CONSOLIDATED FINANCIAL
STATEMENTS AND REPORT BY
THE BOARD OF DIRECTORS 2023
CONTENTS
Report by the Board of Directors for 2023 67
Non-financial Information 73
Disclosure according to the EU
Taxonomy Regulation 75
Share capital and shares 81
Calculation of key figures and reconciliation of
alternative performance measures 83
Consolidated financial statements IFRS 85
Consolidated statement of
comprehensive income 85
Consolidated statement of financial position 86
Consolidated statement of changes in equity 87
Consolidated statement of cash flows 88
Notes to Financial Statements 89
Section 1: Basis Of Preparation 89
Section 2: Group Performance 93
Section 3: Capital Employed 101
Section 4: Net Working Capital 113
Section 5: Net Debt And Contingencies 116
Section 6: Other Notes 128
Parent company financial statements FAS 139
Parent company Profit & Loss Statement 139
Parent company Balance Sheet 140
Parent company Cash flow statement 141
Notes to the financial statements of the
parent company 142
Proposal by the Board of Directors for
distribution of profit 149
Signatures for the financial statements
and the Board of Directors’ report 150
Auditor’s Report
(Translation of the Finnish Original) 151
Auditor’s ESEF assurance report 156
This is an unofficial language version of ESEF 2023.
The official version is available in Finnish at
www.harviagroup.com/fi.
66 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Report by the Board of Directors for 2023
GENERAL INFORMATION OF
HARVIA
Harvia is the industry leader of sauna and spa
products. Harvia has a comprehensive product
offering that strives to meet the needs of the global
sauna and spa market, for industry professionals
and consumers alike. Harvia largest client group
are retailers and wholesalers sell Harvia products to
builders and end customers. Harvia product offering
is divided to five categories, to sauna heaters,
saunas and Scandinavian hot tubs, control units,
steam generators, spare parts, services and other
sauna products.
Harvia’s headquarters is in Muurame, Finland. The
group production facilities are located in Finland,
Germany, China, United States, Romania, Estonia
and Italy, and additionally the group has a sales
and customer service company, along with a
logistics center in Austria. Harvia’s products are
distributed globally through a network of dealers.
PROFIT PERFORMANCE, KEY
FIGURES AND STATEMENT OF
FINANCIAL POSITION
Harvia key figures for the period 1 January
– 31 December 2023 are presented below
(EUR thousand, unless otherwise indicated).
2023 2022 2021
Key statement of comprehensive income indicators
Revenue 150,547 172,408 179,123
EBITDA 39,298 41,173 52,488
EBITDA margin, per cent 26.1% 23.9% 29.3%
Adjusted EBITDA 39,924 42,947 53,116
Adjusted EBITDA margin, per cent 26.5% 24.9% 29.7%
Operating profit 33,044 34,678 46,644
Operating profit margin, per cent 21.9% 20.1% 26.0%
Adjusted operating profit 33,670 36,452 47,272
Adjusted operating profit margin, per cent 22.4% 21.1% 26.4%
Basic EPS (EUR) 1.25 1.45 1.80
Diluted EPS (EUR) 1.24 1.44 1.79
Key cash flow indicators
Cash flow from operating activities 39,139 24,335 21,816
Operating free cash flow 44,601 33,989 20,447
Cash conversion, per cent 111.7% 79.1% 38.5%
Investments in tangible and intangible assets -3,124 -3,587 -11,762
Financial position key figures
Net debt 37,569 54,529 43,817
Net debt / adjusted EBITDA (Leverage), per cent 0.9 1.3 0.8
Net working capital 36,132 45,319 41,931
Capital employed excluding goodwill, average 76,129 66,836 41,984
Capital employed excluding goodwill at the end of period 79,435 79,435 54,236
Adjusted return on capital employed (ROCE), per cent 44.2% 54.5% 112.6%
Equity ratio, per cent 51.0% 47.3% 42.4%
Return on equity (ROE), per cent 22.5% 30.8% 45.5%
67 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
The Group’s revenue decreased in January–
December by 12.7% to EUR 150.5 million (172.4).
At comparable exchange rates, revenue decreased
by 11.7% to EUR 152.2 million. Organic revenue
growth was -9.4%. Revenue increased in North
America but decreased compared to the previous
year in all other market areas. The revenue
decrease in other countries was driven by the exit
from Russia in 2022.
Revenue decreased in all product groups in
January–December, excluding accessories and
heater stones, where sales increased, driven by
heater stone sales. The decline in the sales of
spare parts and services was driven by the general
market development as well as by the exit from
Russia in 2022.
Operating profit in 2023 was EUR 33.0 million
(34.7). The operating profit included EUR 0.6
million (1.8) of items affecting comparability, mainly
related to acquisitions and restructuring. Changes
in exchange rates weakend the operating profit by
approximately EUR 0.8 million, which was caused
mainly by the weakening of the U.S. dollar.
The adjusted operating profit of EUR 33.7 million
decreased from the previous year (36.5) and
the operating profit margin was 22.4% (21.1).
Net financial items for the review period were
amounted to EUR -3,5 million (2.1). Harvia has
an interest rate swap with a nominal value of
36.5 million that matures on 15 December 2026.
Hedging produces clear savings on interest
payments of Harvia in terms of cash flows.
Fair value of the interest rate swap fluctuates
according to interest rate market expectations,
and the change in value is recorded in net financial
items as changes in fair value.
The result before taxes for January−December
was EUR 29.5 million (36.8). The Group’s taxes
amounted to EUR -6.3 million (-8.7).
The result for the financial period attributable
to the owners of the parent company was
EUR 23.3 million (27.1) and the undiluted earnings
per share were EUR 1.25 (1.45).
The Group’s investments in 2023 were
EUR 3.1 million (3.6). During 2023, Harvia made
only minor investments to maintain and improve
its factories. Harvia continued to improve its
energy efficiency in several factories and increased
automation in its factories in the United States
and Germany. In addition, Harvia optimized its
production processes with layout changes at the
Muurame factory and continued to upgrade air
conditioning and lighting to improve working
conditions at the factories in Muurame and the
United States. A production line for wood burning
heater frames was completed in Muurame.
PERSONNEL
The number of personnel employed by the Group
at the end of December was 605 (633) and
averaged 612 (768) in January–December. Of the
personnel at the end of December, 238 (240)
was working in Finland, 116 (136) in Germany, 76
(66) in the United States, 67 (89) in Romania, 57
(58) in China and Hong Kong, 31 (32) in Austria,
12 (0) in Italy, 6 (9) in Estonia, 2 (2) in Sweden
and 0 (1) in Russia.
The decrease in the number of personnel at the
end of December compared to the previous year
was mainly due to personnel reductions after
change negotiations in Finland and restructuring
in other countries as well. In addition, the exit from
Russia in 2022 and acquisition of Italian Phoenix
El-mec Srl impacted the personnel figures.
RESEARCH AND PRODUCT
DEVELOPMENT
In 2023, Harvia’s product development supported
the company’s geographical expansion by the
development and certification of products for
the North American and Japanese markets.
Harvia developed new products such as the new
control unit Harvia Xenio universal for developing
markets. The new control unit is suitable for all
markets regardless of the type of electrical system
used in the country. In 2023, Harvia focused on
its strategic priorities: increasing the average
purchase value by launching new products
especially in the sauna category, expanding
geographically by developing, getting approvals
and launching new products to markets especially
outside Europe, and improving productivity by
focusing on quality, increasing automation and
improving the efficiency of production processes.
During 1 January – 31 December 2023 there were
on average 21 employees working in research
and development. The Group’s research and
development expenditure amounted to EUR 2.3
million (EUR 2.8 million in 2022), of which EUR 1.7
million (EUR 2.2 million in 2022) were recognized
as expenses.
68 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
ASSESSMENT OF THE MOST
SIGNIFICANT RISKS AND
UNCERTAINTIES
General economic, social and political conditions
impact Harvia’s operating environment. Economic
uncertainty in Finland, Europe, North America
or more widely across the globe can affect the
company’s business in many ways and make
accurate predictions and planning of future
business more difficult than usual. Harvia is familiar
with operating successfully in an environment
shaped by changing market conditions, but the full
impact of all changes in different markets is difficult
to foresee, as the situation is in constant change.
Changes in consumer confidence and the resulting
demand implications directly impact Harvia’s
business. Especially in the direct-to-consumer
market, deteriorating consumer confidence
can result in individual consumers postponing
investments in new saunas and components, and to
a lesser extent, in postponing replacement demand.
In addition, the availability of energy and energy
prices may impact consumer confidence and the
frequency of sauna usage.
The Russian invasion of Ukraine has impacted
Harvia, even if many of the impacts have been
indirect. These indirect impacts have been visible
in the higher raw material prices, increased
inflation, reduced consumer confidence and
increased energy prices. Related energy saving
measures were notable especially in Europe
between fall 2022 and spring 2023. Harvia
suspended its operations in Russia at the beginning
of March 2022 due to the war in Ukraine and
completed its exit from Russia by selling its 80%
share in EOS Russia in November 2022. The
transaction was closed in March 2023 after
receiving relevant approvals from Russian
authorities. Developments related to the war and
its impacts as well as other geopolitical events can
further affect Harvia either directly or indirectly.
The increase in cyber threats worldwide alongside
the growing dependency on digital infrastructure
cause risks to Harvia’s business and its critical
data. While the Group continuously takes actions
to prepare for these risks and protect its digital
infrastructure, operations and people against
them, cyber threats in many forms can potentially
affect Harvia. This could occur either directly by
disrupting or endangering Harvia’s daily operations
or compromising data or indirectly through
attacking Harvia’s suppliers or customers, and thus
can potentially result in financial, operational or
reputational damage to the company.
The self-sufficiency of the Group’s manufacturing
process, the backup supplier system for materials
and the widely dispersed customer base balance
potential strategic risks. Production is based on
the company’s own design and patents, and these
are used to manage potential operational risks.
Damage risks are covered with insurances where
possible, and their coverage is assessed annually
together with the insurance company.
The Group’s loans consist of long-term liabilities.
The loans include covenants, which in unfavorable
business conditions may require new financing
negotiations with the bank. The company
protects itself from interest risks arising from
bank loans with interest rate swaps amounting to
EUR 36.5 million.
Harvia has business operations in several countries.
Harvia is exposed to transaction and translation
risks mainly relating to the U.S. dollar. Exchange
rate risks have thus far not been significant for the
Group, and Harvia has not protected itself from
these risks with currency derivatives.
The principles of Harvia’s financing risk
management will be described in the Consolidated
Financial Statements 2023 and the general
principles of risk management on the company’s
website at www.harviagroup.com.
GROUP STRUCTURE
Harvia Plc is a holding company and the parent
company of Harvia Group. Harvia Plc owns through
Harvia Group Oy, another holding company,
the daughter company Harvia Finland Oy that
produces heaters and sauna and spa products,
Velha Oy that produces saunas and Sentiotec
GmbH subgroup that is specialized in control units,
sauna rooms and sauna heaters. Harvia Finland
Oy owns Harvia (HK) Sauna Co. Ltd subgroup
and daughter companies Harvia Estonia ОÜ, LLC
Harvia RUS, Saunamax Oy, Phoenix El-Mec Srl and
a joint venture Harvia Japan Limited. Harvia Group
Oy established Harvia US Holdings Inc. subgroup
to United States in 2018. In May 2021, Harvia
acquired hot tub manufacturer Kirami Oy. After the
acquisition Harvia owns also 50% of an Estonian
production company Metagrupp OÜ and 60% of a
sales company Kirami Sweden AB. In August 2021,
Harvia signed and closed an agreement to
acquire Sauna-Eurox Oy, and its sister company
Parhaat Löylyt Oy.
69 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
In April 2020, Harvia acquired the majority of
the EOS Group and established Harvia Holding
GmbH to hold the subgroup in Germany.
On 27 July 2022, Harvia Plc acquired a 21.4%
minority shareholding of EOS Group’s German
operations from Mr. Rainer Kunz, Managing
Director of EOS Group. After the transaction, EOS
Group’s German operations are fully owned by
Harvia. On 7 November 2022, Harvia Plc signed
an agreement to sell its 80.0% shareholding of
EOS Russia to Mr. Vasilij Sosenkov. After the
transaction Harvia does not own any shareholding
in EOS Russia. Closing of the transaction was
completed in March 2023 after approval from the
Russian officials on 10 March 2023. In 2023 Harvia
establisded a joint venture Harvia Japan
Limited and acquired electromechanical timer
manufacturer Phoenix El-Mec.
ANNUAL GENERAL MEETING
The Annual General Meeting of Harvia, held
on 20 April 2023, approved the financial
statements and discharged the members of the
Board of Directors and the company’s CEO from
liability for the financial year 2022. The Annual
General Meeting approved in an advisory decision
the remuneration report for the governing bodies.
The Annual General Meeting approved the Board
of Directors’ proposal that EUR 0.64 per share be
paid as dividend and that the remainder of the
distributable funds be transferred to shareholders’
equity. The dividend is paid in two installments. The
first installment, EUR 0.32 per share, was paid on
2 May 2023. The second installment, EUR 0.32 per
share, was paid on 30 October 2023. The record
date of the dividend date was 23 October 2023.
The Annual General Meeting resolved that the
Board of Directors consists of six members.
Olli Liitola, Anders Holmén, Hille Korhonen and
Heiner Olbrich were re-elected to the Board of
Directors and Markus Lengauer and Catharina
von Stackelberg-Hammarén were elected as new
members of the Board of Directors. Authorized
Public Accounting firm PricewaterhouseCoopers
Oy was elected as the Auditor of the company and
Markku Katajisto, Authorized Public Accountant,
acts as the responsible auditor.
The Board of Directors was authorized to resolve
on the repurchase of a maximum of 934,711 shares
in the company in one or several tranches. The
maximum number of shares to be repurchased
represents approximately 5% of all the shares in
the company on the date of the Annual General
Meeting. The authorization may be used for the
purposes of the company’s share-based incentive
systems and other matters decided by the Board
of Directors. The authorization is valid until the
closing of the next Annual General Meeting, but no
longer than until 30 June 2024.
SHARE-BASED INCENTIVE PLAN
Harvia has a share based long-term incentive plan
for the CEO, for Management Team members
and some other key employees. The plan form a
part of Harvia Plc’s remuneration program for its
executives, and the aim of the plan is to support
the implementation of the company’s strategy, to
align the interests of the executives with interests
of the shareholders to increase the value of the
company, to improve the performance of the
company, and to retain the executives.
The long-term incentive plan consists of three
performance periods of four calendar years
each 2021–2023, 2022–2024 and 2023–2025.
The Board of Directors decides separately for
each performance period the plan participants,
performance criteria, and related targets, as well
as the minimum, target, and maximum reward
potentially payable based on target attainment.
The Board of Directors of Harvia Plc decided
on 26 June 2023 to continue the Long-term
Performance Share Plan for the management team
and other key employees for the performance
period 2023–2025. In the performance
period 2023–2025, the plan has 16 participants
at most and the targets for the performance
period relate to the company’s total shareholder
return, revenue growth, CO2 emissions and
EBIT margin. The maximum number of Harvia
Plc shares to be paid based on the performance
period 2023–2025 is 61,600. This number of shares
represents the gross earning, from which the
withholding of tax and possible other applicable
contributions are deducted and the remaining net
amount is paid in shares. However, the company
has the right to pay the reward fully in cash under
certain circumstances. Potential rewards from the
performance period 2023–2025 will be paid out
during spring 2026.
BOARD OF DIRECTORS PROPOSAL
FOR DISTRIBUTION OF PROFIT
Harvia Plc’s total unrestricted equity amounts to
EUR 75,439,602 in total, of which profit for the
period accounts for EUR 15,481,367. In order to
determine the amount of dividend, the Board of
70 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Directors has assessed the company’s solvency
and financial standing after the end of the period.
Harvia’s Board of Directors proposes to the
Annual General Meeting that the company
distributes a dividend of EUR 0.68 (0,64) per
share, EUR 12,712,080.48 in total, for the financial
period ended 31 December 2023. The Board
of Directors proposes the dividend to be paid
in two instalments, EUR 0.34 in May 2024 and
EUR 0.34 in October 2024.
BOARD OF DIRECTORS AND THE
COMPANY’S AUDITORS
Harvia Plc’s members of the Board of Directors
were Olli Liitola, Sanna Suvanto-Harsaae
(until 20 April 2023), Hille Korhonen, Anders
Holmén and Heiner Olbrich and Markus Lengauer
and Catharina von Stackelberg-Hammarén
(both as of 20 April 2023). Olli Liitola acted
as Chairman of the Board. Company CEO was
Tapio Pajuharju (until 31 May 2023) and Matias
Järnefelt (as of 1 June 2023). Company auditor
has been PricewaterhouseCoopers Oy, Markku
Katajisto, Authorised Public Accountant as the
responsible auditor.
Group management team was: CEO Tapio
Pajuharju (unti 31 May 2023) and CEO Matias
Järnefelt (as of 1 June 2023), Chief Financial
Officer Ari Vesterinen, Export Director David
Ahonen, Chief Technology Officer Timo Harvia,
Sales Director, Scandinavia Tomas Hjälmeby, Vice
President, Innovation & Marketing Päivi Juolahti,
Sales Director, Finland Anssi Pelkonen, Vice
President, Operations & Sourcing Mika Suoja, Sales
Director, Central Europe Markus Wörmanseder and
CEO of the EOS Group Rainer Kunz.
On 28 March 2023, the Board of Directors of
Harvia appointed Matias Järnefelt as Harvia’s
new CEO. On 17 November 2022, Harvia had
announced that Tapio Pajuharju, CEO of Harvia Plc,
had resigned from his position. Pajuharju continued
in his role until 31 May 2023, and Järnefelt started
in his position on 1 June 2023.
On 28 September 2023, Harvia Plc announced
that Rainer Kunz, Managing Director of EOS Group
and a member of Harvia’s Management Team,
had decided to leave his position in Harvia Group.
Kunz will continue to work for Harvia until the
end of March 2024.
On 17 October 2023, Harvia announced that it is
changing its organizational structure and making
changes to its Group Management Team. The
new organization consists of four geographical
sales regions: North America, Northern Europe,
Continental Europe, and Asia-Pacific-MEA
(Middle East & Africa). It also encompasses five
Group functions: Marketing & Brand, Products &
Solutions, Innovation & Technology, Operations,
as well as Support functions. Additionally, there
is a Management Team position for the Head of
EOS Brand and Products. The new organizational
structure is effective as of 1 January 2024. It will
also be reflected in Harvia’s financial reporting of
revenue by market area as of Q1 2024.
On 18 September 2023, Harvia Plc announced
the composition of the Shareholders’ Nomination
Board, which is comprised of representatives
appointed by the company’s four largest
shareholders. Juho Lipsanen (Onvest Oy),
Jarno Käyhkö (WestStar Oy), Timo Harvia
(Tiipeti Oy) and Annika Ekman (Keskinäinen
Eläkevakuutusyhtiö Ilmarinen) were appointed
to Harvia Plc’s Shareholders’ Nomination Board.
In addition, Olli Liitola, the Chair of the Board of
Directors of Harvia, serves as an expert in the
Nomination Board without being a member.
PROPOSALS OF OF THE
SHAREHOLDERS’ NOMINATION
BOARD
The Shareholders’ Nomination Board of Harvia
Plc proposes the following to the Annual General
Meeting planned to be held on 26 April 2024:
The Nomination Board proposes that the number
of members of the Board of Directors shall be six.
The Shareholders’ Nomination Board proposes
that Olli Liitola, Anders Holmén, Hille Korhonen,
Heiner Olbrich, Markus Lengauer and Catharina
von Stackelberg-Hammarén be reappointed to
the Board of Directors. All proposed persons
have given their consent to the appointment.
They are independent of the company and of the
major shareholders of the company. Olli Liitola
has announced that he will renounce his position
as Chair of the Board of Directors, but that he
is available for the appointment as a member of
the Board of Directors. The Nomination Board
recommends that the Board of Directors would
elect Heiner Olbrich as its Chair.
71 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
OUTLOOK FOR FUTURE
According to Harvia’s estimate, there are
approximately 18 million saunas in the world.
This large sauna base provides significant
business arising from the replacement of saunas
and sauna heaters. Due to the stable demand that
arises from the need to replace sauna heaters
regularly, the sauna and spa market has been
traditionally resilient to economic downturns.
This has been true especially for the more mature
sauna markets.
Historically, the sauna and spa market has grown
annually by an average of 5%. However, the
market growth was significantly higher during the
COVID-19 induced lockdowns prior to 2022, when
the demand was fueled by increasing awareness
of the health benefits of sauna and the home
improvement boom. The awareness of sauna and
its health benefits has continued to grow also
after the pandemic.
In general, the sauna and spa market tends to
witness some seasonality with slightly stronger
demand in the early and late part of the year and
lower during the summer months. During the
pandemic, this was hardly visible, but in 2023 there
were signs that the seasonality in demand is
returning closer to the historical patterns.
Especially in Europe, the sauna and spa market has
been heavily impacted by the Russian invasion of
Ukraine in February 2022 and the wider economic
development afterwards. At the end of 2022 and
during 2023, high economic uncertainty, elevated
inflation and interest rates, as well as eroded
consumer confidence widely affected the
European sauna and spa market across product
segments. However, the negative impacts have
not been equally strong in all European countries.
During the fourth quarter, the market conditions
started to show signs of stabilization in Central
Europe. In Finland and Scandinavia, where the
demand has traditionally been very resilient in
economic downturns, the market conditions
remained challenging as high interest rates,
challenges in the construction sector and weak
consumer confidence continued to prevail.
Outside Europe, especially in North America and
Asia, the sauna and spa market has continued
to grow also after the pandemic. The strong
growth in North America has been heavily
supported by the growing awareness of sauna
and its health benefits as well as strong consumer
confidence and economic conditions. The demand
in market areas outside Europe continues to
be skewed towards more high-end products,
especially compared to Finland. The increase
in the popularity of sauna, low but increasing
sauna penetration, and resilient high-end demand
continue to support market growth in the
emerging sauna and spa markets.
According to the management’s estimate, Harvia’s
share of the sauna and spa market has increased
during the last few years. In 2023, Harvia’s share
of the sauna and spa market was estimated to
be 5%. The company’s share of the sauna heater
and sauna component market is estimated to be
over 20%. The company’s management estimates
that Harvia has the leading position in the global
sauna and spa market.
