Hello, everyone, and welcome to Harvia's Quarter Four 2025 Earnings webcast. My name is Matias Järnefelt. I'm the CEO of the company, and with me, I have Ari Vesterinen, our Chief Financial Officer.
Hello.
We will run the session today as follows: I will start by going through the highlights of the business and financial performance during quarter four. I will also give you an update on how we're progressing with implementing our strategy. After that, Ari will be providing more details on our financial performance for the quarter and for the full year, after which we will be happy to answer any of your questions, which, as usual, you can submit through the chat of this webcast. So let's summarize quarter four. In terms of top line, our revenue increased by 5.3% to EUR 53.7 million, and we delivered positive growth in all regions, and all of the growth was organic.
The currency exchange rates, in particular, the U.S. dollar depreciation against euro, had quite significant impact on our reported numbers. At comparable exchange rates, we grew by 10.2%. A growth in North America was impacted by the currencies. In addition to that, North America had particularly strong comparison period from last year. In quarter four 2024, we grew by over 60%, and around half of it, so around 30%, was organic growth, so that was in the base. We had good sales performance in Europe, with Northern Europe delivering the second consecutive double-digit growth quarter and was Harvia's fastest-growing region during this quarter. In Asia Pacific and Middle East, we posted only a small growth. This was particularly impacted by project deliveries in our Middle East sub-region.
In terms of the bottom line, we delivered Adjusted Operating Profit of EUR 10.5 million, and that represents 19.5% of our revenue. At comparable exchange rates, Adjusted Operating Profit margin was 21%. We continued to strengthen our production capacity, capacity to grow, innovation pipeline and differentiation, and also modernize our IT system landscape, and that was visible in the investment level and also in indirect cost levels of the reported quarter. I'm happy to say that our gross margin developed positively, which was mainly driven by well-executed campaigns during the fourth quarter, in particular, in North America, Black Friday, Cyber Monday campaign was an excellent one for us, with good order intake, growing order intake, with clearly stronger gross margins than in the comparison period year ago.
Summarizing the full year 2025, full-year revenue growth was 13.5%, and our adjusted operating profit margin was 19.6%. Growth at comparable exchange rates was 16%. The operating environment was challenging during the year. There was significant macroeconomic volatility, including currency fluctuations, turbulent tariff policy landscape, and also softer consumer confidence in certain markets, such as the United States. And the numbers that you can see here, I think, are a strong testament to the resiliency of the sauna market demand and also Harvia as a quality company and the leader of this business. During this year, in addition to delivering the results, and managing the ongoing business and changes in the business environment, we've been also taking significant steps forward in implementing our strategy and making Harvia stronger for the future.
While market conditions most likely will remain volatile also this year, personally, I feel that Harvia is very well positioned to drive profitable organic growth and also pursue discipline in organic opportunities as they might emerge. Summarizing quarter four key figures, revenue EUR 53.7 million, and that's growth of 5.3% in euros, and at comparable exchange rates, it's a growth of 10.2%. Adjusted operating profit at EUR 10.5 million, and that's growth of 20% compared to the comparison quarter year ago. In terms of the margin, we delivered 19.5% adjusted operating profit margin. Operating cash flow was at good EUR 13.3 million level, which is over 100% cash conversion.
The same figures for the full year, revenue at EUR 198.9 million, so very, very close to 200 million mark, in euros, and that represents 13.5% growth. In terms of growth at comparable exchange rates, 16% growth and organic revenue growth at comparable exchange rates at 14.4%. Adjusted operating profit EUR 39.1 million, and that's 19.6% of our revenue. Operating free cash flow at EUR 26.5 million, and that's cash conversion of 57%, which is solid outcome, given that the year has been quite significant in terms of investing and strengthening our capabilities, for example, in R&D, innovation, and digital channels, and also while we've been growing.
So then looking at the waterfall of growth from our four reported regions, the leading region this time was Northern Europe at 11.6% growth. Continental Europe, second with 5.7% growth. North America, in euro terms, 2.8% growth. But I said there was significant baseline from last year, and U.S. dollar depreciated by over 8% against euro when we look at the comparisons between quarter four 2024 and 2025. So, the North America in local currencies grew double-digit. APAC, growing around 1%. There was significant impact from project deliveries in the baseline from a year ago.
We had significant deliveries in the Middle East, and the Middle East sub-region reported -60% development due to that baseline effect, while our strategically important markets like China and Japan continued to grow double-digit. So let's look at each of the regions a little bit more in detail. Northern Europe strong sales performance after already a strong growth in quarter three. So the revenue increased by 11.6% to EUR 12.1 million. And I'm happy to report that the growth in Northern Europe was broad-based geographically, where Scandinavia, Finland, and Baltics all performed well. And on a full year level, Northern Europe returned to growth of 6.4% after two years of decline, and second half was clearly double-digit growth, half of a year.
