HARVIA PLC
ANNUAL REPORT
#healingwithheat
HEALING
WITH
HEAT
CONTENTS
Highlights of 2021 3
Harvia in 2021 6
CEO’s review 8
Operating environment and megatrends 10
Strategy and its implementation 16
Harvia’s business operations in 2021 21
Innovations and new products 24
Sustainability 28
Harvia as an investment 34
Corporate governance statement 2021 39
Remuneration report 2021 48
Report by the Board of Directors and
Consolidated Financial Statements 2021 54
HIGHLIGHTS OF
2021
CONTENTS
Highlights of 2021 3
Harvia in 2021 6
CEO’s review 8
Operating environment and megatrends 10
Strategy and its implementation 16
Harvia’s business operations in 2021 21
Innovations and new products 24
Sustainability 28
Harvia as an investment 34
Corporate governance statement 2021 39
Remuneration report 2021 48
Report by the Board of Directors and
Consolidated Financial Statements 2021 54
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 3
RECORD INVESTMENTS INTO INCREASING
PRODUCTIVITY AND CAPACITY
Harvia’s capital expenditure increased significantly
in 2021, to EUR 11.8 million. The main investments of
the year included the Muurame facility expansion in
Finland, with focus on streamlining the early stages
of the heater component manufacturing, as well as
investments into increasing the sauna capacity and
productivity both in the new US facility in Lewisburg,
West Virginia, and the Georgheni facility in Romania.
On top of this, capabilities in China were upgraded
and the logistics capabilities at Kirami were improved.
All major investments were completed in time and on
budget.
The expansion of the Muurame facility and installation
of new, advanced machinery will increase capacity
STRONG REVENUE GROWTH DRIVEN BY
FAVORABLE MARKET DEMAND
In 2021, Harvia’s successful business development
eorts and operational execution delivered robust
growth in all key markets and product categories,
driven by the favorable market demand. Revenue
increased by 64.2%. Strong international growth
continued, as well. Already 79.4% of the company’s
sales comes from outside of Finland.
The Harvia team's solid performance contributed
to the growth. Despite challenges related to the
availability of key raw materials and componentry,
the whole team and especially operations and supply
chain did excellent work in ramping up production
volumes and productivity throughout the year.
YEAR OF INTERNATIONAL
GROWTH
in Muurame by approximately 20%. Harvia also
purchased an industrial building and a plot of land
next to the factory to prepare for further expansion of
operations at Muurame.
The new facility in Lewisburg was acquired by Harvia
in February. A so-called factory of the future for
Harvia’s sauna operations in the United States, the
new facility provides expanded production capacity
and capability, supporting the company’s growth
in the market. Operations in the facility began in
November.
Almost Heaven Saunas – USA
Harvia – Muurame EOS – Germany Harvia – Romania Harvia – China
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 4
KIRAMI AND SAUNA-EUROX STRENGTHEN
HARVIA’S SAUNA AND SPA OFFERING
On top of the organic growth path, Harvia continued
to implement its growth strategy through business
acquisitions in 2021. Kirami, a leading Finnish still-
water hot tub manufacturer and pioneer in wood-
heated hot tubs globally, joined the Harvia family in
May. The acquisition complements Harvia’s sauna
and spa oering well, increasing its market share
especially in the residential sauna and spa solutions.
While still-water hot tubs are a new product category
for Harvia, they are an excellent strategic fit to
Harvia’s ‘healing with heat’ philosophy and respond
to the growing global trend of active backyard living.
Together, saunas and hot tubs provide a complete
wellness experience.
In August, Harvia announced the acquisition of Sauna-
Eurox, one of the world’s largest suppliers of safe,
sustainable and durable sauna stones. The oering
of Sauna-Eurox caters broadly to the needs of both
consumers and spa professionals, including high-
quality, ready-to-use, pre-washed and hand-selected
olivine diabase and vulcanite sauna stones in all sizes,
as well as round, decorative and heat-tempered sauna
stones. Together, Harvia and Sauna-Eurox will be able
to strengthen the availability of high-quality sauna
stones in the market.
SUCCESSFUL MARKET ENTRY IN JAPAN
Harvia signed an exclusive distribution agreement
with Bergman Ltd, of Tokyo, Japan in October.
Bergman has more than 20 years of experience in
marketing and selling branded European heating
devices in Japan.
There are an estimated 26 million sauna users in
Japan, which is approximately 20% of the total
population. The sauna lifestyle with its health eects
has become increasingly popular in Japan since the
beginning of the Covid-19 pandemic. The goal of
Harvia’s strategic partnership with Bergman is to open
50 Harvia Sauna & Spa showrooms in Japan within
the next three years and to help Harvia grow to be the
number one sauna brand in Japan in the construction
industry, small houses and apartment buildings, as
well as commercial projects.
Harvia’s Japan market entry started successfully in
2021, with first 5 showrooms opened in Sapporo,
Obihiro, Kushiro, Kitami and Yamagata by the end of
the year. 30 more showrooms including Tokyo, Osaka
and Nagoya are slated for opening during 2022.
Noriaki Kasai (left), ski jump world champion and
Olympic medalist, Harvia's brand ambassador.
SeijiKasama (right), Managing Director, Bergman Ltd,
Harvia's Distribution Partner.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 5
21
28
16
20
6
5
4
21
28
16
20
6
5
4
0
10
20
30
40
50
0
2
4
6
8
10
2019 2020 2021
28.3
31.9
43.8
1.7
1.1
0.8
Nettovelka, milj euroa
28.3
31.9
43.8
1.7
1.1
0.8
HARVIA IN 2021
Revenue
179.1
(109.1)
EUR million
Revenue growth
64.2%
(47.3)
Adjusted operating profit
47.3
(24.4)
EUR million (+93.4%)
Finland Other European countries
North America Germany Russia
Other Scandinavia Other countries
REVENUE BY
MARKET AREA, %
NET DEBT AND LEVERAGE
Net debt, EUR million
Leverage
ADJUSTED OPERATING PROFIT AND
ADJUSTED OPERATING PROFIT MARGIN
0
10
20
30
40
50
0
10
20
30
40
50
2019
Velkaantumisaste
2020 2021
13.9 24.4 47. 3
18.7%
22.4%
26.4%
Nettovelka, milj euroa
13.9 24.4 47. 3
18.7%
22.4%
26.4%
Nettovelka, milj euroa
(* Adjusted by items aecting comparability)
Adjusted operating profit*, EUR million
Adjusted operating profit margin, %
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 6
Adjusted operating profit
47.3
(24.4)
EUR million (+93.4%)
Earnings per share
1.80
(0.83)
EUR
Dividend per share*
0.60
(0.51)
EUR
(*the Board's proposal to the Annual General Meeting)
Operating free cash flow
20.4
(28.7)
EUR million
Equity ratio
42.4%
(42.0)
Personnel
8 24
(617)
Investments
11.8
(2.6)
EUR million
Adjusted return on capital
employed (ROCE)
112.6%
(73.3)
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 7
CEO'S
REVIEW
I am very happy and proud of being
part of the outstanding Harvia team:
we are very pleased with our
2021results.
The sauna and spa market continues to enjoy good momentum. The general
awareness of health benefits of regular sauna bathing is gaining attention
globally. This applies to all sauna markets and all sauna types and cultures.
Harvia’s full-year figures reflect the excellent execution of our strategy. Our
revenue amounted to EUR 179.1 million, increasing by EUR 70 million or 64.2%
year on year. Revenue increased in all product groups. Sauna heater sales
improved in both electric and wood burning heaters, especially in Germany
and other European countries. The strong growth of sauna room sales
continued especially in North America and in Central Europe. Revenue from
control units developed favorably particularly in Germany and other European
countries. Sales of other product groups, spare parts and services also
developed very well. The share of international business was EUR 142.2 million,
making up 79.4% of the revenue.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 8
LEADING POSITION IN THE GLOBAL SAUNA
AND SPA MARKET
We have continued to gain market share and improved
our position in the market. We estimate that Harvia
has taken the leading position in the global sauna and
spa market. The gain has been strongest in Europe.
We have also opened new markets, such as Japan,
Australia, and New Zealand. Our growth in Finland and
Scandinavia has been robust, and in Scandinavia, we
are now very close to the market leader.
After analyzing the market and its dynamics, we
maintain our general outlook for the market and
estimate that for the next few years, the market
growth will exceed the historical average. However,
we continue to estimate that part of the growth is
so-called advance demand, which is normalizing for
the residential market while the professional market is
gaining momentum. This is not expected to aect the
long-term expectations of the sauna and spa market.
RECORD HIGH INVESTMENTS IN CAPACITY
AND PRODUCTIVITY
Despite the challenges caused by the pandemic, all
of our production units have performed well. Our
capacity utilization has been excellent. To further
boost the capacity and improve productivity, we
completed an all-time high investment program of
EUR 11.8 million during 2021. We opened a new sauna
factory in Lewisburg, West Virginia, USA, expanded
and upgraded the capabilities at the Muurame factory,
expanded capacity at our sauna factory in Romania
and the capabilities in our factory in China, expanded
the warehousing and logistics capacity at Kirami,
upgraded the EOS Driedorf machinery and capacity, as
well as laid the ground for improving internal logistics
at the Muurame facility. All our investments were
completed on time and on budget.
I am extremely happy that the EOS team and
operations are well integrated in the family and
performing ahead of the plan. On top of this, the
integration of the recently acquired Kirami business as
well as Sauna-Eurox, manufacturer of high quality and
sustainable sauna stones, has progressed according to
plans.
MORE SUSTAINABLE SAUNA EXPERIENCES
Harvia has always paid a great deal of attention
and eort on environmental, social, and corporate
governance issues. The year 2021 was no exception.
We created a sustainability program for 2022–2025.
We also carried out a review of our current CO
2
impact. Our starting point for decreasing our CO
2
footprint further is good, and we are committed to
continuous improvement.
Despite the highly demanding situation in the supply
chain and logistics, we were able to maintain excellent
profitability throughout the year. We deliberately
increased our inventories of critical raw materials and
componentry as well as our ready-made goods. The
availability of certain components and raw materials
has caused some delays and increased our order stock,
but our ability to serve our customers remained good.
The year of 2021 was unusual by all standards and
very demanding on our people. We remain committed
to keeping all our people safe, fully functional, and
We estimate that Harvia
has taken the leading position
in the global sauna
and spa market.
highly motivated. We conducted a group-wide
People Power Survey in the last quarter of the year.
The results confirmed that the spirit and motivation
of our personnel is on a very good level. This gives
us an even better fundament to work focused on
our strategy of increasing the value of the average
purchase, geographical expansion, and continuous
improvement of productivity and innovation. M&A
activity in the sauna and spa market remains high.
As stated in our strategy, we will continue to seek
opportunities to grow both organically and through
M&As.
Everyone in the Harvia family as well as our long-
term partners and suppliers have done a great job in
demanding conditions. A job more than well done.
Thank you!
Tapio Pajuharju
CEO,
Harvia Plc
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 9
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 11
Harvia is a global leader in the sauna and spa market.
The company’s market position has historically
been particularly strong in large markets focused
on traditional sauna culture. According to Harvia’s
estimate, there are approximately 17 million saunas in
the world. This large sauna base provides significant
business arising from the replacement of saunas and
sauna heaters.
During 2020, the COVID-19 pandemic caused
significant and quick short-term fluctuations in
demand in several of Harvia’s key markets. The
challenges brought on by the pandemic to Harvia’s
business were still somewhat evident also in 2021,
especially in all of the professional categories and in
Southern Europe, Russia, the Arab countries, and Asia.
Lockdowns and travel restrictions made new market
entries challenging.
Historically, the sauna market has grown annually
by an average of 5%. However, Harvia is currently
seeing considerable growth in the market due to
growing awareness and appreciation of the health
benefits related to sauna and the general trend of
people investing in their own wellbeing. Harvia’s
management estimates that somewhat higher than
historical average market growth rates will continue
in the medium term, for the next few years. However,
according to Harvia’s estimate, part of the growth is
so-called advance demand, which is normalizing for
Awareness and popularity of the
sauna and its health benefits
increased, further boosting the
underlying solid demand in the sauna
and spa market. The health and
wellbeing trend associated with the
sauna strengthened especially in the
United States.
the residential market while the professional market is
gaining momentum. This is not expected to aect the
long-term expectations of the sauna and spa market.
SAUNA AS A SOURCE OF HEALTH
AND WELLBEING
The health and wellbeing trend continued to boost
the demand for sauna and spa experiences globally
in 2021, as awareness of the healing eects of heat
increased.
Sauna has traditionally brought people enjoyment, but
it has also been proven to be a source of health and
wellbeing: sauna and its health benefits contribute
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 12
to a long and enjoyable life. The health benefits of
sauna are becoming more widely known and actively
promoted especially in the United States, where sauna
penetration in general is still on a low level.
Approximately 500 scientific studies have been
conducted on the health impacts of the sauna. Read
more about how sauna promotes health on page 14.
DIFFERENT SAUNA AND SPA CULTURES
Sauna cultures are versatile, and they vary market by
market. In Finland, saunas are part of everyday life.
There are 5.5 million people, approximately 2.7 million
households and approximately 3 million saunas in
Finland. Many households have a sauna at home and
at their summer cottage. Enjoying the heat of sauna
and cleansing oneself are strongly connected to the
local sauna experience.
In the United States, the sauna culture is still rather
young and the sauna penetration is low. On top
of commercial sauna solutions at high-end hotels
and gyms, the sauna has become more popular in
premium residential applications. Lately, the trend of
active backyard living has increased throughout North
America. Building a backyard paradise for relaxation
and enjoyment together with family and friends has
become very popular. In addition to the traditional
barbecue and a hot tub or pool, also outdoor
saunas are showing up in more and more backyards.
Especially the traditional barrel sauna is becoming a
vital ingredient of the backyard paradise concept.
The penetration of residential indoor saunas is growing,
as well, driven by the increased awareness and
popularity of the health benefits of sauna and spa.
The Finnish sauna is not well known in the Arab
countries or Asia, as there is no significant residential
sauna culture. In these countries, the sauna and
spa culture is focused on public spas and steam
rooms. However, the spas usually oer their
guests both traditional, steam and infrared sauna
experiences. In China, homes are usually not designed
to accommodate full-size sauna rooms, but the
popularity of household infrared saunas is picking up.
Harvia has identified four megatrends that impact the sauna
and spa business. The trends were visible in 2021 and they
are expected to drive market demand for innovations in the
sauna and spa market in the coming years.
MEGATRENDS
SHAPE
THE MARKET
ENVIRONMENTAL CONSCIOUSNESS
GUIDES CONSUMER CHOICES
LONGER LIVES –
LONGER ENJOYMENT
Climate change is a global challenge. People are concerned about their
carbon footprint and, increasingly, demand environmentally friendly products
and expect responsibility and societal commitment from companies. Harvia is
paying attention to energy eciency in production as well as to materials and
their recyclability. Product development aims at maximizing sustainability of
the products and creating solutions to optimize the energy consumption of
heating the sauna. In wood-burning heaters, Harvia focuses on improving the
eciency of the burning process and minimizing particle emissions.
DIGITALIZATION ALSO
AFFECTS SAUNAS
The pace of technological change continues to pick up speed. The sauna and
the sauna experience are becoming digital, as well. The heater, lighting and
ventilation of the sauna can be controlled remotely with a mobile app. Digital
technology can also be used to oer programmed experiences for all senses,
for example, with colored mood lighting or one’s favorite music. IoT solutions
for buildings and homes will create new kinds of possibilities for the energy
eciency of the sauna and the promotion of wellbeing.
GROWING MIDDLE CLASS HAS
PURCHASING POWER
Life expectancy is increasing globally, and the need to promote habits
supporting health and wellbeing is growing. At the same time, the aging
population is interested in wellbeing and ready to invest in it. Harvia takes
these needs into consideration by developing products that are safe and
easy to use, as well as sauna and spa experiences that have targeted
wellness benefits.
The growth of the middle class and the subsequent increase of its
purchasing power is a global phenomenon. At the same time, economic
power is shifting from the west to the east. The middle class is prospering
particularly in China, which together with the wellness trend opens many
new growth opportunities for Harvia. The urban, middle-class households
demand individual, high-quality products and solutions adaptable to their
changing needs.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 13
Professor Jari Laukkanen’s research team observed a
link between regular sauna bathing and a lower risk
of blood pressure, coronary heart disease, stroke, and
heart-related sudden death. The study, published in
2015 in American Medical Association's peer-reviewed
JAMA Internal Medicine, suggests that sauna bathing
is a recommendable health habit.
“My enthusiasm for saunas stems from Finnish
traditions. The sauna is part of Finnish heritage, and
what interests me is how saunas have been used and
why people have been sauna bathing for hundreds of
years,” says Laukkanen.
HEART EFFECTS ARE STUDIED THE MOST
According to Laukkanen, the three most important
health benefits of sauna bathing include lowering
of blood pressure, relaxation, and improved blood
circulation.
“The healing eect of heat consists of several factors.
The heat itself dilates blood vessels, stimulates blood
circulation, and relaxes the body. The feeling you get
is in fact the same as after exercising or, for instance, a
yoga session,” Laukkanen explains.
As with any lifestyle change, the health benefits of
sauna bathing can only be achieved with regular
use. “Studies show that taking a sauna in 80 degrees
Celsius three to four times a week for 20–30 minutes
in total gives the best and probably long-term results,”
says Laukkanen.
By long-term results, he refers to lower blood
pressure. Laukkanen and his team are seeking to
measure the long-term eects of sauna, and they
have already discovered some positive eects. The
yet unpublished research suggests that regular sauna
visits can lower blood pressure on a long-term basis.
It remains to be proven if sauna bathing prolongs life;
however, on the basis of published studies, active
sauna-goers have a lower risk of heart-related death.
Japanese researchers have studied the health eects
of infrared saunas among people with reduced heart
function. Their symptoms were eased, possibly
because of the drop in blood pressure, the greater
flexibility in blood vessel walls and the positive impact
on endothelium, a thin lining in the blood vessels.
FASCINATING AND HEALING SAUNA
Sauna bathing offers relaxation, but also
substantial scientifically proven health benefits.
Professor, cardiologist Jari Laukkanen has been
fascinated by the sauna since early 2010’s when
he started his first sauna-related studies.
REGULAR SAUNA BATHING
REDUCES RISK OF:
• Heart-related deaths
• Dementia
• Alzheimer’s disease
• High blood pressure
• Pulmonary disease
• Stroke
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 14
In May 2021, Harvia acquired Kirami Oy, a Finnish
family-owned company and the largest manufacturer
of still water hot tubs globally. Founded in 2001,
Kirami complements Harvia’s spa and sauna oering,
and the two companies have joined forces with a
simple combination: heat and hot water.
The companies have put significant eort into
creating a backyard paradise for consumers, providing
ways to increase wellbeing and enjoyment at home.
Kirami’s Managing Director Mika Rantanen is pleased
with Harvia and Kirami’s shared vision. “It is great that
our ambition is the same. Kirami has been a backyard
paradise company from the start.”
NEW SYNERGIES, DOUBLE THE SKILLS
Kirami has been a strong local operator, opting for
subcontractors and production within a close range.
After the first months of joining forces and seeking
shared routines, synergies have been found in several
areas, says Rantanen.
For Kirami, the Harvia name has opened doors in sales
negotiations and brought a dierent level of stability
for the smaller company. “Joining Harvia has not
changed our organization, but has brought significant
benefits,” Rantanen explains.
With Harvia’s larger support system in place, Kirami
has branched out across the Atlantic for the first time,
looking for a foothold in the US market. Rantanen
believes that Kirami will be able to follow in the
footsteps of Harvia’s success overseas, especially with
Harvia’s broad shoulders to support them.
Having Harvia as the main organization also balances
Kirami’s seasonal sales fluctuation while providing
financial stability for focusing on new innovations.
“Harvia family invests in innovation and in turning
good ideas into development projects quickly.”
INNOVATING TOGETHER
Harvia’s long traditions and Kirami’s specific knowhow
are an asset in R&D. Collaboration oers possibilities
in new product groups.
Kirami systematically looks for ways to find the most
sustainable components and methods in production,
and Harvia provides an excellent framework for this.
The two companies’ joint project on clean burning
has been expanded through wider laboratory
collaboration and Harvia’s extensive facilities, showing
promising results.
Kirami is looking forward to developing new backyard
innovations. “In Harvia, Kirami has found a safe home
and access to a huge amount of technical expertise.”
FINNISH STILL-WATER HOT TUB
MANUFACTURER KIRAMI
JOINED THE HARVIA FAMILY
Kirami’s Managing Director
Mika Rantanen
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 15
In line with its strategic
priorities, Harvia successfully
increased the value of the
average purchase, expanded
its global reach and market
share, and improved
productivity in 2021.
During the year, Harvia continued to gain market
share in the sauna and spa industry. Measured in
revenue, Harvia has become the largest company
in the industry. Strategy implementation in all areas
proceeded according to the plan. On top of the
organic growth, the acquisitions of Kirami and Sauna-
Eurox strengthened Harvia’s comprehensive sauna
and spa oering, further supporting the strategic
priorities.
Harvia clearly outperformed its financial targets
related to growth, profitability, and leverage in 2021.
The company’s revenue grew by 64.2% from 2020,
adjusted operating profit margin was 26.4%, and net
debt to adjusted EBITDA ratio was 0.8.
VALUES
• We believe people are the key to success.
• We are customer and consumer focused.
• We act sustainably and care about the
environment.
• We are passionate in our search of new and
excellence.
• We believe in long-term partnerships, built
on mutual respect and trust.
VISION
Our vision is to become the insightful leader
in sustainable wellbeing experiences in all
sauna categories, cultures and health bene-
fits – both for consumers and professionals
all over the world.
MISSION
Our mission is to inspire people around
the world to experience the healing heat
and relaxation of sauna and spa.
STRATEGIC PRIORITIES
Increasing the value of the average purchase
Our target is to increase the value of the
average purchase by oering sauna heaters
with more advanced properties as well as
more extensive and complete sauna and spa
solutions. In addition, we aim to sell products
that enhance the safe and convenient use of
the sauna both in professional and residential
applications.
Geographical expansion
We aim to expand the market presence and
grow our market share in all our key markets
by developing our distribution and improving
the availability and visibility of our oering.
Continuous improvement of productivity
We aim to continuously improve our
operational eciency and enhance the
eciency of purchasing and logistics.
PURPOSE
We are healing with heat! Our purpose is to
contribute to a long and good life through
healing with heat.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 17
INCREASING THE VALUE OF THE AVERAGE
PURCHASE
Harvia’s sales increased strongly in all product groups
in 2021. However, the growth was especially robust in
the sauna room category, driven by strong demand in
the United States and Central Europe. Sauna heater
sales improved in both electric and wood burning
heaters, with particularly the premium models in
heaters performing well. Sales of safety equipment
and control units for new heaters increased, as well.
Harvia also increased the value of the average
purchase through acquisitions. Kirami’s still-water
hot tubs complement Harvia’s ‘backyard paradise’
concept. The acquisition of Sauna-Eurox expanded
Harvia’s sauna heater stone oering. EOS Group,
acquired in 2020, continued its strong performance
in the premium and professional category, despite
the challenges in the professional market caused
by lockdowns and other pandemic restrictions. In
addition, Almost Heaven Saunas introduced new
models to the North American market.
GEOGRAPHICAL EXPANSION
Strong growth continued in all key markets. During
the year, Harvia succeeded in expanding its foothold
especially in Central Europe and Germany. Sales
increased strongly also in the Scandinavian market,
where the company was able to truly challenge the
local market leader. The North American market
continued on a solid growth path.
Despite the pandemic challenges, the demand in
Southern Europe, Arab markets and Asia gradually
returned closer to normal. Product approvals for
EOS’s selected flagship products in new markets were
delayed due to availability of certain key componentry,
but the US approval is expected in the first half of
2022.
Lockdowns in some areas, such as South America
and Australia, made entries to new markets dicult.
However, Harvia made a successful market entry in
Japan at the end of the year, partnering with Bergman
Ltd. Despite the challenging conditions, the company
has also gained foothold in Australia and Oceania.
CONTINUOUS IMPROVEMENT OF
PRODUCTIVITY
Significant investments were made into improving
productivity and expanding production capacity at
Harvia’s sauna and heater factories during the year.
Production facilities in Finland and Romania were
expanded, and a new facility was acquired in the
United States that started operations in November.
Harvia invested in more advanced production
machinery in China and Romania as well as at the EOS
factory in Driedorf, Germany. Improved production
processes and increased automation also decreased
costs and shortened production cycles.
All of Harvia’s production units performed well and
with excellent capacity utilization and succeeded in
ramping up production volumes and productivity
despite the exceptional situation caused by the
pandemic. Special attention was also paid to sales and
operations planning process to enable more accurate
sales and demand forecasting. In order to maintain
solid customer service and continuous operations,
Harvia deliberately increased the inventories of
key raw and packaging materials as well as critical
componentry.