SIGNIFICANT EVENTS AFTER THE
REVIEW PERIOD
Harvia Plc has appointed Jennifer Thayer as Head
of Region, North America and President of Harvia
US Inc., and a member of the management team of
Harvia Group. In her role, Thayer will be responsible
for leading the North American commercial
organization and driving the growth and
profitability of Harvia’s business in the region. She
will assume her position on 1 February 2024 and
report to the CEO of Harvia Plc.
72 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Non-financial Information
HARVIA’S BUSINESS MODEL AND
SUSTAINABILITY
Sustainability is built into Harvia’s values, mission,
vision and purpose. Harvia wants to make the
relaxing and health-promoting experience of
sauna bathing available to everyone. The company
also wants to be the most trusted partner in the
industry. Harvia’s values incorporate sustainability,
taking care of the environment, and people.
Harvia’s products are made sustainably and
designed to be safe and long-lasting.
Harvia follows the company’s sustainability
program 2022−2025. Its key elements are a
commitment to promoting a long and good
life, providing safe and sustainable experiences,
minimizing the carbon footprint and ensuring the
well-being and safety of key stakeholders. Within
its sustainability program, Harvia has especially
developed its reporting by setting clear targets
and metrics for many of the principles and ways
of working that the company has applied for a
long time. Harvia strives to reduce the greenhouse
gas emissions of its operations to mitigate
global warming and promote global efforts to
safeguard the environment. The company’s
objective is to reach carbon neutrality in its own
operations by 2030.
Harvia’s strategy has a strong focus on growth,
and the company has achieved its target of being
the largest comprehensive operator in the sauna
and spa market. Industry leadership is built on
innovation, sustainability, skilled personnel, and
digitalization.
Sustainability-related risks are identified and
managed preventatively as part of Harvia Group’s
risk management. Climate-related risks have
been processed as part of a materiality analysis,
and the identified key themes are included in the
sustainability program and the related monitoring.
Harvia started preparing for EU’s upcoming
Corporate Sustainability Reporting Directive. In
2023, the company carried out a double materiality
assessment to identify the most significant
sustainability topics both from financial materiality
and impact materiality perspective. The results of
the materiality assessment will form the foundation
for developing Harvia Group’s sustainability
management and reporting going forward.
CORE POLICIES AND PRINCIPLES
Harvia’s operations are based on the company’s
values and the Harvia Code of Conduct. The Code
of Conduct is part of the orientation program for
new employees and other company trainings. The
company has also introduced an environmental
handbook in its operations in Finland.
For reporting potential misconduct, Harvia has an
anonymous whistleblowing channel in use, and
possible observations are duly investigated by
an external expert partner. In 2023, one report
was made through the whistleblowing channel. It
was handled in accordance with the company’s
processes. The channel covers the entire Group,
and it is also available to all external stakeholders.
Harvia Group requires that all its suppliers act
responsibly and that its contract suppliers commit
to the Harvia Supplier and Partners’ Code of
Conduct. It is divided into ethics, corruption, labor
force, health and safety and environment. The
majority (74%) of existing suppliers of goods and
services at Harvia have agreed to comply with the
Code of Conduct, and compliance is a prerequisite
for new suppliers. The company’s goal is that all
suppliers whose annual purchases by Harvia total
at least 20,000 euros have committed to the Code
of Conduct by 2027.
ENVIRONMENT
From the outset, Harvia’s products are made
sustainably and designed to be safe and long-
lasting. Environmental and safety perspectives
are considered in everything from design to
production, logistics, use and recycling. Sustainable
sourcing and materials form an important part of
Harvia’s sustainability program.
The company conducts continuous development
and research to ensure that its products are
always safe to use and increase the well-being of
the users. All heaters meet the requirements of
the target market legislation. Harvia also studies
the energy consumption of electric heaters and
advises consumers on correct use of the heaters.
Harvia is an active participant in the research of
cleaner burning in Finland and in projects aiming
for industry standardization in Europe.
73 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Harvia’s emissions calculation is performed in
accordance with the standards and guidelines
of the Greenhouse Gas Protocol (GHG). Harvia’s
Group-level Scope 1 CO₂ emissions in 2023 were
997.6 tCO₂ (1,196) and Scope 2 emissions 745 tCO₂
(749). The share of emission-free electricity in
Harvia Group was 75% (73) in 2023.
All the electricity used at Harvia’s Muurame
factory, the EOS, Kirami and Sauna-Eurox factories
and in the Sentiotec unit is from 100% emission-
free sources. Some of the electricity used at the
Muurame factory is produced by the factory’s
solar panels. Energy consumption of the factories
is monitored in real time, which allows immediate
actions to be taken in case of consumption
changes. The partners of Harvia Group aim to
reach emission-free transportation in foreign
freight by 2050. In domestic freight, the goal of
Harvia’s partner is to reduce emissions to net zero
already in 2040.
Harvia’s European sauna factories procure their
wood materials from suppliers that have a valid
Chain of Custody certification.
The stainless steel used in Finland and Germany is
manufactured with over 90% recycled steel. The
recycled steel itself is fully recyclable. In Finland,
steel is transported from nearby, minimizing the
carbon footprint of transportation. Harvia only
uses domestic stone in Finland and also exports
stone from Finland to its other European factories.
The company’s operations in China have their own
channel for procuring stone.
In terms of waste and losses, the company aims to
prevent waste with efficient use of materials and
especially by decreasing plastic waste. The waste
is sorted as carefully as possible and delivered to
appropriate processing or recycling.
SOCIAL ISSUES AND EMPLOYEES
SAUNA AND WELL-BEING
Well-being is still one of the most significant
megatrends. Sauna offers a way to relax and
unwind, but according to research it is also good
for the health. Sauna is good for cardiovascular
health and helps with sleeping difficulties as well
as relaxes muscles and affects the body similar to
exercise. Harvia’s product offering covers all three
sauna types: traditional saunas, steam saunas and
infrared saunas. The company’s products are used
by both consumers and sauna and spa industry
professionals alike.
PERSONNEL
A key factor behind Harvia’s success is the skilled
and motivated personnel, whose well-being the
company looks after. Key sustainability elements
related to personnel include well-being and
job satisfaction, attracting and retaining talent,
respecting the rights of employees, and health and
safety at work.
Harvia monitors the job satisfaction and well-being
of its personnel by conducting Group-wide surveys
at regular intervals. In the Group-wide personnel
survey conducted in 2023, the response rate
was 66%. The results were in line with the previous
survey conducted in 2021.
Harvia is committed to maintain a safe and warm
community consisting of employees, partners,
customers and other stakeholders. The commitment
focuses on collaboration, supporting and helping
each other, competence development and safety,
which facilitate well-being and long relationships.
During the year, the company invested into new
machinery, which increases safety by default.
In 2023, occupational safety reporting was
expanded to cover the whole Group. No serious
occupational accidents were reported in the
company during the year.
The company takes care of the continuous
competence development of its personnel. In 2023,
the company carried out, among others, trainings
for leadership, electrical safety and first aid. In
addition, various industry experts participated in
trainings related to their own areas of expertise.
The company’s operations also necessitate many
trainings required by authorities.
RESPECTING HUMAN RIGHTS AND PREVENTION
OF CORRUPTION AND BRIBERY
Harvia’s Code of Conducts defines the company’s
approach to human rights and political activity, as
well as rejection of corruption, bribery or the use
of child and forced labor. Harvia requires the same
from its subcontractors. The company conducts
thorough due diligence in terms of its customers
and takes into account, for instance, EU guidelines.
In 2023, no cases related to human rights,
corruption or bribery were reported.
74 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Disclosure according to the EU Taxonomy Regulation
The Taxonomy Regulation 2020/852 is a key
component of the European Commission’s action
plan to redirect capital flows towards a more
sustainable economy. It represents an important
step towards achieving carbon neutrality by
2050 in line with EU goals as the Taxonomy
is a classification system for environmentally
sustainable economic activities. The six
environmental objectives defined under the EU
Taxonomy are:
1. climate change mitigation,
2. climate change adaptation,
3. sustainable use and protection of water and
marine resources,
4. transition to a circular economy,
5. pollution prevention and control, and
6. protection and restoration of biodiversity
and ecosystems.
Taxonomy Regulation (Regulation (EU) 2020/852,
Article 8) applies to companies like Harvia that
report according to the European Non-Financial
Reporting Directive (2014/95/EU). The following
section presents the share of group net turnover
i.e. revenue, capital expenditure (Capex) and
operating expenditure (Opex) for the reporting
period 2023, which are associated with Taxonomy-
eligible and Taxonomy-aligned economic activities.
Taxonomy-eligible and Taxonomy-aligned
compliance have been analyzed on the basis of
taxonomy legislation, Climate Delegated Act and
Environmental Delegated Act. Taxonomy-aligned
compliance is achieved when Taxonomy-eligible
economic activities contribute significantly to at
least one environmental objective by meeting
pre-defined technical screening criteria, the
activities do not cause significant harm to other
environmental objectives according to the Do
No Significant Harm (DNSH) criteria, and the
Minimum Safeguards defined in the Taxonomy are
met. Harvia has assessed its Minimum Safeguards
against the minimum requirements of the EU
Taxonomy Regulation (EU) 2020/852 on human
rights, corruption, bribery, tax regulation and
fair competition. Harvia assesses its activities as
compliant with the taxonomy criteria.
ACCOUNTING POLICIES
Harvia has assessed the relevant taxonomy-
eligible and taxonomy-aligned economic activities
in accordance with Regulation (EU) 2020/852.
The assessment was conducted together with
representatives from different business areas, the
sustainability team and the finance department.
TAXONOMY-ELIGIBLE AND
-ALIGNED REVENUE
For fiscal year 2023, Harvia has identified one
Taxonomy activity related to the Climate Change
Mitigation (CCM) objective that is both Taxonomy
eligible and Taxonomy aligned: CCM 3.5.
“Manufacture of energy efficiency equipment for
buildings”. The activities that have been considered
eligible under the activity CCM 3.5. relate to
energy efficiency for heating products, appliances,
saunas and sauna technology. The activities that
have been considered aligned under the activity
CCM 3.5. relate to energy-saving automation for
the control and maintenance of sauna technology.
Under the Circular Economy (CE) objective, activity
CE 5.2. “Sale of spare parts”, is also Taxonomy-
eligible. Harvia products are built to last, designed
to be serviceable, repairable, and durable. With
a comprehensive range of spare parts, Harvia
supports sustainable circular economy.
The proportion of Taxonomy-eligible economic
activities has been calculated as the part of revenue
derived from products and services associated with
Taxonomy-eligible economic activities CCM 3.5. and
CE 5.2., divided by the Harvia consolidated revenue
(see Note 2.1 Revenue).
The proportion of Taxonomy-aligned economic
activities has been calculated by dividing the
revenue from the sales associated with Taxonomy-
aligned economic activity CCM 3.5. by the Harvia
consolidated revenue.
Increased sales of products that impact on energy
efficiency of saunas as well as new climate targets
have increased the share of taxonomy-eligible and
taxonomy-compliant turnover.
75 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
PROPORTION OF TURNOVER FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES – DISCLOSURE COVERING YEAR 2023
Financial year N 2023 Substantial contribution criteria
DNSH criteria
(‘Does Not Significantly Harm’)
Economic Activities (1)
Code (a) (2)
Turnover (3)
Proportion of
Turnover. year N (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy
(9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy
(15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy aligned
(A.1.) or eligible
(A.2.) turnover. year
N-1 (18)
Category enabling
activity (19)
Category
transitional activity
(20)
€ %
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c) Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of energy efficient equipment for
buildings
CCM
3.5. 5,347,000 3.6% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 2.1%
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)  5,347,000 3.6% 3.6% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 2.1%
Of which Enabling 5,347,000 3.6% 3.6% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 2.1% E
Of which Transitional % % Y Y Y Y Y Y Y % T
A.2 Taxonomy-Eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities)(g)
Manufacture of energy efficient equipment for
buildings
CCM
3.5. 1,669,000 1.1% EL N/EL N/EL N/EL N/EL N/EL 0.5%
Sale of spare parts
CE
5.2. 3,716,000 2.5% N/EL N/EL N/EL N/EL EL N/EL 0.0%
Turnover of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2) 5,385,000 3.6% 1.1% 0% 0% 0% 2.5% 0% 0.5%
A. Turnover of Taxonomy eligible
activities(A.1+A.2) 10,732,000 7.1% 4.7% 0% 0% 0% 2.5% 0% 2.6%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities 139,815,000 92.9%
TOTAL 150,547,000 100%
76 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
TAXONOMY-ELIGIBLE AND
-ALIGNED CAPEX
During the fiscal year 2023, Harvia has invested in
Taxonomy-eligible activities related to the Climate
Change Mitigation objective CCM 6.6.”Freight
transport services by road”, CCM 7.3. “Installation,
maintenance and repair of energy efficiency
equipment” and CCM 7.4. “Installation,
maintenance and repair of charging stations for
electric vehicles in buildings (and parking spaces
attached to buildings)”, in low energy consumption
lighting, improving the energy efficiency of
buildings, electric forklifts and electric car charging
points. These investments enable energy efficiency
improvements in operations or lead to a reduction
in greenhouse gas emissions.
The investments under the Taxonomy-aligned
economic activity CCM 3.5. relate to developing
automation for energy efficient control.
The Taxonomy-eligible Capex is defined as
Taxonomy-eligible Capex divided by the total
Capex. The Taxonomy-aligned Capex is defined
as Taxonomy-aligned Capex divided by the
total Capex.
Total Capex consists of additions to tangible and
intangible fixed assets during the financial year,
before depreciation and amortisation. Additions
resulting from business combinations are also
included. Goodwill is not included in Capex. For
further details on accounting policies regarding
Capex, see Note 3.2 and 3.4. of Harvia consolidated
financial statements.
77 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
PROPORTION OF CAPEX FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES – DISCLOSURE COVERING YEAR 2023
Financial year N 2023 Substantial contribution criteria
DNSH criteria
(‘Does Not Significantly Harm’)
Economic Activities (1)
Code (a) (2)
CapEx (3)
Proportion of
CapEx. year N (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
Economy(9)
Biodiversity(10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy
(15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy aligned
(A.1.) or eligible
(A.2.) CapEx. year
N-1 (18)
Category enabling
activity (19)
Category
transitional activity
(20)
€ %
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c) Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of energy efficient equipment for
buildings
CCM
3.5. 18.000 0.6% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 4.8%
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1) 18.000 0.6% 0.6% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 4.8%
Of which Enabling 18.000 0.6% 0.6% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 4.8% E
Of which Transitional % % Y Y Y Y Y Y Y % T
A.2 Taxonomy-Eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities)(g)
Freight transport services by road
CCM
6.6. 40.000 1.3% EL N/EL N/EL N/EL N/EL N/EL 1.5%
Installation. maintenance and repair of energy
efficiency equipment
CCM
7.3. 150.000 4.8% EL N/EL N/EL N/EL N/EL N/EL 0.4%
Installation. maintenance and repair of charging
stations for electric vehicles in buildings (and
parking spaces attached to buildings)
CCM
7.4. 2.000 0.1% EL N/EL N/EL N/EL N/EL N/EL 0%
CapEx of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2) 192.000 6.1% 6.1% 0% 0% 0% 0% 0% 1.9%
A. CapEx of Taxonomy eligible
activities(A.1+A.2) 210.000 6.7% 6.7% 0% 0% 0% 0% 0% 6.7%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities 2.914.000 93.3%
TOTAL 3.124.000 100%
78 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
TAXONOMY-ELIGIBLE AND
-ALIGNED OPEX
Harvia has identified as Taxonomy-eligible
Opex in relation to climate change mitigation
objective under activities CCM 6.5 “Transport by
motorbikes, passenger cars and light commercial
vehicles”, CCM 6.6. and. CCM 7.5 “ Installation,
maintenance and repair of instruments and devices
for measuring, regulation and controlling energy
performance of buildings”, the non-capitalised
costs of the group related to renovation,
maintenance and repair of buildings and
associated equipment, monitoring of the energy
efficiency of buildings, all direct costs related to
the daily use of tangible assets and the leasing of
environmentally friendly vehicles. No Taxonomy-
aligned Opex was identified for financial year 2023.
The Taxonomy-eligible Opex is defined as
Taxonomy-eligible Opex divided by the total Opex
as defined in the Taxonomy Regulation.
Total Opex consists of direct non-capitalized
costs that relate to research and development,
building renovation measures, short-term lease,
maintenance and repair, and any other direct
expenditures relating to the day-to-day servicing
of assets of property, plant and equipment.
Double counting has been avoided by allocating
Taxonomy-eligible and -aligned turnover,
capital and operating expenditure to only one
economic activity.
EU Taxonomy Regulation and reporting
requirements will develop in the coming years, and
Harvia will update its Taxonomy assessment and
reporting according to the requirements.
79 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
PROPORTION OF OPEX FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES – DISCLOSURE COVERING YEAR 2023
Financial year N 2023 Substantial contribution criteria
DNSH criteria
(‘Does Not Significantly Harm’)
Economic Activities (1)
Code (a) (2)
OpEx (3)
Proportion of OpEx,
year N (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular Economy
(9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular Economy
(15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy aligned
(A.1.) or eligible
(A.2.) OpEx, year
N-1 (18)
Category enabling
activity (19)
€ %
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c)
Y; N;
N/EL
(b) (c) Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E
A. TAXONOMY-ELIGIBLE ACTIVITIES
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1) % % % % % % % Y Y Y Y Y Y Y %
A.2 Taxonomy-Eligible but not environmentally
sustainable activities (not Taxonomy-aligned
activities) (g)
Transport by motorbikes, passenger cars and
light commercial vehicles
CCM
6.5. 8,000 0.2% EL N/EL N/EL N/EL N/EL N/EL 0%
Freight transport services by road
CCM
6.6. 4,000 0.1% EL N/EL N/EL N/EL N/EL N/EL 0%
Installation, maintenance and repair of
instruments and devices for measuring,
regulation and controlling energy performance
of buildings
CCM
7.5. 34,000 0.8% EL N/EL N/EL N/EL N/EL N/EL 0%
OpEx of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2) 46,000 1.1% 1.1% 0% 0% 0% 0% 0% 0%
A. OpEx of Taxonomy eligible activities(A.1+A.2) 46,000 1.1% 1.1% 0% 0% 0% 0% 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities 4,190,000 98.9%
TOTAL 4,236,000 100%
80 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Share capital and shares
Harvia’s registered share capital is EUR 80,000 and
at the end of the review period, the company
held 18,694,236 (December 31, 2022: 18,694,236)
shares. The ticker symbol for the shares is HARVIA
and their ISIN code is FI4000306873. Harvia has
one series of shares, and each share entitles to one
vote in the company’s general meeting.
The share trading volume in January–December
was EUR 205.2 million (749.5) and 8,997,433
shares (27,500,497). The share’s volume weighted
average price during the review period was EUR
22.81 (27.36), the highest price was EUR 28.08
(60.70) and the lowest EUR 17.41 (12.69). The
closing price of the share at the end of December
was EUR 27.20 (17.68). The market value of the
share capital on 31 December 2023 was EUR 508.5
million (330.5) including treasury shares.
On 3 May 2023, The Board of Directors of Harvia
Plc decided on a directed share issue without
consideration for the payment of rewards earned
under the company’s share-based incentive
program. The share payments concerned the
performance period 2020–2022 of the company’s
share-based incentive program launched in
2020. In the share issue conducted on 30 May
2023, 9,109 own shares held by the company
were transferred without consideration to the
key employees participating in the share-based
incentive program in accordance with the
program-specific terms and conditions. On the
same day, based on the decision of the General
Meeting, Harvia Oyj transferred a total of 2,328
own shares possessed by the company to
members of the Board of Directors of Harvia Oyj as
part of the Board’s remuneration. On 21 September
2023, relating to the same decision, Harvia
transferred 3,424 own shares held by the company
without consideration to the key employees
participating in the share-based incentive program.
The number of registered shareholders at the
end of December was 41,328 (46,011), including
nominee registers. At the end of the review
period, nominee-registered and direct foreign
shareholders held 44.1% (39.5) of the company’s
shares. The ten largest shareholders held a total
of 21.1% (21.3) of Harvia’s shares and votes at the
end of December.
Shareholder profile 31 December 2023 Total % Total pcs
Foreign holding 44.05 8,235,008
Households 28.11 5,256,008
Companies 16.23 3,028,580
Financial institutions and insurance companies 11.59 2,166,166
General Government 0.02 3,402
Harvia Oyj own shares 0.03 5,072
Total 100.00 18,694,236
81 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Shareholders on 31 December 2023 Pcs
Percentage of
shares and votes
ONVEST OY 821,689 4.40
WESTSTAR OY 569,942 3.05
EVLI FINNISH SMALL CAP FUND 500,010 2.67
TIIPETI OY 407,790 2.18
KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ILMARINEN 392,320 2.10
KESKINÄINEN TYÖELÄKEVAKUUTUSYHTIÖ ELO 364,000 1.95
KTR-INVEST OY 242,625 1.30
DANSKE INVEST FINNISH EQUITY FUND 238,660 1.28
MANTEREENNIEMI OY 214,645 1.15
PAJUHARJU TAPIO OLAVI 189,000 1.01
VESTERINEN ARI JUHANI 149,482 0.80
HARVIA TIMO TAPIO 138,525 0.74
NORDEA NORDIC SMALL CAP FUND 136,797 0.73
AHONEN KARL DAVID 120,943 0.65
AVUS OY 120,626 0.65
Grand total 4,607,054 24.64
* According to the fund’s announcement. Harvia has 44 % nominee registered shareholders, and all the major nominee registered
shareholders are not listed here.
MANAGEMENT HOLDINGS
Members of the Board of Directors, CEO and
Directors of the Group, and the companies under
their control owned 31 December 2023 a total of
568,993 Harvia shares, corresponding 3.0 percent
of shares and votes in the company. (31 Dec 2022:
1,005,536 shares and 5.4%)
82 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Calculation of key figures and reconciliation of alternative
performance measures
EUR thousand 1-12/2023 1-12/2022
Operating profit 33,044 34,678
Depreciation and amortisation 6,254 6,494
EBITDA 39,298 41,173
Items affecting comparability
Business transactions related expenses 231 1,174
Restructuring expenses 395 600
Total items affecting comparability 626 1,774
Adjusted EBITDA 39,924 42,947
Depreciation and amortisation -6,254 -6,494
Adjusted operating profit 33,670 36,452
Finance costs, net -3,511 2,110
Adjusted profit before income taxes 30,159 38,562
83 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
CALCULATION OF KEY FIGURES
Key figure Definition
Operating profit Profit before income taxes, finance income and finance costs.
