Company Profile: Sauna Company called Harvo are based in Sweden and Finland. The Company started in 2003 by Swedish owner Lars Hallstrand originally in the business of manufacturing heaters and have since developed the business to become a company amongst the top 5 Sauna providers within Scandinavia. In the last two decades Harvo’s exports expanded into the 4 Scandinavian countries in Sweden, Denmark, Finland, and Norway with the company having its headquarters in Uppsala in Sweden adjacent to its largest sauna and sauna component manufacturing facility. 
In 20 Years, Harvo has developed from being a small workshop into a company with 120 Employees. Harvo employs 120 employees in total with 50 employees in production, 30 employees in Operations and 40 in Head office which includes Sales and Marketing Dept. Their Hiring Strategy is to high sales teams that have a real passion for health and wellness. 

Harvo became the Nordics leading manufacturer of sauna heaters and built on its accumulated expertise and started to expand its range to cover complete sauna and spa solutions. In 2010 Lars Hallstrand was awarded the title of Entrepreneur of the year in Sweden. In 2012, Harvo received another recognition for its work, the National Prize of the Federation of the Swedish Enterprises. The CEO changed in 2016 with Lars Hallstrand appointing his daughter Anna Hallstrand to take over the role as CEO with Lars acting as a member of the board of Directors. They went IPO in 2018 on the stock market with a new board of directors appointed in 2017.

Harvo is passionate about offering its customers innovations that create relaxing experiences and natural well-being. Harvo continues the ambitious product development of its sauna heaters, which are both electric and wood burning, along with saunas, spas and other products related to Sauna bathing. The global trend of people being increasingly conscious of their health continues to build momentum for Harvo’s sauna and spa solutions. Premium models of heaters are performing well. 

Harvo is one of the leading companies in the sauna and spa market in Scandinavia as measured by revenue. Harvo’s brands and product portfolio are well known in the market, and the company’s comprehensive product portfolio strives to meet the needs of the international sauna and spa market of both private and professional customers. 
Harvo’s revenue totalled EUR 80million in 2022, of which 60% came from outside Sweden. 
Demand is high due to increased sales due to people working and home more and with a focus on the health benefits for the Spa industry.

To support their growth, they made record investments of EUR 8.2 million into increasing productivity and capacity in 2022. The main investments included an extension to their production facility in Uppsala as well as increasing sauna capacity from US Suppliers. All major investments were completed on time and on budget. An Expansion in the facility and installation of new advanced machinery will increase capacity which focuses on streamlining the heater component manufacturing as well as increasing capacity to increase the sauna capacity. 
The acquisitions of still-water hot tub manufacturer Kiramix and sauna stone supplier Sauna-Europlex strengthened their sauna and spa offering. New Campaign Healing with Heat – worked well in Sweden but has not been rolled out to other countries. 

On top of organic growth Harvo continued to implement its growth strategy through business acquisition in 2021 with the acquisition of manufacturer Kiramix a leading finish water hot tub manufacture and pioneer in hot tubs Globally. The acquisition complement Harvo’s sauna and spa offering well increasing its market share especially in the residential sauna and spa solutions. While still water hot tubs are a new category for Harvo they are an excellent strategic fit for Harvo with Heat Campaign and respond to the global growing trend of active backward living. 

In August 2023 Harvo announced the acquisition of sauna stone supplier Sauna-Europlex one of the world’s largest suppliers of safe, sustainable and durable hot stones which caters to the needs of consumer and spa professionals including high quality, ready to use , prewashed and hand selected olivine diabase and vulcanite sauna stones in all sizes. This acquisition will strengthen the availability of high-quality sauna stones in the market. 

Harvo has experience in dealing with Bergamm Ltd (US Based Company) who has worked with Harvo for the last 10 years in distributing  their saunas and sauna parts within Scandinavia. Bergamm have extensive experience in distribution within US, AP, and Europe. Growth for them has been especially strong in 2022 in Japan and Australia due to their growth in the advancing into the commercial space within the construction industry as well as small houses and apartment blocks. Both companies have good working relationships at executive levels. 

The Harvo executive team have aggressive sales targets to increase the turnover to €120M within the next 5 years. The short-term focus of the executive team is to go into one new markets and to increase sales from €80m upto €96M by end of 2024 and to €120M by 2025. Part of this plan for 2024 is to enter into a new market by 2023 to support the overall revenues increasing from €80M to €96M. 

The Harvo’s team solid performance contributed to the growth despite challenges of key raw materials, mainly steel and wood but overall the whole team including key operations and supply chain did excellent work in ramping up production volumes and productivity in 2022. 

Harvo has always paid a great deal of attention to the environmental, social, and corporate Governance issues and in 2021 they created a sustainability program from 2022-2025 and carried out a review of their C02 impact. 

They enjoyed strong growth in 2019-2021 despite the pandemic and Harvo managed to truly challenge the market leader in the Scandinavian market. Harvo’s strategy is to pursue opportunities to grow in the sauna and spa market through mergers and acquisitions. Harvo was able to meet the increased demand in 2021 however the availability of sauna rooms was an issue for them from their US Suppliers, resulting in increased lead times and a higher order book. 

Further investments will be made as well as developing new innovations and capabilities. The Magnitude of the investments will decrease from 2023 but will remain higher than the historical average of the company in recent years. Their passion for innovation is to innovate future sauna and spa experiences with healing heat for different sauna cultures, working on cleaner burning, remote connectivity and new sauna models resulting in new products and product improvements. 

 
KEY FIGURES 2022
2022 REVENUE: €80M (SAUNA HEATERS REPRESENT 50% OF OVERALL BUSINESS AT ALMOST €40M, HOT TUBS REPRESENTS 20% AT €20M AND SAUND ROOM SALES REPRESENT 30% WITH REVENUE OF €20M)
 
REVENUE GROWTH 30%
ADJUSTED OPERATING PROFIT €20M.
OPERATIING FREE CASH FLOW 22%
2022 INVESTMENTS €8.1M
DIVIDENDS PER SHARE: (0.31) EURO 
EARNINGS PER SHARE (0.80) EURO

1.	Following your review of the case study evaluate why Harvo should expand internationally and are looking to expand into another country by the end of 2023. 
2.	Critically evaluate the external environments issues associated with the Countries that you are recommend using PESTLE.
3.	Evaluate the Ethical Issues associated with operating Internationally and outline the possible actions the company can take to protect itself.