Continental Europe growth continued actually across the markets, you know, in countries like Germany, France, and in particular, strong performance in the United Kingdom. As you can see on the chart, we've been delivering steady growth now already a number of years in the region. Revenue total, EUR 15.8 million, and that's 5.7% growth, and the growth for the quarter is also very close to the growth for the full year, which was 5.5%. Then here is North America region.
I know that most of you are very interested in, and I said, this reported growth slowed down to around 3%, but you can also see in the graph that we had significant jump in the comparison period when we grew by 63%, and around half of that was organic growth last year. Last year, or 2024, significant part of the, of the growth was coming from very aggressively priced campaign products. And I'm happy to say that we grew, in dollar terms, double-digit, while we improved significant gross margin in the region. And that gross margin improvement in North America is also visible in the three percentage point improvement in the gross margin of the whole group, which I'm very pleased about.
In terms of full-year growth, North America region delivered 22% growth in EUR, and that's around 26% growth in USD. So a solid year. APAC and Middle East and Africa only modest growth this time, but you can also see that we practically grew or nearly doubled the business, so over 90% business in the comparison period in 2024. I said, significant impact from deliveries in the baseline in Middle East. China, Japan, key countries for us both continued to grow double-digit also during quarter four of 2025. On the full-year level, APAC and Middle East and Africa was our fastest-growing region, as it was also the year before. This year, our revenue growth in the region was 25.4%.
Then looking at the product categories, we continue to derive most of our business by selling technical equipment for sauna. Heating equipment share increased somewhat to 54%. Saunas and Scandinavian hot tubs is the second largest product category for us, slight decline to 24%. This is mainly driven by the fact that significant part of this sauna cabin business is in the United States, and that was impacted by the dollar, and also we had very high baseline in the quarter year ago. Steam products, accessories and heater stones, and spare parts and services remaining roughly on the same level in relative terms as year before.
Then looking at the waterfall for the product categories, heating equipment delivering majority of the growth by adding 13%, or growing by 13% and adding EUR 3.4 million to our top line. Saunas and Scandinavian hot tubs declining by around EUR 600,000, as said, mainly due to dollar impact and high baseline. Steam products minus EUR 600,000, and this is very much driven by actually Middle East project that was significant in size in the comparison period. And also another area where we have sizable steam business is United States, where we had the over 8% headwind in the currencies during the quarter. Accessories, heater stones, and spare parts and services reported slight growth. So that's about the numbers. Then a few words about the strategy.
Harvia is operating in a very interesting market business that is supported by strong, sustainable, long-term growth drivers. We are a leader of this business globally, and we intend to remain so. The strategic role that we see for ourselves is that we wanna be an aggressive, offensive market leader that shapes the global sauna market, so that more and more people, everyone, has a reason to experience sauna. We drive this strategy through our four focus areas that answer the questions what, so the products and portfolio we deliver. Which answers the question that which geographies and countries are in our focus, to whom, which touches our channel landscapes and customers, and how, which is about our operations and capability development.
We have been executing systematically our strategy throughout the year, and that work continued also in quarter four of this year, or 2025. As an example, when it comes to enhancing and making our portfolio even stronger and even more exciting, we've introduced innovations, such as the Harvia Fenix control panel that you saw in the introduction video before we started the presentation. The sales started in third quarter, and it's shown really great performance during quarter four, and I'm very, very happy to see that. We also continued to strengthen our portfolio by launching a really exciting new product, even a totally new category, MyHarvia Smart Sauna Sensor, which I'll be talking a bit about in the next slide.
In terms of winning in the strategically important markets, North America delivered double-digit growth in U.S. dollars also during quarter four, despite the baseline, and for the full year, around 26% growth in dollars. So that's, I think, a testament that we continue to perform well there. APAC, it was a slower quarter in terms of reported figures, but there was that impact from Middle East. And for the full year, APAC and Middle East was the fastest-growing region, where we continued to drive systematic and steady growth in markets like China and Japan. Continental Europe continued to develop positively. It's gradual development, but it's also very systematic and steady, which we are happy about.
And Northern Europe, after two years of decline, turned back to strong growth during the second half of the year, where both quarter three and quarter four recorded double-digit growth. We've also been upgrading our direct-to-consumer digital touchpoints, which already are a significant part of our business in the United States, but we've also introduced a new direct-to-consumer web store for the German-speaking Continental Europe, in particular focusing on Germany and Austria, and that it's now open and operational. And we also have been developing our relationships with our global key accounts, such as in the United States, which is also visible in strong performance during the Black Friday, Cyber Monday campaigns, with a clearly healthier margin than we had a year ago. Again, something I'm very, very happy to see.
We have conducted our annual customer survey with our B2B customers, and I'm happy to report that the Net Promoter Score is strong and, you know, even improving from the good levels we had in the past year. In terms of building the capacity and capabilities to grow, we have been continuing our systematic investments in increasing capacity to produce more products to meet the demand in the market, make our product portfolio even more exciting and differentiated, and we have upgraded also our group IT system to support continued growth.
