instance, of our heater sales on the more mature markets are replacement sales.... So, that's not including the new building and property. But of course, when people are moving, then they repair also the house and sauna. Sales development was better than expected, especially in Germany. Can you please describe the trend you see in Germany, and whether you believe this is now a turning point of the demand?
I think I answered this largely in the previous, previous question. So essentially what we saw in Germany is the combination of sell-out and also healthier levels of inventory. And kind of when we look at, for example, German figures from the past quarters, we could see really drastic drops there. You know, much of it really was driven by this, you know, inventory reduction activity and in response to a lower sell-out. But what we see now is, and also is coming through from the discussions when we discuss with our channel partners that, you know, they have been actually reasonably pleased with the sell-out, and again, have the cash as inventory has been sold.
Germany will certainly bounce back one day, but we never know when. How much of the growth in EBIT margin was due to the mix or higher share of sales in North America? Can you also more in detail talk about sales across brands in North America, brands like Almost Heaven Saunas, Harvia, and EOS?
Well, roughly speaking, when we, you know, look at our Northern European... North American market, the solution sales, the brand is Almost Heaven Saunas, and equipment sales, the brand is Harvia. Very little EOS sales in North America at the moment. Of course, you know, we want to turn that also, and I see a lot of opportunities for the higher-end offering for EOS, but that's the status quo. There has been certainly effect on the geographical and margin mix, or product mix, in North America. Now we are performing very well. The general rule that we have is that the kind of Finnish and kind of Scandinavian markets is more price-driven. Here, the market is, you know, every man's market, where there's a lot of DIY.
Also, families with lower income levels want to have sauna and enjoy it, but that also means that typical customers on average are more price-conscious here. When we go then to the further, further away markets like the US or, for example, Asia, there we can see that the customer profile typically tends to have a higher income level, and there's willingness to invest in how say, better solutions, premium equipment, and that's, of course, something that supports our business and margin structure.
How much do you have production capacity left on your production plans? Will you still cut workforce?
Well, actually, as you can see, that employee number has remained largely stable during past year. And it has been more like a fine-tuning to optimize the structure to the kind of current business and the trends. In the pandemic's time, during 2021, there was significant investment in capacity, and we see largely that, you know, from the machinery and a facility point of view, we do have the capacity to grow even quite significantly. And then we adjust more with the kind of the working hours and amount of working staff in the factory floors.
Now, maybe the only exception is that, you know, given our very strong performance in North America, we do see investment needs to expand our capacity there.
Will the new organization, with the increased efforts to drive growth, have a meaningful impact on your fixed costs?
Essentially, kind of what we are focused on is productivity. Of course, you know, one is, you know, that we want to make sure that we always stay cost-competitive. One of the competitive advantages of Harvia has been that, you know, we can offer good value for money for our customers while still making money ourselves, and it is, of course, clear that we want to maintain this. And partly, this new organizational structure with the elements that I described, where we can drive group synergies, for example, global supply chain and manufacturing network provides us opportunities to optimize. So we can, you know, stay productive and even hopefully become even more productive.
At the same time, it will give us an opportunity to get more productivity, for example, from our future-related investments, such as R&D. You know, we have an ambition to have, you know, excite the market, you know, bring novelties to the market, you know, give good reasons to the market to buy better solutions. Digital, we see as clearly an area which will be important in the future, and with this new structure, we can make those investment in the most cost-efficient way.
How do you expect input costs to develop in 2024?
We don't expect that there is going to be that big swings as there has been in the past few years. Of course, during the pandemic times, there was quite a lot of, you know, bottlenecks and limitations in the global supply network. Then, the materials price situation eased during the past year. This year, our base scenario is that there's not going to be so much volatility as during the past years. Of course, we are following closely developments, for example, in the, you know, political front and security front. So for example, the recent attacks on the Red Sea are hampering transportation through Suez Canal.
And for example, part of our shipments now actually go around Africa again, so there's longer lead times and some more expense, but in the bigger scheme of things, that's not decisive as we see it currently.
... Mm-hmm. One question related to profitability in North America, probably we commented, but I repeat, is it lower, same, higher versus group average? In other words, is North America business dilutive for the group in terms of EBIT margin or not?
We have not yet reported the profitability on region level, so we report just the top line. But of course, you know, one can make some conclusions that, you know, the U.S. has become more important in terms of, you know, the size of it and in terms of its share of top line. And at the same time, you have seen a positive development in our overall profitability. And maybe, you know, as I mentioned earlier, what we see is that, you know, further away you go from the Scandinavian markets, the more we see willingness in the customers to invest in a good sauna experience.
