Earnings Call: Q2 2021

Aug 12, 2021

Hello, and welcome to Harivya's First Half Year Review. My name is Tapio Paio Hariv. And next to me, we have Arif Vesterin, our CFO. Hello. We'll run through our performance during the first half. I will dive a bit deeper on the second quarter performance and results. And I think healing with heat during the first half has been the winning concept, winning phenomenon also in sauna and spa business, but also for the ones who've been able to join holidays in June or July. So everyone has been enjoying the healing heat. Very happy for that. All in all, Tim Harivier has once again done a great job, and I'm very pleased and happy about that. And a strong demand has been prevailing most of the markets, that has been boosting the volumes, and all of that has been driving an excellent profitability for the company. I'm very happy to say that in all of the product groups, and this time also, steam included, I know all the market areas have been enjoying growth. The ones who've been following the social media, common awareness and the activity on the sauna and spa market have been most likely paying attention to the increased activity on the social media and the PRM publicity of sauna and spa, and especially in the U. S. Marketplace but also lately in the Central Europe and emerging in the Asia market as well. Having said that, I think within the team, together with our partners, we've been monitoring the situation and the sentiment of the market. We repeat the previous information that part of the increased demand is advanced demand in that respect. Supply chain, I think we have not been immune to the phenomenon in the global supply chain. But together with our good partners, long term partners At Multiple Sourcing, we've been doing a good job and the impact has been modest also on the availability as well as on the pricing in Harvia, Sentiotech, Eos and Almost Hermann Saunas in that respect. Capacity. During the 2nd quarter especially, we've been facing some limitations. Even we've been preparing for the increased demand in Romania and China. Those projects have been completed now. Finland, the expansion in Murame is in line with the time line and budget, And the U. S. Sales are proceeding according to the plan. I think during the second quarter, We've been revising some of our plans, and we've been beefing up our CapEx and especially the increased capacity. In that respect, we made some Acquisitions of machinery and equipment in the Murame facility, and we are planning to add some machinery in the U. S. As well. And on top of that, We realized that our sonar capacity, both in Romania as well as in U. S, need some incremental Machinery. And then also, EOS, we are considering an incremental capacity expansion for the German factory in that respect. Regarding integration, I think very pleased to say that EOS is already part of the family. We operate like we've been working more than 5 years together, so it's a very, very good team play in that respect. Kiram, the newcomer in the team, is on boarding extremely well. And I think also in the culture created by the family Rantanen, it's very close to the Harvia culture, We fit very well together, and we are in line with the timing, and the spirit is excellent. So very happy to work with the Kirami team. Then one issue regarding the EOS. They are performing slightly ahead of the original plan. The approvals for the U. S. And North America is ongoing very well, but We've been setting the applications for certain type of componentry, especially the electronics. And now we need to be Changing some of the componentry in the application, that is a process we can maneuver, But that makes about 4 to 6 weeks incremental lead time for the approval. So our estimate is towards the year end, Not any more for the December, towards the year end, we should be receiving the approval. Okay. First half, I think the ones who've been seeing the pre announcement, very familiar with the top line revenue, excellent growth altogether, even though we had bit A headwind due to the currencies, mainly due to the U. S. Dollar, a bit about the Russian ruble. But I think organic growth Exceeding 60% is a very good and solid achievement. Operating profit landing at €24,400,000 And in relative terms, 28.2%, also a very, very good achievement. Earnings per share, €0.93 also a very nice improvement, more than 3x the prior first half year. Cash flow may be softer than some of you may have expected, but that's due to the investments we've been making As well as on the net working capital. And due to the current volatile atmosphere in the supply chain, We've been beefing up our raw material stocks as well as on the components and especially on the electronics. So We've been able to maneuver with the volatile availability. Net debt landing at €38,400,000 and equity ratio slightly shy of 40%. Then on the Q2, roughly the same pattern continued. And once again, unfortunately, a bit of a headwind on the currencies, but still a very solid growth organically 60% And slightly shy