Translation: Original published in Finnish on 8/7/2026 at 8:00 am EEST.

Harvia reported stronger-than-expected Q2 figures, driven by strong growth in North America. We believe the company's growth and value creation prospects remain strong. The expected return is supported by our estimated annual earnings growth of around 15%. We reiterate our Accumulate recommendation and raise our target price to EUR 47 (was EUR 44) due to higher estimates. 

Q2 was a strong quarter considering the production stoppage

Harvia’s revenue grew by 12% (fully organically) to almost 53 MEUR, while our estimate was only 50 MEUR. The company stated that due to the production stoppage in Muurame, approximately 4 MEUR of revenue was deferred, mainly to Q3. Considering this, revenue would have been ~57 MEUR, representing growth of about 20%. The growth came entirely from North America, which grew by an impressive 40%. Other segments were slightly down from the comparison period (a decrease of 0-5%), which was affected by the production stoppage in Muurame (especially in Europe) and delays/cancellations in Middle East deliveries due to the war in Iran (in the APAC & MEA region).

Harvia's adjusted EBIT amounted to 8.6 MEUR, slightly exceeding the weak comparison period (8.2 MEUR). However, the result exceeded our expectations (7.3 MEUR). This was due to stronger-than-expected revenue growth and, in our assessment, lower costs related to the production stoppage. The changes in Muurame are now behind us, and production has returned to normal. The CEO commented that without the impact of the production stoppage, the adjusted EBIT would have been around 20%, in line with the company's targets. Overall, we believe the result was good given the circumstances.

Headwinds from the Middle East, otherwise strong outlook

Harvia does not typically provide guidance, but generally speaking, its demand outlook still appears strong. Q3 will be supported by deliveries postponed from Q2, which Harvia expects to be largely realized in Q3. On the other hand, the company's comments on ongoing project postponements/cancellations in the Middle East are slightly hindering revenue development (~2 MEUR at the full-year level). However, the comparison figures for the APAC & MEA region are weaker in H2 than in Q2, which is why we believe that, despite the headwinds, this region will also grow in H2.

In coming years, we expect progress to be in line with targets

Harvia's targets include annual sales growth of 10% (incl. acquisitions) and an EBIT margin of over 20%. We believe it will reach these targets in the coming years through organic growth alone. As in recent years, growth in our estimates is driven by non-European regions, with growth in the US, in particular, supported by the company's increased expansion in steam and infrared products. We believe this will allow Harvia to gain further market share in the US. We also believe that the growth of the APAC&MEA region will increasingly support the Group's overall growth as the region's share of revenue increases (11% in 2025). We expect Harvia's profitability to remain at the target level of 20-22%. However, we estimate that continuous growth investments will be reflected in the margin, which, despite strong growth, will not scale up significantly in our forecasts.

Earnings growth as the main driver of expected return

We believe Harvia's current year multiples (EV/EBIT 20x, P/E 25x) appear high in absolute terms, but acceptable given the company's quality and growth profile. We consider the company's return on capital and cash flow generation capabilities excellent, and multiples will moderate in the coming years. We believe that Harvia’s capital allocation will continue to be value-creating, and thus channeling cash either to acquisitions or larger dividends would support the investor's expected return. We also see Harvia as a viable acquisition target. The expected return of the share is driven primarily by annual earnings growth of around 15%, with the role of dividends and multiple revisions being less significant.