Thanks to the development of production capacity
and logistics, Harvia was, together with its partners,
able to meet the increased demand in 2021. However,
the availability of sauna rooms was an issue both in
Europe and the United States, resulting in increased
lead times and a higher order book.
STRATEGIC PRIORITIES IN 2022
General M&A activity in the sauna and spa market
has remained high. As stated in Harvia’s strategy,
the company will pursue opportunities to grow in
the sauna and spa market organically and through
M&A. The integration of EOS is completed, and the
integration of Kirami and Sauna-Eurox will continue
during 2022.
Further investments will be made into improving
productivity as well as developing new innovations
and capabilities. The magnitude of the investments
will decrease from 2021 but will, however, remain
higher than the historical average of the company.
Harvia will also continue to optimize distribution
strategies in all key markets and leverage cross-selling
opportunities.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 18
HARVIA’S SUPPLY CHAIN EXCELLED IN 2021
Harvia’s business acquisitions in 2020 and 2021 have
made supply chain management more complex, and
developing the integration and interoperability of the
supply chains of the Group companies is a key focus
area also going forward. In addition, the locations of
Harvia’s central warehouses will be reviewed in 2022
to ensure that they serve future logistics needs as
eectively as possible, both in terms of customer
service and reducing costs and CO
2
emissions.
With extensive group of long-
term partners as well as the
help of systematic planning and
targeted investments, Harvia
was able to operate in very close
to normal conditions and reach
excellent profitability in 2021.
Like many businesses across the globe, Harvia’s
supply chain was aected by exceptional volatility in
the availability of raw materials and key componentry
as well as climbing prices in 2021, with up to 100
percent price increases for some components. In
addition, freight from Asia to Europe and North
America and from Europe to the United States faced
unprecedented challenges, prompting Harvia to seek
alternative solutions.
To overcome the global sourcing challenges, Harvia
took proactive measures, increasing buer stocks of
critical raw materials and componentry. Thanks to the
successful work of its sourcing team, its long-term
partners and multiple sourcing strategy, the company
was able to keep the impacts modest and secure the
materials needed for production.
RECORD-HIGH PRODUCTION VOLUMES
The whole Harvia team succeeded in ramping up
production volumes and productivity in 2021. All
of Harvia’s production units performed well and
with excellent capacity utilization, several of them
achieving record-high monthly production volumes.
Harvia also developed its sales and operations
planning process during the year to enable more
accurate sales and demand forecasts as well as to
allocate resources to the right products to secure
delivery capacity.
INVESTMENTS IN CAPACITY, EARLY STAGES
OF PRODUCTION
In 2021, Harvia focused on increasing the production
capacity and developing the early stages of the
production process in its facilities. Production
methods were made more ecient through new
machinery and automation, resulting in lower costs
and shorter production times. Significant investments
were made into expanding capacity: Production
facilities in Finland and Romania were expanded, and
a new facility was acquired in the United States that
started operations in November. Kirami's warehouse
capabilities were expanded. Productivity investments
were also made in the facilities in China and Germany.
In 2022, Harvia will develop especially the later
stages of the production process, including assembly,
material flow, and internal logistics. Eorts will also be
made to further reduce waste and improve material
utilization in production.
As a whole, the year 2021 was a huge success
for the supply chain. Even in the very challenging
market environment, we were able to secure the availability
of critical materials and supply the needed products,
keeping our promises to customers, says Mika Suoja,
Vice President of Operations & Sourcing at Harvia.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 19
– Rainer Kunz,
Managing Director of EOS Group
German sauna technology provider EOS Group
continues to drive the premium and professional
channel as a member of Harvia Group. Harvia
acquired the majority of EOS Group in the spring
2020. The integration of EOS has resulted in eective
collaboration and a wider market for both companies.
Founded in 1944, EOS Group aims for a ‘Heat fidelity’
experience, catering to customers’ luxury needs with
first-rate design and technology, including premium
sauna heaters, control units, steam technologies and
a wide field of luxury accessories, developed and
produced in Germany.
From EOS Group’s point of view, moving into the
Harvia family has been a sensible and successful
move. “We are realizing dierent synergies in our
day-to-day business. The potential that we can reach
together is considerable,” says Rainer Kunz, Managing
Director of EOS Group.
The integration has been carried out smoothly,
despite the virtual environment initially set by the
pandemic, Kunz confirms. “From day one, we have
felt that we are part of one big Harvia family and that
we are an international community. People feel safe in
HarviaGroup.”
LARGE DEMAND FOR PREMIUM SAUNA
TECHNOLOGY
The substantial growth in demand continued also
in 2021. According to Kunz, household demand
in particular has been significant, but also the
commercial area has sustained growth. This has
created some new challenges for production,
procurement and logistics, which have been solved
together with reliable teams and partners.
Less than two years ago, we
set out to become the world’s
#1 in the global sauna and spa
market. Working together, Harvia
and EOS have achieved this goal.
EOS GROUP’S PREMIUM SOLUTIONS CATER TO
SAUNA NEEDS IN THE LUXURY SEGMENT
Rainer Kunz, CEO of EOS Group (left) and Tapio
Pajuharju, CEO of Harvia (right) at EOS’s display
in Kauppalehti Optio Gala in December 2021.
EOS continues to focus all its activities on the luxury
and high-end market as an independent brand. The
two companies operate in the same international
market with dierent business models regarding their
approaches and brands, so their oering and services
complement each other well. “Harvia is an expert in
mass production. EOS is focused on design and luxury.
We do not only oer excellent sauna technologies to
our customers – we transfer our special spirit and show
the way to a superior spa experience,” Kunz points out.
EOS Group has also invested in product development.
“In 2021, we introduced several new products, such as
unique design heaters and the expansion of our EOS
Spa Control App featuring a multi-cabin solution able
of control eight dierent cabins with one single app,”
Kunz mentions.
The year 2022 will see significant EOS innovations, as
well, such as an air disinfection device for saunas, the
EOS UV Clean.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 20
HARVIA’S BUSINESS
OPERATIONS IN 2021
Harvia has further strengthened its position
as a global leader in the sauna and spa market
through strategic investments, new acquisitions,
and organic growth.
During its 70-year history, Harvia has developed from
a Finnish sauna heater manufacturer into a leading
international sauna and spa company with emphasis
on healing with heat, or the health benefits of sauna.
Harvia’s oering is truly global and its products are
available in more than 80 countries. The share of
international revenue increased to 79.4% (74.6) in
2021. In addition to Finland, Harvia has production
facilities in China, Germany, Romania, Estonia, and the
United States.
Harvia saw considerable growth in the market for
sauna and spa products and experiences in 2021.
This was due to people’s growing awareness and
appreciation of the health benefits related to sauna
and the general trend of people investing in their own
wellbeing.
Harvia’s successful execution of the strategy,
business development eorts and operational
execution, together with the underlying solid demand,
delivered robust growth in all key markets and
product categories, with revenue increasing to EUR
179.1 million (109.1) in 2021. Profitability increased
significantly as well, with adjusted operating profit
landing record high at EUR 47.3 million (24.4).
49% 23%
10% 3%
15%
Sauna heaters Sauna rooms & Scandinavian hot tubs Control units Steam generators
Other product groups spare parts and services
REVENUE BY PRODUCT GROUP, % (EUR 179.1 million)
On top of the organic growth, the company
strengthened its position in the sauna and spa market
by acquiring still-water hot tub manufacturer Kirami
and the leading supplier of sustainable and safe
high-quality sauna heater stones, Sauna-Eurox. A
significant milestone in further international expansion
was achieved in October, as Harvia announced a
distribution agreement with Bergman Ltd to enter the
Japanese commercial and consumer market. The sales
of EOS products in new markets also progressed,
although product approvals for the North American
market were delayed due to availability of certain key
componentry, especially electronics. The approvals are
expected to be obtained in the first half of 2022.
Global challenges in sourcing of key materials and
componentry as well as logistics aected Harvia’s
supply chain in 2021. However, the company was able
to keep the impacts on delivery times and pricing
under control. While the pandemic presented some
business challenges in the professional channel, the
consumer market developed favorably especially in
Germany, Central Europe, Finland, and Scandinavia.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 21
The sauna heater oering covers electric and
wood-burning heaters as well as combi heaters
with steam and includes all the needed accessories.
The high-quality products are safe, convenient and
easy to use.
Sauna heaters is Harvia’s largest product category,
accounting for 49% of the revenue in 2021. Sales
increased in all markets and especially in electric
heaters. Of the market areas, Germany and other
European countries were driving the growth.
The product category covers saunas for
both indoor and outdoor use, sauna interiors,
Scandinavian still-water hot tubs and all related
accessories.
The product category’s revenue mainly comes
from the sales of sauna rooms. Barrel saunas
were driving the demand in the North American
market, but also sales of indoor saunas in North
America and Central Europe were significant. The
new product category of Scandinavian hot tubs
also performed well in 2021, with main markets in
Finland and Central Europe.
Sauna rooms and
Scandinavian hot tubs
Sauna heaters
CONTINUED INVESTMENTS INTO INCREASED
CAPACITY AND PRODUCTIVITY
Harvia maintained good operational capability despite
the pandemic and continued the systematic and
continuous improvement of productivity. Substantial
investments were made into expanding production
and warehousing capacity in 2021. The company’s
US operations were transferred to a new facility in
Lewisburg, West Virginia with expanded capacity and
capability in November, and a new production facility
with modern and upgraded machinery was installed in
the Muurame factory in Finland. Harvia also invested
in the expansion of the Romanian sauna factory,
as well as in new machinery at the EOS factory in
Driedorf, Germany, and extended Kirami's warehouse
capabilities. Operational capacity was also improved
by adding personnel and extending shifts. Harvia
plans to continue moderate investments to further
increase productivity and capacity in 2022.
PRODUCTS FOR ALL SAUNA TYPES AND
CULTURES
Since its establishment in 1950, Harvia has
accumulated knowhow on all sauna cultures and
sauna types across the world. Harvia is an expert in
traditional saunas, steam saunas and infrared saunas.
Around them, the company has built a comprehensive
and competitive oering which includes all products
needed in the sauna, from heaters to complete
advanced sauna rooms and solutions. The acquisitions
of Kirami and sauna stone supplier Sauna-Eurox in
2021 further complement Harvia’s extensive oering.
Harvia Group’s oering has been divided into
five categories: sauna heaters, sauna rooms &
Scandinavian hot tubs, control units, steam generators
as well as spare parts, services and other products.
Harvia’s revenue increased in all product groups in
2021, totaling EUR 179.1 million.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 22
Steam generators
The product category includes, for example,
sauna heater spare parts, sauna stones, steam
room elements, infrared components, sound and
light solutions, water hygiene products and sauna
accessories, such as sauna scents, buckets, ladles
as well as thermometers and sauna textiles.
Harvia also oers services such as installation and
maintenance services, as well as turnkey sauna and
spa projects.
Sales growth in the category was generated
especially by accessories, heater stones and spa
projects.
Control units are used to control electric and combi
heaters, steam rooms and infrared and hybrid saunas.
Control units control temperature, running time,
lighting, ventilation, sound systems and more. They
control air humidity in saunas with combi heaters,
steam generators in steam rooms and the infrared
radiators in infrared saunas. The most advanced
control units are safe and easy to operate remotely
over a WiFi network – anywhere and anytime.
Revenue from control units developed favorably
particularly in Germany and other European
countries.
Spare parts, services,
and other products
Control units
In a steam room, a steam generator is used to
produce heat and steam.
Steam generators are used professionally in,
for example, spas, hotels, and fitness clubs. The
product oering also includes steam generators for
residential market to create home spa experiences
and environment.
Sales of steam generators developed well in other
European countries and Russia in 2021.
EOS Russia
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 23
INNOVATIONS
AND NEW PRODUCTS
Harvia’s passion is to innovate future
sauna and spa experiences with
healing heat for different sauna
cultures. In 2021, Harvia continued
working on cleaner burning, remote
connectivity and new sauna models,
resulting in completely new products
and product improvements.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 24
Harvia is shifting away from innovating purely around
sauna equipment to looking at the future of sauna
and spa culture and creating new experiences in line
with its ‘healing with heat’ philosophy. Harvia provides
users with a full sauna experience, including heaters,
sauna cabins and sauna rooms, infrared saunas, steam
generators, lighting, scents and textiles.
Harvia collaborates with an extensive ecosystem
of institutions, research centers, certifying bodies,
universities and experts. Harvia has also participated
in several research projects to get a holistic picture
of the health benefits of heat and related therapies
and their opportunities to enrich the future sauna
wellness experience. Harvia has cooperated, for
example, with students of Aalto University in Finland
and Kyoto Institute of Technology in Japan to engage
international teams in innovating around the sauna.
The acquisition of still water hot tub manufacturer
Kirami opened a new and interesting research area,
alternating heat and cold. It is currently being studied
as a path for product innovations. The companies
also see opportunities in expanding the wood heated
oering to electrically heated still water hot tubs.
HACKING THE SAUNA EXPERIENCE
To expand its product innovation outside of traditional
R&D, Harvia launched a hackathon in the second half
of 2021. Startups, SMEs and students with fresh ideas
were invited to explore two dimensions of the future
sauna experience:
1. The Multisensory Experience – how the sauna
experience could be elevated by using wellness
technologies, smart user interfaces, and digital art.
2. The Wellness Experience – what kind of future
wellness experiences could take care of both the
user’s body and mind through personalization and
incorporation of latest research.
The hackathon generated seven compelling proposals
and ideas that gave input to Harvia’s innovation
roadmap.
CLEANER BURNING
Harvia has continued to contribute to the Kiuas 2
project of the University of Eastern Finland to develop
cleaner burning of wood in sauna heaters. Initiated in
2019, the project focuses on improving the burning
process and its eciency, and the results have already
been utilized in Harvia’s GreenFlame products. The
second generation Harvia Linear GreenFlame heater
was launched in 2021. In 2022, Harvia will launch new
heaters enabling cleaner burning. Harvia’s long-term
involvement in research projects related to cleaner
burning helps the company meet the ever-tightening
emission requirements.
When it comes to reducing emissions, also users of
wood-burning heaters play an important role. Harvia
is committed to providing guidance in how people
can warm up wood-burning saunas in a proper and
more environmentally friendly way. In addition to user
manuals, Harvia has produced educational videos
and reached out to users, for example, in social media
channels.
DESIGN AND SMART SOLUTIONS
Harvia’s safe and easy-to-use remote control solution
for home saunas, connected to the MyHarvia
application, was launched in spring 2021. MyHarvia
was launched in the US market in February 2022.
EOS Group introduced several new products in
2021, such as unique design heaters, the first online
configurable sauna heater, and the EOS Spa Control
App featuring a multi-cabin solution able to control
eight dierent cabins with one single app.
Harvia has also strengthened its infrared cabin
oering during 2021 and will launch new solutions
in2022.
Harvia is creating new
experiences in line with
its ‘healing with heat’
philosophy.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 25
HARVIA LINEAR 22 GREENFLAME
is an elegant wood-burning heater
for medium-sized saunas. It ensures
a clean and stable fire behind a
large glass door, which creates a
relaxing atmosphere in the sauna.
Harvia GreenFlame fire chamber is
optimized for clean burning of wood.
You can now take a sauna with lower
emissions than ever before.
Easily installable HARVIA VARIANT
VIEW INDOOR SAUNA CABINS are
specially designed to help you relax
and enjoy the warmth of the sauna.
High-quality large glass walls on the
front let in natural light and create an
open and spacious feeling. Variant View
is available in six configurations.
NOVELTIES 2021 2021
MYHARVIA APP is a mobile
application designed for remote
use of the sauna. You can control
and operate your sauna’s heater,
lighting, and ventilation remotely
with a mobile device. MyHarvia can
be used on multiple compatible
devices. MyHarvia takes your
sauna experience to a new level
and brings you true freedom for
using the sauna.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 26
EOS Spa Control App
KIRAMI FINVISION SAUNA
is a ready, on-site module
with all needed accessories.
The compact-sized sauna
building brings luxury to
everyday life. It is made
of plain sawn softwood
and spruce plywood
complemented by a whole
glass wall. The sauna can be
equipped with an electric or a
wood-burning heater.
HARVIA LEGEND ELECTRIC HEATER
is the newest addition to the popular
Harvia Legend product family. The
compact-sized heater features a new
type of construction for the heating
elements, which increases their service
life, protects them from wear and tear,
and enables faster and more even
heating of the sauna.
EOS SPA CONTROL APP provides a convenient
way to control various sauna cabins, such as
steam rooms, hammams and infrared cabins
while on the move. A quick check of the
current sauna conditions like its temperature
or remaining heating time is easy with the app.
Management of several cabins is also possible.
Additional features include dierent preset
profiles, which can be customized with just a
few clicks.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 27
SUSTAINABILITY
As the sauna and spa market
leader, Harvia wants to lead the
way in the industry for more
sustainable sauna experiences that
promote health and wellbeing.
In 2021, Harvia concentrated
on developing the sustainability
of its supply chain and created a
sustainability program
for 2022–2025.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 28
Harvia is committed to contributing to a long and
good life, providing safe and sustainable experiences,
minimizing its carbon footprint and taking care of the
wellbeing and safety of its key stakeholders.
The reporting of 2021 activities is based on the focus
areas defined in 2019: environmental impacts of
production, personnel, products, and a responsible
Code of Conduct.
A RESPONSIBLE CODE OF CONDUCT
Harvia’s own operations are guided by the Harvia
Code of Conduct. It defines Harvia’s approach on
human rights and political activity, as well as the
company’s rejection of corruption, bribery or the use
of child and forced labor. The Code of Conduct is
part of the orientation program for new employees.
According to the Employee Survey conducted in late
2021, employees are well aware of the company’s
guidelines and operating principles (3.58 on a scale of
1–4).
For reporting potential misconduct, Harvia has a
whistleblowing channel in use in Finland. In 2021,
no reports were made through the whistleblowing
channel. In 2022, the channel will be made available
for all stakeholders on Harvia Group's website.
DRIVER OF INDUSTRY-WIDE
SUSTAINABILITY
MOTIVATED AND COMMITTED PERSONNEL
Harvia’s personnel have shown great team spirit
despite the prevailing pandemic. This positive energy
is one of the key factors behind the company’s
success. In 2021, Harvia had personnel in Finland,
Austria, Germany, China, Hong Kong, Romania, Russia,
Estonia, Sweden and the United States. Continuous
measures have been taken to secure the health and
wellbeing of the personnel.
Harvia conducted an Employee Survey among the
whole Group in late 2021. The response rate was
very high, 84.7 percent. The survey showed that the
personnel are highly committed to the company and
value the company’s agility and eectiveness. They
also think that gender equality is implemented well
(86 percent of respondents) and that employees of
dierent ages are treated equally in the units the
respondents work in (90 percent of respondents). The
development needs and projects based on the survey
results will be defined in 2022.
Employment relationships at Harvia are mostly
long-term and permanent. The company trains its
personnel continuously and develops its capabilities.
In 2021, Harvia carried out, among others, supervisor
training, first aid courses, and electrical safety training.
Due to the pandemic, continuous attention was paid
also to virtual and remote working skills and methods.
BOARD
■ Confirms and approves the sustainability
program and long-term objectives.
■ Monitors and regularly evaluates the
development of sustainability in accordance
with the sustainability program.
CEO AND
GROUP MANAGEMENT TEAM
■ Manage the development of sustainability, set
targets and monitor the progress on a regular
basis.
GROUP SUSTAINABILITY
TASK FORCE
■ Develops and steers the implementation of
the sustainability program across the Group.
■ Coordinates reporting and provides expert
support.
LOCAL PRODUCTION UNITS AND
BUSINESS OPERATIONS
■ Implement the sustainability program and
report on progress to the Group Sustainability
Task Force.
EVERYONE AT HARVIA GROUP
■ Is responsible for ensuring that we work in
accordance with our values, Code of Conduct
and sustainability commitments at all times.
SUSTAINABILITY MANAGEMENT
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 29
Harvia has participated in the “Työkaari kantaa”
project of Technology Industries of Finland in
2019–2020. Based on the key findings of the project,
several concrete actions were carried out at Harvia
during 2021 in Finland. A new modus operandi of
regular monthly meetings between the management
and supervisors was started, which has increased
cooperation. The topics of the meetings have
varied from current aairs to challenging leadership
situations. This, in turn, has benefited the work of
Harvia’s personnel forum, which deals with current
personnel matters and involves dierent personnel
groups, HR and the management.
Two thirds of Harvia’s personnel work in production.
Therefore, a great eort is put into work safety and
related risk management. Monitoring, reporting,
as well as annual risk analyses are a key part of
Harvia’s occupational safety and help the company
to identify and prevent risk situations. The company
also improves occupational safety by investing in
machines. Concrete examples of this include new
lighting and noise cancellation solutions, which
improve safety and comfort, installed in Muurame’s
new production facilities. Investments in machinery
that increase automation replace manual, sometimes
inconvenient work phases, and thus also improve
safety.
No serious occupational accidents occurred involving
Harvia’s personnel in 2021.
Cooperation with the colleagues in
Finland and all over the world is very
smooth. I feel supported and accepted by
everyone. If I need help, I get it, and I try
to help others whenever I can.
– Silke Stallinger,
HR and Purchasing, Sentiotec
SUSTAINABILITY THROUGHOUT
THE SUPPLY CHAIN
Sustainability is built into Harvia’s entire supply chain
and monitored at every level, covering occupational
safety, waste management and energy use in
production, the evaluation of suppliers’ sustainability,
and optimization of loads and logistics. A key focus
area in 2021 was to develop sustainability criteria and
reporting related to Harvia’s suppliers. This work will
continue in 2022.
Harvia requires that all its contract suppliers act
responsibly and commit to the Harvia Supplier and
Partner Code of Conduct, which is divided into
ethics, corruption, labor force, health and safety, and
environment. The company’s goal is to familiarize all
In Harvia Group, we work as one Harvia
family. I can openly share my ideas with
our management team. We help each
other and receive recognition when we
doa good job.
– Toby Liao,
Operation Manager, Harvia China
543 Blue Collar 281 White Collar
STRUCTURE OF PERSONNEL
570 Men
DISTRIBUTION OF PERSONNEL BY GENDER
254 Women
NUMBER OF PERSONNEL ON 31 DECEMBER 2021 (824)
Finland Germany Romania
China & Hong Kong USA
Austria
Russia
Estonia 13
Sweden 2
308 143 133 95 60 43 27
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 30
In 2017, Harvia renewed its strategy regarding
material procurement and invited tenders from steel
manufacturers, among others. The Finnish company
Outokumpu was chosen as the supplier of stainless
steel.
For decades, Outokumpu has been the forerunner
of producing recycled stainless steel globally. Today,
the company operates the largest recycling plant
in Europe where it recycles over one million tons of
recycled steel per year into new steel products. The
raw material, recycled steel, originates from Finland
and other parts of Europe. In 2020, the share of
recycled material in Outokumpu’s production was
92.5%. Due to the high amount of recycled material
and high share of low-carbon electricity, combined
with in-house ferrochrome production, Outokumpu’s
CO
2
footprint is 70% lower than the industry average.
In December 2021, Outokumpu became the first
stainless steel manufacturer in the world whose
climate targets have been approved by the Science
Based Targets initiative aligned with keeping global
warming below 1.5°C and meeting the goals of the
Paris Agreement. Outokumpu’s target is to reduce
CO
2
emissions by 42% by 2030 from the 2016
baseline.
“Stainless steel is a superb material from the
sustainability point of view. Not only is it mostly
made of recycled material, but it is also 100%
recyclable at the end of its life. It is long-lasting
and maintains its qualities throughout its lifecycle.
Stainless steel represents circular economy at its
best,” says Outokumpu’s Juha Erkkilä, Vice President –
Sustainability, Excellence and Reliability.
The characteristics of Outokumpu’s stainless still fit
perfectly with Harvia’s sustainability eorts. Harvia is
committed in manufacturing durable, long-lasting, and
recyclable products.
RECYCLED STAINLESS STEEL
FROM TORNIO, FINLAND
its current and new suppliers and partners with the
Code of Conduct. By the end of 2021, more than
80percent of suppliers had agreed to comply with
the Code of Conduct.
In Finland, Harvia uses only PEFC or FSC certified
wood. In 2021, the use of FSC certified wood was
extended to include also Romania. In the United
States, the company has continued exploring
opportunities to increase the amount of certified
wood in the production facilities.
Harvia has prioritized recycling in its selection of
raw materials and other materials. For example,
the stainless steel supplied by its main partner,
Outokumpu, is manufactured from over 90 percent
recycled steel. Stainless steel itself is 100 percent
recyclable.