of 90% on the total terms. Adjusted operating profitability, €13,200,000 and once again, exceeding 28% and then earnings per share €0.49 a nice improvement on that with respect. Operating free cash flow, we've been investing quite a bit on the capacity expansion and as well as working capital increase €6,500,000 and of that roughly €3,000,000 coming from the acquisitions and rest is organic in that respect. Then when basically taking a quick look on the strategy and the application and implementation of that, On the first path, which is the increasing of the value of the average purchase, happy to announce that our digitalization is taking good steps forward. My Harivya has been well received. Now we've been selling it very nice on the markets where we've been introducing it. By the way, we are also getting applications for the North American market on this one. So most likely beginning of next year, we are ready for that. On the clean burning and the emissions, our green flame family has been expanded, And we've been launching the Harivya Green Flame Lineaar family on top of the legend and good feedback from the Domestic market and gradually also on the Scandinavian marketplace. Complete summer rooms doing an excellent job in Central Europe, The same in the U. S, but we've been slightly impacted by the available capacity and the lead times, which used to be traditionally calculated in weeks. Currently, we are calculating them in months and then a fairly high number of months in that respect. Kirami, we've been now having it on board on the business for some time. First of all, it's completing the slot on the backyard paradise Extremely well, and now we have the missing element available, especially for the Finland, Scandinavian countries, central part of Europe. But there is also traction elsewhere for this type of equipment. Geographical expansion, This time, not opening many new markets, mainly focusing on where we are. Central Europe, we've been taking good steps forward, Both on the Harvia, Sentiatek and EOS platform and then Scandinavia, we've been enjoying a very strong performance. And I think the last bullet point tells where we've been doing good job. We've been overall gaining share in multiple markets. Good news is that I think pandemic hit the Southern Europe, Arabian market, Asia quite badly, especially on the professional part of the business. I think there are initial signs that they are emerging and getting closer to the normal, not yet to the normal, but closer to normal. Our Asian insight, even though we've been not able to travel, but our small but very capable team over there has been improving our insight to the market, and we've been taking baby steps forward on that respect. And I think later in the year and next year, we have more to report on this one. Productivity improvement, I think the investments we've been making, they have been both improving the productivity and increasing capacity. USA transition into the new factories is in line with the initial time line. We should be producing in the new facility Towards end of October, beginning of November, Finland doing extremely well. And then we also made a decision to beef up a bit of the machinery. And already by the time when the new expansion is inaugurated, we will also have machinery compared to the previous planning in that respect. Supply chain, not a dull day on that area, so to say, But I think we've been doing an excellent job in the supply chain globally, together with our partners. And our innovation and R and D has also been finding ways How to tackle and how to do an alternative bill of material, I. E, exchanging some of the components or something which is available. So in that respect, our capacity to serve our customer has maintained to be on a good level. And then the new incremental projects To be coming in place, some of them later this year, some of them early part of next year, and we'll come back on those at a later stage. All in all, I think pandemic has done a bit of a hit the sauna and spine industry, especially in the new markets. But altogether, the underlying solid demand has been favorable in that respect. Some of that is advanced demand, as we've been saying, and will not impact our long term vision of the total market development. Our operational capability has been good. And even though we've been increasing the people, we've been able to Stay safe and healthy in that respect. The productivity has been maintained or improved in all of the units. Sourcing environment, I think repeating this on the 3rd time and for a reason, it's not been normal. But the impact Hello. To Harvey has been modest, and on top of that, we've been able to address the pricing, some of those in terms of price increments And some in terms of surcharges. And we keep eye on the ball. And if needed, we have capability of addressing this going forward as well. And then the most important thing, we stay focused on the health and safety of our people, our customers and the whole ecosystem. And so far, we've been doing good job