Can you talk about the changes in Sweden you mentioned that impacted sales in Q4?
It's no secret, Kesko has been public, so they have announced that they are changing their strategy in Sweden, and they have been an important partner. They are important partner, of course, also in the future. But, you know, for them, year of 2023 is a transition year, where they are closing their K-Rauta brand in Sweden and moving that to K-Bygg. As part of this change, there will be also reduction of kind of retail points that they have. Given their importance for us in the Swedish market, it is also having an impact on our sales performance.
Quite interesting digitalization-related question: How do you utilize artificial intelligence in your operations to bring productivity? I don't know if there is a consultant now in the background, but
Yeah. I would say now, probably there is not real profit impact yet, but of course, we have started to explore. I think, you know, there's a few ways to think about AI and kind of how to absorb that in an organization. One is test, try out, and learn, and in particular, in the office workers, I know that, you know, quite a few of them use ChatGPT type of tools to help them in some of their daily tasks, when it comes to emails, when it comes to document creation, PowerPoint creation, et cetera. So there we are in a, I would say, exploration phase, and that is something I would call the bottom-up approach. On the other hand, we are also thinking of what is the strategic implication for us?
So what are the key areas of our business where we could really leverage AI? And this is, of course, something that, you know, we are vigilant and follow developments, and we do also have good partners that also help us navigate in this area. Hopefully, there will be more to report in the coming quarters.
What is the typical age of a sauna user? Are there differences between North America and historical markets such as Finland and Sweden? I would even add to this question, Japan.
Yes. The way I see it is that, you know, we could say that Europe is a mature market that's also visible in the, in the I would say, typical customer profile or demographics. Say, in Northern Europe, it's every person's product. So for example, in our home country, Finland, you know, typically, the babies, even when they are a few months old, you know, get their first sauna experience, and you know, it's throughout the... throughout your life journey. Maybe I would say that, you know, when I'm looking at the continental Europe there, it's more common that the kind of sauna users are kind of more mature in age.
A typical use case is that there's a couple whose children have moved out, and they have extra space in their house, and they decide to invest in an enjoyable and health-supporting kind of sauna experience and buy a sauna. Then actually, it's very interesting when we go to overseas markets, U.S. and Japan, as an example that Ari mentioned. There we see a clearly younger profile. You might actually go to Harvia's Instagram page to check what happened in Japan, you know, roughly a week ago. We opened a Harvia sauna studio in Tokyo, actually in a really nice area. Go and have a look at the people who were there.
Young adults, both male and female, typically in their twenties to thirties. So kind of young adults are really driving kind of the sauna boom in Japan. Also when we look at the growth in the US, we see actually women in very important role. Women typically tend to invest more in health and wellness-related products. They're also investing in kind of pleasant experience with their friends and also the kind of the age profile there is, what I would say, roughly 30-40, so somewhat sort of maybe younger than in Central Europe that I mentioned.
So hopefully, this brings you or paints a bit of the picture of the different dynamics in terms of age and demographics in different parts of the world. Maybe one thing that I could say there is that, you know, I take this as a very positive sign for North America and Asia. Because basically, the young adults create a culture. Then they get married, they get kids, they teach also their children, you know, the sauna, and that is the way sauna culture really sustainably grows, and we are very happy to see the dynamics that we see in both America and Asia.
Then one bonus question from the CFO. So you have been now the CEO of Harvia about eight months. How have you found this time? How-
Mm.
- was it?
You know, I'm very pleased to have this job. It's a great company. It's a great business. I see a lot of opportunities. You know, already when I started in this role, you know, I could, of course, see that, you know, there's health and wellness, key trends, you know, more affluent, and kind of, in terms of size, the middle-class people who can invest in these solutions, and also opportunities for innovation. I must say that during these months that I've been with Harvia, you know, my view on the opportunities that lie ahead for Harvia have even strengthened.
Also, as in our business, it's well-run, you know, solid foundation, but also it's good that we also see opportunities for improving our own operations, as we discussed. And one of the key things for us in the current market situation, where we expect consolidation, it's excellent that the profitability level of Harvia is on a good level, and also we are good at generating cash. That provides us opportunities to finance also strategic moves in the coming years, which I believe will be an important part of Harvia's long-term success.
Great to have you here.
Thank you.
Thank you very much. These are all the questions this time. Thank you for following, and in social media and on our IR web pages, there will be more information available soon. Thank you.
Thank you very much. Have a good day!