■ Circular economy: old heaters and scrap
metal turn into new stainless steel and
new heaters
■ Stainless steel is 100% recyclable
■ The share of recycled material in
Outokumpu’s steel is 92.5%
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 31
QUALITY AND SAFE USE OF PRODUCTS
Harvia invests in sustainability in product design,
production and logistics. A durable product is
sustainable in itself due to its long useful life. The
products are designed to be repairable, and Harvia
oers spare parts services for them. Another significant
factor is the good recyclability of both the materials
used in products and of the product itself. The company
carries out continuous development and research to
ensure that its products are always safe to use and
increase the wellbeing of the users. Harvia also pays
special attention to guidance in the proper use of
products providing, for example, product information
and facts on the website.
INDUSTRY STANDARDIZATION
Over the years, Harvia has been an active participant
in the development of the industry’s standardization
through research projects and committees. In 2021, the
company continued working in the Kiuas 2 project of the
University of Eastern Finland, which aims to find ways
to reduce emissions caused by wood burning heaters.
One of the project’s goals was to publish a voluntary
environmental label for wood burning heaters, but
that was abandoned because the European Union
issued a standardization request to set strict limits
for the eciency and emissions (particles, Organic
Gaseous Compounds and NOx) of wood burning
fireplaces and heaters. Harvia’s CTO Timo Harvia
acts as the Convenor of the European Committee
for Standardization’s Technical Committee, which is
responsible for the standardization of fireplaces. A
Working Group, which operates under the supervision
of the Technical Committee, prepares the standards
for slow heat release appliances and sauna stoves.
ENVIRONMENTAL IMPACTS OF PRODUCTION
In 2021, Harvia’s emission calculation was performed
for the first time in accordance with the standards and
guidelines of the Greenhouse Gas Protocol (GHG).
The GHG protocol is the most internationally known
and used standard for calculating the carbon
footprint of companies.
0
500
1,000
1,500
2,000
2,500
201920182017 2020 2021*
* Calculated according to GHG protocol, calculations
are not directly comparable to previous years.
Scope 1 Scope 2
921
928
1,069
1,771
1,292
227
202
205
248
1,269
Scope 1 Scope 2
921
928
1,069
1,771
1,292
227
202
205
248
1,269
Harvia Group emissions
0
100
200
300
400
500
600
700
800
Card-
board
Energy
and
mixed
waste
WoodMetal*
* 100 percent of metal waste is recycled
Hazard-
ous
waste
Others
in total
2019 2020 2021 2019 2020 2021
HARVIA GROUP,
CO
2
EMISSIONS (tCO
2
)
DISTRIBUTION OF RESIDUAL MATERIAL
AND WASTE AT MUURAME FACTORY
(tonnes)
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 32
The transition to using calculations aligned with
the GHG protocol refined Harvia's emission
calculation and the classification of emissions into
the Scope 1 and Scope 2 categories. Comparative
data for 2020 has not been restated in accordance
with the GHG protocol, so the results of the 2020
and 2021 calculations are not directly comparable.
Harvia’s Group-level Scope 1 CO
2
emissions in 2021
were 1,269 tCO
2
(248) and Scope 2 CO
2
emissions
1,292 tCO
2
(1,771).
Harvia only uses emission-free electricity
produced by 100 percent renewable energy forms
in Muurame’s production facility. The solar panels
installed on the roof of the Muurame factory
produced 124.5 MWh (55.4) of electric energy
last year. The share of renewable electricity in the
Harvia Group was 51 percent (57) in 2021.
Most of the residual material generated by
production comes from recycled steel, of which
the Muurame factory produced 743.6 tonnes last
year. The amount of wood waste generated was
146.2 tonnes and energy waste 85.4 tonnes. Harvia
also considers the recyclability of its products.
For example, most of the material used in sauna
heaters is recyclable metal, and all heaters in
Finland can be returned to a recycling point for
electrical and electronic devices. The waste is
sorted as carefully as possible and delivered to
appropriate processing or recycling. For example,
100 percent of the metal waste is recycled.
Compared to the previous year, the amount of
waste produced in the Muurame factory increased
due to substantially higher production volumes
in 2021.
■ We create a positive impact on the health and
longevity of people with our oering.
■ We actively share science-based information on
the health benefits of heat and promote the
healthy regimen of using the sauna regularly.
■ We strive to reduce the greenhouse gas
emissions of our operations to limit global
warming and contribute to global eorts in
safeguarding the environment.
■ We believe that by collaborating and
supporting each other we create wellbeing and
long relationships with everyone from our
employees to customers and partners.
■ We look after the safety, equality, and
competence development of our people.
■ We actively guide our end users in responsible
use of our products.
■ We invest in research and development of
products that reduce emissions and optimize
energy consumption.
■ We use sustainable and sustainably
sourced materials.
FOR GOOD AND
HEALTHY LIVING
#
1
FOR SUSTAINABLE
EXPERIENCE & ENJOYMENT
#
2
FOR MINIMIZING OUR
ENVIRONMENTAL FOOTPRINT
#
3
FOR SAFE AND
WARM COMMUNITY
#
4
SUSTAINABILITY PROGRAM 2022–2025
In 2021, Harvia defined its sustainability commitments
for 2022–2025. The process included mapping
of stakeholders and their needs, data gathering,
benchmarking, and a materiality analysis, which
provided information for target setting. Harvia
partnered with a well-established ESG expert to carry
out a review of the current CO
2
impact. The results
showed that Harvia’s starting point for decreasing the
CO
2
footprint is very good, and the company
is committed to continuous improvement.
Based on the research phase,
four commitments that serve both
people and the planet were identified:
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 33
Harvia is a leading global player
in the sauna and spa market,
with a growing shareholder base.
In 2021, Harvia welcomed 20,328 new shareholders. At
the year-end, Harvia had 33,879 shareholders in total,
including nominee registers. The market capitalization
of Harvia was EUR 1,097 million at the end of 2021, up
by EUR 639 million from the previous year.
The cornerstones of Harvia as an investment:
STEADILY GROWING SAUNA
AND SPA MARKET
• Global market potential: sauna and spa market is
approximately four billion euros and the market is
highly fragmented. About 50% of that is direct labor
related to installations, local production and service.
Harvia is not active in that part of the business
internationally.
• Historically, the international sauna and spa market
has been very resilient: replacement demand in the
traditional sauna market is strong.
• Historically, the global market has been growing
on an average 5% per year. Currently, the market is
experiencing considerable growth due to increasing
awareness and appreciation of the health benefits
of sauna and the general trend of investing in
and relaxing at home, which has been further
accelerated by the COVID-19 pandemic. Harvia’s
management estimates that somewhat higher than
historical average market growth rates will continue
in the medium term, for the next couple of years.
STRONG POSITION
IN MAIN MARKETS
• Harvia is the leading player in its main markets.
In 2021, the key markets included Finland (21% of
revenue in2021), other European countries (28%),
North America (16%), Germany (20%),
Russia (6%) and Scandinavia (5%).
• The company’s market position has historically
been particularly strong in large markets focused
on traditional sauna culture. According to the
management’s estimate, Harvia’s share of the global
sauna and spa market is about 5%, and the Group
has an estimated market share of 20% in sauna
heaters and components.
• Systematic work to expand geographical coverage
is carried out through both organic growth
and acquisitions. In line with its strategy, Harvia
continues to actively explore opportunities to grow
through acquisitions.
STRONG BRAND, COMPREHENSIVE PRODUCT
OFFERING AND FUTURE INNOVATIONS
• Harvia’s brands are Harvia, Almost Heaven Saunas,
EOS, Kirami, and Sentiotec. The brand awareness
and position of the Harvia brand is strong in the
company’s main markets.
• Harvia is the most often recognized international
sauna brand internationally. The comprehensive
product oering, in line with Harvia’s healing with
heat philosophy, is constantly developed to meet
the needs of the international sauna and spa market,
targeting professionals and consumers alike. The
product oering comprises all sauna types and
dierent price ranges.
• The cutting-edge product portfolio is supported
by a wide array of development projects in which
current themes include the cleaner burning of
wood and utilizing digital technologies in enhancing
wellness and sauna experiences.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 35
EFFICIENT BUSINESS MODEL
• Harvia demonstrates production and operational
eciency enhanced by the company’s long
experience and expertise in the industry, close
cooperation between sourcing, production, product
development and sales, and modern production
facilities.
• Operational eciency and productivity are
constantly developed by, for example, concentrating
operations and streamlining production processes,
oering and logistics. Sustainability across the value
chain is one of the focus areas.
• Harvia’s business is very capital ecient due
to typically low investment needs, ecient and
modern production facilities as well as a flexible
production model.
• In 2021, Harvia invested EUR 11.8 million especially
into increasing the capacity and productivity of the
heater and sauna production process: facilities were
expanded and new machinery acquired in Harvia’s
factories in Finland, the Unites States, Romania, and
China, as well as the EOS factory in Germany.
TARGET 2021
GROWTH
Average annual revenue growth
of more than 5%
64.2% in total, with acquisitions
43.3% organic growth
PROFITABILITY
Adjusted operating profit margin
exceeding 20%
1)
26.4%
LEVERAGE
Net debt per adjusted EBITDA
in the range of 1.5x–2.5x
2)
0.8
LONG-STANDING CUSTOMER
RELATIONSHIPS AND DIVERSE
DISTRIBUTION CHANNELS
• The large and diverse customer base consists of
sauna specialist stores, retail stores, wholesalers,
sauna integrators and sauna builders, DIY chains as
well as construction companies.
• Products are sold globally mainly via the distributor
network as well as directly to end users through
Harvia’s webstore, like Almost Heaven Saunas’
almostheaven.com. Kirami also has a webstore for
its products.
• Continuously expanding the distributor network in
order to gain a more diverse customer base in the
current markets as well as expanding geographically
are at the core of Harvia’s strategy.
Financial targets
Regularly increasing dividends
Bi-annual payout
Dividend proposal for
the financial year 2021 is
EUR 0.60 per share.
Earnings per share were
EUR 1.80.
1) Adjusted operating profit is operating profit before items aecting comparability.
2) Does not take into account the eect of future changes in IFRS standards.
Dividend policy
STRONG PROFITABILITY AND CASH FLOW
• In addition to strong organic growth and business
acquisitions increasing revenue, the profitability of
Harvia’s business has historically been good. In 2021,
the adjusted operating margin was 26.4%.
• Stability of the business, typically strong cash
conversion and low investment needs together
with the company’s performance create a solid
foundation for profitable growth and the ability to
distribute dividends.
• Resiliency: it is estimated that approximately 80%
of heater and equipment sales is replacement sales.
The same corresponding replacement rate in sales
of sauna rooms is lower, but still in the range of 60%.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 36
20
30
40
50
60
70
€/osake
1/2021
2/2021
3/2021
4/2021
5/2021
6/2021
7/2021
8/2021
9/2021
10/2021
11/2021
12/2021
1/2021
2/2021
3/2021
4/2021
5/2021
6/2021
7/2021
8/2021
9/2021
10/2021
11/2021
12/2021
INVESTOR INFORMATION
Harvia’s shares are listed on the ocial list of Nasdaq
Helsinki in the Mid Cap segment. Harvia has one class
of shares, and the trading code is HARVIA.
Harvia’s investor relations
In its communications, Harvia strives to ensure that
all its stakeholders have access to information that
is material and sucient to support the valuation of
Harvia’s financial instruments. All material information
is disclosed simultaneously and equally to all
stakeholders. Please find additional information and
Harvia’s IR contact details on our website
www.harviagroup.com.
Harvia’s financial reporting
in 2022
ANNUAL GENERAL MEETING 2022 AND
DIVIDEND PROPOSAL
Harvia’s Annual General Meeting will be held on
7April 2022.
The Board of Directors of Harvia proposes to the
Annual General meeting that EUR 0.60 per share
be paid as dividend for the financial year 2021. The
board proposes that the dividend is to be paid in two
instalments, EUR 0.30 in April 2022 and EUR 0.30 in
October 2022.
Please find additional information on Harvia’s website
at www.harviagroup.com.
Harvia’s share price development 2021, EUR
5 May 2022: January−March 2022
interim report
11 August 2022: January−June 2022
half-year financial review
3 November 2022: January−
September 2022 interim report
SKILLED AND EXPERIENCED MANAGEMENT
TEAM AND PERSONNEL
• The extensive experience of Harvia’s management
in the sauna and spa business and in the B2B and
consumer goods market generates a significant
competitive advantage in the market.
• The management’s solid expertise in business
integrations combined with the personnel’s ability
to adapt to change creates a strong foundation for
Harvia’s journey towards global market leadership.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 37
CORPORATE GOVERNANCE
STATEMENT 2021
INTRODUCTION
Harvia Plc’s (“Harvia” or “the company”) corporate
governance complies with the Finnish Limited Liability
Companies Act and Securities Markets Act, regulations
concerning listed companies, the company’s Articles
of Association, and rules and regulations of Nasdaq
Helsinki Ltd. The Company also adheres to the Finnish
Corporate Governance Code 2020 set by the Securities
Market Association (cgfinland.fi).
The Corporate Governance Statement is issued
separately from the company’s Report of the Board
of Directors, and it is published together with Harvia’s
Report of the Board of Directors, Financial Statements
and Remuneration Report for 2021 on the company
website at www.harviagroup.com.
HARVIA’S GOVERNING BODIES
Harvia’s governing bodies comprise the Annual General
Meeting, the Board of Directors, and the CEO. The
General Meeting of shareholders is the highest decision-
making body of the company. The Board of Directors
and the CEO are responsible for the management. The
Management Team assists the CEO in managing the
company and the group.
ANNUAL GENERAL MEETING
The General Meeting of shareholders is the highest
decision-making body of Harvia that decides on
matters stipulated by the Finnish Limited Liability
Companies Act and the Company’s Articles of
Association. In the General Meeting, all shareholders
of the company are entitled to raise questions and
propose resolutions regarding issues on the agenda.
Harvia has one share class, and every share entitles to
one vote in the General Meeting.
The Annual General Meeting is held annually on the
date set by the Board of Directors within six months
of the end of the financial period. An Extraordinary
General Meeting can be convened to discuss a specific
issue if the Board of Directors deems it necessary or it
is otherwise required by law. Harvia’s General Meeting is
held in Muurame, where the Company is registered, or
in Helsinki, and is convened by the Board of Directors.
The Annual General Meeting decides on
• adoption of the financial statements and use of profit
shown in the balance sheet;
• discharging of the members of the Board of Directors
and the CEO from liability;
• election and remuneration of the members of the
Board of Directors;
• election and remuneration of the auditor;
• changes to the Articles of Association;
• purchase of own shares;
• a share issuance or issuance of other specific rights
entitling to shares as well as authorization for the
Board of Directors to resolve these matters.
The notice of the General Meeting is published on the
company’s website or by a newspaper announcement
which is published in at least one widely circulated
daily newspaper chosen by the Board of Directors. The
notice shall be delivered to shareholders no earlier than
three months and no later than three weeks before the
meeting, and in any case at least nine days before the
record date.
To be entitled to participate in the General Meeting, a
shareholder needs to be registered in the company’s
shareholder register at least eight (8) business days
prior to the General Meeting as well as register their
participation in the meeting in the manner specified
in the meeting notice. Holders of nominee-registered
shares may also attend the General Meeting by
temporary registration in the company’s shareholder
register. A shareholder may attend the General Meeting
either in person, or via a representative authorized by
the shareholder.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 39
2021 Annual General Meeting
Harvia’s Annual General Meeting was held on 8 April
2021 in Helsinki. 105 shareholders were represented in
the meeting, representing a total of 9,643,449 shares
and votes, which amounted to 51.6% of all shares and
votes.
In order to limit the spread of the COVID-19 pandemic,
the Annual General Meeting was held without
shareholders’ and their proxy representatives’ presence
at the meeting venue. The shareholders and their
representatives could participate in the Annual General
Meeting and use their shareholder rights only by voting
in advance and by submitting counterproposals and by
asking questions in advance.
The Board of Directors had resolved on the exceptional
meeting procedure pursuant to the Temporary Act
(677/2020). The minutes of the Annual General Meeting
are available on the company website.
BOARD OF DIRECTORS
According to Harvia’s Articles of Association, the
company’s Board of Directors consists of three to six
members. The members are elected in the Annual
General Meeting for a one-year term which expires at
the end of the Annual General Meeting following their
election. The Board of Directors elects a Chairperson
from among its members.
The majority of the Board members shall be
independent of the company, with at least two of
these members also being independent of the major
shareholders of the company. The Board of Directors
assesses its members’ independence of the company
and its major shareholders annually and as needed,
in accordance with the criteria set in the Finnish
Corporate Governance Code. In the selection of
members, attention shall be paid to members’ mutually
complementary experience and competence in the
company’s field of business and development stage.
Duties of the Board of Directors
The duties and activities of the Board of Directors are
defined by the Finnish Limited Liability Companies Act,
the Finnish Corporate Governance Code 2020, other
applicable legislation, Harvia’s Articles of Association
and the Rules of Procedure of the Board of Directors.
The key duties and operating principles of the Board of
Directors are defined in the Rules of Procedure of the
Board of Directors. The Board of Directors approves
Harvia’s strategy and supervises its implementation.
The duties of the Board of Directors include
• approving the Company’s financial statements and
interim reports and monitoring the appropriateness
of accounting and the Company’s financial
management;
• deciding on significant loans, acquisitions, and
investments;
• approving the annual and long-term business
plans and budgets as well as the principles of risk
management;
• deciding on the principles according to which
the management may make decisions regarding
investments, acquisitions and divestments and issuing
of guarantees;
• approving the Group’s long- and short-term
remuneration schemes and their realization; and
• appointing Harvia’s CEO and deciding on the terms
of the CEO’s service contract.
The Board of Directors in 2021
In 2021, the members of the Board of Directors
between 1 January and 8 April 2021 were Olli Liitola
(Chairperson), Ia Adlercreutz, Ari Hiltunen, Kalle
Kekkonen and Sanna Suvanto-Harsaae.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 40
THE BOARD OF DIRECTORS ON 31 DECEMBER 2021
The resumés of the members of the Board of
Directors are available on the company’s investor
website at www.harviagroup.com. All members
of the Board of Directors are independent of the
company and its major shareholders.
HILLE KORHONEN
• Member of the Board of Directors 2021–
• Member of the Board’s Audit Committee 2021–
• Licentiate of Science (Technology)
• Born 1961, Finnish citizen
• Main occupation: Board professional
• Harvia Plc’s shares on 31 December 2021: 4,621
OLLI LIITOLA
• Chairperson and member of the Board of
Directors 2014–
• Member of the Board’s Audit Committee,
Chairperson of the Board’s Audit Committee
2018–2021
• Master of Science in Engineering
• Born 1957, Finnish citizen
• Main occupation: Board professional
• Harvia Plc’s shares on 31 December 2021:
46,000
IA ADLERCREUTZ
• Member of the Board of Directors 2016–
• Master of Arts, Master of Business
Administration (MBA)
• Born 1971, Finnish citizen
• Main occupation: CEO of Co-founders Oy
• Harvia Plc’s shares on 31 December 2021: 9,966
SANNA
SUVANTO-HARSAAE
• Deputy Chair of the Board of Directors 2021–,
member of the Board 2020–
• Chairperson of the Board’s Audit Committee
2021–, member 2020–
• Bachelor of Science (Business Administration)
• Born 1966, Finnish and Danish citizen
• Main occupation: Board professional
• Harvia Plc’s shares on 31 December 2021: 350
ANDERS HOLMÉN
• Member of the Board of Directors 2021–
• Master of Science in Economics and Business
Administration
• Born 1977, Finnish citizen
• Main occupation: CEO of Fyrklöver-Invest Oy
Ab 2013–
• Harvia Plc’s shares on 31 December 2021: 1,200
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 41
Member
Board of Directors
Attendance Attendance %
Audit Committee
Attendance Attendance %
Olli Liitola, Chair of the Board 18/18 100% 7/7 100%
Sanna Suvanto-Harsaae,
Deputy Chair of the Board 17/18 94% 7/7 100%
Ia Adlercreutz 18/18 100%
Anders Holmén (from 8 April 2021) 14/14 100%
Hille Korhonen (from 8 April 2021) 14/14 100% 6/6 100%
Ari Hiltunen (until 8 April 2021) 4/4 100%
Kalle Kekkonen (until 8 April 2021) 4/4 100% 1/1 100%
The Annual General Meeting on 8 April 2021 elected
the members of the Board of Directors for a term
that expires at the end of the next Annual General
Meeting. Olli Liitola, Ia Adlercreutz and Sanna Suvanto-
Harsaae were re-elected as members. Hille Korhonen
and Anders Holmén were elected as new members.
After the Annual General Meeting, the organizational
meeting of the Board of Directors elected Olli Liitola as
its Chairperson. Sanna Suvanto-Harsaae was elected as
Deputy Chair of the Board.
In 2021, the Board of Directors focused in its work
especially on the company’s growth strategy,
acquisitions as well as monitoring the pandemic and
its eects on business operations. In 2021, the Board
of Directors held a total of 18 meetings. Information
about the attendance of the members of the Board
ofDirectors in meetings is shown in the table below.
Independence of the members
of the Board of Directors
In accordance with the Corporate Governance
Code, the majority of the Board members shall be
independent of the company. At least two of these
members shall also be independent of the major
shareholders of the company.
The Board of Directors assesses its members’
independence of the company and its major
shareholders annually. In 2021, the members of
the Board of Directors, elected in the Annual
General Meeting on 8 April 2021 were deemed
to be independent of the company and its major
shareholders based on an assessment of independence
in accordance with the Finnish Corporate Governance
Code.
Self-assessment
The Board of Directors assesses its operations and
ways of working annually as an internal self-assessment.
The self-assessment was carried out also in 2021. The
Board of Directors conducted the self-assessment in
November 2021. The self-assessment focused on the
company’s goals and strategy, investment decisions,
the interaction between the Management Team and
the Board, the management model and organization
of the company, reporting and control, as well as the
general eciency of the Board’s work. The results of
the self-assessment were examined by the Chairperson
of the Board together with the Board members and the
Management Team in November 2021.
Diversity of the Board
Harvia’s Shareholders’ Nomination Board takes into
account the principles concerning the Board of
Directors’ diversity in its work and its proposals. A
person elected as a member of Harvia’s Board of
Directors must have qualifications required for the
task as well as adequate availability for carrying out
the duties of a Board member. When electing Board
members, attention shall be paid to members’ mutually
complementary experience and competence from the
perspective of the company’s field of business and
development stage.
Varied professional and educational backgrounds
support the diversity of the Board.
The goal is to promote gender equality in the selection
of Board members. When electing Board members, the
objective is to ensure that the Board of Directors as
a whole enables ecient management of the Board’s
responsibilities and supports the development of
Harvia’s business.
In 2021, both genders were represented in the
company’s Board of Directors. There are three women
and two men among the five Board members elected
by the Annual General Meeting in April 2021.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 42
SHAREHOLDERS’ NOMINATION BOARD
The Annual General Meeting of Harvia, held on 2
April 2020, decided on establishing a Shareholders’
Nomination Board to prepare proposals concerning the
election and remuneration of the Board members, as
well as the remuneration of the members of the various
Board committees, to be submitted to future Annual
General Meetings and to any Extraordinary General
Meetings where necessary.
The Shareholders’ Nomination Board consists of
representatives appointed by the company’s four
largest shareholders.
Each year, those four shareholders that hold the
largest share of the votes conferred by all shares in the
company on the first working day of the September
preceding the applicable Annual General Meeting
pursuant to the shareholders’ register maintained
by Euroclear Finland Ltd will be entitled to appoint
members that represent the shareholders.
The Chairperson of the Board of Directors will
convene the first meeting of each term of oce
of the Shareholders’ Nomination Board, and the
representative of the largest shareholder will be
appointed as the Chair of the Shareholders’ Nomination
Board, unless the Nomination Board specifically
decides otherwise.
The Shareholders’ Nomination Board must submit its
proposal to the company’s Board of Directors on an
annual basis and at the latest on 31 January preceding
the applicable Annual General Meeting.
AUDIT COMMITTEE
To enhance the eciency of its work, the Board
of Directors has set up an Audit Committee. The
Committee has no independent decision-making
authority; it functions as a preparatory body, and the
matters it addresses are brought to be decided on by
the Board of Directors.
The Board of Directors annually elects from among
its members the chairperson and members of the
Committee and confirms its written Rules of Procedure.
The Audit Committee consists of a minimum of three
Board members. The majority of the members of the
Committee shall be independent of the company,
with at least one member also being independent
of the major shareholders of the company. At least
one member of the Audit Committee shall also have
expertise in accounting or auditing.
According to its Rules of Procedure, the Audit
Committee sees to the financial reporting and auditing
of the company, and its duties consist particularly of
monitoring and assessing
• the company's financial reporting system;
• the eciency of its internal control and audit as well
as that of the risk management systems;
• the independence of the auditor and especially the
non-auditing services provided by the auditor.
In addition, the Audit Committee is tasked with
monitoring the company’s audit and preparing the
selection of the company’s auditor.