EBITDA Operating profit before depreciation and amortisation
Items affecting comparability
Material items outside the ordinary course of business, which relate to i) costs related to the listing ii) strategic development
projects, iii) acquisition and integration related expenses, iv) restructuring expenses and v) net gains or losses on sale of assets and
grants received.
Adjusted operating profit Operating profit before items affecting comparability.
Adjusted EBITDA EBITDA before items affecting comparability.
Adjusted profit before income taxes Profit before income taxes excluding items affecting comparability.
Earnings per share, undiluted Profit for the period attributable to the owners of the parent divided by weighted average number of shares outstanding.
Earnings per share, diluted
Profit for the period attributable to the owners of the parent divided by weighted average number of shares outstanding taken into
consideration the effects associated with any parent company's obligations regarding the possible share issue in the future.
Net debt Lease liabilities and current and non-current loans from credit institutions less cash and cash equivalents.
Leverage Net debt divided by adjusted EBITDA (12 months).
Net working capital Inventories, trade and other receivables less trade and other payables.
Capital employed excluding goodwill Capital employed excluding goodwill is total equity and net debt less goodwill.
Adjusted return on capital employed (ROCE) Adjusted operating profit (12 months) divided by average capital employed excluding goodwill.
Operating free cash flow
Adjusted EBITDA added/subtracted by the change in net working capital in consolidated statement of cash flows less investments
in tangible and intangible assets.
Cash conversion Operating free cash flow divided by adjusted EBITDA.
Equity ratio Total equity divided by total assets less advances received.
Return on Equity (ROE) Profit for the period divided by average total equity
84 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Consolidated financial statements IFRS
Consolidated statement of comprehensive income
EUR thousand Note
1 Jan - 31 Dec
2023
1 Jan - 31 Dec
2022
Revenue 2.1 150,547 172,408
Other operating income 2.3 864 734
Materials and services 2.3 -56,101 -70,150
Employee benefit expenses 2.3 -28,919 -30,832
Other operating expenses 2.3 -27,093 -30,036
Depreciation and amortization 2.4 -6,254 -6,494
Impairment of assets of the sold subsidiary* 3.1 -952
Operating profit 33,044 34,678
Share in profits and losses of associated
companies 3.1 -242 26 26
Finance income
5.4 795 1,909
Finance costs
5.4 -3,929 -3,553
Changes in fair values** 5.1 -136 3,727
Finance costs, net -3,511 2,110
Profit before income taxes 29,533 36,788
Income taxes 6.3 -6,253 -8,719
Profit for the period 23,280 28,068
Attributable to:
Owners of the parent 23,271 27,080
Non-controlling interests*** 10 988
EUR thousand Note
1 Jan - 31 Dec
2023
1 Jan - 31 Dec
2022
Other comprehensive income
Items that may be reclassified to profit or
loss in subsequent periods:
Translation differences 6.4 -1,785 326
Items that will not be reclassified to profit
or loss:
Actuarial gains and losses 5.6 124 598
Other comprehensive income, net of tax -1,662 925
Total comprehensive income 21,619 28,993
Attributable to:
Owners of the parent 21,609 28,005
Non-controlling interests*** 10 988
Earnings per share for profit attributable to
the owners of the parent:
Basic EPS (EUR) 2.5 1.25 1.45
Diluted EPS (EUR) 2.5 1.24 1.44
* Includes the fair value consideration of sold assets and translation differences related to EOS Russia divestement.
**Includes the change in fair value of interest rate swap EUR -1,347 thousand as well as EUR 1,238 thousand gain
from Kirami earn-out. In the comparison period, the interest rate swap receivable grew considerably due to rise in
interests.
*** Kirami Ab Non-controlling interests. The comparison period also included the non-controlling interests of EOS
Group.
The notes are an integral part of these consolidated financial statements.
85 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Consolidated statement of financial position
EUR thousand Note 31-Dec-2023 31-Dec-2022
ASSETS
Non-current assets
Intangible assets 3.2 8,704 10,463
Goodwill 3.2 73,402 73,438
Property, plant and equipment 3.3 26,904 27,098
Right-of-use assets* 3.4 2,488 2,144
Investments in associated companies 3.1 460 727
Derivative financial instruments 5.1 1,869 3,243
Deferred tax recevables 6.3 1,045 1,367
Total non-current assets 114,872 118,481
Current assets
Inventories 4.1 35,480 45,324
Trade and other receivables 4.2 18,697 18,674
Income tax receivables 4,634 1,010
Cash and cash equivalents 5.2 40,581 25,310
Total current asset 99,392 90,318
Total assets 214,264 208,799
EUR thousand Note 31-Dec-2023 31-Dec-2022
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 6.4 80 80
Other reserves 6.4 32,414 33,426
Retained earnings 6.4 51,810 36,687
Profit for the period 6.4 23,271 27,080
Total equity attributable to owners of the
parent 107,575 97,273
Non-controlling interests 6.4 1,082 1,072
Total equity 108,656 98,345
Liabilities
Non-current liabilities
Loans from credit institutions 5.1 75,404 75,389
Lease liabilities 3.4 1,981 1,848
Deferred tax liabilities 6.3 1,182 1,673
Employee benefit obligations 5.6 1,671 1,897
Other non-current liabilities** 5.1 202 3,609
Provisions 3.5 277 331
Total non-current liabilities 80,716 84,747
Current liabilities
Loans from credit institutions 5.1 6 2,028
Lease liabilities 3.4 760 574
Employee benefit obligations 5.6 176 174
Income tax liabilities 5,662 3,960
Trade and other payables 4.3 18,045 18,679
Provisions 3.5 242 292
Total current liabilities 24,891 25,707
Total liabilities 105,607 110,454
Total equity and liabilities 214,264 208,799
* Previously “Leased assets”.
** Other non-current liabilities include purchase price liabilities resulting from acquisitions.
The notes are an integral part of these consolidated financial statements.
86 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Consolidated statement of changes in equity
EUR thousand Attributable to owners of the parent
Note
Share
capital
Invested unrestricted
equity reserve
Translation
differences
Retained
earnings
Equity attributable to
owners of the parent
Non-controlling
interests Total
Equity at 1 January 2022 80 32,047 539 47,886 80,552 3,598 84,149
Share-based incentive plan 557 557 557
Dividend distribution -11,200 -11,200 -127 -11,327
Revaluation of minority redemption liability 1,516 1,516 1,516
Redemption of the share of non-controlling
interest -3,387 -3,387
Repurchase of own shares -313 -313 -313
Share-based payments -1,844 -1,844 -1,844
Total transactions with shareholders 6.4 -83 -11,200 -11,283 -3,514 -14,798
Profit for the period 27,080 27,080 988 28,068
Actuarial gains and losses 598 598 598
Translational differences 326 326 326
Total comprehensive income 598 326 27,080 28,005 988 28,993
Equity at 31 December 2022 80 32,562 865 63,766 97,273 1,072 98,345
Equity at 1 January 2023 80 32,562 865 63,766 97,273 1,072 98,345
Share-based incentive plan 995 995 995
Dividend distribution -11,956 -11,956 -11,956
Share-based payments -346 -346 -346
Total transactions with shareholders 6.4 649 -11,956 -11,307 -11,307
Profit for the period 23,271 23,271 10 23,280
Actuarial gains and losses 5.6 124 124 124
Translation differences 6.4 -1,785 -1,785 -1,785
Total comprehensive income 124 -1,785 23,271 21,609 10 21,619
Equity at 31 December 2023 80 33,334 -921 75,081 107,575 1,082 108,656
The notes are an integral part of these consolidated financial statements.
87 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Consolidated statement of cash flows
EUR thousand Note 1.1.-31.12.2023 1.1.-31.12.2022
Cash flows from operating activities
Profit before taxes 29,533 36,788
Adjustments
Depreciation and amortization 2.4 6,254 7,446
Finance income and finance costs 5.4 3,511 -2,110
Other adjustments 310 311
Cash flows before changes in working
capital 39,608 42,436
Change in working capital
Increase (-) / decrease (+) in trade and
other receivables 4.2 -1,395 495
Increase (-) / decrease (+) in inventories 4.1 10,108 -852
Increase (+) / decrease (-) in trade and
other payables 4.3 -912 -5,014
Cash flows from operating activities before
financial items and taxes 47,409 37,065 37 065
Interest and other finance costs paid -26 -39
Interest and other finance income received 100 6
Income taxes paid 6.3 -8,343 -12,697
Net cash from operating activities 39,139 24,335
EUR thousand Note 1.1.-31.12.2023 1.1.-31.12.2022
Cash flows from investing activities
Purchases of tangible and intangible assets 3.2, 3.3 -3,124 -3,587
Sale of tangible and intangible assets 89 48
Acquisition of subsidiaries, net of cash
acquired 3.1 -2,801
Proceeds from sale of subsidiaries, net of
cash 3.1 104
Net cash from investing activities -5,835 -3,435
Cash flows from financing activities
Acquisition of treasury shares 6.4 -312
Transaction with non-controlling interests 3.1 -19,000
Proceeds from non-current loans 5.1 925 19,000
Repayment of non-current liabilities 5.1 -850 -101
Proceeds from current loans 5,1 2,000
Change in current liabilities 5.1 -2,011 -17
Repayment of lease liabilities 3.4 -765 -518
Interest and other finance costs paid -2,928 -1,022
Dividends paid 6.4 -11,956 -11,327
Net cash from financing activities -17,585 -11,297
Net change in cash and cash equivalents 15,718 9,604
Cash and cash equivalents at 1 January 5.2 25,310 15,488
Exchange gains/losses on cash and cash
equivalents -447 218
Cash and cash equivalents at 31 December 40,581 25,310
The notes are an integral part of these consolidated financial statements. 
88 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Notes to Financial Statements
This section presents the Group’s accounting policies to the extent that they are
not disclosed in other notes. These principles have been applied consistently in all
the periods presented, unless otherwise stated.
Section 1: Basis Of Preparation
1.1 GENERAL INFORMATION
Harvia Plc (the “Parent company”) is a Finnish
limited liability company and the parent company
of the Harvia Group (“Harvia”, “Harvia Group”
or the “Group”). The registered address of
Harvia Plc is Teollisuustie 1-7, PO BOX 12, 40951
Muurame, Finland.
Harvia is one of the world’s leading sauna and spa
companies. Over the past 70 years, Harvia has
expanded its operations from the manufacturer
of heaters to a provider of wide range of saunas
and spa products. Harvia´s products are exported
to over 90 countries. The Group’s product range
includes sauna heaters, sauna rooms, infrared
and steam saunas, spa components, control
units, heater stones, sauna accessories and sauna
interior solutions such as sauna benches, audio
speakers and lighting solutions. The Group also
provides sauna installation, maintenance and repair
services. At the end of the financial year 2023 the
company had 605 employees (31.12.2022: 633),
of which 238 (240) worked in Finland, 116 (136) in
Germany, 76 (66) in the United States, 67 (89) in
Romania, 57 (58) in China and Hong Kong, 31 (32)
in Austria, 12 (0) in Italy, 6 (9) in Estonia, 2 (2) in
Sweden and 0 (1) in Russia.
Harvia Plc is the parent company of the Group.
The following subsidiaries are consolidated to the
Group’s financial statements:
- Harvia Group Oy which is the second
management company of the Group
- Harvia Finland Oy (former Harvia Oy)
manufacturing heaters and sauna and
steam bath products
- Velha Oy manufacturing sauna and
steam bath products
- Sentiotec GmbH subgroup specialised in control
units, sauna products and electric heaters
(acquired on 4 November 2016)
- Saunamax Oy (56.2% acquired
on 24 February 2017), provider of sauna
maintenance and repair services
- Harvia (HK) Sauna Co. Ltd subgroup
manufacturing sauna heaters, steam generators
and components of similar equipment
- Harvia Estonia Oü manufacturing steam room
equipment and sauna products
- LLC Harvia RUS which is the sales company for
Harvia products in Russia
- Holding company Harvia US Holdings Inc. and
manufacturing company Harvia US Inc. The
company also sells Harvia sauna products in the
Unites States. The companies were established
in November 2018.
- Harvia Holding GmbH was established in
February 2020 and it holds the majority of
EOS subgroup in Germany. EOS subgroup
manufactures heaters and other sauna
products. (78.6% acquired on 30 April 2020,
in July 2022 Harvia acquired 21.4% share
from the non-controlling interest and owned
after that 100%)
- Kirami Oy, a leading Finnish still-water hot tub
manufacturer (100% acquired on 28 May 2021)
- Heaters stones selling Sauna-Eurox and Parhaat
Löylyt Oy (100% acquired on 31 August 2021)
- Phoenix El-Mec srl, a manufacturer of
eletcromechanical timers for sauna heaters
(100% acquired on 29 September 2023)
89 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
The parent company Harvia Plc is a Finnish
public company, established according to the
Finnish legislation. Harvia Plc shares are traded
at NASDAQ OMX Helsinki main list. The Group
financial statements are available at the head office
at Teollisuustie 1-7, 40950 Muurame and at the
Group’s home pages harviagroup.com.
The Board of Directors of Harvia Plc has approved
these consolidated financial statements for issue
on 8 February 2024. Under the Finnish Limited
Liability Companies Act, shareholders can
approve or disapprove the consolidated financial
statements in the Annual General Meeting held
after the release. The Annual General Meeting
is also entitled to amend the consolidated
financial statements.
1.2 ACCOUNTING POLICIES
The consolidated financial statements of Harvia
Group have been prepared in accordance with
International Financial Accounting Standards
(IFRS) as adopted by the European Union as
per 31 December 2023. IFRS Accounting Standards
refer to the standards and interpretations
applicable by corporations set out by the Finnish
Accounting Act and other regulations set out on
basis of this ordinance enforced for application in
accordance with the procedure stipulated in the
regulation (EC) No 1606/2002 of the European
Parliament and of the Council. The notes to the
consolidated financial statements also comply with
the Finnish accounting and corporate legislation
complementing the IFRS Accounting Standards.
The figures presented in the financial statements
are rounded and therefore the sum of individual
figures may differ from the presented sum figure.
HOW SHOULD HARVIA GROUP’S
ACCOUNTING POLICIES BE READ?
Harvia Group’s accounting policies of the financial
statements are described in conjunction with
each note in the aim of providing enhanced
understanding of each accounting area. The
table below summarises the note in which each
accounting policy is presented and the relevant
IFRS Accounting Standard.
90 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Accounting principle Note IFRS standard
Revenue 2.1 Revenue IFRS 15
Employee benefits
2.3 Other income and expense items
5.6 Defined benefit obligations
IAS 19
Business combinations 3.1 Business combinations IFRS 3
Intangible assets 3.2 Intangible assets IAS 36, IAS 38
Property, plant and equipment 3.3 Property, plant and equipment IAS 16, IAS 36
Leases 3.4 Leases IFRS 16
Provisions 3.5 Provisions IAS 37
Inventories 4.1 Inventories IAS 2
Financial assets and liabilities 5.1, 5.2 Financial assets and liabilities IAS 32, IFRS 7, IFRS 13, IFRS 9
Financial risk management 5.3 Financial risk management IAS 32, IFRS 7, IFRS 13, IFRS 9
Share based payments 6.2 Related party transactions IFRS 2
Taxes 6.3 Taxes IAS 12
Shareholder’s equity 6.4 Shareholder’s equity IAS 1
HISTORICAL COST CONVENTION
The consolidated financial statements of Harvia
Group have been prepared on a historical
cost basis, except for the derivative financial
instruments measured at fair value.
FOREIGN CURRENCY TRANSLATION
Items included in the financial statements of the
group’s entities are measured using the currency
of the primary economic environment in which
the entity operates (the functional currency). The
consolidated financial statements are presented in
thousands of euros unless otherwise stated.
Foreign currency transactions are translated into
the functional currency using the exchange rates
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement
of such transactions and from the translation of
monetary assets and liabilities denominated in
foreign currencies at year end exchange rates are
recognised in profit or loss.
The results and financial position of foreign
operations that have a functional currency
different from the presentation currency
are translated into the presentation
currency as follows:
- assets and liabilities for each balance sheet
presented are translated at the closing rate at
the date of that balance sheet
- income and expenses for each statement
of profit or loss are translated at average
exchange rates, and
- all resulting exchange differences are
recognised in other comprehensive income.
NEW AND AMENDED STANDARDS AND
INTERPRETATIONS
Harvia has not applied any new standards
or interpretations with material impact on
consolidated financial statements.
Harvia has not early adopted any new or
amended standards or interpretations that have
been issued but are not yet effective. The new and
amended standards and interpretations issued
by the IASB that are effective in future periods
are not expected to have a material impact on
the consolidated financial statements of Harvia
when adopted. Harvia intends to adopt these new
and amended standards and interpretations, if
applicable, when they become effective and are
endorsed by the EU.
91 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
1.3 CRITICAL ACCOUNTING
ESTIMATES AND SIGNIFICANT
MANAGEMENT JUDGEMENTS
The Group’s most significant accounting policies
are primarily described together with the
applicable note. The preparation of Harvia Group’s
consolidated financial statements requires the use
of estimates, judgement and assumptions that may
affect the application of accounting policies and
the recognised amounts of assets and liabilities at
the date of the financial statements. In addition,
the recognised amounts of revenue and expenses
during the periods presented are affected. Actual
results may differ from previously made estimates
and judgements.
Estimates and judgements are reviewed regularly.
Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in
all subsequent periods.
The sources of uncertainty and management
judgement which have been identified by the
Group and which are considered to fulfill these
criteria are presented in connection to the items
considered to be affected. The table below
discloses where to find these descriptions.
Sources of estimation uncertainty and management judgement Note
Marketing subsidies 2.1
Segment reporting 2.2
Research and development expenses 3.2
Key assumptions used in goodwill impairment tests 3.2
Leases 3.4
Provisions 3.5
Defined benefit obligations 5.6
Share-based payments 6.2
Taxes 6.3
92 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Section 2: Group Performance
This section focuses on the results and performance of the Group. The
accompanying notes on the following pages explain the different components of
the Group’s operating profit and the company’s earnings per share.
COMPONENTS OF OPERATING PROFIT
EUR thousand 2023 % of revenue 2022 % of revenue
Revenue 150,547 172,408
Other operating income 864 1 % 734 0%
Materials and services -56,101 -37% -70,150 -41%
Employee benefit expenses -28,919 -19% -30,832 -18%
Other operating expenses -27,093 -18% -30,036 -17%
Depreciation and amortization -6,254 -4% -6,494 -4%
Changes in fair values 0 0% -952 -1%
Operating profit 33,044 22% 34,678 20%
2.1 REVENUE
Harvia is one of the world’s leading sauna and
spa companies. The Group’s product range
includes sauna heaters, sauna rooms, infrared and
steam saunas, steam sauna and spa components,
Scandinavian hot tubs, control units, sauna
accessories and sauna interior solutions such
as sauna benches, audio speakers and lighting
solutions. The Group also provides sauna
installation, maintenance and repair services. The
biggest market areas are Finland, Europe and
North America.
Harvia Group’s revenue includes mainly sales of
products. Only minor part comes from selling of
sauna installation, maintenance and repair services
provided by Group companies. Harvia sells most
of its products to retailers, distributors or sauna
builders. Harvia has customer contracts with
clients, but typically the contracts are short term
(most typical contract type is annual contract).
Long-term customer relationships are based
on customer loyalty. Harvia’s largest customer
relationship is based on the customer’s group-level
framework agreement. The individual agreements
of Group companies with this customer were
accounted for a total of approximately 11% of the
Group’s net sales in 2022 (2021: 10%).
At the end of 2022 and during 2023, high
economic uncertainty, elevated inflation and
interest rates, as well as eroded consumer
confidence widely affected the European sauna
and spa market across product segments.
However, the negative impacts have not been
equally strong in all European countries. During the
fourth quarter 2023, the market conditions started
to show signs of stabilization in Central Europe.
In Finland and Scandinavia, where the demand
93 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
ACCOUNTING POLICY
Harvia’s revenue mainly consists of the sales of
sauna and spa products that it has produced.
Harvia sells most of its products to retailers,
distributors or export companies. Sales of
goods are recognized when the control is
transferred to the buyer. This is when the goods
have been delivered to the buyer. Delivery
is deemed to have taken place when the
products have been delivered to the agreed
location and the risk of obsolescence and
damage of products has been transferred to
the customer. In addition, for certain contract
terms, a transportation service is considered
to be a separate performance obligation when
control to the goods is transferred to the buyer
before the goods are delivered. However,
transportation service is typically performed
during the same day as control is transferred to
the customer and therefore the revenue from
goods and transportation service is recognized
at the same time.
Amounts disclosed as revenue are net of
returns, volume-based marketing subsidies
and rebates. Goods are often sold with volume
discounts based on aggregate sales over
a 12-month period. Revenue from sales is
recognized based on the price specified in the
contract, net of the estimated volume-based
discounts. A contract liability is recognized
for expected volume discounts and marketing
subsidies payable to customers in relation to
sales made until the end of the reporting period.
Certain wholesale customers are given a right of
return in respect of certain campaign products
if the goods are not sold within six months
after the purchase or the legislation concerning
products will change. Products directly sold
to consumers via online shops are subject to
a 14-day return policy. A contract liability for the
expected refunds to customers is recognized as
adjustment to revenue. Accumulated experience
is used to estimate and provide for the
discounts, volume-based marketing subsidies
and returns, and revenue is only recognized
to the extent that it is highly probable that a
significant reversal will not occur.
As for the sold products, they are usually given
a payment period between 30 and 120 days
which is consistent with the market practice,
and thus no finance element is included in the
sales. A receivable is recognized when the
goods are delivered. This is the point in time
that the consideration is unconditional because
only the passage of time is required before the
payment is due.
Minority of Harvia Group’s revenue comes from
rendering services, but mainly from installation
and maintenance services as well as project
sales where sauna or spa department or
many pre-installed saunas are provided to the
customer. Revenue from services is recognized
in the accounting period in which the services
are rendered. For fixed-price contracts, revenue
is recognized based on the actual service
provided by the end of the reporting period as a
proportion of the total services to be provided.