I'm also happy to report that, in the annual employee survey, which we also conducted during quarter four, in addition to customer satisfaction survey, we saw great results in the employee responses, and that confirms that Harvia is a great place to work. Then, you know, just one of the highlights of the fourth quarter related to innovation and our portfolio is a completely new category never seen in the sauna market before. So this is a smart sauna sensor. It includes three precision sensors: one, temperature; second, humidity; and also there's movement detection. So basically, it can sense human presence in sauna. And it's connected via Wi-Fi to Harvia Cloud, and in the Harvia Cloud, there's application programming interface.
So Harvia can innovate, but also external partners can innovate on these sensors' data that it can provide. And it can, for example, notify when the sauna is ready. It can provide you heating curves, humidity curves. It can, for example, tell you that now the heating curve of your sauna is deteriorating, so most likely reason is that you need to replace your sauna stones. And, for commercial customers, it could report that it seems that the door has been left open because the temperature curve is now dropping significantly. So then the commercial operator can go and check that everything is okay with the sauna.
What is really cool about this is that it works in any sauna, so it really turns any sauna into a smart sauna, whether it's a wood-burning sauna without electricity or also saunas where we don't have other Harvia equipment. So really, really cool new innovation, showcasing our ability to innovate in the digital space. With that, I hand over to Ari.
Okay. Thank you. First, a technical note. These full-year figures, what we have now collected and reporting, they have been already audited. So our financial statements for 2025 have been audited, and they will be published together with the annual report at the end of the week 11. That's the second week of March, with couple of administrative reports, too. So the full-year figures are final, and then the KPIs and different other measures, they have been collected by the management, financial management. Okay. Here you see the development of the different quarters during 2024 and 2025.
I'm really glad to announce that the quarter four 2025 was the strongest sales quarter really in the history of the company. And the profitability, relative profitability improved compared to last year's Q4 substantially, and we have been doing there good things to improve the profitability. Unfortunately, we didn't quite reach the financial targeted 20% adjusted EBIT level, but there are different explanations of that. For instance, the currency rates and then additional investments also in development projects and so forth, which will bring growth and improvement of the business in future.
Okay, here we see once more the comparison of the key figures for the full year and for the quarter. And here we see that actually, the adjusted EBIT, for instance, was improving clearly during Q4. It reached almost a average level of 25. And the investments, they have been now quite heavy for this year, and this is not necessarily the normal level compared to the net sales of Harvia for the years to come, but we will have also quite high investments in the next, let's say, 12 months or so.
Since we want to really improve the scalability of the business and improve the capacity of our production places, and we have also a few remarkable ESG-related investments, which we have done. But this was a good year, and also good improving quarter, even if somebody was probably expecting something better. But we are rather satisfied with this quarter. Here we see also how typically the Harvia cash flow, free cash flow, evolves over the year. Typically, we have the lowest cash flow in Q3, when we built goods in the stock, especially in Finland, in the heater manufacturing, but also in sauna manufacturing in U.S.
And then we sell them out typically during the Q4 campaigns, and that was really the case also in 2025. This time, we had just a bit higher investments and certain projects, which were expensed. So that's reduced the profitability and the cash flow a little during Q4 compared to last year. The leverage remained still on a very low level, 1.2, and we have set the long-term target to 2.5. So we have actually quite much space there, for instance, to take more financing if we happen to make acquisition or so. And this 2.5 is also just a level for long term. Temporarily, we could be also over that if we make interesting acquisitions.
Harvia has a very strong cash position. End of last year, we had cash or cash equivalents, EUR 45 million on our accounts. The financing costs, okay, they were quite much based on different valuation of the swap agreements and also the currency rates. But here we see the dotted yellow, sorry, blue dotted line. It really shows the outflow of the finance costs. It has been quite on a steady level. We mentioned already the investments. We have been really improving our IT landscape, making the group more scalable, better for the future growth in that area.
Then in product developments, we have a very nice, interesting projects in pipeline, and we have been improving the production capacity, especially in Germany, but also expanding the factory in U.S. This U.S. expansion still will continue beginning of this year for a while. Yeah, these investments secure the future growth. Harvia's long-term financial targets stay; they are still the same. Growth at least 10% on average on an annual level; profitability, over 20% adjusted operating profit margin; and leverage as set under 2.5 on a long term. The dividend policy has been to pay the dividends regularly increasing dividends in two installments during the year.
This will be Harvia's Board of D irectors' proposal for the Annual General Meeting on the 15th of April to pay EUR .77 in dividends for the result of 2025. Last year, we paid 75. So now it's time for questions and answers. I have here quite many interesting questions already. And let's start. Well, first, a kind of financial question: Harvia has never bought protection against the currency changes. Should you do so in the future, given the drastic effect of U.S.D weakening? Well, we have been following our treasury policy, and we have been protecting us against the actively against the interest rate fluctuations, but in the field of currency, we haven't been so much protecting.