Audit Committee in 2021
In 2021, the members of the Audit Committee between
1 January and 8 April 2021 were Olli Liitola, Kalle
Kekkonen and Sanna Suvanto-Harsaae. The Board of
Directors, appointed in the Annual General Meeting on
8 April 2021, elected from its members Sanna Suvanto-
Harsaae (Chairperson), Hille Korhonen and Olli Liitola
asmembers of the Audit Committee.
In its meeting on 8 April 2021, the Board of Directors
decided that matters relating to the remuneration of
the company’s management will be prepared by the
Audit Committee in future to increase eciency of the
Board’s work.
In 2021, the Audit Committee convened seven times.
The members’ attendance in the meetings is described
in the table on page 42. In 2021, the Audit Committee
focused in its work on risk management, financing, the
development of reporting as well as remuneration.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 43
MEMBERS OF THE MANAGEMENT
TEAM ON 31 DECEMBER 2021
TAPIO PAJUHARJU
CEO
• Master of Science in Economics and Business
Administration
• Born 1963, Finnish citizen
• CEO and member of the Management Team
2016–
• Member of the Board of Directors of Harvia in
2014–2016
• Harvia Plc’s shares on 31 December 2021:
255,233
ARI VESTERINEN
Chief Financial Ocer
• Master of Science in Engineering and a Master
of Business Administration (MBA)
• Born 1963, Finnish citizen
• CFO and member of the Management Team
2014–
• Harvia Plc’s shares on 31 December 2021:
139,375
On 10 September 2021, Harvia announced that the
following persons were appointed as members of the
Shareholders’ Nomination Board:
• Juho Lipsanen (Onvest Oy)
• Heikki Savolainen (WestStar Oy)
• Pertti Harvia (Tiipeti Oy)
• Annika Ekman (Keskinäinen Eläkevakuutusyhtiö
Ilmarinen).
Olli Liitola, Chairperson of the company’s Board of
Directors, serves as an expert in the Nomination Board
but is not a member.
The Shareholders’ Nomination Board held a total of six
meetings. All members participated in all meetings.
On 31 January 2022, the Nomination Board submitted
its proposals for the composition and remuneration
of the Board of Directors and the remuneration of the
members of the Board’s committees to Harvia’s Board
of Directors.
CEO
The CEO is responsible for the day-to-day management
of the company. The CEO is responsible for ensuring
that the targets, plans, guidelines and goals set by
the Board are carried out within Harvia. According to
the Finnish Limited Liability Companies Act, the CEO
ensures that the accounting practices of the company
comply with the law and that asset management is
arranged in a reliable manner.
The Board of Directors appoints and, if necessary,
dismisses the CEO and decides on the CEO’s terms of
service, defined in a written service contract approved
by the Board. The CEO is appointed for the post
until further notice. The Board of Directors evaluates
the CEO’s work and performance in achieving the
assigned targets. The CEO cannot be elected as
Chairperson of the Board of Directors.
Tapio Pajuharju acts as the CEO of Harvia, appointed
by the Board of Directors. The CEO’s financial
benefits are introduced in the 2021 remuneration
report.
THE GROUP’S MANAGEMENT TEAM
The Management Team supports the CEO and is
responsible for the development and operational
management of the Group and its business, in
accordance with the goals set by the Board of
Directors and the CEO. The Management Team also
defines the operating principles and procedures
in line with the direction given by the Board of
Directors. The Management Team convenes monthly
and when needed and focuses on strategic questions
concerning the Group and its businesses. Questions
and reports concerning financial development,
governance, corporate responsibility and
development projects are regularly on the agenda.
The CEO acts as the chairperson of the Group’s
Management Team.
In 2021, the Management Team focused in its
work especially on growth management, ensuring
the delivery capability, and other aspects of
implementing the strategy.
The resumés of the members of the Management
Team are available on the company’s investor website
at www.harviagroup.com.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 44
MEMBERS OF THE MANAGEMENT
TEAM ON 31 DECEMBER 2021
DAVID AHONEN
Export Director
• Vocational qualification in business
and administration
• Born 1966, Finnish and UK Citizen
• Export Director 2016–, member of
the Management Team 2014–
• Harvia Plc’s shares on 31 December
2021: 124,178
TIMO HARVIA
Director, Research
& Development
and Quality
• Master of Science in Engineering
• Born 1978, Finnish citizen
• Director, Research & Development
and Quality 2016–, member of the
Management Team 2014–
• Harvia Plc’s shares on 31 December
2021: 133,236
TOMAS HJÄLMEBY
Sales Director,
Scandinavia
• Technical education and
professional experience in
construction of wooden houses
• Born 1968, Swedish citizen
• Sales Director in Scandinavia 2018–,
member of the Management Team
2018–
• Harvia Plc’s shares on 31 December
2021: 1,500
ANSSI PELKONEN
Sales Director,
Finland
• Vocational qualification in business
and administration
• Born 1964, Finnish citizen
• Sales Director in Finland, member
of the Management Team 2014–
• Harvia Plc’s shares on 31 December
2021: 65,000
MIKA SUOJA
Production and
Sourcing Director
• Master of Engineering degree
• Born 1975, Finnish citizen
• Production and Sourcing Director,
member of the Management Team
2016–
• Harvia Plc’s shares on 31 December
2021: 35,062
MARKUS
WÖRMANSEDER
Sales Director,
Central Europe
• Technical chemistry, Johannes
Kepler University Linz, Austria
• Born 1974, Austrian citizen
• Sales Director, Central Europe
and member of the Management
Team 2017–, Managing Director of
Sentiotec GmbH 2007–
• Harvia Plc’s shares on 31 December
2021: 126,000
RAINER KUNZ
Managing Director
of EOS Group
• Legal studies
• Born 1964, German citizen
• Member of Harvia’s Management
Team 2020–, CEO of EOS Group
2013–
• Harvia Plc’s shares on 31 December
2021: 35,556
• 21.4% ownership in EOS Group’s
German companies
PÄIVI JUOLAHTI
Vice President,
Innovation and
Marketing
• Master of Science in Economics
and Business Administration
• Born 1976, Finnish citizen
• Member of the Management Team
2020–
• Harvia Plc’s shares on 31 December
2021: 1,000
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 45
PRINCIPLES OF INTERNAL CONTROL AND
RISK MANAGEMENT RELATED TO THE
FINANCIAL REPORTING PROCESS
Harvia compiles its financial reporting in accordance
with the International Financial Reporting Standards
(IFRS), the Finnish Securities Markets Act, the Finnish
Accounting Act and the guidelines and statements of
the Finnish Accounting Board, while also complying
with the rules and regulations of the Financial
Supervisory Authority and the rules of the Helsinki
Stock Exchange. The principles, instructions, practices
and areas of responsibility in internal auditing and
risk management relating to the Company’s financial
reporting process are aimed at ensuring that the
Company’s financial reporting is reliable and that the
financial statements have been prepared in accordance
with applicable laws, regulations and the Company’s
operating principles. Harvia’s financial reporting is
supervised on two levels, in a separate company and
at the Group level. On both levels, control measures
and analyses are carried out to ensure the validity of
financial reporting.
The Audit Committee of the Board of Directors is
responsible for overseeing the financial reporting
process.
OVERVIEW OF RISK MANAGEMENT
Risk management is part of Harvia’s business
management. Harvia Group’s risk management is
guided by the Risk Management Policy. The purpose
of risk management is to promote the identification of
risks and their preventive management, to ensure an
adequate level of risk management, and to include risk
management as part of the company’s business.
Harvia has a group-level risk assessment and reporting
model. The Group carries out a comprehensive risk
assessment annually, in which the most relevant risks
to the realization of the Group’s strategy or other
objectives are evaluated based on their likelihood
and impact on business operations. The annual
risk assessment also evaluates the company’s risk
management measures. The Group’s Management
Team is responsible for the risk assessment. If needed,
the risk assessment is updated, for example, for the risk
assessment included in interim reports. The results of
the risk assessment are reported to the Group’s Board
of Directors.
The Group’s Management Team is responsible for the
execution of risk management. The Audit Committee
of the Board of Directors supervises the eciency and
expediency of the Group’s risk management.
INTERNAL CONTROL AND AUDIT
The objective of internal control at Harvia is to ensure
the realization of the Company’s strategic, financial,
operational and procedural targets, and to ensure
compliance with applicable laws and regulations in the
Group. The Group’s internal control is an essential part
of business management and of ensuring that the set
objectives are reached. The Group aims to organize
internal control eciently, so that any deviations from
targets can be detected as early as possible or that
they can be prevented.
Harvia’s tools of internal control include internal
policies, guidelines and instructions, together with
manual controls as well as controls built into systems. In
addition, internal control is implemented in the form of
various monitoring reports and meetings.
The Board of Directors of Harvia is responsible
for organizing the internal control and the Audit
Committee oversees the eciency of internal control.
The Group Management Team and the CEO of each
Group company are responsible for the Group having
functioning control procedures in use.
Harvia Group does not have its own internal audit
function. The Board of Directors will annually assess
the need for internal audit procedures and, if needed,
may use internal company resources or external service
providers for internal audit measures.
RELATED PARTY TRANSACTIONS
Harvia’s Board of Directors has defined the principles
for monitoring and evaluating related party
transactions. The Group maintains a related party list
intended to identify transactions that involve a person
considered as a related party to Harvia. Harvia’s related
parties include the key management personnel: the
Board of Directors and the Management Team and their
close family members as well as the companies under
the control of the managers.
Harvia’s Board of Directors processes any significant
related party transactions. The company’s Board of
Directors resolves on significant transactions carried
out with Harvia’s management and its related parties.
The Board of Directors also resolves on possible related
party transactions that do not fall within the company’s
regular business or are not carried out with regular
market terms.
In 2021, the company had no related party transactions
that were significant to the company and deviated
from its regular business or were carried out on other
than normal market terms. Related party transactions
carried out in the ordinary course of business were
related to purchased services.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 46
INSIDER MANAGEMENT
Harvia complies with the Market Abuse Regulation
((EU) No. 596/2014, “MAR”), including its amendments,
and regulations issued under it, instructions issued
by the authorities, including the insider guidelines of
Nasdaq Helsinki Ltd. In addition, the company has
supplemented Nasdaq Helsinki Ltd’s insider guidelines
with its own insider guidelines.
The company maintains a list of employees and service
providers who have access to insider information. The
company’s insider list comprises one or more project-
based insider lists. The company has estimated that it
does not have insiders who would require a separate
supplement to the insider list.
The company has appointed a person in charge of
insider issues, who is responsible for maintaining insider
lists, handling trading restrictions and the management
of the obligation to notify and disclose transactions,
internal communications related to insider issues,
training on insider issues and the supervision of insider
issues.
Harvia has internal procedures for publishing insider
information, possible delayed disclosure of insider
information and maintaining project-specific insider
lists.
Harvia observes the trading ban on managers (closed
window) specified in MAR article 19(11). In addition, the
Company has separately defined specific individuals
who participate in preparing financial reports, or who
have access to information related to such reports, as
being restricted by a trading ban of similar length and
content (closed window). The closed window begins
30 days prior to the publication of a financial statement
bulletin, half-year report or interim report.
Harvia uses an internal reporting channel that enables
anonymous reporting of suspected violations of rules
and regulations concerning financial markets. In 2021,
no suspected violations were reported through the
reporting channel. In the beginning of 2022, Harvia will
introduce an external reporting channel on its website.
Management transactions
Harvia has determined that managers whose
transactions shall be notified include members and
deputy members of the Board of Directors, the CEO,
and other members of the Management Team. These
persons and their closely associated persons are
required to notify the company and the Financial
Supervisory Authority of every transaction conducted
on their own account relating to the shares, debt
instruments, derivatives or other financial instruments
of Harvia. Harvia discloses the information via a stock
exchange release without delay, at the latest within
three business days following the execution of the
transaction.
Managers may not conduct any transactions on
their own account or on the account of a third party,
directly or indirectly, relating to Harvia’s shares, debt
instruments, derivatives or other financial instruments
during a closed period of thirty (30) calendar days
before the publication of an interim report, half-year
report or financial statements.
AUDIT
The statutory audit covers the company’s accounting,
financial statements and administration for the financial
year.
In addition to the annual auditor’s report, the auditors
regularly report their auditing observations to the
Board of Directors and participate in the meetings of
the Board’s Audit Committee.
The company shall have an auditor which is an auditing
organization approved by the Finnish Patent and
Registration Oce. The term of the auditor expires at
the conclusion of the Annual General Meeting following
their election.
The company’s Audit Committee prepares a proposal
on the auditor and the remuneration of the auditor to
the General Meeting. The General Meeting elects the
auditor and decides on their remuneration.
Audit in 2021
PricewaterhouseCoopers Oy acted as the company’s
auditor in 2021 with Markku Launis, Authorized Public
Accountant, acting as the principal responsible auditor.
The audit fees paid to PricewaterhouseCoopers Oy in
2021 totaled EUR 139 thousand. Of the fees paid, EUR
103 thousand were fees for a statutory audit and EUR
35 thousand comprised other fees. The other fees
were related to tax advisory. Audit fees paid to other
auditors totaled EUR 70 thousand.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 47
REMUNERATION REPORT 2021
I present Harvia’s Remuneration Report for 2021
on behalf of the company’s Board of Directors. The
Remuneration Report has been drafted in accordance
with the Finnish Corporate Governance Code 2020 of
the Securities Market Association and other regulation.
The Remuneration Report will be presented at Harvia’s
Annual General Meeting 2022 for an advisory vote.
Harvia’s key principles of remuneration
The key principles of remuneration at Harvia are that
remuneration is transparent and market-oriented and
that it rewards good performance. The remuneration
policy applicable to the company’s Board of Directors
and CEO aims to encourage and reward for operating
in accordance with the company’s strategy and rules,
and to motivate them to contribute to the success of
the company. Ultimately, the objective is to promote
the long-term profitability and competitiveness of the
company. Harvia also aims to be a competitive employer
to employees regardless of their job description.
In addition to the monthly salary, variable remuneration
plays a significant part in the remuneration of the
CEO. Variable remuneration consists of the annually
determined short-term performance bonus and the
long-term share-based incentive program. The elements
of variable remuneration ensure the connection
between performance and remuneration. The Board
of Directors set the performance criteria and related
targets for the short- and long-term incentive
programs.
2021, a strong year of growth
The past year has been excellent for Harvia: revenue
had a strong increase of 64.2 percent to EUR 179.1
million. Our profitability was at an outstanding level
– the adjusted operating profit nearly doubled to
EUR 47.3 million. This was also a year of significant
investment activities for Harvia. The company invested
a total of EUR 11.8 million in expanding capacity and
improving productivity. The impact of the investments
will be fully evident from the year 2022 onwards.
These figures are impressive. I would like to thank the
management and every employee of Harvia for the
accomplishments of 2021. Especially our personnel in
production, sourcing, and distribution have showcased
their adaptability in the midst of strong growth, supply
chain challenges, and the corona pandemic.
Remuneration in 2021
In 2021, the remuneration of the Board of Directors
and CEO was compliant with the remuneration policy.
Following the resolution of the Annual General Meeting
2021, the monthly remuneration of the Board of Directors
and the remuneration paid for the members of the Audit
Committee remained unchanged. Remuneration paid to
the CEO in the financial year 2021 totaled EUR 1,774,104.
Of this, variable remuneration constituted 70 percent.
Developing remuneration
In 2022, we continue to comply with the principles
outlined in Harvia’s remuneration policy. The Shareholders’
Nomination Board will make proposals to the Annual
General Meeting for the remuneration and development
of the company’s Board of Directors. We utilize short-
and long-term incentive plans for the remuneration of
management to promote Harvia’s performance as well
as success and value creation in the longer term. On top
of financial criteria, the Board of Directors decided to
include sustainability targets in the performance period
2021−2023 of the long-term share-based incentive
program. Harvia’s Board of Directors regularly monitors
the competitiveness of the company’s remuneration and
that it promotes Harvia’s long-term goals.
Olli Liitola
Chairman of the Board
Harvia Plc
DEAR SHAREHOLDER,
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 48
HARVIA’S KEY PRINCIPLES OF
REMUNERATION
The principles of remuneration apply to the entire
personnel of the company. The key principles of
remuneration at Harvia are that remuneration is
transparent, market-oriented, and that it rewards good
performance.
The company’s remuneration policy aims to encourage
and reward management for operating in accordance
with the set strategy and rules, and to motivate them to
contribute to the success of the company.
Eective and competitive remuneration is an essential
tool for recruiting capable directors and executives to
the company, which in turn promotes the company’s
financial success and good governance. Remuneration
supports the execution of the company’s strategy and
promotes the company’s long-term profitability and
competitiveness.
The basic salary of the CEO must be aligned with the
interests of the company and its shareholders. The
salary must be competitive in comparison to the job
market to ensure that the company is able to attract
and retain capable talent.
Remuneration, in accordance with the remuneration
policy, consists of the following parts:
• Basic salary and employee benefits, which adhere
tolocal market practices, laws, and regulations.
• Short-term incentive program, which is meant
to guide the performance of an individual and a
company and to support the rapid implementation
ofstrategic projects.
• Long-term incentive program, which is meant to
ensurethe commitment of key personnel. Long-term
incentives aim at ensuring the commitment of the
management and to align their interests with those of
the company’s shareholders.
Harvia’s Board of Directors supervises the remuneration
policy in terms of its eectiveness and competitiveness as
well as the promotion of the company’s long-term goals.
If necessary, the Board of Directors proposes changes to
the remuneration policy to the General Meeting.
In 2021, the remuneration of the Board of Directors
and CEO complied with the remuneration policy, and
there were no deviations. No remuneration of the Board
of Directors or CEO were canceled or adjusted in the
financial year 2021.
EUR 1,000 2017 2018 2019 2020 2021
Chairperson of the Board of Directors 15 52 58 58 53
Other Board members on average 17 18 20 20 28
CEO’s fixed monthly salary including taxable benefits 414 438 444 479 524
CEO’s remuneration in total 458 514 507 611 1,774
Harvia employee salary on average
1)
27 28 30 33 33
1)
A reward based on Harvia’s 2018−2020 long-term incentive program was paid to the management in May 2021.
The gross value of the shares paid to the CEO was EUR 1,012,291.25.
2)
The average salary of a Harvia employee is calculated by taking the total salaries and bonuses paid to employees other than the members of
the Board of Directors, as defined in the financial statements for the financial year, and dividing the amount by the number of employees.
EUR 1,000 2017 2018 2019 2020 2021
Revenue 60,107 61,942 74,095 109,115 179,123
Adjusted operating profit 10,696 10,852 13,876 24,445 47,272
Adjusted operating profit, % of revenue 17.8 17.5 18.7 22.4 26.4
REMUNERATION DEVELOPMENT
The cornerstones of Harvia’s strategy include increasing
the value of the average purchase, geographical
expansion, and continuous improvement of
productivity.
The company has executed its strategy with
consistency and success. The Group’s revenue has
increased from the total of EUR 60.1 million in 2017
to EUR 179.1 million in 2021. During the same period,
the adjusted operating profit increased from EUR 10.7
million to EUR 47.3 million. The company’s adjusted
operating profit in 2021 was EUR 47.3 million and
operating profit margin 26.4 percent.
AVERAGE REMUNERATION
GROUP’S FINANCIAL DEVELOPMENT
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 49
REMUNERATION OF
THE BOARD OF DIRECTORS IN 2021
In accordance with the Limited Liability Companies
Act, the shareholders decide on the remuneration of
the members of the Board of Directors in the Annual
General Meeting. The task of drafting the proposal
for the remuneration of the members of the Board
of Directors has been assigned to the Shareholders’
Nomination Board, established following the decision
of the Annual General Meeting 2020.
The Annual General Meeting 2021 resolved on the
following monthly remuneration for the members of
the Board of Directors for their term ending after the
Annual General Meeting 2022: Chairperson of the
Board EUR 3,500 and Member of the Board EUR 2,000.
Additionally, the Chairperson of the Audit Committee
is paid EUR 1,300 per month and each Member EUR
750 per month. In early 2021, the remuneration of the
Board of Directors was equivalent to the remuneration
resolved by the Annual General Meeting 2021. The
remuneration of the Board of Directors and the
members of the Audit Committee are paid in cash.
Board members were not compensated separately for
Board meetings in 2021. Travel expenses resulting from
Board meetings will be compensated in accordance
with the company’s traveling compensation regulations.
Remuneration for the company’s Board members does
not include pension payments, and Board members are
not paid other fringe benefits.
The Members of the Board of Directors are not included
in Harvia’s short- or long-term incentive programs.
Member
Monthly remuneration
in total, EUR
Remuneration for
Audit Committee
membership, EUR Total, EUR
Olli Liitola, Chairman of the Board 42,000 10,783 52,783
Sanna Suvanto-Harsaae, Deputy Chair of the Board 24,000 13,868 37,868
Ia Adlercreutz 24,000 24,000
Anders Holmén (from 8 April 2021) 17,700 17,700
Hille Korhonen (from 8 April 2021) 17,700 6,638 24,338
Ari Hiltunen (until 8 April 2021) 6,400 6,400
Kalle Kekkonen (until 8 April 2021)
Total 131,800 31,288 163,088
REMUNERATION OF THE BOARD OF DIRECTORS IN 2021
Kalle Kekkonen was not remunerated for his term
as a member of the Board of Directors or the Audit
Committee. During the financial year, Kalle Kekkonen
was paid consultancy fees amounting to EUR 5,500.
The consulting agremeent ended in 2021.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 50
SUMMARY OF CEO REMUNERATION 2021
CEO REMUNERATION IN 2021
The Board of Directors determines the salary, bonuses,
and other benefits of the CEO. The remuneration of
the CEO consists of a fixed monthly salary, fringe
Type of remuneration Description of remuneration
Fixed:
Salary
Fixed monthly salary including taxable benefits: car benefit, apartment benefit, garage
benefit, and telephone benefit
Fixed:
Pensions
Statutory pension in Finland
Supplementary defined contribution pension. The CEO receives his supplementary
pension upon turning 63 years old.
Variable:
Short-term
performance bonus
Based on financial result and personal targets, a maximum of 50 percent of basic annual
salary in 2021
Variable:
Performance bonus
Based on financial performance, a maximum of 6 percent of basic annual salary in 2021
Variable:
Long-term
incentive program
Share-based long-term incentive program, which aims to support the implementation
of the company’s strategy, align the objectives of the management and the company’s
shareholders to increase the value of the company, improve the performance of the
company, and strengthen the commitment of management to the company.
In 2021, variable remuneration constituted 70 percent
of the overall remuneration of the CEO (21 percent in
2020) and fixed salary 30 percent (79 percent in 2020).
FIXED SALARY
In 2021, CEO Tapio Pajuharju’s total monthly salary was
EUR 523,792 (EUR 479,421 in 2020, including taxable
benefits).
SHORT-TERM PERFORMANCE BONUS AND
PERFORMANCE BONUS
The CEO’s performance targets are set by the
company’s Board of Directors. The purpose of the
short-term incentive program is to support the
achievement of the company’s short-term financial and
strategic objectives. The performance period for the
CEO’s short-term incentive program is one year.
The bonus payable based on the short-term incentive
program for 2021 can account for a maximum of 50
percent of the CEO’s fixed salary. The bonus payment
is based on achieving the set targets related to the
Group’s consolidated adjusted operating profit as well
as the personal targets. The bonus to be paid in March
2022 is 48 percent of the CEO’s 2021 fixed salary, or
EUR 253,766.
The bonus payable based on the short-term incentive
program for 2020 accounted for a maximum of 50
percent of the CEO’s fixed salary. The bonus payment
was based on achieving the set targets related to
the group’s consolidated adjusted operating profit as
well as the personal targets. The bonus paid in 2021
was 42 percent of the CEO’s fixed salary in 2020, or
EUR200,755.
In addition, the CEO is part of a performance bonus
system that covers the entire personnel of Harvia’s
companies in Finland (Harvia Plc, Harvia Group Oy, and
Harvia Finland Oy). In the system, the performance
bonus is a maximum of six percent of the annual salary,
based on the achievement of certain profitability
targets. The 2021 bonus to be paid to the CEO in 2022
was 6% of the annual salary. The 2020 bonus paid to
the CEO in 2021 was 6% of the annual salary.
benefits, and performance-based incentive programs.
Additionally, the CEO is entitled to a supplementary
pension insurance.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 51
2018 2019 2020 2021 2022 2023 2024
Performance period 2018–2020
• Payout
Performance period 2019–2021
• Payout
Performance period 2020–2022
• Payout
Performance period 2021–2023
• Payout
LONG-TERM INCENTIVE PROGRAMS
The purpose of Harvia’s long-term incentive program
is to support the implementation of the company’s
strategy, to align the objectives of the management and
the company’s shareholders to increase the value of the
company, to improve the performance of the company,
and to strengthen the commitment of the CEO to the
company.