This is determined based on the actual costs
relative to the total expected costs.
has traditionally been very resilient in economic
downturns, the market conditions remained
challenging as high interest rates, challenges
in the construction sector and weak consumer
confidence continued to prevail.
Outside Europe, especially in North America and
Asia, the sauna and spa market has continued to
grow also after the pandemic. The strong growth
in North America has been heavily supported by
the growing awareness of sauna and its health
benefits as well as strong consumer confidence
and economic conditions.
94 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
REVENUE BY MARKET AREA
EUR thousand 2023 % 2022 %
Finland 30,238 20% 36,414 21%
Scandinavia 7,734 5% 9,530 6%
Germany 17,101 11% 26,109 15%
Other European countries 41,019 27% 46,404 27%
North America 43,449 29% 36,112 21%
Other countries* 11,007 7% 17,838 10%
Total 150,547 100% 172,408 100%
* The largest of which: Arab countries and Asia
REVENUE BY PRODUCT GROUP
EUR thousand 2023 % 2022 %
Heating equipment * 82,128 55% 93,719 54%
Saunas and scandinavian hot tubs 42,952 29% 47,950 28%
Steam generators 4,573 3% 4,989 3%
Accessories and heater stones 8,812 6% 8,187 5%
Spare parts and services 12,083 8% 17,564 10%
Total 150,547 100% 172,408 100%
* Sauna heaters, controls units, IR components
SIGNIFICANT MANAGEMENT JUDGEMENT
The management uses judgement when
allocating marketing subsidies to allowances
included in the revenue and marketing
costs included in other expenses. Marketing
subsidies determined as the percentage of
sales volume and against which marketing
services are not obtained, are reducing the
revenue. Other marketing subsidies are
allocated to operating expenses.
Management uses judgement when deciding
on the fulfillment of the service obligations
under IFRS15
Revenue from projects recognized over
time was EUR 653 thousand in 2023 (2022:
EUR 896 thousand). Group does not disclose
transaction price allocated to fully or partly unfilled
performance obligations, because performance
obligation is part of a contract where contract
period less than one year.
95 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
2.2 SEGMENT REPORTING
The Group constitutes a single operating segment.
This is consistent with the way that internal
reporting is provided to the chief operating
decision maker (”CODM”) and the way that chief
operating decision maker determines allocation of
resources and assesses the performance.
SIGNIFICANT MANAGEMENT JUDGEMENT
Determining operating segments
The management of Harvia Group has used
judgement when determining Group’s segment
reporting. Areas requiring judgement have been
the determination of CODM, the decisions made
and reports used when managing the Group.
The Board of Directors has been determined as
the chief operating decision maker. The Board
of Directors, taking into account its composition
and its active participation in key strategic
and operative decision-making, is responsible
for allocating resources and assessing the
performance. The management of Harvia Group,
using its judgement, has determined that the
Group has one operating segment.
The Group’s non-current assets are allocated geographically as follows:
EUR thousand 31-Dec-2023 31-Dec-2022
Finland 82 397 82 691
Germany 16 483 17 636
United States 6 483 6 817
Other European countries 4 171 3 437
Asia 1 964 2 563
Total non-current assets 111 498 113 143
Revenue by geographical areas has been presented in note 2.1.
96 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
2.3 OPERATING INCOME AND EXPENSES
This note provides information on other
components of operating profit: other operating
income, material and service expenses, employee
benefit expenses, other operating expenses as
well as depreciations and amortizations. Other
operating income includes gains on sale of
property plant and equipment and sales of scrap
metal which is generated from production.
Materials and services in the consolidated
statement of comprehensive income consist mainly
purchases of electricity and electronic components
such as heating elements, control units and wood
timber for saunas. The change in inventories of
finished goods and work in progress will adjust
the income statement by the cost effect of items
booked and removed from inventory at the
end of the period.
The most significant items of other operating
expenses relate to sales (as sales freight costs and
sales related commissions) and marketing.
Harvia’s production facilities are characterised by
efficient production. Harvia has a long experience
in manufacturing of heaters and other sauna
& spa products and the staff is qualified and
experienced. The company’s operations are highly
integrated. Own R&D department is specialised
in the development of production process
and products. In Muurame, company’s own
department specialised in tools and machinery
used in production ensures the cost-effectiveness
of the production equipment and machinery
maintenance and repair.
ACCOUNTING POLICY
A defined contribution plan is a pension
plan under which the Group pays fixed
contributions into pension insurances.
The Group has no legal or constructive
obligations to pay further contributions
if the insurance does not hold sufficient
assets to pay all employees the benefits
relating to employee service in the current
and prior periods.
The following table presents different components of employee benefit expenses:
EUR thousand 2023 2022
Wages and salaries 23,889 25,372
Pension costs 2,450 2,461
Other employee benefit expenses 2,580 2,999
Total 28,919 30,832
Harvia Group employed a total of 605 employees
as at 31 December 2023 (2022: 633 employees).
Of the total average number of employees
in 2023, 240 were officers and 370 workers. The
decrease in the number of personnel at the end
of December compared to the previous year was
mainly due to restructuring outside of Finland
during 2022 and 2023, but also due to change
negotiations carried out in Finland. In addition,
the exit from Russia in 2022 and the acquisition
of Italian Phoenix El-Mec in 2023 impacted the
personnel figures. Pension plans of employees of
the Group in Finland, Austria, Germany, Romania,
China, USA, Hong Kong and Estonia are defined
contribution plans. Harvia has a defined benefit
pension plan in Germany, which is described more
further in the note 5.6.
97 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Other significant expense items are as follows:
OTHER OPERATING EXPENSES
EUR thousand 2023 2022
Sales and marketing* 14,413 16,715
Travel and cars 1,257 1,212
Electricity, heating and water 1,617 1,680
Audit, accounting, consulting and legal expenses 1,408 1,248
Rents 495 628
IT and telecommunication 1,402 1,236
Voluntary staff expenses 762 643
Other** 5,738 6,672
Total 27,093 30,036
* Sales and marketing include, among others, warranty costs, sales freight costs, sales commissions and marketing expenses.
** Other expenses include, among others, maintenance costs related to the administration of the compnay and the premises.
Audit, accounting, consulting and legal expenses
and other expense items include items outside the
ordinary course of business that are related to the
Group’s strategic development projects, listing,
acquisitions and loss on sales of assets and affect
the comparability between the different periods.
The auditor’s fees recognised during 2023 to
PricewaterhouseCoopers amounted to 223 EUR
thousand (2022: EUR 211 thousand). Of these,
EUR 197 thousand were fees relating to statutory
audit (2022: EUR 196 thousand). In 2023 EUR 0
thousand of fees were related to auditor opinions
and certificates (2022: EUR 0 thousand) and
EUR 26 thousand to other fees (2022: EUR 15
thousand). Audit fees paid to other auditors were
EUR 89 thousand (2022: EUR 102 thousand).
Harvia Group’s research and development
department employed an average of 21 persons
(2022: 23 persons), and expensed research and
development costs totaled EUR 1,714 thousand
in the financial year 2022 (2022: EUR 2,248
thousand).
98 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
2.4 DEPRECIATION AND AMORTIZATION
ACCOUNTING POLICY
Property, plant and equipment
Land and buildings are recognised at historical
cost. Land is not depreciated. Buildings are
depreciated over their useful lives.
Machinery and equipment as well as other
tangible assets are depreciated over their
useful lives. Most machinery and equipment are
depreciated in 3 to 10 years and exceptionally
long-lasting machines in 20 years. Useful lives
are based on estimates of the period over which
the assets will generate revenue. Depreciation
is recognised on a straight-line basis based on
the cost of the assets and estimated useful lives.
Impairment tests for depreciable non-current
assets are performed if there are indications of
impairment at the balance sheet date.
The useful lives of the assets are as follows:
- Buildings 15-30 years
- Machinery and equipment 3-20 years
- Other tangible assets 3-5 years
Intangible assets
Purchased and internally generated intangible
assets are recognised at historical cost. Intangible
assets acquired in business combinations are
measured at fair value at acquisition. Intangible
assets are amortized over 10 to 15 years except
for capitalised development costs and software
licenses, which are amortized in 3 to 5 years.
The following table presents depreciation and amortization by asset class:
EUR thousand 2023 2022
Depreciation by class
Buildings and constructions 1,040 1,076
Machinery and equipment 1,852 1,982
Other tangible assets 111 174
Total property, plant and equipment 3,003 3,232
Leased buildings and structures 463 392
Leased machinery and equipment 220 202
Total right-of-use assets 683 594
EUR thousand 2023 2022
Amortization by class
Development costs 462 417
Customer relationships 1,204 1,337
Brand 490 420
Technology 68 68
Other intangible assets 343 426
Total intangible assets 2,567 2,668
Total depreciation and amortization 6,254 6,494
99 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
2.5 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing
the profit for period attributable to the owners
of the parent company by the weighted average
number of shares outstanding during the financial
period. Diluted earnings per share is calculated on
the same basis as basic earnings per share, unless
it takes into consideration the effects associated
of any parent company’s obligations regarding the
possible share issue in the future.
2023 2022
Profit for the period attributable to the owners of the parent company, EUR thousand 23,271 27,080
Weighted average number of shares outstanding during the financial period, '000 18,687 18,672
Basic earnings per share, EUR 1.25 1.45
Share-based long-term incentive plan 77 167
Weighted average number of shares outstanding during the year, diluted, '000 18,764 18,839
Diluted earnings per share, EUR 1.24 1.44
100 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Section 3: Capital Employed
This section describes the assets that are required to have to run the
business and Harvia’s acquisitions. The Information on net working capital
is presented in section 4.
3.1 BUSINESS COMBINATIONS
For Harvia, acquisitions are a way to speed up the
implementation of its strategy. In 2023, Harvia
acquired Phoenix El-Mec srl, a manufacturer of
electromechanical timers for sauna heaters. The
result of the new subsidiary was consolidated to
Harvia Group as of 1 October 2023. In addition,
Harvia completed the exit from Russia by closing
the sale of EOS Group Russian operations
after approval from the Russian officials
on 10 March 2023.
ACCOUNTING ESTIMATES AND
MANAGEMENT JUDGEMENT
Net assets acquired through business
combinations are measured at fair value. The
measurement of fair value of the acquired
net assets is based on market value of similar
assets (property, plant and equipment), or an
estimate of expected cash flows (intangible
assets). The valuation, which is based on
prevailing repurchase value, expected cash
flows or estimated sales price, requires
management judgement and assumptions. The
management trusts that the applied estimates
and assumptions are sufficiently reliable for
determining fair values.
ACCOUNTING POLICY
The acquisition method is applied for business
combinations. The consideration transferred for
the acquisition of a subsidiary is the fair values
of the assets transferred, the liabilities incurred
to the former owners of the acquiree and the
shares issued by the Group. The consideration
transferred includes the fair value of any asset or
liability resulting from a contingent consideration
arrangement. Identifiable assets acquired and
identifiable liabilities assumed in a business
combination are measured initially at their fair
values at the acquisition date. Identifiable assets
include tangible assets as well as intangible
assets, such as customer relationships, brand
and technology.
Acquisition related costs are expensed as
incurred and presented as other operating
expenses in the income statement.
ACQUISITIONS IN 2023
Harvia completed the exit from Russia
by closing the sale of EOS Group Russian
operations after approval from the Russian
officials on 10 March 2023. The transactions
price is at maximum 600 thousand euros, of
which EUR 400 thousand was paid in 2022 and
on top of this, a delayed purchase price of
EUR 0-200 thousand to to paid in 2024 based on
company’s result of the financial year 2023.
101 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
On 29 September 2023, Harvia signed and closed
an agreement to acquire Phoenix El-Mec srl, a
manufacturer of electromechanical timers for
sauna heaters. The acquisition further strengthens
the Harvia’s supply chain and ensures the
availability of a key component in the sauna heater
production. In addition to sauna heaters, Phoenix
El-Mex’s switches are also used in e.g. ovens,
drying cabinets, and boilers. The company is
located in Belluno, Northern Italy. The result of the
new subsidiary was consolidated to Harvia Group
as of 1 October 2023.
In 2023, Harvia paid additional purchase price of
the Kirami acquisition in advance. Harvia and the
sellers of Kirami had agreed that Harvia will pay the
additional purchase price of EUR 2.5 million earlier
than previously announced, on 21 December 2023.
The original purchase price was EUR 7 million at
closing and on top of this, a delayed purchase
price of EUR 0–4 million after a three years’ period
based on Kirami’s EBITDA development.
Paying the additional purchase price in advance
enables a closer integration of Kirami into Harvia’s
other business operations in conjunction with the
reorganization of Harvia’s organizational structure
as of 1 January 2024.
Harvia financed the payment of the additional
purchase price with cash funds. The paid amount
is approximately EUR 1.2 million smaller than
the provision Harvia made in connection with
the acquisition. This difference will improve
Harvia’s 2023 result, and it was presented as
changes in the fair value of financial items in the
income statement.
ACQUISITIONS AND DIVESTMENTS IN 2022
On 27 July 2022, Harvia Plc acquired a 21.4%
minority shareholding of EOS Group’s German
operations from Mr. Rainer Kunz, Managing Director
of EOS Group. After the transaction, EOS Group’s
German operations are fully owned by Harvia.
The purchase price was EUR 19.0 million. The
purchase price of the minority shareholding was
based on the same adjusted EBITDA multiple
as in the original transaction in 2020, when
Harvia acquired the majority of EOS shares.
Harvia financed the acquisition of the minority
shareholding with long-term interest-bearing debt.
Mr. Kunz continues as Managing Director of EOS
Group and a member of Harvia’s management team.
On 7 November 2022, Harvia Plc signed an
agreement to sell its 80.0% shareholding of
EOS Russia to Mr. Vasilij Sosenkov. Before the
agreement, Mr. Sosenkov, Managing Director of
EOS Russia, held 20.0% of the shares in OOO
EOS Premium SPA Technologies, the company
operating EOS Group’s Russian operations. After
the transaction has been completed, Mr. Sosenkov
will own 100.0% of EOS Russia. Closing of the
transaction was subject to official approvals in
Russia.
The transaction price is at maximum EUR 600,000,
of which EUR 400,000 was paid during 2022.
According to the agreement, all references to
EOS or Harvia will be removed from the Russian
company’s name, brand names or similar.
EOS-related intellectual property rights stay in
Harvia’s ownership.
EOS Russia has not been consolidated in the
Harvia Group figures as of November 2022. The
fair values of net assets of the sold subsidiary were
considered to be EUR 1,280 thousand less than
the carrying value in the Group’s balance sheet
at 31 October 2022. The consideration included
EUR 748 thousand intangible assets consisting of
goodwill and customer relationships. There was
also EUR 328 thousand translation differences
in the Harvia’s balance sheet relating to EOS
Russia which were reclassified to profit due the
divestment. All the items impacting profit are
presented in the Impairment of assets of the sold
subsidiary in the profit & loss.
Altogether, the impact to Harvia’s income
statement was EUR -952 thousand in 2022.
According to Harvia’s accounting principles,
the impact was classified as item that affects
comparability of the key figures. In the cash flow
of Harvia Group, the proceed from selling the
subsidiary was EUR 104 thousand after deducting
cash of the divested subsidiary.
ASSOCIATES AND JOINT ARRANGEMENTS
Harvia owns 50% of the Estonian company
Metagrupp OÜ, which operates as a production
company for the Kirami subgroup. In Harvia’s
financial statements, the company is presented as
an associated company, as Harvia’s management
considers that Harvia has not control over the
company. In 2023, the value of Metagrupp in
Harvia’s balance sheet was EUR 727 thousand
(2022: EUR 727 thousand). Harvia’s share of the
associate’s result was EUR 26 thousand (2022:
EUR 26 thousand). The company has been
consolidated in Harvia’s financial statements using
the equity method from May 2021.
102 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
3.2 INTANGIBLE ASSETS AND IMPAIRMENT TESTING
The majority of the goodwill was recognised in
connection of the acquisition of Harvia group
companies in 2014. During 2021, the acquisitions
of Kirami Group and Sauna-Eurox increased
the amount of goodwill. In 2022, goodwill
was decreased slightly in connection with the
divestment of EOS Russia.
ACCOUNTING POLICY
Goodwill
Goodwill arises on the acquisition of subsidiaries
and represents the excess of the consideration
transferred over the fair value of the identifiable
net assets acquired.
For the purpose of impairment testing, goodwill
acquired in a business combination is allocated
to cash generating units (CGU’s), that are
expected to benefit from the synergies of the
combination. This unit to which the goodwill is
allocated represents the lowest level within the
entity at which the goodwill is monitored for
internal management purposes.
Goodwill impairment reviews are undertaken
annually or more frequently if events or changes
in circumstances indicate a potential impairment.
The carrying value of the CGU containing the
goodwill is compared to the recoverable amount,
which is the higher of value in use and the fair
value less costs of disposal. Any impairment is
recognised immediately as an expense and is not
subsequently reversed.
Other intangible assets
Other intangible assets mainly include customer
relationships, brands and technology acquired
in business combinations that are recognised
in fair value at the date of acquisition.
These are amortized on a straight-line basis
over 10-15 years. Other intangible assets also
include capitalised development expenditures
and software licenses and are amortized on a
straight–line basis in 3 to 5 years.
Capitalised development costs
Development costs are capitalised when certain
criteria related to economic and technical
feasibility are met and when it is expected that
the product will generate economic benefits in
the future. Capitalised development costs mainly
include materials, supplies and direct labor costs.
Development costs booked earlier as expenses
will not capitalised later. Intangible assets under
development are not amortized but are tested
for impairment at least annually.
Harvia Plc and Bergman Ltd signed a letter
of intent (LOI) on 7 March 2023 to create
a joint venture in Japan with the mission to
becoming a substantial local player in the
attractive and growing Japanese sauna and
spa market. The cooperation to establish the
joint venture progressed according to plans
during the third quarter of 2023. As a result, the
joint venture Harvia Japan Ltd. was registered
on 21 August 2023. The operations of the joint
venture will be gradually ramped-up, but the
established company was not yet operational
in Q4. Harvia owns 51% and Bergman 49%
of the company.
103 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
ACCOUNTING ESTIMATES AND
MANAGEMENT JUDGEMENT
Costs incurred in the development phase of
a project are capitalised as intangible assets
if the criteria is met. Management has made
judgements and assumptions when assessing
whether a project meets these criteria, and
on measuring the costs and the economic life
as well as the future cash inflows generated
by the development projects. Expected
returns from capitalised development projects
involve estimates and judgement from the
management about the future revenue and
related costs. These estimates involve risks and
uncertainties and it is possible that following
changes in circumstances, expected returns
from capitalised development projects change.
Harvia assesses indications of impairment for
capitalised development projects.
The following tables present the movements in intangible assets including goodwill during the reported periods:
EUR thousand Goodwill
Development
expenditure
Advance
payments
Customer
relationships Brand Technology
Other intangible
assets Total
2023
Cost at 1 January 73,438 3,260 577 7,391 4,981 746 3,213 93,606
Additions 250 368 25 644
Disposals
Reclassifications/Adjustments 271 -455 377 193
Exchange differences -36 -9 -21 -1 -66
Cost at 31 December 73,402 3,771 491 7,391 4,961 746 3,615 94,377
Accumulated depreciation at 1 January -1,983 -3,614 -1,478 -291 -2,339 -9,705
Amortization -462 -1,204 -490 -68 -343 -2,567
Exchange differences 9 -8 1
Accumulated depreciation at 31 December -2436 -4,818 -1,976 -385 -2,682 -12,271
Net book amount at 1 January 73,438 1,276 577 3,777 3,503 455 875 83,901
Net book amount at 31 December 73,402 1,332 491 2,573 2,985 388 933 82,106
104 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
EUR thousand Goodwill
Development
expenditure
Advance
payments
Customer
relationships Brand Technology
Other intangible
assets Total
2022
Cost at 1 January 73,730 2,582 628 7,788 4,941 746 2,991 93,406
Additions 159 730 170 1,059
Disposals -352 -397 -749
Reclassifications 527 -781 56 -198
Exchange differences 60 -8 40 -4 88
Cost at 31 December 73,438 3,260 577 7,391 4,981 746 3,213 93,606
Accumulated depreciation at 1 January -1,567 -2,277 -977 -223 -1,900 -6,944
Amortization -417 -1,337 -420 -68 -426 -2,668
Exchange differences 1 -81 -13 -93
Accumulated depreciation at 31 December -1,983 -3,614 -1,478 -291 -2,339 -9,705
Net book amount at 1 January 73,730 1,014 628 5,511 3,964 523 1,092 86,462
Net book amount at 31 December 73,438 1,276 577 3,777 3,503 455 875 83,901
IMPAIRMENT TEST FOR GOODWILL
ACCOUNTING ESTIMATES AND MANAGEMENT
JUDGEMENT
Key assumptions used in goodwill impairment
testing
The management makes significant estimates
and judgements in determining the level at which
the goodwill is allocated and whether there is
any indication of impairment in goodwill.
The recoverable amount of a cash generating
unit is determined based on value-in-use
calculations which require the use of estimates.
The calculations use cash flow projections based
on budgets and financial estimates approved
by management covering a five-year period.
Cash flow forecasts are based on the Group’s
actual results and the management’s best
estimates on future sales, cost development,
general market conditions and applicable tax
rates. Cash flows estimates include budgets
and rolling estimates for a period of five years
and cash flows beyond the five-year period are
extrapolated using the estimated growth rates
stated above. The growth rates are based on
the management’s estimates on future growth
in the business. Management tests the impacts
of changes in significant estimates used in
forecasts by sensitivity analyses as described
above in this note.
105 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
The allocation of goodwill to the Group’s cash-
generating units is presented below:
EUR thousand 31-Dec-2023 31-Dec-2022
Finland 62,403 62,831
Central Europe 10,999 10,607
Total 73,402 73,438
To carry out impairment testing, the management
monitors goodwill at the level of Finland and
Central Europe. The recoverable amount of cash
generating units has been determined based
on value-in-use calculations using the projected
discounted cash flows. These calculations use
pre-tax cash flow projections based on the
budgets and forecasts approved by management
covering a five-year period. The fair value less cost
to sell was assessed and value in use was then
used as recoverable amount. Goodwill arising from
acquisition of Almost Heaven Saunas business
in 2018 has been presented as part of goodwill
in Finland, and was included to impairment
testing starting from 2019. The goodwill from the
acquisition of EOS Group is presented as part the
goodwill in Central Europe and begame subject
to impairment testing in 2020. The goodwill from
acquisitios in 2021 is presented as part of the
goodwill in Finland.