on that respect. We'll maintain focus on that area. Then On the geographical split by the markets, I think not the major change in that one. All the markets performing well, But the relative share of the domestic market is decreasing, still a substantial part, 21%, other European markets already exceeding that. Germany becoming importer 1, North America slightly shy of 20% and the share of Russian market stable compared to the past. Then on the product groups, even though we've been doing an excellent job on the sauna and spa business, Heater is still more than 50% of the total business. It's not visible over here very well, but later on, we'll see that this steam business gradually Balancing and actually increasing in that respect, and that's usually very good for us and for the markets where steam plays a big part in that respect. The same picture on the Q2, no major change in that respect, mainly the same phenomenon, same pattern, both in the geographical split as well as on the sales by product group altogether. But that may be more important is to have a look on the increase, where it's coming from. Finland, A slightly shy of 30% increase may be looking modest, but I can assure that means that we've been gaining share of the domestic marketplace And in multiple channels, both on the retail market as well as on the professional market. Harvia has been gaining share quite nicely. And our premium end offering as well as the more advanced offering has been gaining share quite nicely. Scandinavia, where we are not the market leader as of yet, but I think we've been closing the gap and we are gradually catching up with the number player quite fast actually in that area. Germany, Central Europe, a good performance Altogether, Russia stabilizing and now delivering a, I would say, reasonable growth. North America still growing very nicely, but I think due to the coming factory transition, Some of the campaign activity we've been driving down so that we don't disappoint the customer base. And on top of that, I think the ones who'll be monitoring how the summer has been in the northern part of the U. S, it's been extremely hot in the U. S. And the other countries, they've been coming back in a nice way. And we see emerging activity on the markets, which used to be either completely closed or they were quite silent or close to silent in that respect. And then the same picture Snapshots from the Q2. I think the overall message is more or less the same, maybe just Scandinavia gaining a bit more speed and then the rest is roughly the same. And then by the product group, the first half, sauna heaters enjoying a good growth. Sounder rooms and Scandinavian hot tubs, now we need to keep in mind that Kirami has been on board only for a very short time on that one. And control units, And I think the high growth of the control units, which is exceeding the growth of the sauna heaters, also tells that we've been successful in selling control units to some of our peers and competitors in the industry, and then we are very happy for that. And the steam generators are gradually coming back. And the ones who've been on board for a longer time most likely remember that we were struggling a bit on last year for the Last two quarters, due to the pandemic, we got a hit on this one. Now we are back more or less back on track, even though the category as such It's still quite small for Harvya, but it delivers a good healthy profitability in an area where we would like to gain speed and put more effort on that one. And then on the Q2, the same pattern most likely prevails in all of the categories. And based on our read, no major change in the development or the trends on that area. Then I think this picture is good to keep in mind. And traditionally, the Q1 and Q4 has been the strongest one on the industry. And then the 2 quarters in between have been a bit of a mild. This time, I think there was overlapping Demand from Q1 to Q2. And then Q4 is going to be strong, but we see also that the indications for the whole year Very close to the I would and I have not done in detail analysis if the analysts have been updating their outlooks. But based on my last look, roughly at par with the ideas of the analysts in that respect for the whole year. Next one is just to remind that Harvija is a player for the sauna and spy industry. In all of the 3 sauna types, We have a very strong grip on the traditional so called Scandinavian sauna culture. Our grip is Okay, but not strong enough on the steam industry. And then on the infrared industry, which is gaining speed, especially on the U. S. Market, we are still very early on our journey on the infrared. I would like to do more on these two latter ones. Then on the strategy plan, I think we will keep eye on the ball. We'll not deviate from the previous good Hello. Sergey Blanna will keep focused on the 3 pillars on that one. And by the way, on the picture on the Far right corner, that's the expansion of the hydrovia plant in Murame. And as of last Friday, we already have the roof, We have the concrete