The performance periods of the long-term incentive
program are 2018–2020, 2019–2021, 2020–2022, and
2021–2023. For each performance period, the Board
HARVIA'S SHARE-BASED INCENTIVE PLAN
of Directors will make a separate decision on the plan
participants, performance criteria, and related targets,
as well as the minimum, target, and maximum reward
potentially payable based on target attainment. If
the targets of the incentive program are reached, the
rewards will be paid in shares or in some situations in
cash during the spring following the end of the given
performance period. The program has no commitment
period or terms and conditions associated with the
amount of shareholdings.
Rewards from the first performance period 2018−2020
were paid during spring 2021. In this performance
period, the targets for the long-term incentive program
were related to the company’s total shareholder return,
revenue growth, and EBIT margin. The maximum
number of shares paid based on the first performance
period corresponded to 89,727 shares in Harvia Plc.
This number of shares represented gross earning, from
which withholding tax and possible other applicable
contributions were deducted, and the remaining net
amount was paid in shares.
The reward of the CEO based on the incentive program
was paid in the spring of 2021 in company’s shares. The
CEO was paid 25,358 shares (gross) in total.
Based on the performances in the second performance
period of the program, 2019−2021, the total number of
shares to be paid to the participants of the program
corresponds to 92,496 shares in Harvia Plc. Also in
this performance period, the targets for the long-
term incentive program related to the company’s total
shareholder return, revenue growth, and EBIT margin.
The above-mentioned number of shares represents
gross earning, from which withholding tax and possible
other applicable contributions are deducted, and the
remaining net amount is paid in shares.
The CEO achieved the maximum targets for the
performance period. The reward of the CEO based
on the long-term incentive program, 23,124 shares
(gross) in total, will be paid in the spring of 2022 in the
company’s shares unless the Board of Directors decides
on the payment of the complete reward in cash.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 52
REWARD OF THE CEO TO BE PAID IN 2022
Remuneration component EUR
Fixed salary
1)
523,792
Short-term performance bonus from 2020 200,755
Performance bonus from 2020 28,765
Long-term incentive program 2018–2020
2)
1,012,291
Supplementary pension 8,500
Total 1,774,104
1) Including taxable benefits
2) Gross value of the rewards. The CEO was paid 25,358 shares (gross), and the value of the shares on the date of payment 12 May 2021 was EUR 1,012,291.
Withholding tax and possible other applicable contributions were deducted from the gross earning, and the remaining net amount was paid in shares.
Remuneration component
Short-term performance bonus from 2021, EUR 253,766
Performance bonus from 2021, EUR 31,427
Long-term incentive program 2019–2021
1)
, shares 23,124
1) Gross value of the rewards. The CEO will be paid 23,124 shares (gross) on or about 16 May 2022, and the value of the shares on the payment date will be based on
the closing price of the company's share on that date. Withholding tax and possible other applicable contributions will be deducted from the gross earning, and
the remaining net amount will be paid in shares.
The targets for the performance period 2020−2022
decided by the Board of Directors in November 2020
relate to the company’s total shareholder return,
revenue growth, and EBIT margin. The total number of
shares to be paid based on the period corresponds to
a maximum of 50,300 shares in Harvia Plc. Potential
rewards for the period 2020−2022 will be paid out in
the spring of 2023.
In July 2021, the Board decided on a new performance
period 2021−2023 for the share-based incentive
program. The targets for the performance period relate
to the company’s total shareholder return, revenue
growth, sustainability targets, and EBIT margin. The
total number of shares to be paid based on the period
2021−2023 corresponds to a maximum of 33,500
shares in Harvia Plc. Potential rewards from the period
will be paid out in the spring of 2024.
THE KEY TERMS OF SERVICE OF THE CEO
The management contract of the CEO is valid until
further notice. The CEO’s contract contains a mutual
six-month period of notice and a 12-month non-
compete period upon its termination.
If the company terminates the service contract, the
CEO is entitled to a severance payment corresponding
to six months’ basic salary.
The CEO’s retirement age is determined by the
statutory pension system. The CEO is entitled to a
supplementary pension insurance. The supplementary
pension agreement is a defined contribution plan. The
CEO receives his supplementary pension upon turning
63 years old. The CEO has a life insurance policy
provided by Harvia, and the beneficiaries are the family
members of the CEO.
REMUNERATION PAID TO THE CEO IN 2021
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 53
CONTENTS
Report by the Board of Directors for 2021 55
Non-financial Information 60
Disclosure according to
the EU Taxonomy Regulation 61
Share capital and shares 63
Calculation of key figures and reconciliation
of alternative performance measures 65
Consolidated financial statements IFRS 67
Consolidated statement of comprehensive income 67
Consolidated statement of financial position 68
Consolidated statement of changes in equity 69
Consolidated statement of cash flows 70
Notes to Financial Statements 71
Section 1: Basis of preparation 71
Section 2: Group Performance 74
Section 3: Capital employed 81
Section 4: Net working capital 94
Section 5: Net debt and contingencies 97
Section 6: Other notes 109
Parent company financial statements FAS 120
Parent company Profit & Loss Statement 120
Parent company Balance Sheet 121
Parent company Cash flow statement 122
Notes to the financial statements
of the parent company 123
Signatures for the financial statements
and the Board of Directors’ report 131
Proposal by the Board of Directors
for distribution of profit 132
Auditor’s Report 133
REPORT BY THE BOARD OF
DIRECTORS AND CONSOLIDATED
FINANCIAL STATEMENTS 2021
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 54
Report by the Board of Directors for 2021
Report by the Board of Directors for 2021
GENERAL INFORMATION OF HARVIA
Harvia is one of the world’s leading companies of sauna
and spa products. Harvia has a comprehensive product
oering 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 that sell Harvia products to
builders and end customers. Harvia product oering 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 and Estonia,
and additionally the group has a contract producer in
Russia and has 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 2021 are presented below
(EUR thousand, unless otherwise indicated).
2021 2020 2019
Key statement of comprehensive income indicators
Revenue 179,123 109,115 74,095
EBITDA 52,488 26,705 16,437
EBITDA margin, percent 29.3% 24.5% 22.2%
Adjusted EBITDA 53,116 28,775 16,989
Adjusted EBITDA margin, percent 29.7% 26.4% 22.9%
Operating profit 46,644 22,376 13,324
Operating profit margin, percent 26.0% 20.5% 18.0%
Adjusted operating profit 47,272 24,445 13,876
Adjusted operating profit margin, percent 26.4% 22.4% 18.7%
Basic EPS (EUR) 1.80 0.83 0.51
Diluted EPS (EUR) 1.79 0.82 0.51
Key cash flow indicators
Cash flow from operating activities 21,816 28,080 15,072
Operating free cash flow 20,447 28,688 15,167
Cash conversion, percent 38.5% 99.7% 89.3%
Investments in tangible and intangible assets -11,762 -2,567 -1,807
Financial position key figures
Net debt 43,817 31,891 28,305
Net debt / adjusted EBITDA (Leverage), percent 0.8 1.1 1.7
Net working capital 41,931 17,952 16,840
Capital employed excluding goodwill, average 41,984 33,337 36,301
Capital employed excluding goodwill at the end of period 54,236 29,732 36,943
Adjusted return on capital employed (ROCE), percent 112.6% 73.3% 38.2%
Equity ratio, percent 42,4% 42.0% 56.6%
Return on equity (ROE), percent 45.5% 23.2% 14.3%
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 55
The Group’s revenue increased in January–December
by 64.2% to EUR 179.1 million (109.1). At comparable
exchange rates, revenue increased by 65.8% to
EUR 180.9 million. Organic growth was very strong
at 43.3%. Revenue growth was significant in all of
Harvia’s key markets, especially in Germany and
in other European countries. The growth in other
countries was driven mainly by Asian and Arab
countries.
Revenue increased in all product groups in January–
December. Sauna heater sales improved in both electric
and wood burning heaters, especially in Germany and
other European countries. The strong growth of sauna
room sales continued especially in North America
and in Central Europe. Revenue from control units
developed favorably particularly in Germany and other
European countries. Sales of other product groups,
spare parts and services also developed very well.
Operating profit in 2021 was EUR 46.6 million (22.4).
The operating profit included EUR 0.6 million (2.1)
of items aecting comparability, mainly related to
acquisitions. The calculative eect of currency rate
changes weakened the operating profit EUR 0,7million.
The adjusted operating profit of EUR 47.3 million
improved from the previous year (24.4) and the
operating profit margin was 26.4% (22.4). Financing
expenses for the review period amounted to EUR
-1.4million (-2.0).
The result before taxes for January−December was
EUR 45.2 million (20.4). The Group’s taxes amounted
to EUR -10.4 million (-4.4).
The result for the financial period attributable to the
owners of the parent company was EUR 33.8 million
(15.5) and the undiluted earnings per share were EUR
1.80 (0.83).
The Group’s investments in January–December were
EUR 11.8 million (2.6). The investments increased
significantly compared to 2020. The investments
expand Harvia’s capacity and improve productivity
in line with Harvia's strategy. In April 2021, Harvia
acquired a facility suited for production of sauna and
spa products in Lewisburg, USA. In addition, Harvia
invested in increasing the production capacity of its
Muurame factory in Finland by expanding the factory,
acquiring new machinery and purchasing industrial
building including its property next to the Muurame
factory. In addition, Harvia has invested in production
machinery in China, Germany and Romania.
PERSONNEL
The number of personnel employed by the Group at
the end of the December 2021 was 824 (617) and
averaged 767 (534) in January–December. Wages and
salaries were EUR 25.3 million in 2021 (EUR 17.6 million
in 2020). Of the personnel, 308 (201) worked in Finland,
143 (136) in Germany, 133 (88) in Romania, 95 (66) in
China and Hong Kong, 60 (49) in the United States,
43 (37) in Austria, 27 (25) in Russia, 13 (14) in Estonia
and 2 (1) in Sweden.
RESEARCH AND PRODUCT DEVELOPMENT
In 2021 Harvia research and development activities
concentrated on improving the productivity and
competitiveness and diversifying the product oering.
Harvia is also involved in research projects related to
the fine particulate emissions of burning wood, and
environmental aspects are always taken into account in
product development. Sustainability is part of Harvia’s
continuous business development.
During 1 January – 31 December 2021 there were
on average 23 employees working in research and
development. The Group’s research and development
expenditure amounted to EUR 2.7 million (EUR2.3
million in 2020), of which EUR 2.3 million (EUR1.7
million in 2020) were recognized as expenses.
RISK MANAGEMENT
As a global sauna and spa company, the health and
well-being of our employees, partners and customers
is our top priority also in the COVID-19 situation.
All Harvia oces and production facilities follow the
guidelines set by local health authorities to contain
the spread of the pandemic. In accordance with our
contingency plan, we have taken special measures
to ensure the safety of our personnel as well as
the continuity of our production and services in the
exceptional situation caused by the coronavirus.
The company is constantly assessing the COVID-19
situation in terms of its business. In 2021, the pandemic
increased demand in the sauna and spa market.
According to the company’s assessment, a part
of this demand may be so-called advance demand.
The magnitude and timing of the potential reverse
impact remain unknown for the time being. Our supply
chain has been aected by increased prices and
exceptional volatility in availability of raw materials
and key componentry, but thanks to our partners and
multiple sourcing strategy, we have been able to keep
the impact under control. Going forward, we anticipate
the same challenging situation to continue at least for
the first half of 2022.
So far, Harvia has been able to maintain full operational
capability, but if the need to restrict operations arises,
this may have a negative impact on the company’s
business volume, result or financial performance.
If the exceptional circumstances caused by the
pandemic prove to be long-lasting, the general
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 56
economic situation may have a dampening eect on
demand in the industry.
General economic, social and political conditions impact
Harvia’s operating environment. Economic uncertainty
in Finland, Europe, Russia, North America or more wide-
ly across the globe can aect the company’s business in
many ways and make accurate predictions and planning
of future business more dicult than usual.
The self-suciency 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 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 25 million.
Harvia has business operations in several countries.
Harvia is exposed to transaction and translation risks
mainly relating to the US dollar and the Russian ruble.
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
are described in the Consolidated Financial Statements
and the general principles of risk management on the
company’s website at www.harviagroup.com.
GROUP STRUCTURE
Harvia Plc is holding company and parent company of
Harvia Group. Harvia Plc owns through another holding
company Harvia Group Oy 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 and Saunamax Oy. Harvia Group Oy
established Harvia US Holdings Inc. subgroup to
United States in 2018. In April 2020, Harvia acquired
the majority of the EOS Group and established
Harvia Holding GmbH to hold the subgroup in Germany.
Harvia Holding GmbH owns the EOS subgroup in
Germany (ownership 78.6%) and Russian EOS Premium
SPA Technologies company (ownership 80.0%).
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.
ANNUAL GENERAL MEETING
On 8 April 2021, the Annual General Meeting of
Harvia Plc approved the 2020 Financial Statements.
The members of the Board of Directors and the CEO
were discharged from liability for 2020.
Based on the proposal by the Board of Directors,
the Annual General Meeting resolved that a dividend
of EUR 0.20 per share (totaling EUR 3,728,847.20)
be distributed based on the approved Financial
Statements for 2020. In addition, the Annual General
Meeting approved the Board of Directors’ proposal of
paying a dividend of EUR 0.12 to celebrate Harvia’s
70-year anniversary (totaling EUR 2,237,308.32).
The dividend’s date of record was April 12, 2021
and the dividend was paid on April 19, 2021.
The Annual General Meeting decided to authorize
the Board of Directors to resolve, at its discretion, on
distributing an extra dividend amounting to a maximum
of EUR 0.19 per share. The Board of Directors decided
on the payment of a EUR 0.19 per share extra dividend
(EUR 3,550,564.01 in total) at its meeting held on
October 15, 2021. The dividend’s date of record was
October 19, 2021 and the dividend was paid on
October 26, 2021.
The Board of Directors was authorized to resolve
on the repurchase of a maximum of 934,711 treasury
shares using the company’s unrestricted equity.
The purchase will be carried out as a directed purchase.
The authorization is valid until the next Annual General
Meeting of the company, however until June 30, 2022
at the latest. Based on the authorization, the company
repurchased 44,000 of its own shares during
the financial year.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 57
The Board of Directors was authorized to decide on
the issue of new shares and special rights entitling
to shares as referred to in chapter 10, section 1 of the
Finnish Limited Liability Companies Act, in one or
more instalments, either against payment or without
payment. The aggregate number of shares issued,
including the shares received based on special rights,
must not exceed 1,869,423 shares. The company can
issue either new shares or possible treasury shares
held by the company. The authorization is valid until
the closing of the next Annual General Meeting, but
no longer than until June 30, 2022. Based on the
authorization, the company transferred 42,943 of
its own shares during the financial year.
SHARE-BASED INCENTIVE PLAN
Harvia has a share based long-term incentive plan
for the CEO and Management Team members.
The plan forms 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, toimprove 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
2019–2021, 2020–2022 and 2021–2023. 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. Similar incentive plan started in
2018 and rewards were paid in May 2021.
The Board of Directors of Harvia Plc decided on
2 July 2021 to continue the Long-term Performance
Share Plan for the management team and other key
employees for the performance period 2021–2023.
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. 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 2021–2023 will be paid out during spring 2024.
BOARD OF DIRECTORS’ PROPOSAL
FORDISTRIBUTION OF PROFIT
Harvia Plc’s total unrestricted equity amounts to
EUR 69,226,116 in total, of which profit for the period
accounts for EUR 16,607,971. 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 0.60 per share, EUR 11,216,541.60 in
total, for the financial period ended 31 December 2021.
The Board of Directors proposes the dividend to be
paid in two instalments, EUR 0.30 in April 2022 and
EUR 0.30 in October 2022.
THE ORGANIZATION, MANAGEMENT
ANDAUDITORS OF THE COMPANY
Harvia Plc’s members of the Board of Directors were
Olli Liitola, Ia Adlercreutz, Sanna Suvanto-Harsaae,
Ari Hiltunen (until 8 April 2021), Kalle Kekkonen (until
8 April 2021), Hille Korhonen (as of 8 April2021)
and Anders Holmén (as of 8 April 2021). Olli Liitola
acted as Chairman of the Board. Company CEO
was Tapio Pajuharju. Company auditor has been
PricewaterhouseCoopers Oy, Markku Launis, Authorised
Public Accountant as principal auditor.
Group management team was: CEO Tapio Pajuharju,
Chief Financial Ocer Ari Vesterinen, Export Director
David Ahonen, Chief Technology Ocer 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.
The company announced the composition of Share-
holders’ Nomination Board on 10 September 2021. The
members of the Shareholders’ Nomination Board are:
• Juho Lipsanen, Onvest Oy, Member of the Board
• Heikki Savolainen, WestStar Oy, Managing Director
• Pertti Harvia, Tiipeti Oy, Chairman of the Board
• Annika Ekman, Keskinäinen Eläkevakuutusyhtiö
Ilmarinen, Head of Direct Equity Investments
In addition, Olli Liitola, the Chairman of the Board
of Directors of Harvia, serves as an expert in the
Nomination Board without being a member
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 58
OUTLOOK FOR 2022
The sauna and spa market has been resilient due to
demand arising from the need to replace sauna heaters.
According to Harvia’s estimate, the total impacts of
the COVID-19 pandemic on the sauna and spa markets
were favorable in 2020–2021, although the pandemic
caused significant and quick short-term fluctuations
in demand in several of Harvia’s key markets in 2020.
The challenges brought on by the pandemic to Harvia’s
business are still somewhat evident in Southern Europe,
Russia, the Arab countries and Asia.
According to Harvia’s estimate, there are approximately
17 million saunas in the world. This large sauna
base provides significant business arising from the
replacement of saunas and sauna heaters. Historically,
the sauna market has grown annually by an average of
5%. However, Harvia is currently seeing considerable
growth in the market due to growing awareness and
appreciation of the health benefits related to sauna and
the general trend of investing in and relaxing at home,
which began already before but has been accelerated
by the COVID-19 pandemic. Harvia’s management
estimates that somewhat higher than historical average
market growth rates will continue in the medium term,
for the next couple of years.
SIGNIFICANT EVENTS AFTER
THE REVIEW PERIOD
Nasdaq Nordic, responsible for the trading on
the Helsinki stock exchange, announced changes
to the OMX Helsinki 25 Index portfolio in January 2022.
Harvia Plc (HARVIA) is one of the companies to be
added to the OMX Helsinki 25 (OMXH25). The new
portfolio of the OMX Helsinki 25 became eective
on 1 February 2022.
On 31 January 2022, Harvia announced the proposals
of Harvia Plc’s Shareholders’ Nomination Board to the
Annual General Meeting 2022. The Nomination Board
proposes that the number of members of the Board
of Directors will be increased by a maximum of one
member, from the current five to six members.
The Shareholders’ Nomination Board proposes that
Olli Liitola, Sanna Suvanto-Harsaae, Anders Holmén
and Hille Korhonen be reappointed to the Board of
Directors. The Nomination Board proposes that
Heiner Olbrich be appointed as a new member of
the Board of Directors. All proposed persons are
independent of the company and of the major
shareholders of the company.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 59
NON-FINANCIAL
INFORMATION
Non-financial Information
HARVIA’S BUSINESS MODEL
AND SUSTAINABILITY
Sustainability is built into Harvia’s mission and vision.
Harvia wants to enable everyone across the globe
to experience the healing and relaxing eects of
taking a sauna. The company also wants to be the
most trusted partner in the industry. Harvia’s values
incorporate acting responsibly, taking care of the
environment, and people. Harvia’s products are made
sustainably and designed to be safe and long-lasting.
Sustainability at Harvia includes the following four core
areas: a responsible Code of Conduct, personnel, the
environmental impacts of production, and products.
During the year 2021, Harvia created the company’s
sustainability program for years 2022–2025. The key
elements of the program 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.
Harvia’s strategy has a strong focus on growth,
and the company aims to further strengthen its
position in the global sauna and spa market with its
comprehensive oering. 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.
CORE POLICIES AND PRINCIPLES
Harvia’s operations are guided by 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 whistle-blowing channel in use in Finland,
and possible observations are duly investigated by an
external expert partner. In 2021, no reports were made
through the whistle-blowing channel. The company
aims to launch the whistle-blowing channel in all
operating countries during 2022.
Harvia requires that all its contract suppliers act
responsibly and commit to the Harvia Supplier
and Partners’ Code of Conduct. It is divided into
ethics, corruption, labor force, health and safety and
environment. The company’s goal is to familiarize all its
current and new suppliers and partners with the Code
of Conduct. By the end of 2021, more than 80percent
of suppliers had agreed to comply with the Code of
Conduct.
ENVIRONMENT
Key environmental topics in Harvia’s operations include
selection of materials and resources and their ecient
use, energy consumption and energy sources used,
reduction of emissions, as well as production quality
and eciency. Harvia’s products are designed to be
safe, durable and repairable. The company also takes
care of the recyclability of its products and guides
consumers especially in the correct use of woodburning
heaters to minimize fine particle emissions.
Harvia is an active participant in the research of cleaner
burning in Finland and in projects aiming for industry
standardization in Europe.
In 2021, Harvia's emissions calculation was performed
for the first time in accordance with the standards and
guidelines of the Greenhouse Gas Protocol (GHG).
The GHG protocol is the most internationally known and
used standard for calculating the carbon footprint of
companies. The transition to calculation according to
the GHG protocol refined Harvia's emission calculation
and the classification of emissions between the
Scope 1 and Scope 2 categories. Comparative data
for 2020 have not been restated in accordance with
the GHG protocol, so the results of the 2020 and 2021
calculations are not directly comparable. Harvia’s
Group-level Scope 1 CO
2
emissions in 2021 were 1,269
tCO
2
(248) and Scope 2 emissions 1,292 tCO
2
(1,771).
The share of renewable energy in Harvia Group was
51(57) percent in 2021.
All the electricity used at the Muurame factory is from
renewable sources. A part of it is produced by the
factory’s solar panels. The factory’s energy consumption
has been reduced by, for instance, switching to LED
lighting. Harvia Group uses a transportation partner that
aims to have emission-free operations by 2050.
In Finland, Harvia uses only PEFC- or FSC-certified
wood. Starting from 2021, Domo Wellness from
Romania has been using only wood with FSC-
certificate. In other countries, the company is exploring
opportunities to increase the share of certified wood.
The stainless steel supplier in Finland is Outokumpu
Plc, whose product is manufactured with over 90%
recycled steel. The recycled steel is also fully recyclable.
In Finland, steel is transported from nearby, minimizing
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 60
the carbon footprint of transportation. In 2022, the
company will start to use recycled steel from the
same supplier also in production in Germany. 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 ecient 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 one of the most significant megatrends.
Sauna oers 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
diculties as well as relaxes muscles and aects the
body similar to exercise. Harvia’s product oering
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.
In 2021, Harvia conducted its first group wide personnel
survey. A total of 84.7% of the personnel responded
to the survey. According to the survey, the personnel
are committed to the company. Gender equality is
well implemented in the company, and employees of
dierent ages are treated equally. In 2022, the results
will be discussed in teams and an action plan will be
drawn up to further develop sta well-being.
As two thirds of Harvia’s personnel work in
production, Harvia puts a great eort in work safety
and related risk management. Monitoring, reporting
as well as annual risk analyses are a key part of
Harvia’s occupational safety and help to identify and
prevent risk situations. The company also improves
occupational safety by investing in machinery. There
were no serious accidents involving Harvia’s personnel
in 2021.
The company takes care of the continuous competence
development of its personnel. In 2021, the company
carried out, among others, trainings for leadership,
electrical safety and first aid. The company’s operations
also necessitate many trainings required by authorities
Respecting human rights and prevention
ofcorruption and bribery
Harvia’s Code of Conduct defines the company’s
approach to political activity and human rights, 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 2021, no cases
related to human rights, corruption or bribery were
reported.
DISCLOSURE ACCORDING
TO THE EU TAXONOMY
REGULATION
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 (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 2021, which are associated with Taxonomy-
eligible economic activities related to the first two
environmental objectives (climate change mitigation
and climate change adaptation) in accordance with
Art.8 Taxonomy Regulation and Art. 10 (2) of the
Art.8Delegated Act.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 61
TAXONOMY-ELIGIBLE REVENUE,
CAPEX AND OPEX
Harvia has assessed the relevant Taxonomy-eligible
economic activities in accordance with Annex I and
II of the Climate Delegated Act. The assessment was
conducted together with representatives from the
businesses, sustainability and finance operations.
Based on the analysis, Harvia has identified one
taxonomy activity relevant to its business. The eligible
Total (mEUR)
Proportion of
Taxonomy-eligible
economic activities (in %)
Proportion of
Taxonomy-non-eligible
economic activities (in %)
Revenue* 179.1 2.5% 97.5%
Capital expenditure (Capex)* 19.1 0.8% 99.2%
Operating expenditure (Opex) 3.8 0.6% 99.4%
*See Note 2.1 Revenue, 3.2 and 3.3 Capital expenditure
PROPORTION OF TAXONOMY-ELIGIBLE AND TAXONOMY-NON-ELIGIBLE ECONOMIC ACTIVITIES
IN TOTAL REVENUE, CAPEX AND OPEX
activity is Activity 3.5 “Manufacture of energy eciency
equipment for buildings” and relates to the climate
change mitigation objective. The items that have been
considered eligible relate to energy ecient use of
heaters, improved heater maintenance, better timing
of heating or heaters with lower emissions and more
ecient wood burning. In addition, Harvia has in
previous years made investments in solar energy cells,
charging equipment of electric and hybrid cars, in low
energy consumption lighting and electric forklifts.