We have to really consider that in future. Currently, for instance, U.S. dollar is already quite on a low level, and we have to think that level also over, and the protection typically gives protection only about six-12 months on decent terms, so it's also a cost factor. But we adapt, as you see, our pricing also in terms of euros. In terms of dollars, we have been able to improve the dollar-based profitability in U.S. through price increases. So this topic is on the desk all the time, and we will review it once more.
Can you clarify why you say that no growth in segment other, in the segment other, was related to the timing effects? Will these deliveries take place in Q1 2026? I think, it's related to APAC, Emil.
Yeah, I-
Yeah
A ssume it's segment or geographical segment of APAC and Middle East. It's basically due to timing for the reason that we had, a year ago, fourth quarter 2024, significant project-related deliveries in Middle East, which were not repeated in the fourth quarter this year. And I mentioned during my presentation, in fact, in the sub-region Middle East, we reported actually internally a 60% decline year-on-year. So that's that is the reason why referred to timing of deliveries as a key reason for the slow growth that you see for the APAC region as a whole.
At the same time, I did also mention that the strategic countries, the big countries that we are developing for sustainable long-term growth, China and Japan, both grew by healthy double-digit rate also during the fourth quarter of 2025.
Okay. How do you elaborate? How do you see marketing spent in 2026 versus 2025?
I see that marketing is really playing a significant role in our business. It's branded consumer goods business. Mainly, it's a consumer wellness business, and in another perspective, and in that business, power of brands and power of marketing are important. In terms of the cost of marketing or spend for marketing, I don't expect that in terms of marketing spend per revenue, we would see significant changes as we go into next year. What we are really thinking of, how can we do marketing effectively in an interesting, inspiring way that captures the attention of the audience and could even go viral? So this is more like the preferred way we would like to see for Harvia this year and going forward.
What do you consider are the main variables with the biggest swing risks, positive or negative, for 2026? And here are the examples mentioned, like volume, mix, price, input costs, Forex.
Well, all of those are, of course, relevant, and if we think about kind of, you know, what we have been seeing in the reported figures, I think the most important thing is that the demand towards our category, sauna and sauna wellness, going to stay robust also going forward and also increasing? And we have all the reasons to believe that, yes, it will. And if we look at the full year performance of Harvia at 13.5% growth in euro terms and 16% in comparable currencies, I think it's a good, good, good result, given that the macro environment, as I mentioned at the beginning of my presentation, was challenging.
A lot of confusion, in particular in the beginning of the year, with tariffs, currency depreciation, lower consumer confidence, and despite all of that, we delivered the numbers that we delivered. That's a comforting signal that there is strong longevity and the macro trends that support the growth of this business also kind of come through even during the more difficult macroeconomic year, as we saw in 2025. So demand of course is one key thing. But in addition to that, it's, we have to recognize that the world has become a more volatile place when it comes to the tariff regimes, the currencies, et cetera.
And that means that also as a company, we need to adjust and make sure that we are agile and can react as quickly as it's needed for those changes. During the year 2025, I think you know, it was quite difficult to fully compensate the cost of increase in the cost of doing business, for example, due to the tariffs or currencies, because they were so quick changes in such a short period of time. And that did have a bit of an impact on our reported full-year figures. I hope that the environment is a bit more stable, but I also am confident that our ability to react and manage in even a more real-time manner is improved for the year 2026.
We more or less almost answered already this one question, but I ask it once more if you have something to add. Timing of deliveries in APAC and MEA, is it right to assume that this phasing was between Q4 and Q1? Do you have anything to add to that?
Well, it's mainly related literally project timings in the Middle East sub-region. That is clearly the driving reason. And overall, I said APAC was the fastest growing region for us in 2024. It grew by 50% in euro terms, and in 2025, it grew by 25% in euro terms. So I think you should put things in context that it is one quarter with extremely strong baseline. As you can see, baseline, we had increased the growth of 94% in the fourth quarter of 2024. And that, you know, then you should be putting the numbers that you see now reported in that sort of bit more long-term perspective.
One important factor, which I already shared a couple of times, is that the big markets, China, Japan, continue to perform really well.
Is M&A back on the table for 2026? How are the valuation levels looking like at the moment?
It's a great question, and Harvia is in a very interesting position. We are in a growing market, which continues to be quite underdeveloped in terms of the structure of the competitive landscape, so several rather small regional local players. And Harvia, I think, has the right to play and right to win as a consolidator of this industry. Now, we didn't do acquisitions during the year 2025. The main reason for that was twofold. On one hand, we closed an acquisition of steam company ThermaSol in the United States in the second half of 2024, and we wanted to make sure that we integrate that properly, we get the synergies in terms of top line and cost efficiencies as we planned.