floor. The concrete is drying. And when it's dry enough, we can start operating on the floor and gradually start building up and installing machinery over there. So we should be well in time on that expansion. Then maybe a word about Kirami. Very happy to have the Kirami team and the offering on board. It's one of the oldest still water hot tub, so called Scandinavian hot tub suppliers in the marketplace. We paid €7,000,000 upfront on the company, and then there is a delayed purchase price between €0,000,000 to €4,000,000 after 3 years when we see how it's been performing. And on top of that, with the 100% of the Kiramio Y, we got a 50% share of the Metagroup, which is basically making the heater and heater components for the hot tubs and then also for the sales unit in where we got a 51% share. Going forward, we expect to have roughly €1,000,000 synergy Benefits out of the deal by the end of 'twenty three. The company, the brand and the offering, the management will continue independently, But they will get benefits in sourcing and then in distribution and marketing working with the Harvia team. I'm very happy to have Mika Eero, Rantanen, and the top management of Kirami on board. And maybe just to recap on the magnitude of the Kirami net sales. As of last day of the April this year, the last 12 months sales were slightly exceeding €22,000,000 42 percent of the sales came from the export markets. Domestic market is still the majority close to 60%. But we've been seeing an increasing trend on the exports. And I think together with the Harvia team, That's an area where we can help and support Kirami team to be even more successful going forward. I think this is all from my part At this stage, and I will pass the word for Ari for the Ari Vier figures, and then Ari will take a deeper dive on that one. And thereafter, we'll have time for entertaining questions and So Ari, please. Yes. Thank you. So as you saw, we had a great growth of 80 3% during the Q2. And during that time, we also Invested quite much in the production facilities. We also increased our net working capital. When our volumes increased over 80%, the net working capital increased only 30%. So the overall effectiveness improved there quite nicely even if we invested more money there in net working capital. And the same actually happened with adjusted operating profit. It was almost 2.5 times as high as a year ago, the growth was 146% there. So that was really a great, great quarter. The operating cash Flow, free cash flow. It was under the last year's level because of the quite high investments. We had over €4,000,000 during Q4 investments and overall in 1st 6 months, 5.5%. So this affects also the operating free cash flow slightly. Here you can see the net debt and CapEx and finance cost Development, our net debt increased about 12 1,000,000 compared to end of quarter 1 due to the investments and Kirami acquisition And also increase of the net working capital. End of Q2, we had gas resources of over €20,000,000 and we have been able to I and pay all the acquisitions and investments out of our cash resources during the springtime. So we haven't increased the interest bearing bank debt at all. And that's also visible on the right side of the picture that Our cash based interest outflow hasn't increased at all. Here you can see the investment amounts what we had In Q1, 1.5 percent and in Q2, 4.1 percent. And the biggest Really the biggest part of the investments in Q2 were in U. S. And we will have we have started already, as Tapio told, the construction works and the hall is almost ready in Finland, There will come also some machinery still during the 2021. So we estimate that for this year end of this year, our CapEx, the investments will be in the group Around €10,000,000 Earlier, this estimate was €5,000,000 to €8,000,000 But now we have increased and Fine tuned our planning since these investments are really good. We need New capacity and effectiveness, productivity improvements and those investments, they have Rather slow sorry, rather short payment times also paying back the investments. The structure of Harvia shareholders has Changed a bit compared to last year, end of June. We had end of June 2020, About 48%, the nominee registered, that's foreign outside Finland, investors, shareholders. And now it's about €44,000,000 And what has actually increased quite much is the share of households. They are mainly Finnish households from 17% of the shares to almost 24%. And that's also visible then on the right side of the picture that end of June, we had almost 24,000 shareholders holding Harvia shares. So very welcome all to the Harvia Club, and thank you for joining. And the Value of the shares end of June, they were clearly higher than Beginning of the year, €950,000,000 Now they are slightly more again. So the Harvia long term financial targets, we haven't changed them. We have experienced advanced demand. We have experienced short term growth or mid term growth of the market. But in the long term, we still stick on these financial targets