ACCOUNTING POLICIES
The specification of the KPIs is determined in accor-
dance with Annex I (climate change mitigation) of
the Art. 8 Delegated Act. We determine the Taxonomy-
eligible KPIs in accordance with the legal requirements
and describe our accounting policy in this regard
as follows:
REVENUE KPI
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 activity 3.5 “Manufacture
of energy eciency equipment for buildings” divided
by the Harvia consolidated revenue.
CAPEX KPI
The Capex KPI is defined as Taxonomy-eligible Capex
divided by our 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 1, 3.2 and 3.3. of Harvia consolidated financial
statements. Major part of taxonomy eligible Capex
includes investments related to the taxonomy-eligible
economic activities. Minor part of eligible Capex is
related to measures enabling energy eciency or
leading to greenhouse gas reductions.
OPEX KPI
The Opex KPI is defined as Taxonomy-eligible Opex
divi ded by our total Opex, as defined in the taxonomy
regulation.
Total Opex consists of direct non-capitalized costs that
relate to research and development, building renovation
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 62
Shareholder profile 31 December 2021 Total % Total pcs.
Foreign holding 48.7% 9,111,166
Households 25.6% 4,788,259
Companies 15.9% 2,964,014
Financial institutions and insurance companies 9.5% 1,776,825
General Government 0.0% 2,915
Harvia Plc own shares 0.3% 51,057
Total 100.0% 18,694,236
SHARE CAPITAL AND SHARES
Share capital and shares
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.
Taxonomy-eligible Opex includes non-capitalized
R&D costs related to improvement of environmental
performance of our products.
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. In 2022, Harvia will
assess the taxonomic compliance of the financial
activities identified in 2021 and update the reporting
as required. According to initial analysis, Harvia expects
the alignment percentages of its currently identified
taxonomy-eligible activity to be lower compared to
the eligibility percentages as the identified economic
activity does not materially advance or undermine the
environmental objectives of the taxonomy.
Harvia’s registered share capital is EUR 80,000 and
at the end of the review period, the company held
18,694,236 (31 December 2020: 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 company’s shares are included in a book-entry
system. The share trading volume in the review period
was EUR 882.0 million (115.5) and 18,798,719 shares
(8,496,186). The share’s volume weighted average price
during the review period was EUR 46.96 (13.59), the
highest price during the review period was EUR 64.10
(25.10) and the lowest EUR 22.00 (7.02). The closing
price of the share at the end of December 2021 was
EUR 58.70 (24.50). The market value of the share capital
on 31 December 2021 was EUR 1,097 million (458.0)
including treasury shares.
On 4 May 2021, 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
concern the performance period 2018–2020 of the
company’s share-based incentive program launched in
2018. In the share issue, 42,943 own shares held by
the company were transferred without conside ration
to the key employees participating in the share-based
incentive program in accordance with the program-
specific terms and conditions. After the transfer of
shares, Harvia Plc held a total of 7,057 own shares,
corresponding to 0.04% of the total number of shares.
On 2 December 2021, The Board of Directors of
Harvia Plc decided to start repurchasing the company’s
own shares. The shares should be re pur chased to be
used as a part of the company’s incentive plan. The
maximum number of shares to be acquired was 44,000,
corresponding to 0.24% of the total number of shares.
The maximum sum to be used for the repurchase was
EUR 3.0 million. The repurchase of own shares started
on 3 December 2021 and ended on 8 December 2021.
During that period Harvia acquired a total of 44,000
own shares for an average price of EUR 57.23 per share.
After the repurchase, Harvia Plc holded a total of 51,057
own shares, corresponding to 0.27% of the total number
of shares.
The number of registered shareholders at the end
of December was 33,879 (13,551), including nominee
registers. At the end of the review period, nominee-
registered and direct foreign shareholders held 48.7%
(44.8) of the company’s shares. The ten largest share-
holders held a total of 22.3% (30.5) of Harvia’s shares
and votes at the end of December 2021.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 63
Shareholders on 31 December 2021 pcs Percentage of shares and votes
ONVEST OY 821,689 4.4
LANNEBO FONDER* 636,969 3.4
WESTSTAR OY 569,942 3.0
TIIPETI OY 407,790 2.2
DANSKE INVEST FINNISH EQUITY FUND 390,000 2.1
KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ILMARINEN 372,320 2.0
KTR-INVEST OY 262,625 1.4
PAJUHARJU TAPIO OLAVI 255,233 1.4
SIJOITUSRAHASTO EVLI SUOMI PIENYHTIÖT 237,177 1.3
MANTEREENNIEMI OY 214,645 1.1
PENSIONSFÖRSÄKRINGSAKTIEBOLAGET VERITAS 192,521 1.0
AVUS OY 169,645 0.9
VESTERINEN ARI JUHANI 139,375 0.7
ERIKOISSIJOITUSRAHASTO AKTIA MIKRO MARKKA 137,000 0.7
HARVIA TIMO TAPIO 133,236 0.7
Grand Total 4,940,167 26.4
* According to the fund's announcement. Harvia has 49% 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 on 31 December 2021 a total of 978,277 Harvia
shares, corresponding to 5.2 percent of shares and
votes in the company. (31 Dec 2020 1,144,371 and 6.1%)
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 64
Calculation of key figures and reconciliation of alternative performance measures
Calculation of key figures and reconciliation
of alternative performance measures
EUR thousand 1–12/2021 1–12/2020
Operating profit 46,644 22,376
Depreciation and amortisation 5,844 4,329
EBITDA 52,488 26,705
Items aecting comparability
Strategic development projects
Acquisition related expenses 587 1,934
Restructuring expenses 41 135
Total items aecting comparability 628 2,070
Adjusted EBITDA 53,116 28,775
Depreciation and amortisation -5,844 -4,329
Adjusted operating profit 47,272 24,445
Finance costs, net -1,428 -2,026
Adjusted profit before income taxes 45,844 22,419
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 65
Key figure Definition
Operating profit Profit before income taxes, finance income and finance costs.
EBITDA Operating profit before depreciation and amortisation
Items aecting 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 aecting comparability.
Adjusted EBITDA EBITDA before items aecting comparability.
Adjusted profit before income taxes Profit before income taxes excluding items aecting 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 eects 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
CALCULATION OF KEY FIGURES
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 66
EUR thousand Note
1 Jan–
31 Dec 2021
1 Jan–
31 Dec 2020
Revenue 2.1 179,123 109,115
Other operating income 2.3 539 377
Materials and services -70,114 -42,033
Employee benefit expenses 2.3 -30,591 -21,180
Other operating expenses 2.3 -26,469 -19,573
Depreciation and amortisation 2.4 -5,844 -4,329
Operating profit 46,644 22,376
Share in profits and losses of associated
companies 57
Finance income 5.4 698 229
Finance costs 5.4 -2,601 -2,645
Changes in fair values 5.4 418 390
Finance costs, net -1,428 -2,026
Profit before income taxes 45,216 20,350
Income taxes 6.3 -10,427 -4,399
Profit for the period 34,789 15,951
Attributable to:
Owners of the parent 33,674 15,475
Non-controlling interests* 1,115 476
EUR thousand Note
1 Jan–
31 Dec 2021
1 Jan–
31 Dec 2020
Other comprehensive income
Items that may be reclassified to profit or loss in
subsequent periods:
Translation dierences 6.4 1,197 -801
Other comprehensive income, net of tax 1,197 -801
Total comprehensive income 35,986 15,150
Attributable to:
Owners of the parent 34,871 14,674
Non-controlling interests* 1,115 476
Earnings per share for profit attributable to
the owners of the parent:
Basic EPS (EUR) 2.5 1.80 0.83
Diluted EPS (EUR) 2.5 1.79 0.82
* EOS Group and Kirami Ab Non-controlling interests
The notes are an integral part of these consolidated financial statements..
Consolidated financial statements IFRS
Consolidated financial statements IFRS
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 67
EUR thousand Note 31-Dec-21 31-Dec-20
ASSETS
Non-current assets
Intangible assets 3.2 12,732 10,420
Goodwill 3.2 73,730 71,018
Property, plant and equipment 3.3 27,994 16,907
Leased assets 3.4 2,644 2,683
Investments in associated companies 726
Deferred tax recevables 6.3 1,488 1,924
Total non-current assets
Current assets
Inventories 4.1 46,130 20,696
Trade and other receivables 4.2 20,447 14,411
Income tax receivables
Cash and cash equivalents 5.2 15,488 27,321
Total current asset
Total assets 201,492 165,625
EUR thousand Note 31-Dec-21 31-Dec-20
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 6.4 80 80
Other reserves 6.4 32,585 42,627
Retained earnings 6.4 14,212 8,254
Profit for the period 6.4 33,674 15,475
Total equity attributable to owners of the parent
Non-controlling interests 6.4 3,598 2,423
Total equity
Liabilities
Non-current liabilities
Loans from credit institutions 5.1 56,380 56,328
Lease liabilities 3.4 2,315 2,425
Derivative financial instruments 5.1 484 903
Deferred tax liabilities 6.3 2,260 1,941
Employee benefit obligations 5.6 2,595 2,847
Other non-current liabilities 5.1 20,553 9,616
Provisions 3.5 345 305
Total non-current liabilities
Current liabilities
Loans from credit institutions 5.1 48 55
Lease liabilities 3.4 562 404
Employee benefit obligations 5.6 188 186
Income tax liabilities
Trade and other payables 4.3 24,646 17,156
Provisions 3.5 305 277
Total current liabilities
Total liabilities
Total equity and liabilities
The notes are an integral part of these consolidated financial statements.
Consolidated statement of financial position
Consolidated statement of financial position
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 68
Consolidated statement of changes in equity
Consolidated statement of changes in equity
EUR thousand Attributable to owners of the parent
Note Share capital
Invested
unrestricted
equity reserve
Translation
dierences
Retained
earnings
Equity
attributable
to owners of
the parent
Non-controlling
interests Total
Equity at 1 January 2020 80 53,257 142 15,358 68,837
Share-based incentive plan 563
Dividend distribution
-7,104 -7,104 -7,104
Repurchase of own shares -1,026
-1,026 -1,026
Total transactions with
shareholders 6.4 -463 -7,104 -7,567 -7,567
Profit for the period
Acquisitions -9,508
-9,508 1,947 -7,561
Other comprehensive income 6.4
-801 -801 -801
Total comprehensive income
-801 15,475 14,674 476 15,150
Equity at 31 December 2020 80 43,286 -658 23,729 66,437 2,423 68,859
68 859
Equity at 1 January 2021 80 43,286 -658 23,729 66,437 2,423 68,859
Share-based incentive plan 806
Dividend distribution
-9,517 -9,517 -16 -9,532
Revaluation of minority
redemption liability -7,641
-7,641 -7,641
Repurchase of own shares -2,518
-2,518 -2,518
Share-based payments -1,886
-1,886 -1,886
Total transactions with
shareholders 6.4 -11,239 -9,517 -20,756 -16 -20,772
Profit for the period
Acquisitions
Other comprehensive income 6.4
Total comprehensive income
Equity at 31 December 2021 80 32,047 539 47,886 80,552 3,598 84,149
The notes are an integral part of these consolidated financial statements.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 69
Consolidated statement of cash flows
Consolidated statement of cash flows
EUR thousand Note
1 Jan–
31 Dec 2021
1 Jan–
31 Dec 2020
Cash flows from operating activities
Profit before taxes 45,216 20,350
Adjustments
Depreciation and amortisation 2.4 5,844 4,329
Finance income and finance costs 5.4 1,428 2,026
Other adjustments -1,278 1,496
Cash flows before changes in working capital 51,210 28,201
Change in working capital
Increase (-) / decrease (+) in trade
and other receivables 4.2 -2,051 750
Increase (-) / decrease (+) in inventories 4.1 -22,574 -2,449
Increase (+) / decrease (-) in trade
and other payables 4.3 3,718 4,178
Cash flows from operating activities before
financial items and taxes 30,303 30,681
Interest and other finance costs paid -192 -339
Interest and other finance income received 232 114
Income taxes paid 6.3 -8,527 -2,376
Net cash from operating activities 21,816 28,080
EUR thousand Note
1 Jan–
31 Dec 2021
1 Jan–
31 Dec 2020
Cash flows from investing activities
Purchases of tangible and intangible assets 3.2, 3.3 -11,762 -2,567
Sale of tangible and intangible assets 98 25
Acquisition of subsidiaries, net of cash acquired 3.1 -7,559 -18,059
Net cash from investing activities -19,223 -20,602
Cash flows from financing activities
Acquisition of treasury shares 6.4 -2,518 -1,026
Proceeds from non-current loans 5.1 56,500 20,000
Repayments of non-current loans 5.1 -56,761 -63
Change in current interest-bearing liabilities 5.1 -142 -61
Repayment of lease liabilities 3.4 -373 -647
Interest and other finance costs paid -1,885 -2,186
Dividends paid 6.4 -9,532 -7,104
Net cash from financing activities -14,711 8,914
Net change in cash and cash equivalents -12,118 16,391
Cash and cash equivalents at 1 January 5.2 27,321 10,879
Exchange gains/losses on cash
and cash equivalents 285 51
Cash and cash equivalents at 31 December 15,488 27,321
The notes are an integral part of these consolidated financial statements.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 70
Notes to 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.
1.1. GENERAL INFORMATION
liability company and the parent company of the
Harvia Group (“Harvia”, “Harvia Group” or the “Group”).
The registered address of Harvia Plc is T eollisuustie 1- 7 ,
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
80 countries. The Group’s product range includes
The Group also provides sauna installation,
maintenance and repair services. At the end of the
financial year 2021 the company had 824 employees,
of which 308 (201) worked in Finland, 143 (136) in
Germany, 133 (88) in Romania, 95 (66) in China and
Hong Kong, 60 (49) in the United States, 43 (37) in
Austria, 27 (25) in Russia, 13 (14) in Estonia and
2 (1) in Sweden.
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)
• EOS Premium SPA Technologies, which is the sales
company for saunas and EOS products in Russia
(80% acquired on 30 April 2020).
• 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)
The parent company Harvia Plc is a Finnish public
company, established according to the Finnish legis-
lation. Harvia Plc shares are traded at NASDAQ OMX
Helsinki main list. The Group financial statements
are available at the head oce at Teollisuustie 1-7,
40950 Muur ame 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
9 February 2022. 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 Reporting Standards (IFRS) as adopted by
the European Union, conforming with the IAS standards
and IFRS standards as well as SIC and IFRIC interpre-
tations applicable as per 31 December 2020. IFRS 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 en-
forced for application in accordance with the procedure
SECTION 1: BASIS OF
PREPARATION
Section 1: Basis of preparation
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 71
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 standards.
The figures presented in the financial statements are
rounded and therefore the sum of individual figures
may dier 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 standard.
Accounting principle Note IFRS standard
Revenue 2.1 Revenue IFRS 15
Employee benefits 2.3 Other income and expense items IAS 19
5.6 Defined benefit obligations
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..
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 trans-
actions 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 dierent from the pre-
sentation 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 dierences are recognised in
other comprehensive income.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 72
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 aect 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 aected. Actual results may dier from
previously made estimates and judgements.
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
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 aected. The table below discloses where to find
these descriptions.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 73
SECTION 2: GROUP PERFORMANCE
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 2021 % of revenue 2020 % of revenue
Revenue 179,123
109,115
Other operating income 539 0% 377 0%
Materials, services and change in inventories -70,114 -39% -42,033 -39%
Employee benefit expenses -30,591 -17% -21,180 -19%
Depreciation and amortisation
-5,844
-3% -4,329 -4%
Other operating expenses
-26,469
-15% -19,573 -18%
Operating profit 46,644 26% 22,376 21%
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,
North America and Russia.
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 9% of the Group's net sales
in 2021 (2020: 10%).
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
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 74
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 BY MARKET AREA
EUR thousand 2021 % 2020 %
Finland 36,900 21% 27,679 25%
Scandinavia 9,357 5% 5,615 5%
Germany 35,351 20% 17,644 16%
Other European countries 49,674 28% 26,118 24%
Russia 11,549 6% 7,881 7%
North America 29,132 16% 20,847 19%
Other countries* 7,160 4% 3,331 3%
Total 179,123 100% 109,115 100%
* The largest of which: Arab countries and Asia
The accumulation of Harvia’s revenue has been stable
in recent years, but the increased awareness and
popularity of the sauna's health benefits and the
general trend of investing in homes has strengthened
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.
during the corona pandemic, which has had a
positive eect on the Group's net sales. Net sales
for the financial year 2021 were also boosted by the
acquisitions of Kiram and Sauna-Eurox.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 75
REVENUE BY PRODUCT GROUP
EUR thousand 2021 % 2020 %
Sauna heaters 88,177 49% 59,003 54%
Sauna rooms and Scandinavian hot tubs 41,185 23% 20,646 19%
Control units 17,578 10% 10,217 9%
Steam generators 5,129 3% 3,199 3%
Other product groups, spare parts and services 27,053 15% 16,049 15%
Total 179,123 100% 109,115 100%
Revenue from projects recognized over time was
EUR 616 thousand (2020: EUR 248 thousand).
Group does not disclose transaction price allocated
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.
tofully or partly unfilled performance obligations,
because performance obligation is part of a contract
where contract period less than one year.
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-2021 31-Dec-2020
Finland 84,266 71,184
Other EU 23,484 23,829
Asia 3,060 2,509
United States 6,289 3,506
Total non-current assets 117,099 101,028
Revenue by geographical areas has been presented in note 2.1.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 76
EUR thousand 2021 2020
Wages and salaries 25,348 17,558
Pension costs - defined contribution plans 2,213 1,503
Other employee benefit expenses 3,031 2,119
Total 30,591 21,180
2.3 OPERATING INCOME AND EXPENSES
TThis 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
amortisations. Other operating income includes gains
on sale of property, plant and equipment, sales of scrap
metal which is generated from production and dierent
kind of grant income.
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
eect of items booked and removed from inventory at
the end of the period.
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
sucient assets to pay all employees the benefits
relating to employee service in the current and
prior periods.
The most significant items of other operating expenses
relate to sales (as sales freight costs and sales related
commissions) and marketing.
Harvia’s production facility in Muurame is characterised
by ecient production. Harvia has a long experience
in manufacturing of heaters and other sauna
products and the sta 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 and company’s
own department specialised in tools and machinery
used in production ensures the cost-eectiveness of
the production equipment and machinery maintenance
and repair.
The following table presents dierent components of
employee benefit expenses:
Harvia Group employed a total of 824 employees as
at 31 December 2021 (2020: 617 employees). Of the
total number of employees at the end of 2021, 289 were
ocers and 535 workers. 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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 77
Other significant expense items are as follows:
OTHER OPERATING EXPENSES
EUR thousand 2021 2020
Sales and marketing* 15,506 10,237
Travel and cars 768 551
Electricity, heating and water 1,420 902
Audit, accounting, consulting and legal expenses 1,489 2,558
Rents 513 244
IT and telecommunication 1,080 791
Voluntary sta expenses 665 476
Other** 5,028 3,814
Total 26,469 19,573
* 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 company 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 aect the comparability
between the dierent periods.
The auditor’s fees recognised during 2021 to
PricewaterhouseCoopers amounted to 139 EUR
thousand (2020: EUR 164 thousand). Of these,
EUR 103 thousand were fees relating to statutory
audit (2020: EUR 138 thousand).
In 2021 EUR 0 thousand of fees were related to auditor
opinions and certificates (2020: EUR 2 thousand)
and EUR 35 thousand to other fees (2020: EUR 23
thousand). Audit fees paid to other auditors were
EUR 70 thousand (2020: EUR 67 thousand).
Harvia Group’s research and development department
employed an average of 23 persons (2020: 25 persons),
and expensed research and development costs totaled
EUR 2,265 thousand in the financial year 2021
(2020: EUR 1,651 thousand).
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 78
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. 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 5-10 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 amortised
over 10 to 15 years except for capitalised
development costs and software licenses,
which are amortised in 5 years.
2.4 DEPRECIATION AND AMORTISATION
The following table presents depreciation and
amortisation by asset class:
EUR thousand 2021 2020
Depreciation by class
Buildings and constructions 937 810
Machinery and equipment 1,326 1,077
Other tangible assets 221 151
Total property, plant and equipment 2,484 2,037
Leased buildings and structures 372 453
Leased machinery and equipment 239 171
Total leased assets 610 624
EUR thousand 2021 2020
Amortisation by class
Development costs 412 344
Customer relationships 1,274 753
Brand 422 280
Technology 90 73
Other intangible assets 552 218
Total intangible assets 2,750 1,668
Total depreciation and amortisation 5,844 4,329
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 79
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 eects associated of any parent
company's obligations regarding the possible share
issue in the future.
2021 2020
Profit for the period attributable to the owners of the parent company,
EUR thousand 33,674 15,475
Weighted average number of shares outstanding during the financial period,
'000 18,668 18,691
Basic earnings per share, EUR 1.80 0.83
Share-based long-term incentive plan 150 184
Weighted average number of shares outstanding during the year, diluted, '000 18,818 18,875
Diluted earnings per share, EUR 1.79 0.82
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 80
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.
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 2021, Harvia acquired
the Kirami Group. The result of the new subsidiary
was consolidated to Harvia Group as of 28 May 2021.
In addition, Harvia acquired Sauna-Eurox Oy and
Parhaat Löylyt Oy. The results of the new subsidiaries
were consolidated to Harvia Group as of
31 August 2021.
THE ACQUISITION OF KIRAMI
On 28 May 2021, Harvia signed and closed an
agreement to acquire Kirami, a leading Finnish still-
water hot tub manufacturer and pioneer in wood-
heated hot tubs globally. The acquisition complements
Harvia’s sauna and spa oering well and strengthens
Harvia’s leading position as a global sauna and spa
experience brand. At the time of the acquisition,
Kirami Oy owned 50% of an Estonian production
company Metagrupp OÜ and 51% of a sales company
Kirami Sweden AB.
Kirami is a family business that was established in 2001
by the sellers and has grown to be one of the largest
makers of stillwater hot tubs globally. The company’s
SECTION 3: CAPITAL EMPLOYED
Section 3: Capital employed
main product is a wood heated still-water hot tub.
Kirami’s oering also includes hot tub accessories,
water sanitation products, and outdoor saunas, as
well as other products for outdoor living. Kirami has
grown rapidly in recent years, its revenue totaling
EUR 16 million in the fiscal year ended September
2020, with approximately 42% of the sales coming
from exports to Central Europe and Scandinavia.
In Finland, the company has a production facility
in Sastamala and a sales oce in Turku, employing
approximately 40 persons in total. In addition, Kirami
employs seasonal workforce in production and logistics
in April–August.
The 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-year period based on Kirami’s
EBITDA development. Harvia financed the acquisition
with cash funds.
The acquisition is expected to create annual synergies
of approximately one million euros, which are expected
to be realized in full by the end of 2023. The identified
key sources of synergy comprise distribution, sourcing
and logistics, and R&D. One-o integration and post-
closing costs are estimated to total EUR 0.4 million
over the years 2021 and 2022.
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 suciently reliable
for determining fair values.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 81
Preliminary purchase price allocation of the acquisition is presented in the table below:
EUR thousand
Purchase price 9,917
Net identifiable assets acquired
Non-current assets
Intangible assets 3,539
Property, plant and equipment 1,346
Leased assets 92
Investments in associated companies 669
Current assets
Inventories 2,290
Trade and other receivables 2,855
Cash and cash equivalents 1,783
Total assets 12,574
Non-current liabilities
Loans from credit institutions 300
Lease liabilities 61
Deferred tax liabilities 701
Provisions 17
Current liabilities
Loans from credit institutions 91
Lease liabilities 31
Trade and other payables 3,063
Total liabilities 4,264
Total net assets acquired 8,310
Group’s share of net assets 8,234
Goodwill 1,683
The aqcuired subsidiary Kirami Ab has been consolidated into the Group as a whole,
and the associated company Metagrupp OÜ as of May 2021 using the equity method.
Cash flow impact
EUR thousand
Cash consideration of the acquisition 7,000
Cash balance acquired - 1,783
Impact on cash flows – investing activities 5,217
Expenses of EUR 0.3 million related to the acquisition are presented under
Other operating expenses and in operating cash flows in the consolidated statement
of cash flows.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 82
OTHER MERGERS & ACQUISITIONS
On 31 August 2021, Harvia Plc signed and closed an
agreement to acquire Sauna-Eurox Oy. Together, the
parties will continue to develop and expand the sauna
stone business. Concurrently, Harvia also acquired
Sauna-Eurox Oy’s sister company Parhaat Löylyt Oy.