At the same time, the company management was very busy managing the volatility as the tariffs, the currency is impacting our biggest region, North America. And I think in combination, the fact that we had completed a reasonable-sized acquisition in the second half of 2024, plus year 2025 was a very busy year for management. That had an impact. At the same time, of course, you know, we are disciplined in the M&A. We wanna make sure that it's value accretive. We are continuously in discussions, and I hope that in not so distant future, we would have something to report also on this front.
The dividend rates was quite lower than expected. Interest, for instance, expected EUR 0.85. Are you being cautious with the dividend growth at the moment because of the possible ramification of tariffs, or will this slow slower dividend growth be or will this lower dividend growth become the norm?
Maybe I can take that.
Yes.
So basically, we have a first of all a dividend policy that we wanna pay increase in dividends, and we have now a very, very good track record of growing dividends since we have been public since 2018. There has been a rather steady pace for us to increase our dividends, with the exception of 2025. And in 2025, we paid. We increased the dividends more than we have done in the past for the reason that we wanted to deliver that EUR 0.75 to celebrate our seventy-fifth anniversary year. And now this, you know, increase from EUR 0.75 to EUR 0.77, we kind of return to the I would say kind of systematic path that we have been on for a longer period of time.
We hope to continue increase dividends also for many years to come. Now, this is one of the reason. So there was this extraordinary added kind of dividend, in a sense, in 2025. The second is that we want to reserve firepower as the market is growing, and we have plenty of opportunities. We are increasing organically our capacity to grow. We are enhancing the competitiveness and differentiation, excitement in our portfolio, but also we are reserving firepower for the consolidation game. So it's a combination of many factors why then the Board of Directors decided to propose this EUR 0.77 for the Annual General Meeting.
Okay, then, there is a question about the breakdown of the CapEx. It was directed more to me. We don't publish so exactly the breakdown of the CapEx, but there is a question about tangible versus intangible CapEx. We can say that it's almost half and half, and we have been substantially really, really investing in intangible things like this digital what you see on the screen. That's just a beginning of the area. But at the same time, we really invest also in tangible like, like, buildings and machinery and so forth. But that said, we don't disclose it so exactly.
The goal is we allow capacity to grow and improve the scalability of the business. So this is basically what we are driving with the investment. So for example, one of the key areas for investment has been modernizing and simplifying our IT landscape. We have grown through acquisitions in the past years, where different units had different IT systems, legacy systems, some of them are very old ones. And now we have taken significant steps to modernize and have the kind of IT capability to grow as we have been also making other investments such as, you know, investments in physical facilities, plus machinery to keep growing.
Then the question asker is indicating a signal about our dividend policy. He or she has looked back to our dividend history, and there is a note that, "Small dividend increases indicate that there is something cooking on the M&A front, a bit similar to 2019, when you raised the dividend by a penny and then announced the EOS acquisition." It's not necessarily directly a signal or-
Yeah, I would say that, you know, it's a bit like, you know, in the old times, there were these the Kremlin analysts trying to find meanings between the lines. And, you know, it's pretty much, I guess, you know, what it is when looking at the dividends. That we cannot, of course, comment specifically on potential M&As in the pipeline, but it is clear that we are interested in it. And as said, hopefully, you know, not in too distant future, we could also report some practical outcomes also in this sense.
Okay, then lengthy comment with the question. "Several large foreign investors told me that they would consider adding Harvia to their portfolio if there would be a flexible mix of growing dividends and paybacks. There have been some paybacks in Harvia stock in to service the long-term incentive program, but I'm talking about a net reduction of the total share count. In the U.S., strong consumer companies will, with steady growth and high cash flow returns, have created a lot of tax-free value for shareholders by repurchasing stock.
What's your view on this, considering the strong balance sheet and flexible investment policy?" It's probably a matter of our Board of Directors, and we don't want to predict these discussions, but we have noted that there is also the possibility of purchasing back the shares. We now don't announce currently any program for that, or would you like to-
No, I think that's it. And of course, it's very, it's clear that in any company's owner base, there are different interests, and some of them are more focused on the share price growth, and some are more dividend-focused. I think in Harvia's case, probably the kind of the best way for us to create long-term value is that we deliver significant profitable growth in the coming years, that then will turn into shareholder value. And that's the perspective I believe that the board has when looking at this.
A reflection on the gross margin and OpEx. You are still priced, and now the question is relating to our products. "You are still priced well below your competitors in many categories. Would you increase the pricing to then also invest more aggressively in marketing and other OpEx? In other words, there is a possibility to strengthen your strategic P&L investments by adjusting the prices.
That is correct. I think there are different means that we want to use in a balanced way. One, of course, is that we have operational leverage, so scalability in our business, which we continue to improve, for example, through the investments that we made during the year. And then the volume growth will turn into a stronger bottom line and in terms of absolute profit, but also in relative profit. The other thing, of course, is that we can you know, push our gross margin through price increases, which we have been actually doing during 2025, in particular as reaction to the currencies and the tariffs. The good news is, which you also pointed out in the question, we are practically in any category, Harvia is the best choice.