Key assumptions in the projections are the
development of net sales and key cost items, the
discount rate used in the calculation as well as the
cash flow growth rate after the five-year forecast
period. The projections have been prepared to
reflect the past performance and expectations for
the future considering the Group’s market position
and the general economic environment. Cash flows
beyond the five-year period are extrapolated using
the estimated growth rates. The discount rate used
in the impairment testing is weighted average
pre-tax cost of capital (WACC). The discount rate
reflects the total cost of equity and debt and the
market risks related to the Group.
The key assumptions used for value-in-use calculations and basic information are as follows:
31-Dec-2023 31-Dec-2022
Long-term growth rate 1.0 % 1.0 %
Average revenue growth for the forecast period
Finland 6.0 % 3.7 %
Central Europe 5.8 % 3.7 %
Average EBITDA for the forecast period (% of revenue)
Finland 25.5 % 27.2 %
Central Europe 23.3 % 30.2 %
Pre-tax discount rate
Finland 11.4 % 11.8 %
Central Europe 11.0 % 11.4 %
As result of the impairment tests performed no
impairment loss has been recognised for any
period presented. In 2023 the recoverable amount
calculated based on value-in-use exceeded the
carrying value by EUR 312 million in Finland
and EUR 58 million in Central Europe (2022 by
EUR 236 million in Finland and EUR 95 million in
Central Europe).
106 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Management has prepared sensitivity analyses regarding the key factors, and based on the analyses
performed the recoverable amount equals with the carrying value if the EBITDA margin or the
discount rates change one at a time and other assumptions remain unchanged as follows (changes in
percentage points):
31-Dec-2023 31-Dec-2022
Finland
EBITDA margin decrease -26.4 % -25.3 %
Change in discount rate 24.9 % 18.6 %
Central Europe
EBITDA margin decrease -15.6 % -20.5 %
Change in discount rate 15.0 % 24.4 %
3.3 PROPERTY, PLANT AND EQUIPMENT
Land areas and buildings consist mainly of
Harvia’s factory building in Muurame. Velha Oy
and the Harvia Group’s management companies
also operate at Harvia’s Muurame premises.
During 2023, Harvia made minor investments
to maintain and improve its factories, continued
to improve its energy efficiency in factories and
increased automation in its factories in the United
States and Germany. In addition, Harvia optimized
its production processes with layout changes at
the Muurame factory and continued to upgrade
air conditioning and lighting to improve working
conditions at the factories in Muurame and the
United States. A production line for wood burning
heater frames was completed in Muurame.
The factory in Romania is owned by a Romanian
real estate company K&R Imobiliare which is
wholly owned by the Group. The group has
production and warehouse facility in the United
States. The production and office facilities of EOS
Group transferred to ownership of Harvia in 2020.
The production and office premises of Kirami and
Sauna-Eurox, which were acquired in 2021, were
also transferred to Harvia. Other production units
operate in leased premises.
Other significant items of property, plant and
equipment are the production machineries in
Muurame, USA, China, Romania and Germany.
Harvia has a separate department in Muurame
that manufactures tools and equipment used
in production.
For depreciations see also note 2.4.
107 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Changes in property, plant and equipment are presented in the following tables for the financial periods presented in the financial statements.
EUR thousand Land
Buildings and
structures
Machinery and
equipment
Other tangible
assets
Construction in
progress Total
2023
Cost at 1 Jan 2,060 29,465 23,590 1,851 1,028 57,994
Additions 35 482 656 18 1,945 3,136
Disposals -134 -134
Reclassifications/Adjustments 62 904 1 -967 0
Exchange differences -11 -119 -83 1 -212
Cost at 31 Dec 2,083 29,889 24,934 1,871 2,006 60,783
Accumulated depreciation at 1 Jan -14,107 -15,509 -1,282 -30,897
Depreciation -1,040 -1,852 -111 -3,003
Exchange differences 8 13 21
Accumulated depreciation at 31 Dec -15,139 -17,348 -1,393 0 -33,879
Net book amount at 1 Jan 2,060 15,358 8,081 569 1,028 27,097
Net book amount at 31 Dec 2,083 14,750 7,586 478 2,006 26,904
ACCOUNTING POLICY
Property, plant and equipment are presented
at acquisition cost less depreciation and
potential impairment losses. Subsequent costs
are included in the carrying amount when they
can be measured reliably and future economic
benefits associated with the these will flow to
the entity.
Significant leasehold improvements are included
in the asset’s carrying amount or are separated
as a separate asset when it is probable that they
will be economically useful in the future and the
costs incurred can be distinguished from normal
repair and maintenance costs.
The Group assesses at every reporting date
whether there is any indication of impairment
of an asset. If there are any indications, the
asset is tested for impairment. An impairment
test estimates the recoverable amount of the
asset. The recoverable amount is the higher of
the asset’s fair value less costs to sell or cash
flow based value-in-use. If the recoverable
amount can not be determined at the level of
an individual asset, the need for impairment
is reviewed at the level of the lowest cash
generating unit (CGU), which is largely
independent of other units and its cash flows can
be distinguished from the cash flows of other
similar entities.
108 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
EUR thousand Land
Buildings and
structures
Machinery and
equipment
Other tangible
assets
Construction in
progress Total
2022
Cost at 1 Jan 2,044 27,644 21,429 1,868 2,796 55,781
Additions 269 577 55 1,245 2,146
Disposals -57 -144 -201
Reclassifications/Adjustements 1,377 1,573 23 -3,013 -40
Exchange differences 16 175 68 49 308
Cost at 31 Dec 2,060 29,465 23,590 1,851 1,028 57,994
Accumulated depreciation at 1 Jan -13,062 -13,619 -1,107 -27,787
Depreciation -1,076 -1,982 -174 -3,232
Exchange differences 31 92 -1 122
Accumulated depreciation at 31 Dec -14,107 -15,509 -1,282 -30,897
Net book amount at 1 Jan 2,044 14,582 7,810 761 2,796 27,994
Net book amount at 31 Dec 2,060 15,358 8,081 569 1,028 27,097
3.4 RIGHT-OF-USE ASSETS
IFRS 16 Leases standard specifies the definition
of leases, recognition and valuation of the
lease agreements and disclosures of the leases.
Implementation of the standard has a significant
impact for the lessee’s recognition, as the standard
removes the current distinction between operating
and financing leases. According to the standard,
a lease is recognized as a right-of-use-asset
(the right to use the leased asset) and as a lease
liability to pay rentals, recorded under interest-
bearing liabilities.
ACCOUNTING POLICY
According to IFRS 16 Leases standard a lease
is recognized as a right-of-use-asset (the right
to use the leased asset) and as a lease liability
to pay rentals, recorded under interest-
bearing liabilities.
The Group uses the simplified transitional
approach, whereby comparative financial
information is not adjusted. Lease liability
is calculated discounting the future lease
payments with the incremental borrowing
rate. The value of right-of-use-asset equals the
lease liability.
The Group is implementing the exemptions
provided by the standard and is not recognizing
low-value or short-term leases as right-to-
use-assets or lease liability. The Group applies
same discount rate to a group of similar
lease contracts.
Lease period is the non-cancellable period of
the lease plus periods covered by an option to
extend or an option to terminate if the lessee
is reasonably certain to exercise the extension
option or not exercise the termination option.
Lease liability and interest payment is presented
in cash flow from financing activities in the
consolidated statement of cash flows.
109 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Bookings of leases to the balance sheet and profit and loss statement
were following:
THE AMOUNTS ENTERED IN THE BALANCE SHEET
EUR thousand
Buildings and
structures
Machinery and
equipment
Right-of-use assets
Book amount at 1 Jan 2022 2,302 342
Additions 164
Exchange differences -68
Depreciations -392 -202
Book value at 31 Dec 2022 1,841 304
Book amount at 1 Jan 2023 1,841 304
Additions 671 285
Exchange differences 72
Depreciations -463 -220
Book value at 31 Dec 2023 2,120 369
EUR thousand 2023 2022
Lease liabilities
Non-current 1,981 1,848
Current 760 574
Book value at 31 Dec 2,741 2,421
ACCOUNTING ESTIMATES AND
MANAGEMENT JUDGEMENT
The management uses judgement when
determining the lease period for ongoing rental
contracts and when the lease contract includes
options for extension or termination of the
contract or purchasing the asset. Management
decisions are based on the strategic position
of the company and the market situation.
The management uses judgement also when
defining the interest rate of incremental
borrowing. The interest rate of incremental
borrowing is based on the financing contracts of
the group taking into consideration the variation
of the risk-free interest rate in each country. The
Group applies single discount interest rate for
portfolio of similar leases.
110 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
AMOUNTS RECOGNISED IN PROFIT AND LOSS
EUR thousand 2023 2022
Depreciation
Buildings and structures -463 -392
Machinery and equipment -220 -202
-683 -594
Interest expense (included in finance cost) -101 -106
Expense relating to short-term and low-value leases (other operating expenses) -495 -628
Total amounts recognised in profit and loss -1,280 -1,328
Amounts booked to balance sheet are considered
in the IAS 36 impairment testing going forward.
Cash flows resulting from lease contracts have
been disclosed in note 1.3 and maturities of the
lease contracts in note 5.3.
3.5 PROVISIONS
The Group provides warranties for its products
and recognises provision for this obligation.
The warranty provision includes all expenses
required to settle the present obligation. The
amount of accrued estimated warranty costs
is primarily based on historical experience
and current information on repair costs and
processing costs of the claims.
ACCOUNTING POLICY
Provision is made for estimated warranty
claims in respect of products sold which
are still under warranty at the end of the
reporting period. Management estimates
the provision based on historical warranty
claim information and any recent trends that
may suggest future claims could differ from
historical amounts.
ACCOUNTING ESTIMATES
The amount of warranty provision involves
uncertainty as estimated warranty claims may
not realise as predicted. Typically the claims
are realised frontloaded during the warranty
period. Estimates and assumptions are
reviewed quarterly. The differences between
actual and estimated warranty claims may
affect the amount of the provisions to be
recognised in future financial periods.
111 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Changes in warranty provisions are as follows:
EUR thousand 31-Dec-2023 31-Dec-2022
At 1 January 623 651
Additions 519 623
Canceled unrealized provisions during the year -623 -651
At 31 December 519 623
of which
current 242 292
non-current 277 331
Total 519 623
The warranty provision was canceled as unrealized
EUR 623 thousand (2022: EUR 651 thousand) and
was increased EUR 619 thousand during 2023
(2022: EUR 623 thousand). The provision is divided
to current and non-current liability. Most of the
Harvia’s products sold have two years’ warranty
for private use and one years’ warranty for
professional use. Warranty provision is calculated
for external warranty costs, for employees
processing complaints and for warranty parts.
For exported products, no warranty provision
is recognised as under these contracts the
counterparty is responsible for warranty work.
112 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Section 4: Net Working Capital
This section describes components of net working capital.
EUR thousand 31-Dec-2023 31-Dec-2022
Net working capital
Inventories 35,480 45,324
Trade receivables 16,336 16,408
Other receivables 2,361 2,266
Trade payables -8,690 -8,737
Other payables -9,355 -9,942
Total 36,132 45,319
Change in net working capital in the statement of financial position -9,187 3,388
Items not taken into account in change in net working capital in the statement of
cash flows and the effect of which is included elsewhere in the statement of cash
flows* 1,386 1,983
Change in net working capital in the statement of cash flows** -7,801 5,371
* The most significant items are related to finance costs, unrealised exchange rate gains and losses, acquisitions and investments.
** An increase in net working capital decreases cash flows, and a decrease in net working capital increases cash flows.
4.1 INVENTORIES
The inventory of the Group consists of raw
materials such as steel, stone and wood, work
in progress as well as finished goods on sales
(sauna heaters, sauna interiors and other sauna
related products).
ACCOUNTING POLICY
Materials and supplies, work in progress and
finished goods are measured at the lower of
cost and net realisable value. Cost of work
in progress and finished goods comprises
direct materials, direct labour costs and an
appropriate proportion of variable and fixed
overhead expenditure, the latter being allocated
on the basis of normal operating capacity. The
acquisition cost is assigned to individual items
of inventory on the basis of weighted average
cost formula. The cost of purchased inventory
are determined after deducting rebates and
discounts. Net realisable value is the estimated
selling price in the ordinary course of business
less the estimated costs of completion and the
estimated costs necessary to make the sale.
113 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
The inventory is divided as follows:
EUR thousand 31-Dec-2023 31-Dec-2022
Materials and supplies 16,921 24,070
Work in progress 3,413 3,621
Finished goods 15,145 17,634
Total 35,480 45,324
Harvia recognised items related to changes in
the value and quantity of inventories in its profit
and loss for a total of EUR 10,919 thousand
(in 2022: EUR 1,247 thousand). Harvia’s material
and service costs totalled EUR 56,101 thousand
(2022: EUR 70,150 thousand). The inventory
value was reduced by obsolescence reserve
booking of EUR 915 thousand (31 December 2022:
EUR 921 thousand).
4.2 TRADE AND OTHER RECEIVABLES
ACCOUNTING POLICY
Trade receivables are amounts due from
customers for goods sold or services performed
in the ordinary course of business. They are
classified as at amortized cost if collection
of the amounts is expected in one year or
less they are classified as current assets.
Otherwise they are presented as non-current
assets. Trade receivables are generally due for
settlement within 30-120 days and therefore
are all classified as current. Impairment and
other accounting policies for trade and other
receivables are outlined in note 5.3.
Other receivables include mainly prepaid
expenses and accrued income from the usual
operating activities of the Group.
The receivables are included in current assets,
except for maturities longer than 12 months
after the end of the reporting period.
Trade and other receivables consist of trade
receivables, other receivables (mainly VAT
receivables) and prepayments and accrued
income. Income tax receivables are presented on
a separate row in the consolidated statement of
financial position.
Payment terms of trade receivables varies
according to customer type and creditworthiness.
Advance payment is required from certain
customers. Information on the impairment of trade
and other receivables and the Group’s exposure to
credit risk, refer to note 5.3.
114 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
The following tables present the different
components of account and other receivables:
EUR thousand 31-Dec-2023 31-Dec-2022
Trade receivables 16,336 16,408
Prepayments and
accrued income 1,249 1,309
Other receivables 1 112 956
Total 18,697 18,674
4.3 TRADE AND OTHER PAYABLES
Trade and other payables include trade payables,
other liabilities, advance payments and accrued
expenses related the usual operating activities of
the Group.
ACCOUNTING POLICY
Trade payables are payment obligations
arising from goods or services acquired
from suppliers or service providers in the
ordinary course of business. Trade payables
are classified as current liabilities if payment
is due within one year or less. Trade and
other payables are classified as other financial
liabilities at amortised cost.
Material items included in prepayments and
accrued income:
EUR thousand 31-Dec-2023 31-Dec-2022
Social costs 9 55
Insurances 147 96
Advance payments 429 353
Other 663 1,158
Total 1,249 1,309
Other accrued income included mainly items
related to materials costs, marketing and IT. Due
to the short-term nature of the current receivables,
their carrying amount is assumed to be the same
as their fair value.
The following tables present the different
components of trade and other payables:
EUR thousand 31-Dec-2023 31-Dec-2022
Trade payables 8,690 8,737
Advance payments 1,103 794
Accrued expenses 7,817 8,775
Other liabilities 435 373
Total 18,045 18,679
Trade payables are unsecured and are usually paid
within 30 to 60 days of recognition.
Material items included in accrued expenses:
EUR thousand 31-Dec-2023 31-Dec-2022
Accrued salaries and
social security costs 4,631 3,193
Accrued annual discounts 1,474 1,553
Accrued interests 83 176
Other 1,629 3,853
Total 7,817 8,775
Other accrued expenses included items related to
material costs, marketing and sales comissons. The
carrying amounts of trade and other payables are
assumed to be the same as their fair values, due to
their short-term nature.
115 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Section 5: Net Debt And Contingencies
This section describes how the Group has financed its operations. This section also describes exchange rate, interest rate,
liquidity and credit risks related to financial assets and liabilities. This section also provides information how the Group
addresses above mentioned risks.
5.1 BORROWINGS AND OTHER FINANCIAL LIABILITIES
In 2023 Harvia renegotiated the terms of EUR 75,5
million term loans and EUR 8 million revolving
credit limit. In addition, the revolving credit limit
was increased to EUR 10,000 thousand. The Group
has entered into an interest rate swap agreement
to hedge against interest rate risk arising from
variable rate of bank loans.
The following tables present the classification of the financial liabilities as well as carrying values:
EUR thousand
Other financial
liabilities at
amortized cost
31-Dec-2023
Liabilities per balance sheet
Loans from credit institutions 75,409
Lease liabilities 2,741
Other non-current liabilities 202
Trade and other payables 9,125
Total 87,478
EUR thousand
Financial liabilities at
amortized cost
31-Dec-2022
Liabilities per balance sheet
Loans from credit institutions 77,417
Lease liabilities 2,421
Other non-current liabilities 3,609
Trade and other payables 9,110
Total 92,558
ACCOUNTING POLICY
Borrowings are recognised initially at fair value,
net of transaction costs incurred. Borrowings
are subsequently carried at amortised cost;
any difference between the proceeds (net of
transaction costs) and the redemption value is
recognised in the income statement over the
period of the borrowings using the effective
interest rate method.
Fees paid on the revolving credit facility
arrangements are capitalised as a prepayment
for liquidity services and amortised as expense
over the period of the facility to which it relates,
if there is no certainty that some or all of the
facility will be drawn down. This reflects the
finance cost of the undrawn facility. To the
extent that it is probable that some or all of
the facility will be drawn down, the fees are
recognised as transaction costs when the loan
is drawn down and recognized in profit and loss
using the effective interest rate method.
116 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
LOANS FROM CREDIT INSTITUTIONS AND
SHAREHOLDER LOANS
Loans from credit institutions
At the end of 2023 Harvia renegotiated the terms
of EUR 75,500 thousand term loans and EUR 8,000
thousand revolving credit limit resulting in more
favorable conditions. In addition, the revolving credit
limit was increased to EUR 10,000 thousand. The
term loan matures in two installments. The term
loan amounting to EUR 36,500 thousand and the
revolving credit limit of EUR 5,000 thousand mature
on December 2026 and the term loan amounting to
EUR 39,000 thousand and the revolving credit limit
of EUR 5,000 thousand mature in March 2027. The
nominal interest of the loans is tied to Euribor and
its margin is tied to the Group’s net debt / adjusted
EBITDA ratio.
Compliance with loan covenants
The bank loans include covenants according to the
financing agreement, such as net debt to adjusted
EBITDA ratio and interest cover ratio. Covenants
are monitored quarterly. The Group has complied
with all covenants related to new bank loans
in 2023 and 2022.
Fair values
The fair values of non-current borrowings are based
on discounted cash flows using a current borrowing
rate. They are classified as level 2 in the fair value
hierarchy due to the use of unobservable inputs,
including own credit risk.
The Group’s management has determined that there
is no essential difference between carrying value
and fair value. Margins of loans are considered to
reflect different conditions and the subordination of
the loans with reasonable accuracy.
DERIVATIVE FINANCIAL INSTRUMENTS
ACCOUNTING POLICY
Derivative financial instruments are initially
recognised at fair value on the date a
derivative contract is entered into and
subsequently measured at their fair value
through profit or loss.
The Group uses derivative financial instruments
such as interest rate swaps to hedge its risks
associated with interest rate fluctuations. The
Group had interest rate swap agreements with
fair value of EUR 1 869 thousand at the end
of 2023 (2022: EUR 3,243 thousand). Hedging
produces clear savings on interest payments of
Harvia in terms of cash flows. Fair value of the
interest rate swap fluctuates according to interest
rate market expectations, and the change in value
is recorded in net financial items as changes in fair
value. Changes in the fair value of the swap have
no cash flow impact. Nominal value of the interest
rate swap contract was EUR 36,500 thousand as
at 31 December 2023 (2022: EUR 36,500 thousand).
The interest rate swap contract matures
in 15 December 2026.
The fair value of interest rate swap is calculated
as the present value of the estimated future cash
flows based on observable yield curves. The fair
value is on level 2 in the fair value hierarchy.
OTHER NON-CURRENT LIABILITIES
ACCOUNTING POLICY
Harvia’s other long-term liabilities consist of
redemption and additional purchase price
liabilities related to acquisitions. Redemption
and additional purchase liabilities are initially
recognised at fair value at the date of
acquisition of the subsidiaries. Subsequently,
they are measured at fair value through profit
or loss or equity.
The Group had long-term additional purchase
price liabilities related to acquisitions of
EUR 202 thousand (2022: 3,609 thousand).
The contractual amount of the liabilities is
EUR 250 thousand (2022: 4,250). In 2023, Harvia
paid additional purchase price of the Kirami
acquisition in advance. Harvia and the sellers of
Kirami agreed that Harvia will pay the additional
purchase price of EUR 2.488 thousand earlier
than previously announced, on 21 December 2023.
The paid amount is approximately EUR 1.2 million
smaller than the provision Harvia made in
connection with the acquisition. This difference
will improve Harvia’s 2023 result, and it will be
presented as changes in the fair value of financial
items in the income statement.
After the payment, only additional purchase
price liabilities related to the Sauna-Eurox
acquisition remain on Harvia’s balance sheet.
Harvia’s additional purchase price liabilities
in 2023 and 2022, were linked to the development
of the key performance indicators of the acquired
companies (typically to EBITDA).
117 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
5.2 CASH AND CASH EQUIVALENTS
Cash and cash equivalents amounted to EUR
40,581 thousand at the end of 2023 (31 December
2022: EUR 25,310 thousand).
In the consolidated statement of cash flow, cash
and cash equivalents include cash in hand and
deposits held at call from banks. The short-term
deposits are considered readily convertible to
cash as those have original maturities of three
months or less. Cash and cash equivalents on the
statement of financial position equals the cash and
cash equivalents of the consolidated statement of
cash flows. Cash and cash equivalents are financial
asset and valued at amortized cost.
5.3 FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT
This note explains Harvia Group’s exposure to
financial risks and how these risks could affect
Harvia Group’s future financial performance. Profit
and loss information for the period has been
included where relevant to add further context.
This note also describes how the Group monitors
its capital structure and what are the targets
for the structure.