Consolidated revenue of the acquired companies
totaled approximately EUR 3.2 million in 2020.
The acquisition allows Harvia and Sauna-Eurox to
strengthen the availability of sauna stones and
increase production capacity.
In 2021, Harvia acquired the shares of Saunamax Oy
from minority shareholders (43.8%). In addition,
Kirami Oy acquired an additional 9% share of Kirami AB.
THE ACQUISITION OF EOS GROUP IN 2020
At the end of April, Harvia completed the acquisition
of the majority of the German EOS Group. EOS is
the technology leader for professional and premium
sauna & spa products with a revenue of EUR 17.3
million in 2019. The acquisition complements Harvia’s
professional and premium sauna oering well and
strengthens Harvia’s leading position as a professional
global sauna and spa experience brand. Harvia owns
78.6 percent of the German operations of EOS Group
and 80.0 percent of its Russian operations, and
the company holds an option entitling to purchase
the minority shares in the future.
The purchase price was EUR 19.7 million and it was
based on the debt-free valuation of EUR 25.5 million for
the entire EOS Group at the time of the signing of the
deal. Harvia financed the acquisition by interest-bearing
debt and its own cash funds.
In the EOS Group acquisition, fixed assets amounting
to EUR 2.6 million, net working capital items amounting
to EUR 3.6 million, cash and cash equivalents amoun-
ting to EUR 1.7 million and pension liabilities amounting
to EUR 3.0 million were transferred. The preliminary
purchase price allocation pertaining to the
acquisition includes intangible assets amounting to
EUR 7.0 million with annual amortization of approxi-
mately EUR 1.2 million. Valuation of inventory to fair
value increased inventory by EUR 1.3 million, which is
amortized in calculations in 12 months.
According to the preliminary purchase price allocation,
goodwill amounts to EUR 10.8 million. The estimated
non-controlling interests’ redemption liability of
EUR 9.5 million pertaining to the acquisition has been
entered as liability and decrease in shareholders’ equity.
The redemption liability is presented in non-interest-
bearing liabilities.
The acquisition is expected to create annual synergies
of at least EUR 2.2 million, which are expected to be
realized in full by 2024. Costs relating to the acquisition
in January–December 2020 were EUR 1.8 million.
EUR 0.1 million. The integration or post-closing costs
were EUR 0.1 million in 2020. Post-closing costs were
minor in 2021.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 83
Preliminary purchase price allocation of the acquisition is presented in the table below:
EUR thousand
Purchase price 19,751
Net identifiable assets acquired
Non-current assets
Intangible assets 7,032
Property, plant and equipment 2,647
Other assets 278
Current assets
Inventories 5,392
Trade and other receivables 1,386
Cash and cash equivalents 1,692
Total assets 18,427
Non-current liabilities
Employee benefit obligations 3,016
Deferred tax liabilities 2,317
Lease liabilities 154
Current liabilities
Trade and other payables 2,108
Total liabilities 7,560
Total net assets acquired 100% 10,832
Group’s share of net assets 8,885
Goodwill 10,866
Resulting from the acquisition, non controlling interests’ redemption liability
amounting to EUR 9.5 million was booked as liability and equity decrease.
Cash flow impact
EUR thousand
Cash consideration of the acquisition 19,751
Cash balance acquired - 1,692
Impact on cash flows – investing activities 18,059
Expenses of EUR 1,8 million related to the acquisition were presented under
Other operating expenses and in operating cash flows in the consolidated statement
of cash flows.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 84
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.
3.2 INTANGIBLE ASSETS AND
IMPAIRMENT TESTING
Majority of the goodwill was recognised in connection
of the acquisition of Harvia in 2014. During 2021, the
acquisitions of Kirami Group and Sauna-Eurox increased
the amount of goodwill.
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
amortised on a straight-line basis over 10-15 years.
Other intangible assets also include capitalised
development expenditures and software licenses
and are amortised on a straight–line basis
over 5 years.
Capitalised development costs
KDevelopment 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 amortised but are tested for
impairment at least annually.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 85
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
2021
Cost at 1 January 71,018 2,163 402 5,556 3,378 744 2,339 85,600
Business combinations 2,618 2,225 1,506 259 6,608
Additions 410 251 550 1,211
Disposals -12 -10 -22
Reclassifications 12 -25 -152 -165
Exchange dierences 94 9 7 57 2 5 174
Cost at 31 December 73,730 2,582 628 7,788 4,941 746 2,991 93,406
Accumulated depreciation
at 1 January -1,154 -994 -546 -131 -1,337 -4,162
Amortisation -412 -1,274 -422 -90 -552 -2,750
Disposals 4 4
Exchange dierences -1 -9 -9 -2 -15 -36
Accumulated depreciation
at 31 December -1,567 -2,277 -977 -223 -1,900 -6,944
Net book amount at 1 January 71,018 1,008 402 4,562 2,832 613 1,003 81,438
Net book amount
at 31 December 73,730 1,014 628 5,511 3,964 523 1,092 86,462
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 86
EUR thousand Goodwill
Development
expenditure
Advance
payments
Customer
relationships Brand Technology
Other intangible
assets Total
2020
Cost at 1 January 60,200 1,709 407 1,040 1,528 189 1,794 66,867
Business combinations 10,866 4,541 1,929 561 17,897
Additions 312 157 539 1,008
Disposals -3 -3
Reclassifications 145 -163 17 0
Exchange dierences -47 0 -25 -79 -6 -11 -169
Cost at 31 December 71,018 2,163 402 5,556 3,378 744 2,339 85,600
Accumulated depreciation
at 1 January -811 0 -257 -281 -61 -1,120 -2,530
Amortisation -344 -753 -280 -73 -218 -1,668
Disposals 1 1
Exchange dierences 16 15 4 1 35
Accumulated depreciation
at 31 December -1,154 0 -994 -546 -131 -1,337 -4,162
Net book amount at 1 January 60,200 898 407 784 1,247 128 674 64,337
Net book amount
at 31 December 71,018 1,008 402 4,562 2,832 613 1,003 81,438
IMPAIRMENT TEST FOR GOODWILL
The allocation of goodwill to the Group’s cash-
generating units is presented below:
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.
EUR thousand 31-Dec-2021 31-Dec-20
Finland 62,743 60,118
Central Europe 10,958 10,958
Total 73,701 71,076
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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 87
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.
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 develop-
ment of net sales and key cost items, the discount rate
used in the calculation as well as the cash flow growth
31-Dec-2021 31-Dec-20
Long-term growth rate 1.0% 1.0%
Average revenue growth for the forecast period
Finland 7.1% 5.2%
Central Europe 7.9% 8.7%
Average EBITDA for the forecast period (% of revenue)
Finland 28.9% 23.5%
Central Europe 31.7% 23.2%
Pre-tax discount rate
Finland 9.2% 9.2%
Central Europe 10.0% 9.9%
As result of the impairment tests performed no
impairment loss has been recognised for any period
presented. In 2021 the recoverable amount calculated
based on value-in-use exceeded the carrying value
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
are as follows:
by EUR 386 million in Finland and EUR 197 million in
Central Europe (2020 by EUR 117 million in Finland
and EUR 68 million in Central Europe).
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 88
3.3 PROPERTY, PLANT AND EQUIPMENT
Land areas and buildings consist mainly of Harvia’s
factory building in Muurame. Also Velha Oy operates
in the facilities owned by Harvia. During 2021, Harvia
invested in increasing the production capacity of its
Muurame factory in Finland by expanding the factory,
acquiring new machinery and purchasing industrial
building including its property next to the Muurame
factory. Velha Oy and the Harvia Group's management
companies also operate at Harvia's Muurame premises.
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 ware-
house facility in the United States and in April 2021
acquired a new facility suited for production of sauna
and spa products. The production and oce facilities
of EOS Group transferred to ownership of Harvia in
2020. The production and oce premises of Kiram 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 equip-
ment 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.
Please view also the appendix 2.4 of the depreciations.
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.
31-Dec-2021 31-Dec-20
Finland
EBITDA margin decrease -19.4% -10.4%
Change in discount rate 25.0% 10.6%
Central Europe
EBITDA margin decrease -26.1% -15.2%
Change in discount rate 50.0% 21.1%
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 assumptions change one at a time
and other assumptions remain unchanged as follows
(changes in percentage points):
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 89
EUR thousand Land
Buildings
and structures
Machinery
and equipment
Other
tangible assets
Construction
in progress Total
2021
Cost at 1 Jan 1,776 22,827 15,840 1,263 510 42,216
Business combinations 118 1,285 998 279 27 2,707
Additions 142 2,912 4,257 366 3,100 10,777
Disposals -106 -40 -146
Reclassifications 555 396 1 -841 111
Exchange dierences 8 65 44 -1 116
Cost at 31 Dec 2,044 27,644 21,429 1,868 2,796 55,781
Accumulated depreciation at 1 Jan -12,120 -12,296 -894 -25,309
Depreciation -938 -1,325 -221 -2,484
Disposals 10 7 17
Reclassifications 0
Exchange dierences -4 -8 1 -11
Accumulated depreciation at 31 Dec -13,062 -13,619 -1,107 -27,787
Net book amount at 1 Jan 1,776 10,707 3,544 369 510 16,907
Net book amount at 31 Dec 2,044 14,582 7,810 761 2,796 27,994
Changes in property, plant and equipment are
presented in the following tables for the financial
periods presented in the financial statements.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 90
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 has decided to adopt the standard
using the simplified transitional approach, whereby
comparative financial information is not adjusted.
Lease liability at the adoption has been calculated
discounting the future lease payments with the
incremental borrowing rate at the time of adopti-
on. The value of right-of-use-asset at adoption equals
the lease liability. Adoption of the standard did not
aect the retained earnings.
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
EUR thousand Land
Buildings
and structures
Machinery
and equipment
Other
tangible assets
Construction
in progress Total
2020
Cost at 1 Jan 1,404 21,174 14,116 1,096 64 37,853
Business combinations 391 1,309 836 111 2,647
Additions 241 785 59 766 1,851
Disposals 0 -20 -20
Reclassifications 158 162 -320 0
Exchange dierences -19 -54 -39 -3 -115
Cost at 31 Dec 1,776 22,827 15,840 1,263 510 42,216
Accumulated depreciation at 1 Jan -11,314 -11,248 -748 -23,311
Depreciation -810 -1,077 -151 -2,037
Disposals 14 14
Exchange dierences 4 15 5 0 25
Accumulated depreciation at 31 Dec -12,120 -12,296 -894 0 -25,309
Net book amount at 1 Jan 1,404 9,859 2,868 348 64 14,543
Net book amount at 31 Dec 1,776 10,707 3,544 369 510 16,907
3.4 LEASES
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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 91
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.
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 exten-
sion 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 bor-
rowing. 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.
AMOUNTS RECOGNISED IN THE BALANCE SHEET
Bookings of leases to the balance sheet and profit and
loss statement were following:
EUR thousand Buildings and structures Machinery and equipment
Leased assets
Book amount at 1 Jan 2020 2,485 96
Additions 303 247
Aqcuisitions 278
Disposals -51 -1
Exchange dierences -49
Depreciations -453 -171
Book value at 31 Dec 2020 2,234 449
Book amount at 1 Jan 2021 2,234 449
Additions 179 132
Aqcuisitions 92
Disposals
Exchange dierences 168
Depreciations -372 -239
Book value at 31 Dec 2021 2,302 342
EUR thousand 2021 2020
Lease liabilities
Non-current 2,315 2,425
Current 562 404
Book value at 31 Dec 2,877 2,829
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 92
AMOUNTS RECOGNISED IN PROFIT AND LOSS
EUR thousand 2021 2020
Depreciation
Buildings and structures -372 -453
Machinery and equipment -239 -171
-610 -624
Interest expense (included in finance cost) -106 -105
Expense relating to short-term and low-value leases
(other operating expenses) -513 -244
Total amounts recognised in profit and loss -1,229 -973
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.
Changes in warranty provisions are as follows:
EUR thousand 31-Dec-2021 31-Dec-2020
At 1 January 582 444
Additions 651 582
Used during the year -582 -444
At 31 December 651 582
of which
current 305 305
non-current 345 277
Total 651 582
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 dier
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 dierences between actual and estimated
warranty claims may aect the amount of
the provisions to be recognised in future
financial periods.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 93
The warranty provision was released EUR 582 thousand
(2020: EUR 444 thousand) and was increased EUR 651
thousand during 2021 (2020: EUR 582 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.
This section describes components
of net working capital.
SECTION 4: NET WORKING CAPITAL
Section 4: Net working capital
EUR thousand 31-Dec-21 31-Dec-20
Net working capital
Inventories 46,130 20,696
Trade receivables 16,222 11,826
Other receivables 4,225 2,585
Trade payables -11,703 -8,476
Other payables -12,943 -8,679
Total 41,931 17,952
Change in net working capital in the statement of financial position 23,979 1,112
Items not taken into account in change in net working capital in the
statement of cash flows and the eect of which is included elsewhere
in the statement of cash flows* -3,073 -3,592
Change in net working capital in the statement of cash flows** 20,906 -2,480
* 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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 94
EUR thousand 31-Dec-21 31-Dec-20
Materials and supplies 21,066 9,536
Work in progress 3,410 2,521
Finished goods 21,653 8,639
Total 46,130 20,696
EUR thousand 31-Dec-21 31-Dec-20
Trade receivables 16,222 11,826
Prepayments and accrued income 2,242 1,330
Other receivables 1,984 1,255
Total 20,447 14,411
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).
The inventory is divided as follows:
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.
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 60 days and therefore
are all classified as current. Impairment and other
accounting policies for trade and other receivables
are outlined in note 5.3.
In 2021 Harvia Group made EUR -74 thousand
obsolescence reserve booking
(2020: EUR -190 thousand).
4.2 TRADE AND OTHER RECEIVABLES
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.
The following tables present the dierent components
of account and other receivables:
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 95
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.
EUR thousand 31-Dec-21 31-Dec-20
Insurances 91 165
Other 2,150 1,165
Total 2,242 1,330
EUR thousand 31-Dec-21 31-Dec-20
Trade payables 11,703 8,476
Advance payments 2,933 1,532
Accrued expenses 9,606 6,785
Other liabilities 405 362
Total 24,646 17,156
EUR thousand 31-Dec-21 31-Dec-20
Accrued salaries and social security costs 4,863 2,282
Accrued annual discounts 1,867 1,370
Accrued interests 21 51
Other 2,855 3,082
Total 9,606 6,785
Due to the short-term nature of the current receivables,
their carrying amount is assumed to be the same as
their fair value.
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 payables
are recognised initially at fair value and subsequently
measured at amortised cost using the eective interest
rate method. Trade and other payables are classified as
other financial liabilities at amortised cost.
The following tables present the dierent components
of trade and other payables:
Trade payables are unsecured and are usually paid
within 30 days of recognition.
Material items included in accrued expenses:
The carrying amounts of trade and other payables are
assumed to be the same as their fair values, due to their
short-term nature.
Material items included in prepayments and accrued income:
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 96
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.
SECTION 5: NET DEBT AND CONTINGENCIES
Section 5: Net debt and contingencies
5.1 BORROWINGS AND OTHER
FINANCIAL LIABILITIES
In 2021 Harvia renegotiated the terms of EUR 56,5
million term loans and EUR 8 million revolving credit
limit. 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:
Accounting policy
Borrowings are recognised initially at fair value,
net of transaction costs incurred. Borrowings
are subsequently carried at amortised cost;
any dierence 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 eective
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 eective interest rate method.
EUR thousand
Liabilities at fair value
through profit or loss
Other financial liabilities
at amortised cost
31-Dec-21
Liabilities per balance sheet
Loans from credit institutions 56,428
Lease liabilities 2,877
Other non-current liabilities 20,553
Trade and other payables 12,107
Derivative financial instruments 484
Total 484 91,965
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 97
LOANS FROM CREDIT INSTITUTIONS AND
SHAREHOLDER LOANS
Loans from credit institutions
At the end of 2021 Harvia renegotiated the terms
of EUR 56,000 thousand term loans and EUR 8,000
thousand revolving credit limit resulting in more
favorable conditions. The term loan matures in two
installments. Term loan amounting EUR 20,000
thousand and revolving credit limit of EUR 8,000
thousand mature on December 2024 and term loan
amounting EUR 36,500 thousand matures on
December 2026. The nominal interest of the loans
is tied to Euribor and its margin is tied to the Group’s
net debt / adjusted EBITDA ratio.
Bank loans of acquired companies EUR 454 thousand
were paid back by the end of financial year.
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 2021 and 2020.
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 dierence between carrying value and fair
value because there have not been significant changes
in interest rates since the issue date of the loans and
margins of loans are considered to reflect dierent
conditions and the subordination of the loans with
reasonable accuracy.
EUR thousand
Liabilities at fair value
through profit or loss
Other financial liabilities
at amortised cost
31-Dec-20
Liabilities per balance sheet
Loans from credit institutions 56,451
Lease liabilities 2,829
Other long-term liabilities 9,616
Trade and other payables 15,623
Derivative financial instruments 903
Total 903 84,520
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 98
DERIVATIVE FINANCIAL INSTRUMENTS
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 -484 thousand
at the end of 2021 (2020: EUR -903 thousand).
Nominal value of the interest rate swap contract was
EUR 25,000 thousand as at 31 December 2021 (2020:
EUR 25,000 thousand). After the year-end 2021, Harvia
has negotiated new interest swap with nominal value
of EUR 36 500 thousand which will replace the old
interest rate swap. 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
Harvia had acquisition related long term redemption
and purchase price liabilities EUR 20,553 thousand
(2020: 9,616). Contract based amount of debt was
21,959 (2020: 10,083).
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.
5.2 CASH AND CASH EQUIVALENTS
Cash and cash equivalents amounted to EUR 15,488
thousand at the end of 2021 (31 December 2020:
EUR 27 321 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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 99
5.3 FINANCIAL RISK MANAGEMENT AND
CAPITAL MANAGEMENT
This note explains Harvia Group’s exposure to financial
risks and how these risks could aect 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 ca-
pital structure and what are the targets for the structure.
The Group’s overall risk management program focuses
on the unpredictability of financial markets and seeks
to minimise potential adverse eects 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. Harvia is mainly
exposed to transaction risk and translation risk
asso ciated with the US dollar and the Russian ruble
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.
During the financial period, the following foreign
exchange related amounts were recognised in profit or
loss and other comprehensive income:
EUR thousand 2021 2020
Amounts recognised in profit or loss
Net foreign exchange gains/losses included in operating income/expenses -76 -314
Net foreign exchange gains/losses included in finance income/costs 248 -475
Gains/losses recognised in other comprehensive income 172 -789
Gains/losses recognised in other comprehensive income
Translation dierences of foreign operations 1,197 -801
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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 100
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 dierence 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 eective 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 eective
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.
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.
Group’s target is to maintain at least 60% thereafter
of its borrowings at fixed rate and use interest rate
swaps to achieve this when necessary. During 2021
and 2020, the Group’s borrowings at variable rate were
denominated in euros and swaps in place covered 44%
on 31 December 2021 and 44% on December 2020 of
the variable loan principal outstanding. Based on the
sensitivity analysis, if interest rate level of unhedged
borrowings at variable rate would have been one
percentage point higher with all other variables held
constant, interest expenses of the Group would have
been EUR 315 thousand higher in 2021.
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 dierent banks.
The Group considers that there is evidence of
impairment if any of the following indicators
are present:
• significant financial diculties of the debtor
• probability that the debtor will enter bankruptcy
or financial reorganisation, and
• default or delinquency in payments
In 2021, Harvia has significant trade receivables due
to long terms of payment in the client agreements.
In certain circumstances, Harvia has also supported its
distribution and dealership relationships by accepting
longer than ordinary terms of payment periods and
by agreeing on a new payment plan in respect of
receivables due, which has increased trade receivables
especially in United States and in Russia.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 101
During 2021, EUR 48 thousand (2020: EUR 20 thousand)
was recognised in profit or loss in relation to credit
losses. The loss allowance on 31 December 2021,
EUR 637 thousand (2020: EUR 528 thousand), is
specified as follows:
31-Dec-21
EUR thousand
Gross book
value
Allowance for
bad debt
Not due 10,297 8
Overdue by
Less than 30 days 2,629 11
30-60 days 912 12
61-90 days 270 7
91-180 days 1,036 104
181-360 days 784 196
Over 360 days 300 300
Total 16,228 637
31-Dec-20
EUR thousand
Gross book
value
Allowance for
bad debt
Not due 9,814 8
Overdue by
Less than 30 days 940 4
30-60 days 228 3
61-90 days 587 15
91-180 days 50 5
181-360 days 321 80
Over 360 days 414 414
Total 12,354 528
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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 102
LIQUIDITY RISK
Cash flow forecasting is performed on Group basis.
Group finance department monitors Harvia Group’s
liquidity requirements to ensure it has sucient cash
to meet operational needs while maintaining sucient
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 8,000
thousand as at 31 December 2021 (EUR 9,250 thousand
as at 31 December 2020).
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.
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-21
Non-derivatives
Loans from credit institutions 26 11 22 56,511 56,570 56,428
Lease liabilities 308 290 491 843 1,520 3,451 2,877
Pension liabilities 94 94 188 563 1,844 2,783 2,783
Redemption and purchase price liability 17,709 4,250 21,959 20,553
Trade payables 11,703 11,703 11,703
Total non-derivatives 12,130 395 18,409 62,168 3,364 96,466 94,343
Derivatives
Total non-derivatives 207 209 69 485 484
Total derivatives 207 209 69 0 485 484
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 103
EUR thousand 31-Dec-21 31.12.2020
Loans from credit institutions 56,428 56,383
Lease liabilities 2,877 2,829
Less cash and cash equivalents -15,488 -27,321
Net debt 43,817 31,891
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-20
Non-derivatives
Loans from credit institutions 6 49 4 56,500 56,559 56,383
Lease liabilities 218 277 473 693 1,325 2,986 2,829
Pension liabilities 93 93 186 558 2,103 3,033 3,033
Redemption liability 10,083 10,083 9,616
Trade payables 8,476 8,476 8,476
Total non-derivatives 8,793 418 663 67,834 3,428 81,137 80,337
Derivatives
Interest rate swaps 207 209 409 69 894 903
Total derivatives 207 209 409 69 894 903
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 table below shows the net debt position.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 104
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-Jan-20 10,879 -123 -36,395 -2,667 -28,305
Cash flows 34,451 68 -39,933 647 -4,767
Acquisitions -18,059 20,000 -274 1,667
Exchange dierences 51 51
Other non-cash movements -535 -535
31-Dec-20 27,321 -55 -56,328 -2,829 -31,891
Cash flows -4,559 142 261 373 -3,784
Acquisitions -7,559 -135 -314 -92 -8,100
Exchange dierences 285 285
Other non-cash movements 2 -328 -327
31-Dec-21 15,488 -48 -56,379 -2,877 -43,817
Reconciliation of net cash flow to movement in net debt:
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 105
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 1 186 thousand during
2021 (2020: EUR 619 thousand). Finance costs related
mainly to loans from financial institutions, exchange
dierences and losses on valuation of derivative
contracts. See the following table:
EUR thousand 2021 2020
Finance income
Share in profits and losses of associated companies 57
Interest income 3 3
Fair value gain on interest rate swap 431 524
Other finance income 695 91
Total 1,186 619
Finance costs
Interest costs -1,165 -1,005
Other finance charges paid/payable for financial liabilities not at fair
value through profit or loss -1,436 -1,506
Fair value losses on interest rate swaps -13 -135
Total -2,614 -2,645
Finance costs, net -1,428 -2,026
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..
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 106
5.6 DEFINED BENEFIT OBLIGATIONS
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 May 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.
EUR thousand 31-Dec-21 31-Dec-20
Other guarantees:
Pledged accounts 29 43
Customs guarantee 50 30
Total 79 73
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.
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.
The defined benefit expense is as follows:
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 sucient
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
EUR thousand 2021 2020
Service cost 3 2
Net interest 29 28
Total 32 30
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 107
by using the projected unit credit method.
The dis count 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 cur-
rent 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.
The actuarial gains and losses recognized in other
comprehensive income are as follows:
EUR thousand 2021 2020
Actuarial gains (-) / losses (+) caused by changes in demographic
assumptions 0 0
Actuarial gains (-) / losses (+) caused by changes in financial assumptions -50 149
Experience adjustments -47 -38
Return on plan assets, excluding amounts included in net interest 0 0
Total -97 111
EUR thousand 2021 2020
The defined benefit obligation 1.1. 3,033 0
Fair value of plan assets 1.1.
Acquisition 3,015
Service cost 3 2
Net interest 29 28
Actuarial gains (-) / losses (+) -97 111
Benefits paid -186 -124
Total 2,783 3,033
2021 2020
Discount rate 1.16% 0.99%
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 reconcilation of the net defined benefit liability and
the defined benefit obligation is as follows:
Actuarial assumptions used in calculating the defined
benefit obligation are as follows:
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 108
This section of the notes includes other information that must be
disclosed to comply with accounting standards and other pronouncements.