You get the best product, best solution for the money you spend. That also has been one of the key formulas for success of Harvia, the reasons why we have become the market leader. We want to keep that going, that Harvia is a premium brand, world-leading brand, but also provides great value for our customers. We, of course, look at this in balanced way because we know that we need the margin to be able to keep investing in making the company stronger and introducing even more exciting innovations to the market.
Early Q3, you are launching the high-end sauna rooms via ThermaSol. How should we think about the future sales impact, scaling, implied margins? Sauna rooms typically have lower margins, total addressable market required CapEx. Is it an option to expand with the high-end sauna rooms into Europe as well, making you a direct competitor of Glass?
Hmm. Well, the main, main reason for us to introduce a higher, higher, like, higher end, or say, premium range of sauna rooms in the United States is really to tap into new price categories and help expand the size of the market. And in a sense, the way we kind of look at the United States, we see a market with significant growth potential. We believe that there is a great opportunity and plausible opportunity for more than 10 million saunas to be built or purchased in the United States in the coming years. Now, in terms of the market value, it of course then matters that what's the price point of those new saunas?
Our stronghold in the United States has been in what I would call rather entry price point saunas, so Almost Heaven is the brand which you could consider as kind of like the IKEA of the saunas. So good-looking, affordable, assembly of products with a strong American flavor. They are made in America, in the heartlands of America in West Virginia. So basically, 10 million new saunas multiplied by $5,000 or so for Almost Heaven saunas would imply that there would be a possibility for $50 billion market potential with that sort of back-of-the-envelope calculation. But if we can actually inspire the market to spend some more with a, with a, you know, great designs, great more premium, premium categories, maybe the market is not gonna be full of $5,000 saunas, but maybe closer to, let's say, 10,000 sauna-$10,000 saunas.
That really has been a kind of main reason we have been introducing these products and are very interested in playing in those price points as well. 'Cause we know we are market leader. We can actually w e don't have to only follow the market, but we can also shape the market. In terms of profitability, these products are highly profitable for us, so we hope to scale that part of the business up rather quickly in the coming quarters and years.
Excluding the very tough comparison last year, on a two years stock basis, the underlying normal sales performance in the U.S. has actually, actually accelerated throughout the year. Still, many analysts and investors are focused on the smallest detail in every quarterly report. Wouldn't it be more useful if Harvia ceased reporting quarterly performance, but instead focus on half-year and full-year results? Well, probably yes, but at least this European stock market requires that we report quite regularly, and we feel really that so we draw also our investors' attention to us. We have almost half of our investors outside Finland, big stock funds and so forth.
We would really like to inform them on a regular basis, and to create that basis, we need also the quarterly reporting. Or how do you see this?
Yeah, I think you answered very well the kind of reporting, but I would also like to compliment and thank the person asking this question, 'cause I think you're absolutely right, that Harvia is not so much about the, you know, single quarters and some of the details in them. It's about the bigger story, how big the global sauna market can grow, and will Harvia be the leader of this business also in the future? Personally, I believe we have everything it takes to play and win, and we are executing our strategy systematic and also putting the chips on the table so that that's possible.
And then if you look at just simply the kind of the longer-term perspective of Harvia being a public listed company since 2018, basically we went to the stock exchange, first-year revenue, EUR 62 million. Now we're very close to EUR 200 million. We talk about companion annual growth rates of around 18% for the full period, and if you look at just the year 2025, it was in comparable currency, 16% growth. Majority, clear majority organic, so I think that there is a clear red thread and mega trend looking at Harvia's performance. And also, we have maintained strong profitability, also during year 2025. Maybe not quite to the level which we in the end hoped to develop for the full year, but it's not too bad.
We have been managing a highly volatile environment, impacting in kind of the heart of Harvia's business, North America, in terms of tariffs, the currencies, and at the same time brought great innovation to the market, developed our channels, developed our capacity and scalability of the business. So all in all, you know, I would definitely support your view that it's important to put things in perspective and in the bigger picture when assessing Harvia and Harvia's future value creation potential.
Back to M&A. On the M&A front, what's on the wish list? A local or worldwide player in infrared, for example, or do you believe you have got the organic capabilities for that?
We have been quite open in the previous communications that, you know, one of the prime candidates, of course, for us, is infrared sauna business in the United States. United States is the most important single country for the sauna wellness business, and infrared saunas play a significant part there. We would be quite interested in finding a suitable kind of inorganic opportunity to accelerate when the deal is right, and value-accretive, and we can really see it, this is the way it would work. So that's one opportunity.