ACCOUNTING POLICY
Classification and measurement of financial
assets
The Group’s financial assets consist of trade
receivables, certain other receivables and
accrued income as well as cash and cash
equivalents. A financial asset is measured at fair
value at initial recognition, to which are added
transaction costs directly attributable to the
acquisition, excluding trade receivables that are
measured at transaction price when they do not
contain a significant financing component.
Harvia’s management has determined which
business models are applied for the Group’s
financial assets at the date of application of IFRS
9 as of January 1, 2018 and classified financial
assets into categories according to IFRS 9.
All financial assets of the group, excluding
possible derivative assets, are classified as at
amortized cost.
Impairment of financial assets
Financial assets consist mainly of trade
receivables and for the recognition of expected
credit losses the group applies the simplified
approach, which permits the use of the lifetime
expected loss provision for all trade receivables.
To measure the expected credit losses, trade
receivables have been grouped based on shared
credit risk characteristics and the days past due.
Expected credit losses also incorporate forward
looking information.
Classification and measurement of financial
liabilities
Loans from credit institutions are recognized
initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried
at amortized cost; any difference between the
proceeds (net of transaction costs) and the
redemption value is recognized in the income
statement over the period of the borrowings
using the effective interest rate method.
Fees paid on the revolving credit facility
arrangements are capitalized as a prepayment
for liquidity services and amortized as expense
over the period of the facility to which it relates,
if there is no certainty that some or all of the
facility will be drawn down. This reflects the
finance cost of the undrawn facility. To the
extent that it is probable that some or all of
the facility will be drawn, the fees are partly
recognized as transaction costs, when the loan is
drawn, recognized in the income statement over
the period of the borrowings using the effective
interest rate method.
Derivative financial instruments
Group’s derivatives have not been determined
as hedging instruments and therefore 9 they
are classified at fair value through profit or loss
under assets or liabilities.
118 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
During the financial period, the following foreign exchange related amounts were recognised in profit or
loss and other comprehensive income:
EUR thousand 2023 2022
Amounts recognised in profit or loss
Net foreign exchange gains/losses included in operating income/expenses -9 -75
Net foreign exchange gains/losses included in finance income/costs -277 257
Total net foreign exchange gains/losses recognised in profit before income tax
for the period -286 181
Gains/losses recognised in other comprehensive income
Translation differences of foreign operations -1,785 326
INTEREST RATE RISK
The Group’s main interest rate risk arises from
non-current borrowings with variable rates, which
expose the Group to cash flow interest rate risk.
However, the Group manages interest rate risk in
these loans by swapping floating rate into fixed rate.
The Group has raised non-current loans from credit
institutions at floating rates and swapped them into
fixed rates that are lower than those available if the
Group borrowed at fixed rates directly.
The following table shows the sensitivity analysis of Harvia’s interest-bearing liabilities to a 1% increase in
interest rates:
EUR thousand 2023 2022
Interest bearing liabilities 75,506 77,528
Leasing liabilities 2,877 3,144
Interest rate swap 36,500 36,500
Share of liabilities covered with interest rate swaps 47% 45%
Impact on interest costs if interest rates were to rise by 1% 784 807
Interest rate swap -365 -365
Total, Impact on interest costs if interest rates were to rise by 1% 419 442
* The amount of debt to be tested is the nominal value of Harvia’s cash flows related to loan and lease agreements, which is also presented in the reconciliation
of net debt and cash flow.
The Group’s target is keep at least 60% of its
borrowings at fixed rates and, if necessary, use
interest rate swaps to achieve this. The Group’s
variable rate loans in 2023 and 2022, were mainly
The Group’s overall risk management program
focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects
on the Group’s financial performance. Derivative
financial instruments are used to hedge certain
risk exposures.
The Group’s risk management is carried out by
a finance department under guidelines provided
by the Board of Directors. Finance department
identifies, evaluates and hedges financial
risks in close co-operation with the Group’s
business operations.
FOREIGN EXCHANGE RISK
Harvia operates in several countries. In 2022,
Harvia was mainly exposed to transaction risk
and translation risk associated with the US dollar
arising when the parent company’s investments to
subsidiaries outside euro area are converted into
euros. Transaction risk associated with subsidiaries
outside the euro area consists primarily of trade
receivables and trade payables from these
subsidiaries arising in the operational business of
the Group companies.
So far transaction risks have not been significant
for the Group and Harvia has not hedged against
these risks by currency derivatives. In other
respects, the Group’s income and expenses arise
almost exclusively in euros. The Group’s net
investment to units outside the euro area consist
of the investments in subsidiaries in China, Hong
Kong, Russia, Romania and the United States.
Foreign exchange risk related to net investments is
not hedged.
119 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
relationships by accepting longer than ordinary
terms of payment periods and by agreeing on a
new payment plan in respect of receivables due.
Trade receivables increased in North-America
due to strong demand supported by the growing
awareness of sauna and its health benefits as well
as strong consumer confidence and economic
conditions. In 2022, Harvia had significantly
increased its expected credit loss provision in
Russia, due to the uncertainty caused by the
Russia’s attack war. As of 31 December 2023,
Harvia had trade receivables from Russia in rubles
amounted to EUR 0.8 million (2022: 1.8 million),
of which EUR 712 thousand (2022: 916 thousand)
were written down in 2023. A payment plan
has been established for the receivables. Harvia
has no significant concentrations of credit
risks due to the large number and geographic
dispersion of companies that comprise the
Group’s customer base.
During 2023 EUR 26 thousand (2022: EUR 7 thousand) was recognised in profit or loss in relation to
credit losses. The loss allowance on 31 December 2023, EUR 1,273 thousand (2022: EUR 1,347 thousand), is
specified as follows:
31-Dec-23
EUR thousand Gross book value Allowance for bad debt
Not due 12,755 6
Overdue by
Less than 30 days 2,207 9
30-60 days 844 11
61-90 days 167 4
91-180 days 70 7
181-360 days 338 84
Over 360 days 1,228 1,151
Total 17,609 1,273
31-Dec-22
EUR thousand Gross book value Allowance for bad debt
Not due 12,129 9
Overdue by
Less than 30 days 1,777 7
30-60 days 475 6
61-90 days 221 6
91-180 days 728 70
181-360 days 803 84
Over 360 days 1,621 1,165
Total 17,755 1,347
denominated in euro and the interest rate swaps
covered 47% of principal outstanding at 31
December 2023 and 45% at 31 December 2022.
Based on the sensitivity analysis, if the interest rate
on uncovered variable rate borrowings were to
increase by one percentage point as of 31.12.2023
with all other variables held constant, the Group’s
interest expense would increase by EUR 419
thousand (in 2022: EUR 442 thousand). In 2022,
Harvia extended its sensitivity analysis to all its
interest-bearing liabilities.
CREDIT RISK
Credit risk refers to the risk that a counterparty will
default on its contractual obligations resulting in
a financial loss to the company. Credit risk arises
from cash and cash equivalents, as well as from
credit exposures to customers from outstanding
receivables. Insurance for certain customers and
for some customers advance payments are in use.
The credit risk on cash and cash equivalents is
limited because the counterparties are banks with
high credit ratings assigned by international credit
rating agencies. To spread the credit risk, Harvia
deposits its cash reserves with different banks.
The Group considers that there is evidence
of impairment if any of the following
indicators are present:
- significant financial difficulties of the debtor
- probability that the debtor will enter bankruptcy
or financial reorganisation, and
- default or delinquency in payments
In 2023, Harvia had significant trade receivables
due to long terms of payment in the client
agreements. In certain circumstances, Harvia has
also supported its distribution and dealership
120 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
The other classes within other receivables do not
contain essentially impaired or overdue assets.
Based on the credit history of these other classes,
it is expected that these amounts will be received
when due. The Group does not hold any collateral
in relation to these receivables.
LIQUIDITY RISK
Cash flow forecasting is performed on Group
basis. Group finance department monitors Harvia
Group’s liquidity requirements to ensure it has
sufficient cash to meet operational needs while
maintaining sufficient headroom on its undrawn
committed loan facility so that the Group does not
breach loan limits or covenants on its loan facility.
The Group has undrawn interest-bearing facilities
(revolving credit facility) of EUR 10,000 thousand
as at 31 December 2023 (EUR 6,000 thousand
as at 31 December 2022). The undrawn interest-
bearing facility is available constantly. Operating
cash flows and liquid funds are the main source of
financing for the future payments together with
possible new debt or equity financing.
The table below shows future repayments,
interest expenses and capitalised interest
expenses of Group´s financial liabilities divided
into maturity groupings based on the remaining
contractual maturity at the balance sheet date. The
amounts disclosed in the table are the contractual
undiscounted cash flows. Harvia has a interest
rate swap with a nominal value of 36.5 million that
matures in 15 December 2026. Interest rate swap
produces clear savings on interest payments of
Harvia in terms of cash flows. Fair value of the
interest rate swap fluctuates according to interest
rate market expectations, and the change in value
is recorded in the net financial items as changes
in fair value. The figures presented are contractual
undiscounted cash flows.
EUR thousand
Less than 6
months 6 – 12 months
Between 1 and 2
years
Between 2 and 5
years Over 5 years
Total contractual
cash flows Carrying amount
31-Dec-2023
Non-derivatives
Loans from credit institutions 6 75,500 75,506 75,409
Lease liabilities 355 293 360 1,545 324 2,877 2,741
Pension liabilities 88 88 172 490 1,185 2,023 2,071
Redemption and purchase price liability 250 250 202
Trade payables 8,690 8,690 8,690
Total non-derivatives 9,139 381 783 77,535 1,509 89,346 89,113
Derivatives
Interest rate swap -568 -574 -1,123 395 -1,869 -1,869
Total derivatives -568 -574 -1,123 395 -1,869 -1,869
121 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
EUR thousand
Less than 6
months 6 – 12 months
Between 1 and 2
years
Between 2 and 5
years Over 5 years
Total contractual
cash flows Carrying amount
31-Dec-2022
Non-derivatives
Loans from credit institutions 2,014 14 39,000 36,500 77,528 77,417
Lease liabilities 256 225 288 627 1,748 3,144 2,421
Pension liabilities 87 87 170 485 1,242 2,071 2,071
Redemption and purchase price liability 4,000 250 4,250 3,609
Trade payables 8,737 8,737 8,737
Total non-derivatives 11,094 326 43,458 37,862 2,990 95,730 94,256
Derivatives
Total non-derivatives -321 154 302 290 899 -3,243
Total derivatives -321 154 302 290 899 -3,243
CAPITAL MANAGEMENT
The Group’s objectives when managing capital
are to safeguard the Group’s ability to continue as
a going concern to provide returns and increase
in value of invested capital for shareholders. The
Group monitors net debt to adjusted EBITDA ratio
and to net working capital.
Net debt is calculated as loans from credit
institutions (included in current and non-current
interest-bearing liabilities) less cash and cash
equivalents. The target of the net debt and net
debt position to EBITDA are linked to a covenant
of borrowing facilities. The ratio of net debt to
EBITDA has an impact on the loan margins of the
Harvia’s loan agreements.
The table below shows the net debt position.
EUR thousand 31-Dec-2023 31-Dec-2022
Loans from credit institutions 75,409 77,417
Lease liabilities 2,741 2,421
Less cash and cash equivalents -40,581 -25,310
Net debt 37,569 54,529
122 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Reconciliation of net cash flow to movement in net debt:
EUR thousand
Cash and cash
equivalents
Loans from credit
institutions due within 1 year
Loans from credit
institutions due after 1 year Lease liabilities Total net debt
1.1.2022 15,488 -48 -56,380 -2,877 -43,817
Cash flows 9,500 -1,983 10 518 8,045
Acquisitions -19,000 -19,000
Divestments 104 104
Exchange differences 218 4 222
Other non-cash movements -20 -63 -82
31.12.2022 15,488 -48 -56,380 -2,877 -43,817
Cash flows 18,519 2,022 92 765 21,398
Acquisitions -2,801 -66 -307 -3,173
Exchange differences -447 -447
Other non-cash movements -41 -777 -818
31.12.2023 40,581 -6 -75,404 -2,741 -37,569
123 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
5.4 FINANCE INCOME AND COSTS
This note presents the finance income and finance
costs of the Group. The Group has entered into
interest rate swap agreements to hedge against
interest rate changes arising from the variable rate
external bank loans.
For information about derivatives and financial
liabilities, refer note 5.1.
For information about cash and cash
equivalents, refer note 5.2
Group’s interest and other finance income related mainly to foreign exchange gains, interest income of
trade receivables and gains on valuation of derivative contracts. They amounted to EUR 1,791 thousand
during 2023 (2022: EUR 5,663 thousand). Finance costs related mainly to loans from financial institutions,
exchange differences and losses on valuation of derivative contracts. See the following table:
EUR thousand 2023 2022
Finance income
Share in profits and losses of associated companies -242 26
Interest income 531 20
Fair value gain on interest rate swap 0 3,727
Fair value gain 1,238 0
Exchange rate gains 259 1,769
Other finance income 5 120
Total 1,791 5,663
Finance costs
Interest costs -2,743 -1,062
Other finance charges paid/payable for financial liabilities not at fair value through
profit or loss -649 -979
Exchange rate losses -536 -1,512
Fair value losses on interest rate swaps -1,374 0
Total -5,302 -3,553
Finance costs, net -3,511 2,110
124 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
5.5 COMMITMENTS AND CONTINGENT LIABILITIES
This note provides information about items that
are not recognised in the financial statements
as they do not (yet) satisfy the recognition
criteria. These are guarantees, pledges and
contingent liabilities.
EUR thousand 31-Dec-2023 31-Dec-2022
Other guarantees:
Pledged accounts 37 36
Customs guarantee 50 50
Total 87 86
OTHER COMMITMENTS
Harvia becomes involved from time to time in
various claims and lawsuits arising in the ordinary
course of its business, such as disputes with
customers and proceedings initiated by public
authorities. During the reporting periods, Harvia
has not been a party to legal, arbitration or
administrative proceedings which could have a
significant impact on the Group’s financial position
or profitability.
5.6 DEFINED BENEFIT OBLICATIONS
Defined benefit obligations are recognized
according to IAS 19. Harvia has an unfunded
defined benefit pension plan in Germany. German
pension plan was acquired at 1.5.2020. Harvia’s
other pension plans, such as statutory Finnish TyEL
plan are classified as defined contribution plans.
German pension plan is a salary-based plan
which provides old-age, disability and survivor
benefits for plan members. The pension plan is
administrated according to local legislation and
practices. The pension plan includes pensioners,
active and deferred vested plan members.
Defined benefit plans expose Harvia to risks the
most relevant being the interest risk relating to the
discount rate. If the discount rate decreases, the
defined benefit obligation will increase. Changes in
an inflation assumption or mortality models may
also increase the defined benefit obligation.
125 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
The actuarial gains and losses and defined benefit expense recognized in comprehensive income and other
comprehensive income are as follows:
EUR thousand 2023 2022
Net interest 70 31
Actuarial gains (-) / losses (+) caused by changes in financial assumptions -36 -524
Experience adjustments 87 -37
Total 121 -530
The reconcilation of the net defined benefit liability and the defined benefit obligation is as follows:
EUR thousand 2023 2022
The defined benefit obligation 1.1. 2,071 2,783
Service cost
Net interest 70 31
Actuarial gains (-) / losses (+) 51 -561
Benefits paid -169 -182
Total 2,023 2,071
ACCOUNTING POLICY
A defined contribution plan is a post-
employment benefit plan under which an entity
pays fixed contributions into an insurance
company or a separate entity fund. The entity
will have no legal or constructive obligation
to pay further contributions if the fund does
not hold sufficient assets to pay all employee
benefits relating to employee service in the
current and prior periods. Contributions to the
defined contribution plans are charged directly
to the profit or loss in the year to which these
contributions relate. Defined benefit plans are
post-employment benefit plans other than
defined contribution plans.
Under defined benefit plans both actuarial and
investment risks are on the responsibility of
the Group and the defined benefit obligation
is recognized. The defined benefit obligation
represents the present value of future cash flows
from payable benefits, which are calculated for
by using the projected unit credit method. The
discount rate used in calculating the present
value of the defined benefit obligation is based
on the market yields of high-quality corporate
bonds with appropriate durations. Pension
expenses are recognized in the profit or loss
by allocating the current service cost over the
service lives of employees based on actuarial
calculations. The net interest is included as part
of the personnel expenses.
The liability (or asset) recognized in the
consolidated statement of financial position is the
defined benefit obligation at the closing date less
the fair value of plan assets. Actuarial gains and
losses arising from experience adjustments and
changes in actuarial assumptions are charged
or credited to equity in other comprehensive
income in the period in which they arise.
ACCOUNTING ESTIMATES AND
MANAGEMENT JUDGEMENT
The valuation of defined benefit obligation
is based on management’s estimates about
actuarial assumptions such as discount rate,
inflation and future mortality rates.
126 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Actuarial assumptions used in calculating the defined benefit obligation are as follows:
2023 2022
Discount rate 3.76% 3.55%
Benefit increase 2.00% 2.00%
Salary increase 1.00% 1.00%
Turnover rate 0.00% 0.00%
Mortality model
Richttafeln
2018 G
Richttafeln
2018 G
The sensitivity analysis of the defined benefit obligation is as follows. The below sensitivity analysis is based
on a change in an assumption while holding all other assumptions constant:
EUR thousand 2023 2022
Impact of the change in the discount rate (+0.50%) on the defined benefit obligation -82 -87
Impact of the change in the discount rate (-0.50%) on the defined benefit obligation 88 94
The duration of the defined benefit pension
obligation is apx. 9 years in 2022. The defined
benefit plan has no plan assets.
127 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Section 6: Other Notes
This section of the notes includes other information that must be disclosed to
comply with accounting standards and other pronouncements.
6.1 GROUP STRUCTURE AND CONSOLIDATION
This note provides information of the
Group structure and accounting principles
for consolidation.
ACCOUNTING POLICY
Subsidiaries are all entities over which the
Group has control. The Group controls an
entity when the group is exposed to, or has
rights to, variable returns from its involvement
with the entity and has the ability to affect
those returns through its power to direct the
activities of the entity. Subsidiaries are fully
consolidated from the date on which control is
transferred to the Group.
Intercompany transactions, balances and
unrealised gains on transactions between
Group companies are eliminated. When needed,
the financial statements by subsidiaries have
been adjusted to conform to the Group’s
accounting policies.
128 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Parent company
Country of
incorporation Nature of business Parent ownership (%) Group ownership (%)
Acquired/ established
(month/year)
Harvia Oyj Finland Parent company
Subsidiaries
Harvia Group Oy Finland Holding 100 100 4/2014
Harvia Finland Oy Finland Manufacturing 100 4/2014
Velha Oy Finland Manufacturing 100 4/2014
Harvia (Hong Kong) Sauna Co. Ltd Hong Kong Sales 100 4/2014
Guangzhou City Harvia Sauna Co. Ltd China Manufacturing 100 4/2014
Harvia Estonia Oü Estonia Manufacturing 100 12/2014
LLC Harvia RUS Russia Sales 100 6/2015
Sentiotec GmbH Austria Sales 100 11/2016
Domo Wellness Romania Srl Romania Manufacturing 100 11/2016
K&R Imobiliare Romania Real estate 100 11/2016
Saunamax Oy Finland Service 100 3/2017
Harvia US Holdings Inc. United States Holding 100 11/2018
Harvia US Inc. United States Manufacturing 100 11/2018
Harvia Holding GmbH Germany Holding 100 02/2020
EOS Saunatechnik GmbH Germany Manufacturing 100 04/2020
Kusatek GmbH Germany Manufacturing 100 04/2020
Spatronic GmbH Germany Manufacturing 100 04/2020
Kirami Oy Finland Manufacturing 100 05/2021
Kirami Ab Sweden Sales 60 05/2021
Metagroupp OÜ Estonia Manufacturing 50 05/2021
Sauna-Eurox 0y Finland Manufacturing 100 08/2021
Parhaat Löylyt Oy Finland Sales 100 08/2021
Harvia Japan Limited Japan Sales 51 08/2023
Phoenix El-Mec srl Italy Manufacturing 100 09/2023
SUBSIDIARIES
The Group’s subsidiaries as at 31 December 2023
are set out below. Unless otherwise stated, they
have share capital consisting solely of ordinary
shares that are held directly by the Group, and the
proportion of ownership interests held equals the
voting rights held by the Group. The country of
incorporation or registration is also their principal
place of business.
129 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
6.2 RELATED PARTY
TRANSACTIONS
This note provides information of Harvia Group’s
related parties and transactions with related
parties. The Group’s related parties include the
parent company, the Group companies mentioned
in note 6.1 above. The related parties include
also key management personnel and their family
members as well as companies controlled by these.
Key management personnel are members of the
Board of Directors, Chief Executive Officer and
management team.
RELATED PARTY TRANSACTIONS
Harvia’s key management personnel, the members
of the Board of Directors, and their family
members are entitled to purchase sauna products
from Harvia in accordance with the policy applying
to the entire personnel of Harvia.
Transactions with related parties have been made
on an arm’s length basis.
EUR thousand 2023 2022
Sales of goods and services 86 7
Purchases of goods and services 22 1
ACCOUNTING POLICY
Share-based payments
Share-based incentive plans have been
recognized as an expense during the
earnings period in the income statement item
personnel expenses. The fair value of the
arrangement is the share value at benefit’s
grant date. The amount to be recognized
as an expense is based on estimate of the
number of shares, which are expected
to be earned during the vesting period.
The estimate of the shares earned will be
assessed at every balance sheet date. If
the estimate of the shares changes in later
periods, the change shall be adjusted in the
income statement at that period the change
is noticed. The contra account for shares
to be granted according to the incentive
plans is invested unrestricted equity reserve.
Harvia’s share-based incentive plans, that
are paid net in shares after deducting
withholding tax, are booked as share paid
arrangements although Harvia pays taxes in
cash in favor of the incentive plan participant.
ACCOUNTING ESTIMATES AND
MANAGEMENT JUDGEMENT
Share-based payments
Harvia Group makes judgements on whether
an arrangement or a transaction contains a
share-based payment. The measurement of
the fair value for the arrangement requires
judgement from the management.
Harvia has not used share-based
arrangements in acquisitions. In the
acquisition of EOS Group, the sellers were
left with a minority share with the aim
of motivating joint value creation. The
share agreement was that Harvia would
purchase the minority shares after a certain
period of time.