that average Annual revenue growth is over 5%. And adjusted operating profit margin is also exceeding 20%. And the leverage level is somewhere between 1.5 to 2.5. Now the leverage was 0.9. And Harvia is also a good dividend payer. We our target is to pay 60% of the Group net results as dividends. And as you see, we had actually The highest dividends ever paid during Q2 to our shareholders, The Harvia 70 years anniversary dividend, €0.12.20 the normal Dividend. And there is also a dividend payout planned for the coming fall, maximum €0.19 So that's our presentation in this stage. Any questions? I think we will take first the questions from telephone line. We have also very nice Interesting questions in the text chat, but first, telephone line, please. Thank you. Telephone line, we've been planning to maybe cut the telephone line as the chat system seems to work rather well. So this is just maybe pre announcement that maybe next time we will not have the telephone line. We have an audio question from the line of Maria Rickstrom from Danske Bank. Please go ahead. Hello. Can you hear me? Yes. We can hear you. Hi, Maria. Okay, perfect. And I got to say in the beginning Maybe I'm just like the telephone girl, but I actually like to ask the questions rather by phone than on the chat. But Maybe you need to have a consensus on this one. So my first question is, I think this is a Probably the kind of like a first time, if I remember, that you hinted about the order book strength in the report. That like can you a little bit like elaborate that I mean the how you because I mean I think previously you have said that I mean we don't really have That long visibility in your sales going forward. So now you talked about The order book, so can you give us a little bit of color, I mean, what you said in your Tapio, in your statement in the CEO comments for the Europe, please? Yes. I don't have the detailed information, but the ones who've been on board since the IPO, During that time, Harveer roughly had a 2 to 3 week horizon on the order stock. Gradually, it's been going up to a number of weeks, up to months. And today, in certain categories, Our order book is strong and exceeding my fingers in one hand on the months. So that's something we have not seen in the past. And that's why we've been increasing capacity in certain areas. And we'll continue doing that. And then maybe continuing on this one, as I think you said in the presentation that you think The current market expectations for the second half, I mean, seems realistic to you and probably don't have The estimate is now in front of me, but I have a feeling that I mean the market is currently expecting the growth to come down on the second half. I mean where is The growth figures that we looked in the first half. So is this, I mean, what you are currently seeing here as well that the growth is unlikely to continue as Yes, it has been the first half of the year. Tough question because I didn't pay attention on the Growth factor as such, I was more looking at the total numbers and maybe just taking average of all of the 3 ones I know. But I think all in all, my own personal feeling is that the same trend, what we've been seeing now seems to be continuing. But the fundamental of the Q1 and Q4 being the strongest one will not go away. I think it will automatically, Even though our geographical split is wider than in the past, the same phenomenon will stay in the business. Hari, maybe you You've been longer in the business. Yes, this has been traditionally a window business in quarter 4 and quarter 1 have been The strongest, but now during this pandemic time, the pattern has changed a little during the summertime. Customers also receive goods quite well. And we have got also the company Kirami, which has the strongest sales during the summertime. So this Barron will stay. That's my prediction, but it will not be as strong as in the past. I think in terms of the actual outcome, I'm not too much worried about the demand. I'm more worried about Certain componentry, if that's going to be available. And so far, we've been sailing pretty well on a stormy ocean, And I expect to do the same going forward. But I think that's more my worries than the current demand atmosphere. Yes. And that strong demand also encourages us to invest in the capacity. So we see There are certain need also in future. Okay. And then Finally, if I may touch on the I mean, the Russian market. I mean, you said that your new distribution structure has Sean, it's Benefit. So if you could a little bit elaborate on maybe the new distribution set up in Russia and what you are currently seeing in the Russian market in terms of the In terms of the demand? In the past, we used to have and that's concerning Harvia. We used to have 3, I would say equally powerful distributors, 2 in the Moscow region, but covering the whole of Russia, One originally from the Sanpi region, but also covering the whole of Russia. We limited the number of distributors into 2 And had a bit of a more consensus how to operate, how to deal