But at the same time, we are looking at other significant-sized markets with you know, clear potential, both in Asia and also some of the fastest-growing big countries in Europe, and looking at categories such as cold wellness, kind of digital wellness capabilities, that could provide even more benefits for those who seek for example, health benefits when using sauna. For example, digital sauna wellness protocols that are customized for person's health and personal needs. So there are many, many different opportunities and directions that we are looking at. There are things cooking behind the curtain, but whether and when they will realize into announcements that we can make, I cannot really comment further.
Did you open new distributor doors in the U.S. in 2025, and what is the plan for 2026?
In the U.S., we have, I would say, three main channels. One is what we call the big box retail, so that's kind of mass merchants. The second is, specialty dealers specializing in, wellness products such as sauna, pool, and spa, and then our own D2C. And that landscape has been pretty steady, with the exception that we actually opened Amazon, as a, I would say, a shopping shop, during 2025. But at the same time, we are working diligently, with our commercial teams. We want to grow each of these key channel pillars that we have. We want even bigger key accounts in, in the big box retail, and we want more of them.
We want to expand further our reach in the regional specialty dealership for wellness products, and we see significant growth opportunity for our own D2C in the U.S., and we continue to develop all of those during this year.
Yeah. Follow-up question more or less to U.S. How do you see the underlying demand in the U.S.? Has the trends seen in Q4 continued in January and early February?
Well, we don't comment on the current quarter, but all in all, I said, the year despite all the noise in the macro environment, consumer confidence, et cetera, we delivered 26% growth for the full year in the United States, and clear majority of that, organic growth. I think it really tells the story that sauna is a strong trend that even defies the kind of environment outside the sauna market. I think that I have all the reasons to believe that that is going to continue also this year.
Can you discuss the outlook for operating margin for the next two-three years? Can you generate operating leverage or likely to stay close to 20%, given reinvestment and Forex headwinds?
Mm. Well, it's also decision by management, how do we steer the business? And if we look at the, for example, fourth quarter, and on the full year 2025, it is clear that we have increased the OpEx levels, and that relates to, for example, marketing, channel development, R&D, et cetera. And why we are doing it, because we are seeing such a big growth opportunity for years to come in this market, and we want to have the absolute best portfolio to play and the best channels to play. And we made the choice. Of course, we could have made the choice that we not invest as much in marketing, not as much in product development, but I think it would not be maximizing the value potential of Harvia in the longer term.
The way I think is that, you know, still in couple of years, we are in this phase where there are significant needs and opportunities for us to make Harvia stronger, while those actions do require also us to spend some money, so put chips on the table for payback over time. But at the same time, we try to manage also that the results, even on a quarterly basis, would provide evidence to the market that we are on the right track. So, it is clear that management wants to avoid dips in the EBIT, but at the same time, if EBIT margin would be significantly higher, way beyond 20%+, then we might not be investing enough to make the future happen and make sure that Harvia is by far the most competitive player in the market.
So ultimately, it's very much about the management decisions we make, and this is the way I see Harvia in the big, big picture. We see clear operational leverage. So when we have the volumes and volumes come through, it is really, in our high growth margin business, having a very positive impact on the, on the bottom line. And, now assuming that my vision of Harvia, which is that Harvia will be much bigger in the future than we are today, I think it should have a positive impact through operational leverage, so scalability of the business also in the bottom line in the, the years to come.
Could you please explain the spike of CapEx in 2025? What should be, what, should be expected in 2026 and beyond, please? I can take this. I calculated that the CapEx now for 2026 was about 7.5% of the total, net revenues. In, in, 2024, it was, 3.5%. We haven't really put this as an official, financial long-term target, but, good estimate, could be somewhere, lower than, what, what we had in, in 2025, but higher than what we had in 2024. So, somewhere in between. We will have, some, some, substantial investments, still in, 2026 and, time after that. We want to, we want to invest for the growth. What was the organic growth in the U.S. in Q4?
Okay, we don't disclose really the single countries, even if North America is really really the biggest part is U.S.. And as you see, we had in euro terms 2.8% in the spreadsheets there in the report. And since the dollar depreciated about 8%, so it should be somewhere about 12%-13% during Q4, including Canada.
And just to comment that we didn't have any inorganic moves that would have impacted. So all of that growth in North America was organic because ThermaSol has been consolidated in our P&L since August 2024. So all you can see for North America is organic.
That's right. Yep. How much did the mismatch in deliveries in North America affect the quarter? So, mismatch of deliveries. What would growth have been in those orders if they would be included in Q4? How will this affect Q1 in 2026 in North America?
Hmm. Well, we didn't have, like, a number that we would have for that sort of, you know, kind of overflow from quarter four to quarter one in North America. But what I can say that the campaigns went really well, and there will be deliveries happening quarter one based on significant and great order intake during quarter four. So, from that angle, it does look positive.
What kind of sales growth did ThermaSol deliver in financial year 2025?