Harvia has a share-based long-term incentive
plan for the CEO, the management team and
certain other key employees. The long-term
share-based incentive plan has been decided
by Harvia’s Board of Directors to include
members of the company’s management
team and certain other key personnel in units
where they have independent management
responsibility and, as a consideration of the
Board of Directors, a significant impact on
the company’s growth and profitability.
130 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
MANAGEMENT HOLDINGS
The following table indicates the ownership
interests of the members of the Board of Directors,
the Chief Executive Officer and the members of
the management team in the parent company’s
shares outstanding at 31 December 2023:
2023 2022
Members of the Board of
Directors 0.3% 0.3%
Chief Executive Officer 0.0% 1.4%
Other Management team 2.8% 3.7%
REMUNERATION TO MANAGEMENT
The Board of Directors decides on the amount
of and basis for the remuneration of the Chief
Executive Officer (CEO) and the members of
the management team. The remuneration of
the CEO and the members of the management
team consists of a monthly salary plus a bonus.
The bonus to the CEO and the members of
the management team is paid based on the
achievement of personal objectives as well as
objectives relating to profitability for the financial
year. The performance-based bonus must not
exceed 31% of the fixed salary of the CEO and of
other members of the management team.
The CEO of the Group is entitled to statutory
pension, and the age of retirement is determined in
accordance with the statutory employee pension
system. The term of notice for the CEO has been
specified as 6 months, and he is entitled to salary
for the term of notice. If the company terminates
the employment contract of the CEO, he is, under
certain conditions, entitled to a compensation that
equals full salary for 6 months.
KEY MANAGEMENT PERSONNEL
COMPENSATION
EUR thousand 2023 2022
Chief executive officer
Salaries and other short-term
employee benefits 691 793
Long-term incentive program 0 721
Pension costs - defined
contribution plans* 123 141
Total 815 1,656
* Includes costs of voluntary pension plan amounting to EUR 4 thousand in
2023 (2022: EUR 9 thousand).
Other management team
Salaries and other short-term
employee benefits 1,432 1,488
Long-term incentive program 455 1,949
Pension costs - defined
contribution plans 188 203
Total 2,076 3,641
REMUNERATION TO MEMBERS OF BOARD OF
DIRECTORS
EUR thousand 2023 2022
Olli Liitola (as of 11 March 2014) 61 53
Olbrich Heiner (as of 7 April 2022) 39 26
Sanna Suvanto-Harsaae (2 April
2020 - 20 April 2023) 15 47
Ia Adlercreutz (1 September 2016 -
7 April 2022) 0 7
Anders Holmen (as of 8 April 2021) 43 35
Hille Korhonen (as of 8 April 2021) 47 37
Catharina von Stackelberg-
Hammarén (as of 20 April 2023) 25 0
Markus Lengauer (as of 20 April
2023) 25 0
Total 254 205
SHARE-BASED INCENTIVE PLAN
Harvia has a share based long-term incentive plan
for the CEO and Management Team members.
The plan form a part of Harvia Plc’s remuneration
program for its executives, and the aim of the plan
is to support the implementation of the company’s
strategy, to align the interests of the executives
with interests of the shareholders to increase the
value of the company, to improve the performance
of the company, and to retain the executives.
The long-term incentive plan consists of three
performance periods of three calendar years
each, 2021–2023 and 2022–2024 and 2023–2025.
During 2023 Harvia paid out the rewards regarding
the performance period 2010–2022.The Board of
Directors decides separately for each performance
period the plan participants, performance criteria,
131 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
incentive program in accordance with the
program-specific terms and conditions. On the
same day, based on the decision of the General
Meeting, Harvia Oyj transferred a total of 2,328
own shares possessed by the company to
members of the Board of Directors of Harvia
Oyj as part of the Board’s remuneration. On 21
September 2023, relating to the same decision,
Harvia transferred 3,424 own shares held by
the company without consideration to the key
employees participating in the share-based
incentive program.
In the performance period 2021–2023, the plan
has 15 participants at most and the targets for
the performance period relate to company’s total
shareholder return, revenue growth, sustainability
targets and EBIT margin. The maximum number
of shares in Harvia Plc to be paid based on the
performance period 2021–2023 is 33,500. Potential
rewards from the performance period 2021–
2023 will be paid out during spring 2024.
In the performance period 2022–2024, the plan
has 16 participants at most and the targets for
the performance period relate to company’s
total shareholder return, revenue growth,
sustainability targets and EBIT margin. The
maximum number of shares in Harvia Plc to be
paid based on the performance period 2022–
2024 is 73,600. Potential rewards from the
performance period 2022–2024 will be paid out
during spring 2025.
The Board of Directors of Harvia Plc decided
on 26 June 2023 to continue the Long-term
Performance Share Plan for the management team
and other key employees for the performance
period 2023–2025. In the performance
period 2023–2025, the plan has 16 participants
at most and the targets for the performance
period relate to the company’s total shareholder
return, revenue growth, CO2 emissions and
EBIT margin. The maximum number of Harvia
Plc shares to be paid based on the performance
period 2023–2025 is 61,600. This number of shares
represents the gross earning, from which the
withholding of tax and possible other applicable
contributions are deducted and the remaining net
amount is paid in shares. However, the company
has the right to pay the reward fully in cash under
certain circumstances. Potential rewards from the
performance period 2023–2025 will be paid out
during spring 2026.
and related targets, as well as the minimum, target,
and maximum reward potentially payable based on
target attainment.
In the performance period 2020–2022, the plan
had 15 participants at most and the targets for
the performance period related to company´s
total shareholder return, revenue growth and EBIT
margin. The number of shares to be paid based on
the performance period 2020–2022 is maximum
of 50 300 Harvia Plc´s shares.This number of
shares represents gross earning, from which the
withholding of tax and possible other applicable
contributions are deducted, and the remaining net
amount was paid in shares.
On 3 May 2023, The Board of Directors of Harvia
Plc decided on a directed share issue without
consideration for the payment of rewards earned
under the company’s share-based incentive
program. The share payments concerned the
performance period 2020–2022 of the company’s
share-based incentive program launched in
2020. In the share issue conducted on 30 May
2023, 9,109 own shares held by the company
were transferred without consideration to the
key employees participating in the share-based
132 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
6.3 TAXES
This note provides an analysis of the Group’s taxes.
ACCOUNTING POLICY
The tax expense for the period comprises
current and deferred tax. Tax is recognised
in the consolidated profit or loss statement
or if tax relates to items recognised in
profit and loss statement or directly in
equity, then the related tax is recognised
in other comprehensive income or equity
correspondingly.
The current income tax charge is calculated
on the basis of the tax laws enacted or
substantively enacted at the balance sheet
date in the countries where the company
and its subsidiaries operate and generate
taxable income.
INCOME TAX EXPENSE
EUR thousand 2023 2022
Current tax:
Current tax on profits for the year -6,448 -9,093
Adjustments in respect of prior years -5 -14
Total current tax expense -6,452 -9,107
Deferred tax:
Change in deferred taxes 200 176
Income taxes -6,253 -8,719
RECONCILIATION OF INCOME TAX EXPENSE AND TAXES CALCULATED AT THE FINNISH TAX RATE 20%
EUR thousand 2023 2022
Profit before tax 29,533 36,788
Tax calculated at Finnish tax rate 20% -5,907 -7,358
Effect of other tax rates for foreign subsidaries -602 -1,195
Expenses not deductible for tax purposes* -252 -211
Income not subject to tax 353 102
Other items 155 -58
Taxes in income statement -6,253 -8,719
133 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
DEFERRED TAXES
ACCOUNTING POLICY
Deferred income tax is recognised on
temporary differences arising between the
tax bases of assets and liabilities and their
carrying amounts in the consolidated financial
statements. However, deferred tax liabilities
are not recognised if they arise from the initial
recognition of goodwill; deferred income tax
is not accounted for if it arises from initial
recognition of an asset or liability in a transaction
other than a business combination that at the
time of the transaction affects neither accounting
nor taxable profit or loss. Deferred income tax
is determined using tax rates (and laws) that
have been enacted or substantively enacted
by the balance sheet date and are expected
to apply when the related deferred income tax
asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised only to the
extent that it is probable that future taxable
amounts will be available to utilise those
temporary differences.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset
current tax assets against current tax liabilities
and when the deferred taxes assets and liabilities
relate to income taxes levied by the same
taxation authority on either the same taxable
entity or different taxable entities where there is
an intention to settle the balances on a net basis.
MANAGEMENT JUDGEMENT
Determining to which extent deferred tax
assets can be recognised requires management
judgement. The management of Harvia Group
has used judgement when determining if
deferred tax asset is recognised for an unused
tax loss carryforward or unused tax credits.
Recognition is done only to the extent that
it is probable that future taxable profits will
be available against which the loss or credit
carryforward can be utilised.The Group
estimates positions taken in tax return with
respect to situations in which applicable
tax regulation is subject to interpretation. If
necessary, the booked amounts are adjusted to
correspond to amounts expected to be paid to
the tax authorities.
Harvia’s tax receivables include old tax
receivables arising from intra-group
interest payments. The deductibility of
these interest expenses is limited by tax
legislation. In 2023 EUR 3,027 thousand intra-
group interests were deducted in taxation
(2022: EUR 377 thousand). There were
EUR 3,253 thousand remaining intra-group
interest expenses at 31 December 2023. There
is no time limit for the deduction of net interest
expenses in taxation.
134 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Harvia has no expiring deferred tax assets. The movement in deferred tax assets and liabilities during the
year, without taking into consideration the offsetting of balances within same tax jurisdiction, is as follows:
EUR thousand At 1 January
Recognised in
profit or loss
Business
combinations
At 31
December
2023
Deferred tax assets
Tax losses and net interest costs 1,248 -606 642
Internal margin of inventories 364 37 401
Provisions 119 -20 99
Other items 372 267 639
Total 2,103 -322 1,782
Netting of deferred taxes -737 -737
Net deferred tax asset 1,367 -322 1,045
2023
Deferred tax liabilities
Measurement of acquired net assets at fair value 1,856 -441 1,416
Accumulated depreciation differences 154 -16 138
Property, plant and equipment 381 -39 341
Other items 19 5 24
Total 2,410 -491 1,919
Netting of deferred taxes -737 -737
Net deferred tax liability 1,673 -491 1,182
135 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
EUR thousand At 1 January
Recognised in
profit or loss
Business
combinations
At 31
December
2022
Deferred tax assets
Tax losses and net interest costs 1,448 -200 1,248
Internal margin of inventories 381 -17 364
Provisions 124 -5 119
Other items 285 116 -29 372
Total 2,238 -106 2,103
Netting of deferred taxes -750 -737
Net deferred tax asset 1,488 -106 1,367
2022
Deferred tax liabilities
Measurement of acquired net assets at fair value 2,402 -467 -79 1,856
Accumulated depreciation differences 124 30 154
Property, plant and equipment 421 -40 381
Other items 63 -4 -40 19
Total 3,010 -481 -119 2,410
Netting of deferred taxes -750 -737
Net deferred tax liability 2,260 -481 -119 1,673
The Group has not recognised deferred tax liability
on the undistributed profits of its subsidiaries
in the countries where the dividend distribution
causes tax penalties but dividend distribution is
considered unlikely.
136 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
6.4 EQUITY
This note describes what is included in the equity
of Harvia Group.
The total equity consists of the share capital, the
invested unrestricted equity reserve, currency
translation differences and accumulated profits.
SHARE CAPITAL AND NUMBER OF SHARES
Harvia has one share class and shares entitle the
holders equal right to dividends and votes in the
general meeting of Harvia.
EUR thousand
Ordinary
shares
Number of
shares
At 31 December 2022 80 18,694,236
At 31 December 2023 80 18,694,236
Harvia Plc held a total of 5,072 own shares
at 31 December 2023. The repurchased shares
were acquired based on the Company’s
incentive program.
OTHER RESERVES
The following table shows a breakdown of the
balance sheet line item ‘other reserves’ and the
movements in these reserves during the year. A
description of the nature and purpose of each
reserve is provided below the table.
EUR thousand
Invested
unrestricted equity
Translation
differences Total
At 1 January 2022 32,047 539 32,585
Share-based incentive plan 557 557
Revaluation of minority redemption liability 1,516 1,516
Repurchase of own shares -313 -313
Share-based payments -1,844 -1,844
Actuarial gains and losses 598 598
Translation differences 326 326
At 31 December 2022 32,562 865 33,427
Share-based incentive plan 995 995
Revaluation of minority redemption liability
Repurchase of own shares
Share-based payments -346 -346
Actuarial gains and losses 124 124
Translation differences -1,785 -1,785
At 31 December 2023 33,334 -1,785 32,414
INVESTED UNRESTRICTED EQUITY RESERVE
Under the Finnish Companies Act, the subscription
price of new shares is credited to the share capital,
unless it is provided in the share issue resolution
that it is to be credited in full or in part to the
invested unrestricted equity reserve. Contributions
to the reserve for invested unrestricted equity can
also be made without share issues.
TRANSLATION DIFFERENCES
ACCOUNTING POLICY
Translation differences that arise when
translating the financial statements of
subsidiaries are recognised in other
comprehensive income and accumulated in
translation differences reserve in equity.
Exchange rate differences arising on
translation of the foreign controlled entity are
recognised in other comprehensive income
as described in note 5.3 and accumulated
in a separate reserve within equity. The
cumulative amount is reclassified to profit or
loss when the net investment is disposed of.
137 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
RETAINED EARNINGS
Movements in retained earnings were as follows:
EUR thousand 2023 2022
At 1 January 63,766 47,886
Dividend distribution -11,956 -11,200
Profit for the period 23,271 27,080
At 31 December 75,081 63,766
In 2023, Harvia paid a dividend of EUR 0.64 per
share, in total EUR 11,956 thousand.
Harvia Plc’s total unrestricted equity amounts to
EUR 75,439,602 in total, of which profit for the
period accounts for EUR 15,481,367. Harvia targets
a regularly increasing dividend with a bi-annual
dividend payout. In order to determine the amount
of dividend, the Board of Directors has assessed
the company’s solvency and financial standing
after the end of the period.
Harvia’s Board of Directors proposes to the Annual
General Meeting that the company distributes a
dividend of EUR 0.68 per share, EUR 12,712,080.48
in total, for the financial period ended 31 December
2023. The Board of Directors proposes the
dividend to be paid in two instalments, EUR 0.34 in
May 2024 and EUR 0.34 in October 2024.
EQUITY ATTRIBUTABLE TO NON-CONTROLLING
INTERESTS
Movements in non-controlling interests
were as follows:
EUR thousand 2023 2022
1-Jan 1,072 3,598
Acquisitions & Divestments 0 -3,387
Dividend distribution 0 -127
Profit for the period 10 988
31-Dec 1,082 1,072
The non-controlling interest consists of minority
interests in Kirami Ab. In 2022, the non-controlling
interests also included EOS Group.
6.5 EVENTS OCCURRING AFTER THE
REPORTING DATE
Harvia Plc has appointed Jennifer Thayer as Head
of Region, North America and President of Harvia
US Inc., and a member of the management team of
Harvia Group. In her role, Thayer will be responsible
for leading the North American commercial
organization and driving the growth and
profitability of Harvia’s business in the region. She
will assume her position on 1 February 2024 and
report to the CEO of Harvia Plc.
138 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Parent company financial statements FAS
Parent company Profit & Loss Statement
EUR 1 Jan - 31 Dec 2023 1 Jan - 31 Dec 2022
Revenue 1,083,600.00 1,083,600.00
Other operating income 725.81 42,614.68
Materials and services 0.00 0.00
Staff expenses
Wages and salaries -1,123,073.85 -1,538,930.36
Social security expenses
Pension expenses -152,829.24 -141,185.01
Other social security expenses -23,827.00 -18,847.34
Other operating expenses -1,187,101.86 -1,085,809.11
Depreciation and amortization
Depreciation according to plan -18,831.01 -39,987.57
Operating profit -1,421,337.15 -1,698,544.71
Finance income
Income from other investments held as
noncurrent assets 15,000,000.00
From group undertakings 2,215,581.36 1,342,060.16
From others 1,254,679.23 3,506,199.83
Finance costs
To group undertakings -542,524.49 -167,483.17
To others -4,582,443.59 -651,753.91
Finance income and expenses total 13,345,292.51 4,029,022.91
Profit before income appropriations and
taxes 11,923,955.36 2,330,478.20
EUR 1 Jan - 31 Dec 2023 1 Jan - 31 Dec 2022
Appropriations
Change in cumulative accelerated
depreciation 29,469.84 -29,469.84
Group contribution 3,650,000.00 15,460,000.00
Income taxes -122,058.64 -3,561,215.02
Profit for the period 15,481,366.56 14,199,793.34
139 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Parent company Balance Sheet
EUR 1.1.-31.12.2023 1.1.-31.12.2022
ASSETS
Non-current assets
Intangible assets
Intangible rights 0.00 38.33
Other long-term expenses 7,388.32 14,208.32
Advance payments and construction in
process 109,255.00 88,959.05
Property, plant and equipment
Machinery and equipment 0.00 119,726.77
Holdings in group undertakings 85,909,022.95 85,909,022.95
Total non-current assets 86,025,666.27 86,131,955.42
Current assets
Long-term receivables
Receivables from group companies 42,954,013.00 48,407,186.93
Short-term receivables
Receivables from group companies 19,178,773.95 15,971,717.10
Other receivables 171,150.80 150,720.20
Prepayments and accrued income 4,068,068.07 702,332.52
Cash and cash equivalents 11,969,863.16 10,216,787.76
Total current asset 78,341,868.98 75,448,744.51
Total assets 164,367,535.25 161,580,699.93
EUR 1.1.-31.12.2023 1.1.-31.12.2022
EQUITY AND LIABILITIES
Equity
Share capital 80,000.00 80,000.00
Reserve for invested unrestricted equity 50,790,748.26 50,790,748.26
Retained earnings 9,167,487.52 6,923,638.50
Profit for the period 15,481,366.56 14,199,793.34
Total equity 75,519,602.34 71,994,180.10
Depreciation difference 0.00 29,469.84
Liabilities
Non-current liabilities
Loans from credit institutions 75,500,000.00 75,500,000.00
Amounts owed to group undertakings 8,000,000.00 8,000,000.00
Total non-current liabilities 83,500,000.00 83,500,000.00
Current liabilities
Loans from credit institutions 0.00 2,000,000.00
Trade payables 129,600.11 321,371.89
Amounts owed to group undertakings 4,711,720.38 3,164,628.06
Other liabilities 114,080.35 48,868.98
Accrued expenses 392,532.07 522,181.06
Total current liabilities 5,347,932.91 6,057,049.99
Total liabilities 88,847,932.91 89,557,049.99
Total equity and liabilities 164,367,535.25 161,580,699.93
140 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Parent company Cash flow statement
EUR 1 Jan - 31 Dec 2023 1 Jan - 31 Dec 2022
Cash flow from operating activities:
Profit (loss) before taxes 11,923,955.36 2,330,478.20
Adjustments to operating profit (+/–) for:
Depreciation and amortization 18,831.01 39,987.57
Unrealised foreign exchange gains and
losses 837.60 158,559.62
Other non-cash income and expenses -26,666.29 0.00
Financial income and expenses -13,345,292.51 -4,029,022.91
Cash flow before working capital changes -1,428,334.83 -1,499,997.52
Working capital changes:
Increase/decrease in trade an other
short-term interest-free receivables 14,325.10 -15,921.18
Increase/decrease in short-term interest-
free liabilities -274,954.18 -78,854.66
Change in working capital -1,688,963.91 -1,594,773.36
Operating cash flow before financing items
and taxes -163.78 -78.70
Interest received relating to operating
activities 421,486.23 13,563.83
Income taxes paid (–), received (+) -3,561,214.98 -6,677,350.12
Cash flow from operating activities: -4,828,856.44 -8,258,638.35
EUR 1 Jan - 31 Dec 2023 1 Jan - 31 Dec 2022
Cash flow from investments
Purchase of tangible and intangible items (–) -20,295.95 -136,288.98
Proceeds from sale of tangible and
intangible assets 89,000.00 0.00
Loans granted -510,000.00 -20,950,000.00
Loans reveived or granted (group accounts) 1,837,307.03 -591,458.62
Repayment of loan receivables 4,568,919.93 1,840,143.23
Interest received from investments 2,123,020.01 1,283,963.78
Cash flow from investments 8,087,951.02 -18,553,640.59
Cash flows from financing activities
Repurchase of own shares 0.00 -312,026.54
Proceeds from current interest bearing
liabilities 0.00 2,000,000.00
Repayment of current interest bearing
liabilities -2,000,000.00 0.00
Proceeds from non-current loans 925,225.67 22,000,000.00
Repayment of non-current loans -925,225.67 0.00
Interest and other financing expenses paid
(–) -3,010,074.86 -1,134,587.84
Dividends paid -11,955,944.32 -11,199,702.30
Group contributions received 15,460,000.00 23,025,000.00
Cash flows from financing activities -1,506,019.18 34,378,683.32
Net increase (+) / decrease (–) in cash and
cash equivalents 1,753,075.40 7,566,404.38
Cash and cash equivalents at beginning of
period 10,216,787.76 2,650,383.38
Cash and cash equivalents at end of period 11,969,863.16 10,216,787.76
141 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Notes to the financial statements of the parent company
PARENT COMPANY ACCOUNTING
POLICIES
Harvia Plc’s Financial Statements are presented
according to the Finnish Account Standards (FAS).
The financial statements are in Euros.
The preparation of Harvia Plc’s financial statements
requires the use of estimates, judgement and
assumptions that may affect the application of
accounting policies and the recognised amounts
of assets and liabilities at the date of the financial
statements. Actual results may differ from
previously made estimates and judgements.
NON-CURRENT ASSETS
Intangible assets are recognised at the acquisition
cost less the depreciation according to plan.
Acquisition costs consists of direct costs of the
acquisition. The depreciation has been calculated
straight-line basis over the financial use of the
asset. The depreciation period of intangible assets
is 3 years. Machinery and equipment are to be
depreciated within a maximum of 5 years.
Investments to group companies are valued at
acquisition cost or net realizable value, if the
investment value has deteriorated significantly
and permanently.
RECEIVABLES
Receivables are valued at acquisition cost or the
likely recoverable value if lower.
PENSIONS
Pension cover of Finnish employees and possible
voluntary pension has been arranged by pension
insurances through pension insurance companies.