with the physical distribution and especially how to deal with the Web stores in Russian marketplace. In the electric heaters, Haravi has been doing a very good job, including New models, increased value of the purchase control units and the entry level steam. In the sales of sauna, we still have work to do, and one of the themes for going forward is the sauna market. And then EOS is in the premium projects for the professionals as well as for the wealthy individuals, and they've been doing Good job. Despite of the pandemic where the EOS team is also installing some of the machinery During the worst time of the pandemic, that has been a struggle, people not accepting people to go to their homes and not even into the hotels or spas. So that Took a bit of a hit in the early part, but now it seems to be balancing out on the Russian marketplace. I hope this covers your question, Maria. Okay, perfect. I'll jump back on the queue. I might have one more to follow-up, but Let's take for other people first. Thank you. Any other questions on the telephone line, please? There are no other audio questions at this moment. Okay. I'll read here the questions, very good questions we have got through the chat. First one, the first cornerstone of the strategy is to increase the average Purchase price. How much average purchase has increased during the time the company has been listed? How much the organic growth comes from the growth of the average purchase during H1 2021, for example? That's something we don't openly disclose. But by the product group, we are internally monitoring it. And take an example from the heaters, it's been doing a very good job on the heated marketplace. Same applies for the ready made saunas. Steam, yes, we've been doing it, maybe not equally successful. And then on the other parts of the thing, doing a good job in that But we don't disclose the exact quantity or magnitude of this. How is Harvija advancing in the steam and infrared market? And what is your competitive position there? Do you have own capabilities to capture market share in these areas? Maybe entertaining first with this team. On the residential team, I think we have all the means To make it happen, we have the physical product, we have the offering, we have the distribution network, and that's what we are driving forward. On the professionals team, it's more of a it's not the actual delivery business, it's more of the reputation business. And to earn the reputation takes A number of years and our number of years is still in the infancy, so we need to take steps going forward. But at the same token, we're also monitoring if there will be something where Harvaya could speed up the development. And together with the EOS steam offering, I think we are Closer to our target also on the professional area, but we still need to get number of installations and prove that our Systems and solutions do work and deliver the wished end result on the steam area. What was the other part? Was it infrared as well? Yes. Infrared, we continue doing the componentry for the infrared sauna market, but we are mainly focused currently on the Premium and super premium and where we are missing is the entry level infrared cabin market where we do partner with some of our suppliers. And we operate on the Central European marketplace, especially close to Austria, Germany. Then on the Russian marketplace, we also do Commercial business with that one. And lately, in the U. S, we have a very limited offering testing the waters in the U. S. But having said that, infrared is an area where we could take bigger steps. We just need to find the right formula how to make it happen, and that's what we are developing as we speak. Okay. How strong is the order book at the moment compared to the beginning of the year? I can partially cover that with the Maria Wickstrom answer, but having said that, in the beginning of the Harvehill As a listed company, we had 2 to 3 weeks visibility. Then we started having months currently we or month, then months and currently we have A couple of months and in some categories, a quite a number of months in that respect. Okay. During the pandemic, you've been talking a lot about advanced demand, so called advanced demand in the Southern market. But lately, you have been also Talking a lot about long term positive growing or positively growing global sauna trend. Could you open a little bit the relative power between the two forces during the past quarters and their future outlook, Which is which has been the stronger driver for Harvje during the past year? And which one will be stronger during the coming 2 to 3 years? Not an easy question, but take a step back. And I think initially, we've been anticipating that the Southern market will be growing slightly above 5% per annum. Due to the prevailing pandemic, we have revised our estimate But the market growth most likely going to be double the traditional speed. And currently, what we see is maybe even higher than that. But it's very difficult to say what is driven by the pandemic, what is driven