SECTION 6: OTHER NOTES
Section 6: Other notes
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 aect 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.
SUBSIDIARIES
The Group’s subsidiaries as at 31 December 2021 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.
EUR thousand 2021 2020
Impact of the change in the discount rate (+0.50%) on
the defined benefit obligation -139 -158
Impact of the change in the discount rate (-0.50%) on
the defined benefit obligation 151 173
The sensitivity analysis of the defined benefit obligation
is as follows. The below sensitivity analysis is based
The duration of the defined benefit pension obligation
is apx. 10 years in 2021. No contributions are expected
on a change in an assumption while holding all other
assumptions constant:
to be paid to the defined benefit plan during 2022.
The defined benefit plan has no plan assets.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 109
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 78.6 04/2020
Kusatek GmbH Germany Manufacturing 78.6 04/2020
Spatronic GmbH Germany Manufacturing 78.6 04/2020
OOO EOS Premium SPA Technologies Russia Sales 80 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 Oy Finland Manufacturing 100 08/2021
Parhaat Löylyt Oy Finland Sales 100 08/2021
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 110
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 manage-
ment personnel are members of the Board of Directors,
Chief Executive Ocer 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.
MANAGEMENT HOLDINGS
The following table indicates the ownership interests
of the members of the Board of Directors, the Chief
Executive Ocer and the members of the management
team in the parent company’s shares outstanding at
31 December 2021:
• Members of the Board of Directors 0.3%
• Chief Executive Ocer 1.4%
• Other Management team 3.5%
REMUNERATION TO MANAGEMENT
The Board of Directors decides on the amount of
and basis for the remuneration of the Chief Executive
Ocer (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 CEO
has a life insurance and an additional defined
contribu tion plan pension insurance provided by Harvia.
The CEO is entitled to the additional pension at the
age of 63 years. The term of notice for the CEO has
been specified as 6 months, and he is entitled to salary
for the term of notice as well as a performance-based
bonus up to the date of termination. 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.
EUR thousand 2021 2020
Sales of goods and services 2 2
Purchases of goods and services 26 0
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 111
KEY MANAGEMENT PERSONNEL COMPENSATION
REMUNERATION TO MEMBERS OF BOARD OF DIRECTORS
EUR thousand 2021 2020
Chief executive ocer
Salaries and other short-term employee benefits 1,766 611
Pension costs - defined contribution plans* 129 107
Total 1,894 718
* Includes costs of voluntary pension plan amounting to EUR 9 thousand in 2021 (2020: EUR 9 thousand).
EUR thousand 2021 2020
Olli Liitola (as of 11 March 2014) 53 58
Pertti Harvia (1 July 2016–2 April 2020) 6
Ia Adlercreutz (as of 1 September 2016) 24 24
Ari Hiltunen (9 February 2018–8 April 2021) 6 26
Sanna Suvanto-Harsaae (as of 2 April 2020) 38 25
Kalle Kekkonen (2 April 2020–8 April 2021)
Anders Holmen (as of 8 April 2021) 18
Hille Korhonen (as of 8 April 2021) 24
Total 163 138
Other management team
Salaries and other short-term employee benefits 4,102 1,347
Pension costs - defined contribution plans 208 197
Total 4,310 1,544
Kalle Kekkonen was not remunerated for his term
as a member of the Board of Directors or the Audit
Committee. During the financial year, Kalle Kekkonen
was paid consultancy fees amounting to EUR 5,500.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 112
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,
2019–2021, 2020–2022 and 2021–2023. During 2021
Harvia paid out the rewards regarding the performance
period 2018–2020. 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.
In the first performance period 2018–2020, the plan
had 10 participants at most and the targets for the
long-term incentive plan relate to the company’s total
shareholder return, revenue growth and EBIT margin.
The maximum number of shares to be paid based
on the first performance period was approximately
125,000 This number of shares represents gross
earning, from which the withholding tax and possible
other applicable contributions were deducted, and the
remaining net amount was paid in shares. However, the
company had the right to pay the reward fully in cash
under certain circumstances. On 4 May 2021, 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. In the share issue, 42,943 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.
In the performance period 2019–2021, the plan
has 13 participants at mosts and the targets for
the performance period relate to companyt’s total
shareholder return, revenue groqth and EBIT margin.
The maximum number of shares to be paid based on
the performance period 2019–2021 is approximately
130,000 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 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 2019–
2021 will be paid out during spring 2022.
In the performance period 2020–2022, the plan
has 15 participants at most and the targets for the
performance period relate to company’s total share-
holder 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 the gross
earning, from which the with holding 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 2020–2022 will be paid out
during spring 2023.
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
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 paymentst
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 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 113
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
Reconciliation of income tax expense and taxes calculated at the Finnish tax rate 20%
EUR thousand 2021 2020
Current tax:
Current tax on profits for the year -10,445 -5,438
Adjustments in respect of prior years -158 15
Total current tax expense -10,602 -5,423
Deferred tax:
Change in deferred taxes 176 1,024
Income taxes -10,427 -4,399
EUR thousand 2021 2020
Profit before tax 45,216 20,350
Tax calculated at Finnish tax rate 20% -9,045 -4,070
Eect of other tax rates for foreign subsidaries -1,317 -185
Expenses not deductible for tax purposes* -215 -238
Income not subject to tax 155 54
Other items -5 41
Taxes in income statement -10,427 -4,399
of shares in Harvia Plc to be paid based on the
performance period 2021–2023 is 33,500. 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 2021–2023 will be paid out during
spring 2024.
In 2021 EUR 806 thousand has been recognised
as expenses related to share-based incentive plan
(2020:EUR 563thousand).
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 114
DEFERRED TAXES
The movement in deferred tax assets and liabilities
during the year, without taking into consideration
the osetting of balances within same tax jurisdiction,
is as follows:
Accounting policy
Deferred income tax is recognised on temporary
dierences 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
aects 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 dierences.
Deferred tax assets and liabilities are oset
when there is a legally enforceable right to oset
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 dierent taxable entities where there is an
intention to settle the balances on a net basis.
EUR thousand
At 1
January
Recognised in
profit or loss
Business
combinations
At 31
December
2021
Deferred tax assets
Tax losses and net interest costs 1,548 -100 1,448
Internal margin of inventories 176 205 381
Provisions 111 14 124
Other items 810 -525 285
Total 2,644 -406 2,238
Netting of deferred taxes -721 -750
Net deferred tax asset 1,924 -406 1,488
2021
Deferred tax liabilities
Measurement of acquired net assets
at fair value 2,046 -476 832 2,402
Accumulated depreciation dierences 90 34 124
Property, plant and equipment 355 -31 97 421
Inventories 119 -119 0
Other items 52 11 63
Total 2,662 -580 928 3,010
Netting of deferred taxes -721 -750
Net deferred tax liability 1,941 -580 928 2,260
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 115
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.
No deferred tax receivables for intra-group
interest expenses of EUR 8,185 thousand that
were non-deductible in taxation for previous years
have been recognized in Harvia’s Consolidated
Financial Statements for the year ended on
December 31, 2017. These net interest costs
incurred to Harvia Group Oy form intra-group
net interest expenses, the deductibility of which
are restricted by the applicable tax provisions.
The deductibility of these net interest costs and
their use in the taxation of following years was
thus uncertain and thereby no deferred tax assets
were recognized at the end of 2017. In March 2018,
majority of intra-group loans of Harvia Group Oy
were converted into the company’s unrestricted
equity and the company’s equity was also
strengthened by cash contribution. As a result,
Harvia Group Oy will have less intra-group net
interest expenses in future. This increases the
prospects for Harvia Group Oy to deduct all
EUR thousand
At 1
January
Recognised in
profit or loss
Business
combinations
At 31
December
2020
Deferred tax assets
Tax losses and net interest costs 1,648 -100 1,548
Internal margin of inventories 115 61 176
Provisions 89 22 111
Other items 368 -111 553 810
Total 2,220 -128 553 2,644
Netting of deferred taxes -872 -721
Net deferred tax asset 1,347 1,924
2020
Deferred tax liabilities
Measurement of acquired net assets at fair value 266 -30 1,810 2,046
Accumulated depreciation dierences 171 -81 90
Property, plant and equipment 381 -26 355
Inventories 119 119
Other items 54 -2 0 52
Total 872 -140 1,929 2,662
Netting of deferred taxes -872 -721
Net deferred tax liability 0 -140 1,929 1,941
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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 116
of its net interest expenses and the likelihood
of deduction of the non-deducted net interest
expenses from previous years in the taxation
of Harvia Group Oy. As a result, an increase
in deferred tax assets of EUR 1,637 thousand
was recognized in March 2018 and a total
of EUR 1,748 thousand in 2018. In 2021 EUR 500
thousand intra-group interests were deducted
in taxation (2020: EUR 525 thousand).
There were EUR 6,660 thousand remaining
intra-group interest expenses at 31 December
2021. There is no time limit for the deduction
of net interest expenses in taxation.
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 dierences 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 2020 80 18,694,236
At 31 December 2021 80 18,694,236
Harvia Plc held a total of 51,057 own shares at
31 December 2021. 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
dierences Total
At 1 January 2020 53,257 142 53,399
Share-based incentive plan 563 563
Repurchase of own shares -1,026 -1,026
Acquisitions -9,508 -9,508
Translation dierences -801 -801
At 31 December 2020 43,286 -658 42,627
Share-based incentive plan 806 806
Revaluation of minority redemption liability -7,641 -7,641
Repurchase of own shares -2,518 -2,518
Share-based payments -1,886 -1,886
Translation dierences 1,197 1,197
At 31 December 2021 32,047 539 32,585
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 117
Accounting policy
Translation dierences that arise when translating the
financial statements of subsidiaries are recognised
in other comprehensive income and accumulated in
translation dierences reserve in equity.
Exchange rate dierences 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.
RETAINED EARNINGS
Movements in retained earnings were as follows:
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
TRANSLATION DIFFERENCES
unrestricted equity reserve. Contributions to the
reserve for invested unrestricted equity can also be
made without share issues.
Harvia acquired a total of 44,000 own shares
during 2021.
EUR thousand 2021 2020
At 1 January 23,729 15,358
Dividend distribution -9,517 -7,104
Profit for the period 33,674 15,475
At 31 December 47,886 23,729
In 2021 Harvia paid a dividend of EUR 0.51 per share,
in total EUR 9,517 thousand.
Harvia Plc’s total unrestricted equity amounts to
EUR 69,226,116 in total, of which profit for the
period accounts for EUR 16,607,971. 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 0.60 per share, EUR 11,216,541.60 in
total, for the financial period ended 31 December 2021.
The Board of Directors proposes the dividend to be
paid in two instalments, EUR 0.30 in April 2022 and
EUR 0.30 in October 2022.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 118
EQUITY ATTRIBUTABLE TO
NON-CONTROLLING INTERESTS
Movements in non-controlling interests were as follows:
EUR thousand 2021 2020
1-Jan 2,423
Acquisitions 76 1,947
Dividend distribution -16
Profit for the period 1,115 476
31-Dec 3,598 2,423
The non-controlling interest consists of minority
interests in EOS Group and Kirami Ab.
6.5 EVENTS OCCURRING AFTER
THE REPORTING DATE
Nasdaq Nordic, responsible for the trading on the
Helsinki stock exchange, announced changes to
the OMX Helsinki 25 Index portfolio in January 2022.
Harvia Plc (HARVIA) is one of the companies to be
added to the OMX Helsinki 25 (OMXH25). The new
portfolio of the OMX Helsinki 25 became eective
on 1 February 2022.
On 31 January 2022, Harvia announced the proposals
of Harvia Plc’s Shareholders’ Nomination Board to
the Annual General Meeting 2022. The Nomination
Board proposes that the number of members of the
Board of Directors will be increased by a maximum
of one member, from the current five to six members.
The Shareholders’ Nomination Board proposes that
Olli Liitola, Sanna Suvanto-Harsaae, Anders Holmén
and Hille Korhonen be reappointed to the Board of
Directors. The Nomination Board proposes that
Heiner Olbrich be appointed as a new member of
the Board of Directors. All proposed persons are
independent of the company and of the major
shareholders of the company.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 119
EUR thousand 1 Jan–31 Dec 2021 1 Jan–31 Dec 2020
Revenue 1,084 1,084
Sta expenses
Wages and salaries -2,111 -1,056
Social security expenses
Pension expenses -180 -144
Other social security expenses -28 -15
Other operating expenses -851 -625
Depreciation and amortisation
Depreciation according to plan -210 -732
Operating profit (loss) -2,297 -1,487
Finance income 805 440
Finance costs -766 -1,037
Finance income and expenses total 39 -596
Profit (Loss) before income appropriations and taxes -2,259 -2,084
Appropriations
Group contribution 23,025 14,500
Income taxes -4,158 -2,486
Profit for the period 16,608 9,930
Parent company financial statements FAS
Parent company financial statements FAS
Parent company Profit & Loss Statement
Parent company Profit & Loss Statement
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 120
Parent company Balance Sheet
Parent company Balance Sheet
EUR thousand
31-Dec-2021 31-Dec-2020
ASSETS
Non-current assets
Intangible assets
Intangible rights 0 174
Other long-term expenses 21 28
Advance payments and construction in process 11
Property, plant and equipment
Machinery and equipment 53 82
Holdings in group undertakings 85,909 85,909
Total non-current assets 85,994 86,193
Current assets
Long-term receivables 19,350 18,500
Short-term receivables
Receivables from group companies 30,145 18,973
Other receivables 150 192
Prepayments and accrued income 46 194
Cash and cash equivalents 2,650 3,225
Total current asset 52,341 41,084
Total assets 138,335 127,277
EUR thousand
31-Dec-2021 31-Dec-2020
EQUITY AND LIABILITIES
Equity
Share capital 80 80
Reserve for invested unrestricted equity 51,103 53,621
Retained earnings 1,515 1,102
Profit for the period 16,608 9,930
Total equity 69,306 64,733
Liabilities
Non-current liabilities
Loans from credit institutions 56,500 56,500
Amounts owed to group undertakings 5,484 903
Total non-current liabilities 61,984 57,403
Current liabilities
Trade payables 105 120
Amounts owed to group undertakings 3,607 2,251
Other liabilities 60 55
Accrued expenses 3,272 2,715
Total current liabilities 7,044 5,141
Total liabilities 69,029 62,544
Total equity and liabilities 138,335 127,277
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 121
Parent company Cash flow statement
Parent company Cash flow statement
EUR thousand
1 Jan–
31 Dec 2021
1 Jan–
31 Dec 2020
Cash flow from operating activities:
Profit (loss) before taxes -2,259 -2,084
Adjustments to operating profit (+/–) for:
Depreciation and amortisation 210 732
Unrealised foreign exchange gains and losses 251 -175
Financial income and expenses -39 596
Cash flow before working capital changes -1,836 -931
Working capital changes:
Increase (-)/decrease (+) in trade an other
short-term interest-free receivables 1,512 -1,495
Increase (+)/decrease (-) in short-term
interest-free liabilities -244 408
Cash flow before working capital changes -568 -2,017
Income taxes paid -3,749 -827
Cash flow from operating activities: -4,317 -2,845
Cash flow from investments
Purchase of tangible and intangible items -11 -22
Loans granted -6,939 -20,840
Loans received or granted (group accounts) 1,639 -394
Repayment of loan receivables 2,226 2,510
Interest received from investments 591 380
Cash flow from investments -2,494 -18,365
EUR thousand
1 Jan–
31 Dec 2021
1 Jan–
31 Dec 2020
Cash flows from financing activities
Repurchase of own shares -2,518 -1,026
Proceeds from non-current loans 61,500 20,000
Repayment of non-current loans -56,500
Interest and other financing expenses paid -1,229 -1,206
Dividends paid -9,517 -7,104
Group contributions received 14,500 10,300
Cash flows from financing activities 6,236 20,964
Net increase (+) / decrease (–) in cash
and cash equivalents -575 -245
Cash and cash equivalents at beginning of period 3,225 3,470
Cash and cash equivalents at end of period 2,650 3,225
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 122
Notes to the financial statements
of the parent company
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 aect the application of
accounting policies and the recognised amounts
of assets and liabilities at the date of the financial
statements. Actual results may dier 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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 123
NOTES TO THE PROFIT AND LOSS STATEMENT
2021 2020
Notes relating to personnel
Number of personnel at the end of the financial year 2 2
Average number of personnel during the financial year
Ocers 2 2
EUR thousand 2021 2020
Manangement compensation
Members of the Board of Directors and CEO 1,934 750
Auditors' fees
Statutory audit 48 56
Other services 9 2
56 58
EUR thousand 2021 2020
Finance income and costs
Other interest income
Group undertakings 554 440
Other than group companies 251 0
Total finance income 805 440
Interest and finance charges
Group undertakings -15 -31
Other than group companies -752 -1,005
Total financial expenses -766 -1,037
Total financial income and expenses 39 -596
Income taxes
Income taxes for ordinary business -4,158 -2,486
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 124
NON-CURRENT ASSETS
EUR thousand 2021 2020
Intangible assets
Acquisition cost at 1 January 2,124 2,089
Additions 34
Acquisition cost at 31 December 2,124 2,124
Accumulated amortisation at 1 January -1,921 -1,219
Amortisation for the financial year -181 -703
Accumulated amortisation at 31 December -2,102 -1,921
Advance payments on intangible assets 11
Book value 31 December 32 202
Machinery and equipment
Acquisition cost at 1 January 115 115
Acquisition cost at 31 December 115 115
Accumulated depreciation at 1 January -34 -5
Depreciation for the financial year -29 -29
Accumulated depreciation at 31 December -62 -34
Book value 31 December 53 82
EUR thousand 2021 2020
Investments
Acquisition cost 1 January 85,909 85,909
Acquisition cost 31 December 85,909 85,909
Book value 1 January 85,909 85,909
Book value 31 December 85,909 85,909
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 125
HOLDINGS IN GROUP UNDERTAKINGS
Group companies
Parent ownership
31-Dec-2021
Harvia Group Oy, Muurame 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
OOO EOS Premium SPA Technologies
Harvia Holding GmbH
Kirami Oy
Kirami Ab
Metagroupp OÜ
Sauna-Eurox Oy
Parhaat Löylyt Oy
All Group companies have been consolidated to the Group consolidated IFRS
financial statements.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 126
RECEIVABLES
EUR thousand 2021 2020
Long-term receivables
Loans to group companies 19,350 18,500
Short-term receivables
Receivables from group companies
Trade debtors 207 117
Loans receivable 6,733 2,870
Other receivables 23,168 14,500
Prepayments and accrued income 38 1,487
Total 30,145 18,973
Receivables from others
Other receivables 150 192
Prepayments and accrued income 46 194
195 385
Material amounts included in prepayments
and accrued income
Insurances 29 29
Others 17 25
Tax receivables 140
Total 46 194
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 127
EUR thousand 2021 2020
Long-term liabilities
Loans from credit institutions 56,500 56,500
Loans from group companies 5,484 903
61,984 57,403
EUR thousand 2021 2020
Short-term liabilities
Loans from group undertakings
Other liabilities 3,607 2,251
Liabilities for others
Trade creditors 105 120
Other liabilities 60 55
Accruals and deferred income 3,272 2,715
3,437 2,890
Material amounts shown under accruals
and deferred income
Wages and salaries including
social security expenses 574 455
Interest expenses 7 51
Income taxes 2,521 2,112
Other 170 96
3,272 2,715
LIABILITIES
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 128
EQUITY
EUR thousand 2021 2020
Restricted equity
Subscribed capital 1 January 80 80
Subscribed capital 31 December 80 80
Total restricted equity 80 80
Unrestricted equity
Reserve for invested unrestricted equity 1 January 53,621 54,647
Acquisition of treasury shares -2,518 -1,026
Reserve for invested unrestricted equity
31 December 51,103 53,621
Retained earnings from previous financial years 11,032 8,206
Dividend distribution -9,517 -7,104
Retained earnings from previous financial years 1,515 1,102
Profit (loss) for the financial year 16,608 9,930
Total unrestricted equity 69,226 64,653
Total equity 69,306 64,733
Distributable unrestricted equity
Reserve for invested unrestricted equity 51,103 53,621
Retained earnings from previous years 1,515 1,102
Profit for the financial year 16,608 9,930
Distributable unrestricted equity 69,226 64,653
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 129
GUARANTEES AND COMMITMENTS
EUR thousand 2021 2020
Rental payments under lease contracts
Payable during the following financial year 15 13
Payable in later years 12 25
Income taxes 27 38
PROPOSAL BY THE BOARD OF DIRECTORS
FOR DISTRIBUTION OF PROFIT
Harvia Plc’s total unrestricted equity amounts to
EUR 69,226,116 in total, of which profit for the period
accounts for EUR 16,607,971. Harvia targets a regularly
increasing dividend with 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 0.60 per share, EUR 11,216,541.60 in
total, for the financial period ended 31 December 2021.
The Board of Directors proposes
the dividend to be paid in two instalments, EUR 0.30
in April 2022 and EUR 0.30 in October 2022.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 130
SIGNATURES FOR THE FINANCIAL STATEMENTS
AND THE BOARD OF DIRECTORS’ REPORT
In Muurame, 9 February 2022
AUDITOR’S NOTE
A report on the audit performed has been issued today.
In Muurame, 9 February 2022
PricewaterhouseCoopers Oy
Authorised Public Accountants
Markku Launis
Authorised Public Accountant
Olli Liitola
Chairman of the Board
Sanna Suvantoa-Harsaae
Member of the Board
Anders Holmén
Member of the Board
Ia Adlercreutz
Member of the Board
Hille Korhonen
Member of the Board
Tapio Pajuharju
CEO
Signatures for the financial statements
and the Board of Directors’ report
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 131
Auditor’s Report (Translation of the Finnish Original)
Auditor’s Report
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 and financial
performance and cash flows in accordance with
International Financial Reporting Standards (IFRS)
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 the 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 2021. The financial statements comprise:
• the consolidated balance sheet, statement of
comprehensive income, statement of changes in
equity, statement of cash flows and notes, including
a summary of significant accounting policies
• the parent company’s balance sheet, income
statement, statement of cash flows 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 sucient 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 to the 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.
Proposal by the Board of Directors
for distribution of profit
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 132
Auditor’s Report
OUR AUDIT APPROACH
Overview
• We have applied an overall group materiality of
EUR 2,3 million
• 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
• Business combinations
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 eect of misstatements
on the financial statements as a whole.
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 network firms operating
under our instructions.
OVERALL GROUP
MATERIALITY EUR 2,3 million
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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 133
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.
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
At 31 December 2021 the Group’s goodwill balance amounted to EUR 73,7 million.
As such, goodwill represents 37 % 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.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 134
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.
Business combinations
Refer to accounting principles of the consolidated financial statements and
note 3.1 Business combinations
During 2021 Harvia acquired Kirami Ltd for a total consideration of EUR 9,9 million.
The acquisition is accounted for as a business combination and includes a number of
significant and complex judgments in the determination of the fair value of the assets
and liabilities acquired.
The primary element of the valuation and purchase price allocation process was to
assess the fair value of intangible assets (EUR 3,5 million) in the form of order backlog,
customer relationships and trademarks. Resulting goodwill amounted to EUR 1,7
million. The purchase price allocation is reported as preliminary in the consolidated
financial statements.
Business combinations is a key audit matter in the audit due to the high level of
management judgement used in determining the fair value of the net assets acquired
and the amount of redemption liability.
KEY AUDIT MATTER IN
THE AUDIT OF THE GROUP
HOW OUR AUDIT ADDRESSED
THE KEY AUDIT MATTER
For business combinations we considered the purchase agreements, evaluated the
valuation principles of the assets and liabilities of the acquiree and the underlying
assumptions used, as well as assessed the technical accuracy of the purchase price
allocations.
Our audit procedures also included assessing the amount of contingent considerations
and redemption liability and the appropriateness of the accounting treatment.
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 135
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 International Financial Reporting Standards (IFRS)
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 sucient 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
eectiveness 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 sucient 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.
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, r
elated 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
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 136
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 7 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.
Muurame 9 February 2022
PricewaterhouseCoopers Oy
Authorised Public Accountants
Markku Launis
Authorised Public Accountant (KHT)
HARVIA 2021 OPERATING ENVIRONMENT STRATEGY INNOVATIONS SUSTAINABILITY INVESTORS GOVERNANCE FINANCIAL STATEMENTS 137
HARVIA OYJ
Teollisuustie 1–7
40950 Muur ame
www.harviagroup.com/fi
We are publishing this Annual Report
in March 2022 in a situation marked by
significant uncertainty in the world.
Harvia suspended its operations in
Russia in the beginning of March. We are
supporting those aected by the war in
Ukraine and are doing everything we can
to help our local partners in Ukraine.