INCOME TAXES
Income taxes have been recognised based on
the current year profit according to Finnish tax
legislation, with any adjustments resulting from
prior years. The parent company does not book
deferred taxes.
DIVIDENDS
Dividend that the Board of Director has proposed
has not been booked to the financial statements.
The dividends will be booked based on the
decisions of Annual General Meeting.
INTEREST SWAP
The interest rate swap of Harvia Group has been
transferred to Harvia Plc from Harvia Group
Oy during the financial year 2022. The interest
rate swap has been recorded at fair value in the
accounts, as it has been recorded in Harvia Group
Oy from the financial year 2018.
142 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE PROFIT AND LOSS STATEMENT
2023 2022
Notes relating to personnel
Number of personnel at the end of the financial year 2 2
Average number of personnel during the financial year
Officers 2 2
EUR 2023 2022
Manangement compensation
Members of the Board of Directors and CEO 945,700.64 1,719,639.88
Auditors' fees
Statutory audit 56,102.83 120,669.76
Other services 14,689.50 12,903.36
70,792.33 133,573.12
EUR 2023 2022
Finance income and costs
Other interest income
Group undertakings 2,215,581.36 1,342,060.16
Other than group companies 1,254,679.23 3,506,199.83
Total finance income 3,470,260.59 4,848,259.99
Interest and finance charges
Group undertakings -542,524.49 -167,483.17
Other than group companies -4,582,443.59 -651,753.91
Total financial expenses -5,124,968.08 -819,237.08
Total financial income and expenses -1,654,707.49 4,029,022.91
Income taxes
Income taxes for ordinary business -122,058.64 -3,561,215.02
143 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
NON-CURRENT ASSETS
EUR 2023 2022
Intangible assets
Acquisition cost at 1 January 2,123,591.25 2,123,591.25
Additions
Acquisition cost at 31 December 2,123,591.25 2,123,591.25
Accumulated amortization at 1 January -2,109,344.60 -2,102,432.60
Amortization for the financial year -6,858.33 -6,912.00
Accumulated amortization at 31 December -2,116,202.93 -2,109,344.60
Advance payments on intangible assets 109,255.00 88,959.05
Book value 31 December 116,643.32 103,205.70
Machinery and equipment
Acquisition cost at 1 January 215,251.14 115,289.27
Additions 143,194.98
Disposals -107,754.09 -43,233.11
Acquisition cost at 31 December 107,497.05 215,251.14
Accumulated depreciation at 1 January -95,524.37 -62,448.80
Depreciation for the financial year -11,972.68 -33,075.57
Accumulated depreciation at 31 December -107,497.05 -95,524.37
Book value 31 December 119,726.77
Investments
Acquisition cost 1 January 85,909,022.95 85,909,022.95
Acquisition cost 31 December 85,909,022.95 85,909,022.95
Book value 1 January 85,909,022.95 85,909,022.95
Book value 31 December 85,909,022.95 85,909,022.95
144 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
HOLDINGS IN GROUP UNDERTAKINGS
Group companies Parent ownership
Parent ownership 31-Dec-2023 31-Dec-2022
Harvia Group Oy, Muurame 100% 100%
Domo Wellness Romania Srl.
Guangzhou City Harvia Sauna Co. Ltd
Harvia Estonia Oü
Harvia Finland Oy, Muurame
Harvia (HK) Sauna Co. Ltd
Harvia US Holdings Inc.
Harvia US Inc.
K&R Imobiliare
LLC Harvia RUS
Saunamax Oy
Sentiotec GmbH
Velha Oy, Muurame
EOS Saunatechnik GmbH
Kusatek GmbH
Spatronic GmbH
Harvia Holding GmbH
Kirami Oy
Kirami Ab
Metagroupp OÜ
Sauna-Eurox Oy
Parhaat Löylyt Oy
Harvia Japan Limited
Phoenix El-Mec srl
All Group companies have been consolidated to the Group consolidated IFRS financial statements.
145 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
RECEIVABLES
EUR 2023 2022
Long-term receivables
Loans to group companies 41,085,000.00 45,163,919.93
Other receivables
Interest rate swap receivables 1,869,013.00 3,243,267.00
Total 42,954,013.00 48,407,186.93
Short-term receivables
Receivables from group companies
Trade debtors 220,396.00 137,311.91
Loans receivable 120,000.00 100,000.00
Other receivables 18,650,000.00 15,638,588.59
Prepayments and accrued income 188,377.95 95,816.60
Total 19,178,773.95 15,971,717.10
Receivables from others
Other receivables 171,150.80 150,720.20
Prepayments and accrued income 4,068,068.07 702,332.52
4,239,218.87 853,052.72
Material amounts included in prepayments and accrued income
Insurances 21,848.34 25,448.96
Others 12,278.41 82,098.58
Tax receivables 4,033,941.32 594,784.98
4,068,068.07 702,332.52
146 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
LIABILITIES
EUR 2023 2022
Long-term liabilities
Loans from credit institutions 75,500,000.00 75,500,000.00
Loans from group companies 8,000,000.00 8,000,000.00
83,500,000.00 83,500,000.00
EUR 2023 2022
Short-term liabilities
Loans from credit institutions 0,00 2,000,000.00
0,00 2,000,000.00
Loans from group undertakings
Other liabilities 4,711,720.38 3,164,628.06
Liabilities for others
Trade creditors 129,600.11 321,371.89
Other liabilities 114,080.35 48,868.98
Accruals and deferred income 392,532.07 522,181.06
636,212.53 892,421.93
Material amounts shown under accruals and deferred income
Wages and salaries including social security expenses 233,427.56 281,537.75
Interest expenses 82,799.75 175,681.09
Income taxes 0,00 0,00
Other 76,304.76 64,962.22
392,532.07 522,181.06
147 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
EQUITY
EUR 2023 2022
Restricted equity
Subscribed capital 1 January 80,000.00 80,000.00
Subscribed capital 31 December 80,000.00 80,000.00
Total restricted equity 80,000.00 80,000.00
Unrestricted equity
Reserve for invested unrestricted equity 1 January 50,790,748.26 51,102,774.80
Repurchase of shares -312,026.54
At 31 December 50,790,748.26 50,790,748.26
Retained earnings from previous financial years 21,123,431.84 18,123,340.80
Dividend distribution -11,955,944.32 -11,199,702.30
Retained earnings from previous financial years 9,167,487.52 6,923,638.50
Profit (loss) for the financial year 15,481,366.56 14,199,793.34
Total unrestricted equity 75,439,602.34 71,914,180.10
Total equity 75,519,602.34 71,994,180.10
Distributable unrestricted equity
Reserve for invested unrestricted equity 50,790,748.26 50,790,748.26
Retained earnings from previous years 9,167,487.52 6,923,638.50
Profit for the financial year 15,481,366.56 14,199,793.34
Distributable unrestricted equity 75,439,602.34 71,914,180.10
148 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
NOTES ON FAIR VALUE MEASUREMENT
Object: Loan, EUR 36,500 thousand
DERIVATIVE:
Interest rate swap nominal amount
EUR 36,500 thousand, for the
period 21 Jan 2023 to 15 Dec 2026
The company will receive 6 months interest and
pays fixed interest. The fair value of the contract at
the balance sheet date was EUR 1,869,013.
The cash flows of the interest rate swap are
recognised in the income statement.
GUARANTEES AND COMMITMENTS
EUR 2023 2022
Rental payments under lease contracts
Payable during the following financial year 45,945.96 12,365.26
Payable in later years 81,554.64 0,00
127,500.60 12,365.26
Derivatives
Interest rate swap 21.1.2022-15.12.2026
Nominal value 36,500,000.00 36,500,000.00
Present value 1,869,013.00 3,243,267.00
PROPOSAL BY THE BOARD OF DIRECTORS FOR DISTRIBUTION OF PROFIT
Harvia Plc’s total unrestricted equity amounts to
EUR 75,439,602.34 in total, of which profit for the
period accounts for EUR 15,481,366.56. In order to
determine the amount of dividend, the Board of
Directors has assessed the company’s solvency
and financial standing after the end of the period.
Harvia’s Board of Directors proposes to the
Annual General Meeting that the company
distributes a dividend of EUR 0.68 (0,64) per
share, EUR 12,712,080.48 in total, for the financial
period ended 31 December 2023. The Board of
Directors proposes the dividend to be paid in two
instalments, EUR 0.34 in May 2024 and EUR 0.34
in October 2024.
149 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
SIGNATURES FOR THE FINANCIAL STATEMENTS AND THE BOARD OF
DIRECTORS’ REPORT
In Helsinki, 7 February 2024
Olli Liitola
Chairman of the Board
Matias Järnefelt
CEO
Heiner Olbrich Anders Holmén
Hille Korhonen Catharina von
Stackelberg-Hammarén
Markus Lengauer
AUDITOR’S NOTE
A report on the audit performed has been issued today.
In Helsinki, 7 February 2024
PricewaterhouseCoopers Oy
Authorised Public Accountants
Markku Katajisto
Authorised Public Accountant
150 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Auditor’s Report (Translation of the Finnish Original)
To the Annual General Meeting of Harvia Oyj
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
OPINION
In our opinion
- the consolidated financial statements give
a true and fair view of the group’s financial
position, financial performance and cash flows in
accordance with IFRS Accounting Standards as
adopted by the EU
- the financial statements give a true and fair view
of the parent company’s financial performance
and financial position in accordance with the
laws and regulations governing the preparation
of financial statements in Finland and comply
with statutory requirements.
Our opinion is consistent with the additional report
to the Audit Committee.
What we have audited
We have audited the financial statements of
Harvia Oyj (business identity code 2612169-5) for
the year ended 31 December 2023. The financial
statements comprise:
- the consolidated balance sheet, statement of
comprehensive income, statement of changes in
equity, statement of cash flows and notes, which
include material accounting policy information
and other explanatory information
- the parent company’s balance sheet, income
statement, cash flow statement and notes.
BASIS FOR OPINION
We conducted our audit in accordance with good
auditing practice in Finland. Our responsibilities
under good auditing practice are further described
in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report.
We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We are independent of the parent company and
of the group companies in accordance with the
ethical requirements that are applicable in Finland
and are relevant to our audit, and we have fulfilled
our other ethical responsibilities in accordance
with these requirements.
To the best of our knowledge and belief, the
non-audit services that we have provided to the
parent company and group companies are in
accordance with the applicable law and regulations
in Finland and we have not provided non-audit
services that are prohibited under Article 5(1)
of Regulation (EU) No 537/2014. The non-audit
services that we have provided are disclosed in
note 2.3 to the Financial Statements.
151 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
OUR AUDIT APPROACH
Overview
- Overall group materiality:
€ 1 800 000, which
represents 5 % of
profit before tax
- The group audit scope
includes all significant
operating companies in
Finland, Austria, Germany
and USA covering vast
majority of revenues, assets
and liabilities.
- Valuation of goodwill
As part of designing our audit, we determined
materiality and assessed the risks of material
misstatement in the financial statements. In
particular, we considered where management
made subjective judgements; for example, in
respect of significant accounting estimates that
involved making assumptions and considering
future events that are inherently uncertain.
Materiality
The scope of our audit was influenced by our
application of materiality. An audit is designed to
obtain reasonable assurance whether the financial
statements are free from material misstatement.
Misstatements may arise due to fraud or error.
They are considered material if individually or in
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on
the basis of the financial statements.
Based on our professional judgement, we
determined certain quantitative thresholds for
materiality, including the overall group materiality
for the consolidated financial statements as
set out in the table below. These, together with
qualitative considerations, helped us to determine
the scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate
the effect of misstatements on the financial
statements as a whole.
OVERALL GROUP MATERIALITY € 1 800 000
HOW WE DETERMINED IT We used 5% of profit before tax to determine overall group materiality.
RATIONALE FOR THE MATERIALITY
BENCHMARK APPLIED
We chose profit before tax as the benchmark because, in our view, it
is the benchmark against which the performance of the group is most
commonly measured by users, and is a generally accepted benchmark.
We chose 5% which is within the range of acceptable quantitative
materiality thresholds in auditing standards.
How we tailored our group audit scope
We tailored the scope of our audit, taking into
account the structure of the group, the accounting
processes and controls, and the industry in which
the group operates.
We have performed audit procedures in the most
significant subsidiaries in Finland, Austria, Germany
and USA. We determined the type of work needed
to be performed at group companies by us, as
the group engagement team, or by auditors from
other PwC or non-PwC network firms operating
under our instructions.
Materiality
Group
scoping
Key audit
matters
152 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
KEY AUDIT MATTER IN THE AUDIT OF THE GROUP HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
Valuation of goodwill
Refer to accounting principles of the consolidated financial statements and note 3.2
Intangible assets and Impairment testing
On 31 December 2023 the Group’s goodwill balance amounted to EUR 73,4 million.
As such, goodwill represents 34 % of total assets in the balance sheet. Goodwill is
allocated to the cash-generating units.
The Company tests goodwill for potential impairment annually and whenever there is
an indication that the carrying value may be impaired by comparing the recoverable
amount against the carrying value of goodwill.
The recoverable amounts are determined using value in use model. Value in use
calculations are subject to significant management judgement in form of estimates of
future cash flows, such as estimates of future sales and expenses, and discount rates.
Valuation of goodwill is a focus area in the audit due to the size of balance and the
high level of management judgement involved.
Our audit focused on assessing the appropriateness of management’s judgement and
estimates used in the impairment analysis through the following procedures:
- We tested the methodology applied in the value in use calculation by comparing
it to the requirements of IAS 36, Impairment of Assets, and we tested the
mathematical accuracy of calculations;
- We evaluated the process by which the future cash flow forecasts were drawn up,
including comparing them to the budgets and strategic plans approved by the
Board of Directors;
- We assessed the reasonableness of cash flow forecasts by comparing the accuracy
of prior period revenue growth and operating profit forecasts to actual outcomes
and to external forecasts;
- We considered whether the discount rates applied within the model and the
sensitivity analysis performed by the management around key assumptions of the
cash flow forecast were appropriate; and
- We also considered the appropriateness of the related disclosures provided in note
3.2 in the financial statements.
We have no key audit matters to report with respect to our audit of the parent company financial statements.
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated financial statements or the
parent company financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our
professional judgment, were of most significance
in our audit of the financial statements of the
current period. These matters were addressed in
the context of our audit of the financial statements
as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion
on these matters.
As in all of our audits, we also addressed
the risk of management override of internal
controls, including among other matters
consideration of whether there was evidence
of bias that represented a risk of material
misstatement due to fraud.
153 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
RESPONSIBILITIES OF THE BOARD OF
DIRECTORS AND THE MANAGING DIRECTOR
FOR THE FINANCIAL STATEMENTS
The Board of Directors and the Managing Director
are responsible for the preparation of consolidated
financial statements that give a true and fair view
in accordance with IFRS Accounting Standards
as adopted by the EU, and of financial statements
that give a true and fair view in accordance
with the laws and regulations governing the
preparation of financial statements in Finland
and comply with statutory requirements. The
Board of Directors and the Managing Director are
also responsible for such internal control as they
determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board
of Directors and the Managing Director are
responsible for assessing the parent company’s
and the group’s ability to continue as a going
concern, disclosing, as applicable, matters relating
to going concern and using the going concern
basis of accounting. The financial statements
are prepared using the going concern basis
of accounting unless there is an intention to
liquidate the parent company or the group
or to cease operations, or there is no realistic
alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with good
auditing practice will always detect a material
misstatement when it exists. Misstatements can
arise from fraud or error and are considered
material if, individually or in the aggregate, they
could reasonably be expected to influence the
economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with good
auditing practice, we exercise professional
judgment and maintain professional skepticism
throughout the audit. We also:
- Identify and assess the risks of material
misstatement of the financial statements,
whether due to fraud or error, design and
perform audit procedures responsive to
those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a
material misstatement resulting from fraud
is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control.
- Obtain an understanding of internal control
relevant to the audit in order to design
audit procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness
of the parent company’s or the group’s
internal control.
- Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by management.
- Conclude on the appropriateness of the Board
of Directors’ and the Managing Director’s use
of the going concern basis of accounting and
based on the audit evidence obtained, whether
a material uncertainty exists related to events
or conditions that may cast significant doubt on
the parent company’s or the group’s ability to
continue as a going concern. If we conclude that
a material uncertainty exists, we are required
to draw attention in our auditor’s report to the
related disclosures in the financial statements
or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based
on the audit evidence obtained up to the
date of our auditor’s report. However, future
events or conditions may cause the parent
company or the group to cease to continue as
a going concern.
- Evaluate the overall presentation, structure
and content of the financial statements,
including the disclosures, and whether the
financial statements represent the underlying
transactions and events so that the financial
statements give a true and fair view.
- Obtain sufficient appropriate audit evidence
regarding the financial information of the
entities or business activities within the group
to express an opinion on the consolidated
financial statements. We are responsible for the
direction, supervision and performance of the
group audit. We remain solely responsible for
our audit opinion.
154 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
We communicate with those charged with
governance regarding, among other matters,
the planned scope and timing of the audit and
significant audit findings, including any significant
deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance
with a statement that we have complied
with relevant ethical requirements regarding
independence, and to communicate with
them all relationships and other matters
that may reasonably be thought to bear on
our independence, and where applicable,
related safeguards.
From the matters communicated with those
charged with governance, we determine those
matters that were of most significance in the
audit of the financial statements of the current
period and are therefore the key audit matters.
We describe these matters in our auditor’s
report unless law or regulation precludes public
disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter
should not be communicated in our report because
the adverse consequences of doing so would
reasonably be expected to outweigh the public
interest benefits of such communication.
OTHER REPORTING REQUIREMENTS
APPOINTMENT
We were first appointed as auditors by the
annual general meeting on 5 February 2015.
Our appointment represents a total period of
uninterrupted engagement of 9 years. Harvia Oyj
became a public interest entity on 26 March 2018.
We have been the company’s auditors since it
became a public interest entity.
OTHER INFORMATION
The Board of Directors and the Managing Director
are responsible for the other information. The other
information comprises the report of the Board
of Directors and the information included in the
Annual Report, but does not include the financial
statements and our auditor’s report thereon. We
have obtained the report of the Board of Directors
prior to the date of this auditor’s report and the
Annual Report is expected to be made available to
us after that date.
Our opinion on the financial statements does not
cover the other information.
In connection with our audit of the financial
statements, our responsibility is to read the
other information identified above and, in doing
so, consider whether the other information
is materially inconsistent with the financial
statements or our knowledge obtained in the
audit, or otherwise appears to be materially
misstated. With respect to the report of the
Board of Directors, our responsibility also includes
considering whether the report of the Board of
Directors has been prepared in accordance with
the applicable laws and regulations.
In our opinion
- the information in the report of the Board of
Directors is consistent with the information in
the financial statements
- the report of the Board of Directors has been
prepared in accordance with the applicable laws
and regulations.
If, based on the work we have performed on the
other information that we obtained prior to the
date of this auditor’s report, we conclude that
there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Helsinki 7 February 2024
PricewaterhouseCoopers Oy
Authorised Public Accountants
Markku Katajisto
Authorised Public Accountant (KHT)
155 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
Independent Auditor’s Reasonable Assurance Report on Harvia Oyj’s ESEF
Financial Statements
To the Management of Harvia Oyj
We have been engaged by the Management of
Harvia Oyj (business identity code 2612169-5)
(hereinafter also “the Company”) to perform
a reasonable assurance engagement on
the Company’s consolidated IFRS financial
statements for the financial year 1 January - 31
December 2023 in European Single Electronic
Format (“ESEF financial statements”), version
7437002ULTBOWQQOXL69-2023-12-31-fi.zip.
MANAGEMENT’S RESPONSIBILITY FOR THE
ESEF FINANCIAL STATEMENTS
The Management of Harvia Oyj is responsible
for preparing the ESEF financial statements
so that they comply with the requirements as
specified in the Commission Delegated Regulation
(EU) 2019/815 of 17 December 2018 (“ESEF
requirements”). This responsibility includes the
design, implementation and maintenance of
internal control relevant to the preparation of ESEF
financial statements that are free from material
noncompliance with the ESEF requirements,
whether due to fraud or error.
OUR INDEPENDENCE AND QUALITY
MANAGEMENT
We have complied with the independence and
other ethical requirements of the International
Code of Ethics for Professional Accountants
(including International Independence Standards)
issued by the International Ethics Standards
Board for Accountants (IESBA Code), which is
founded on fundamental principles of integrity,
objectivity, professional competence and due care,
confidentiality and professional behaviour.
Our firm applies International Standard on Quality
Management 1, which requires the firm to design,
implement and operate a system of quality
management including policies or procedures
regarding compliance with ethical requirements,
professional standards and applicable legal and
regulatory requirements.
OUR RESPONSIBILITY
Our responsibility is to express an opinion on
the ESEF financial statements based on the
procedures we have performed and the evidence
we have obtained.
We conducted our reasonable assurance
engagement in accordance with the International
Standard on Assurance Engagements
(ISAE) 3000 (Revised) Assurance Engagements
Other than Audits or Reviews of Historical Financial
Information. That standard requires that we plan
and perform this engagement to obtain reasonable
assurance about whether the ESEF financial
statements are free from material noncompliance
with the ESEF requirements.
A reasonable assurance engagement in
accordance with ISAE 3000 (Revised) involves
performing procedures to obtain evidence about
the ESEF financial statements compliance with
the ESEF requirements. The procedures selected
depend on the auditor’s judgment, including the
assessment of the risks of material noncompliance
of the ESEF financial statements with the ESEF
requirements, whether due to fraud or error. In
making those risk assessments, we considered
internal control relevant to the Company’s
preparation of the ESEF financial statements.
We believe that the evidence we have obtained
is sufficient and appropriate to provide a basis
for our opinion.
OPINION
In our opinion, Harvia Oyj’s ESEF
financial statements for the financial year
ended 31 December 2023 comply, in all material
respects, with the minimum requirements as set
out in the ESEF requirements.
Our reasonable assurance report has been
prepared in accordance with the terms of our
engagement. We do not accept, or assume
responsibility to anyone else, except for Harvia Oyj
for our work, for this report, or for the opinion that
we have formed.
Helsinki
PricewaterhouseCoopers Oy
Authorised Public Accountants
Markku Katajisto
Authorised Public Accountant (KHT)
156 HARVIA 2023 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS
HARVIA PLC
Teollisuustie 1-7
40950 Muurame
www.harviagroup.com/en
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