by customer and consumer behavior. But everyone sees what is happening on the marketplace. And our I think everyone's Behavior is changing, and the new behavior is enhancing our type of business where health and well-being is more in the focus. You don't travel as much as you used to travel. People are upgrading their homes. They are upgrading their 2nd homes, if they have 1 or they are considering upgrading or considering acquiring a second home. And then instead of traveling Broad, domestic travel, experienced travel is gaining speed. So I think in that respect, we are in a very favorable trend. Then the awareness of the sauna and the health benefits, that's taking a big step forward. And if someone is following Instagram, for example, yesterday and today, Good day. Yesterday morning, it was opened by Josh Bruulin. He's an actor, U. S.-based actor from Los Angeles. He shared his sauna experience. He has 3 plus 3,000,000 followers. By the morning, when I woke up, he already had 48,000 likes on the posting. He is not advertising us. We don't pay him $0.01 or $0.01 But on his Instagram video, he is, in a way giving a sneak peek into his heater, and that was a Harvia heater. So we are very happy for that. And the sound was made by one of our partners. So this type of thing is going forward. And at the same token, the ones who maybe were following the Olympic Games from Tokyo, Japan. Also monitoring what is happening in the Japanese marketplace where Sauna used to be Maybe a experience of the how would I say, more experienced people, what I could say, elderly people, Not anymore. It's more of everyone's hobby and everyone is testing that in the Japanese and Asian market as well. So in that respect, The growth is coming from multiple fronts, and it's very difficult to basically put them in the box. This is from this and this is from that. So Unfortunately, cannot deliver any better answer than this. But whatever the reason for the growth is, Our anticipation is not only for 1 year, it's a start of a longer journey. Then the question is how Steep of a curve, when will it have and will it go in the way of so how does it go? But I think we are on a favorable trend despite The COVID being in the environment or not. Yes. The estimate of growth of the global sauna market was at and If we have gained share or not, as we heard, it's really difficult to estimate what is the growth right now. There is a certain growth, and we have gained share With all of the brands, Harvia, Sentiatek, EOS, almost every 100, we've been gaining share in all of the markets. Okay. What is the situation with your international expansion? U. S. And Central Europe have been growing fast this year, But what about other new or smaller markets where Harvey has not been so established, Asia, Australia, so forth? We recently increased manpower, meaning just 2, but we have 2 local people, 1 in Trieli Oceania. He's also in charge of the Japanese market and one based in Hong Kong. Unfortunately, both individuals cannot travel, so we've been entertaining the expansion through video conferences, teams, And you name it. Still making good baby steps forward. And I think going forward, we're going to see multiple new initiations. And currently, even the China market, domestic China market is doing good on the heaters. Japan opening up, Korea getting speed, Vietnam, Hong Kong, Thailand, Malaysia, I think they are currently opening, we are in the game. So I think we are going to be enjoying. But they're not going to be major. Always when we open a new market, it starts with, say, an order of 20,000 to 50,000 goes Then to 100,000, 150,000, 200,000 and only on an established market, one can expect They have higher number than the preliminary order. And in that respect, I think the established markets are Japan and Korea, that's where one may expect a faster opening than the others. The others will open very small baby steps. It has been also asked when will we buy the rest of the 20% of EOS Group. We haven't disclosed it except that it will happen within the next 7 years. We have been very, very pleased and satisfied with the development of EOS and the Managing Director of EOS is also the minority shareholder there. So they are performing well. What are your plans of increasing Kirami sales in future? When we acquired the company, we We foresee the opportunity to speed up the growth in Sweden, Norway and Denmark, partially also in the Central Europe. But lately we have been testing the waters in the North America And it seems that there are a couple of still water hot tub makers. They are made out of Brett Cedar, I think our model is a hybrid and can deliver longevity, good quality and better User experience, so I think we may have a good chance, but not in the plans when to start and how to start, but in the plans. And at the same time, for the ones who maybe monitor Kirame social media, if you check the Instagram and see where they've been shipping. There are shipping company in the Asian marketplace, in a couple of the markets, and then Japan So I think