Well, we don't. I don't think we haven't disclosed that fully, but we are pleased with ThermaSol. It's providing us a solid base to grow our position in the steam. It's also an avenue for us to drive our higher-end offering beyond steam, since ThermaSol's channel mainly relate to high-end home spas and commercial spas. The integration is working as planned. Kind of the profitability impact is coming through. Of course, you know, in ThermaSol's case, the dollar depreciation, you know, has been a bit of a topic. But when it comes to, for example, the steam numbers that we reported for quarter four, there's a significant portion that is coming from that Middle East project business. So ThermaSol, it's good.
Yeah, the follow-up question from another person: "Can you provide some color on development of ThermaSol?" We did it.
Mm.
Has it developed as expected
Yes.
Y ou think, yes? What type of synergies have you seen so far, and are there more synergies yet to come?
There are both top-line and cost synergies. Top-line relates to especially the sort of cross-selling between the channels that ThermaSol has and the channels that we had before ThermaSol, which are complementary. So we want to sell more of premium products from Harvia Group side through ThermaSol high-end channels, and we want to bring ThermaSol steam expertise through our kind of, I would say, legacy or previously the channels we already previously had in Harvia in the United States. Mostly we've been focusing on this sort of cross-selling in the United States so far, but we will be also using ThermaSol to enhance our steam game beyond United States in places like Europe, Middle East, and Asia. So that's top line.
Then the cost synergies relate to things like, Harvia is significantly bigger player than ThermaSol. So when we look at, for example, procurement, so simply component prices that Harvia is getting and what ThermaSol used to get, there is a significant difference. So, we have been able to lower the cost of components sourced for ThermaSol even quite significantly. First, we had to kind of burn through the existing component inventory that ThermaSol had at the time of the acquisition, plus it took some time for us to kind of find those alternative suppliers, do the appropriate testing, make sure that everything is fine for us to take those new, cheaper components in use through Harvia's own sourcing.
But it's really happening as we speak, and the impact has already started to come through. Not to the full effect yet, so.
When does Harvia start the cooperation with Ronaldo?
Well, we are very thankful for Ronaldo and actually many other, I would say, mega celebrities in the world. Actually, sauna category is pretty interesting that, you know, people really love to talk about it. There is just something that, you know, that really, kind of, sparks people's interest and emotion. It's, you know, on one hand, it's great for our health. On the other hand, it's great, relaxing, pleasant experience, but it's also something that I think it's very much into the core of humanity, connecting our body, mind, and spirit. It's a very physical experience, but also the physical reaction and our body reaction to the heat really helps to calm our minds, et cetera.
So people really love sauna, and that's why I believe we see so much, for example, social media postings, not just from the mega influencers like Ronaldo and others, elite athletes, but also in entertainment superstars, but also ordinary people. And we haven't paid anything really to this sort of mega stars. You know, they would also come probably with a pretty high price tag. We have been estimating for fun at times that, you know, how much of free marketing they are making for us, and it probably would be counted in tens of millions EUR, if not even 100-plus million EUR over multiple years, the kind of value of posts that people like, like, Cristiano Ronaldo and the likes have done for sauna.
And then we think that as the global leader of the sauna movement and sauna business, we probably are the company that benefits most of this activity in social media, so we're very thankful for that.
What's the opportunity to team up with other wellness players such as Garmin, Technogym, or others?
Mm. Great question. Something that is on our minds. So if you think about sauna providing significant wellness benefits, but we would like to see a future where those who are interested wouldn't just feel have that feel-good feeling, relaxing feeling, more calm minds, et cetera, but also, you know, for those interested, we could also provide the data, what's happening in their kind of bodies through the sauna wellness programs and routines that they go through. And that would obviously, you know, key part of that would be, kind of sensing, what happens in our bodies, and there are many players, like the ones you mentioned, that are on our radar screen in terms of potential partners in the future.
Now we have been in this session already over one hour, so now the last, last question. Thank you very much, by the way, for all the great questions. Could you elaborate, what is the value of the brand? Considering the actual product from technology, it's not complicated to manufacture. Are there small barriers to entry to this business?
Yeah, I think the brand is significant part of Harvia and Harvia's success, and I think it's gonna get even more important in the future. And why I'm saying that, you know, if you think about what's happening in the market, Harvia has become and emerged as the leader of what used to be a niche business that was mainly known by just the industry insiders. And in most countries, if you would just go and ask a consumer on the road, "Hey, name me one sauna brand," they would answer that, "I don't know any." But this is changing because sauna is becoming much more of a volume category or maybe even a mainstream category, and in such an environment, the power of brands become stronger and more important.
I have a dream that Harvia could be brand like to Google is practically a synonym for internet search or Tesla became the icon for electric cars, that Harvia would be the icon of sauna, and basically, the thought that it would invoke is Harvia, global leader of sauna, and sauna feels better with Harvia. And maybe that's a good ending-
Yeah
T o this session.
Okay, thank you very much for everybody, and thank you for following. Let's sauna!
Thank you very much. Take care. Let's sauna.