we may see new inroads into this business. And then especially when we are able to deliver The hybrid heater together with the wood burning and electric, maybe even one day the electric only or liquid gas or whatever we Opton on top of that and then also the cold water dip Tabs. I think then we will see a clearly better platform in the international marketplace. Harvey has been growing a lot bigger during the recent few years. What competitive advantages Have you been gaining because of your bigger scale? I think one of the original Harvey advantages We've been trying to hone and improve. That's the one we have fully integrated. Most of the Merchandise we sell is also designed, developed and manufactured by Harvia. And only very few of the componentry we are outsourcing. And even the ones which are critical, if they are outsourced, Usually, we also have the capability of making the very same or at least similar So that we can control the pricing. And then on top of that, I think the ability to act and Stretch, the capability and capacity has been one of the backbones of HireVue in the past that will also stay on that level Going forward, and then regarding the innovation pipeline, even though we don't have an army of innovative R and D People, we have very capable team who has cross functional benefits and know how and knowledge. And when they work together, We can bring value adding innovation to the marketplace in the sauna spa market quite fast and effective. Murame has been the heart of the production for decades. Could you describe the current profitability of Murame and possibilities to even increase it From the current high level, could you describe the profitability of the other units? We don't disclose So the profitability of a production unit, but I think all of our equipment and heater manufacturing units are With very healthy profitability and the ones who will be longer in the business, remember that to make the same Profitability in the sauna industry is more difficult, but lately, even the sauna business has been getting closer to the profitability of the heater business in that respect. Moran was once more asked if there is any more landscape for expanding the factory There is still. Yes, we have we are in very close cooperation with the Murame community. And if and when needed, I think we have Capabilities of expanding further in the Muram. Okay. One international question. Can you please expand the company's plans for Expansion in Northern America, is Harvia planning to retain almost 7 saunas as an independent sauna brand in the medium or long term? Or will there be more promotion of Harvia as a more dominant international brand? Harvia is Known globally and also the North America as a heater and equipment one stop shop for the sauna and spa industry. We are not known with the Harvia brand in the sauna industry. And our intention and our Plan is not to step on the toes of our partners who are sauna builders and operate in the sauna market in the North America. That's something we're going Be honoring. So in that respect, we're going to put our effort in the almost 7 saunas and we'll stay away of the business of our current customers. And that's not only relevant for the North America, that's relevant for Central Europe and Asia included. So globally, that's our plan going forward. We don't have any other questions in the chat. Is there anything still on the audio line? Maria Gave a hint that maybe she's coming back. So Maria, are you still online? We have, yes, a follow-up question from Maria. Yes. Thank you. Merely that I'm still here, I think you've partly answered the question. Mine would have been on the North America, which is clearly one of the key Growth areas for you guys. And maybe a little bit like, I mean, do you see Like any kind of like changes in the business now when the economies have been opening up. So 2 weeks I mean, 2 days ago, I think there was a Danish packaging company who said that they see a sharp decline in the demand for eggs, I mean, post the opening of the Off the economies, so is there anything, I mean, you could say that has changed now when people start moving more? Or do you see that it is Same as you've seen in the past. And maybe in the North America, which I think, I mean, is probably recovering the strongest. I think at least what we've been seeing in our own hemisphere, both on our own Web Store as well as our partners, not the major change. What has been, I would say, Indicative is that the hot weather has changed some of the patterns when you see what Costco, for example, is promoting and selling and And that's been visible. But I cannot at least in my knowledge, I have not received an indication that it would have an impact on our type of business. More of the hot weather than the economy, I would say. Okay, perfect. That's a lot of ask for. Probably nothing. Thank you, Maria. Unless anyone else has any questions, we'd like to thank you for the attention. Thank you for the participation. I wish you a good day. Take care. All the best. Bye. Bye now.