Do You Have a Quiet H.E.R.O. In Your Portfolio Protecting & Fighting For You? [Nordic Global #1 Leader in Sauna & Spa Tech]
Case Story: Nordic Global #1 Leader in Sauna & Spa Tech
[Week (21-25 Sep): +4.4%]
Another uplifting story in our portfolio companies in the Fund is Nordic global #1 leader in sauna & spa tech, which is up 5.7% since the inception of the Fund on 28 August 2020, versus MSCI ACWI World index/NASDAQ -5.1%/-6.7% over the same period. The rising dividend-yielding company has also compounded 131% in capital gains in the recent one year vs MSCI ACWI World index +6.5%.
The UPSTREAM story started when founder Mr. H plummeted into an icy lake in a plane following an accident in 1947 and miraculously climbed out without a scratch. As he headed for a sauna to warm up and digest what had just happened, he came up with the idea of starting to make sauna heaters that would do justice to all the great purposes that people go to a sauna for. Mr. H has been passionate about his sauna since his youth. In the army, he was always the one who dictated the pace of throwing water on the sauna stones. At the request of those who became impatient with his style of sauna bathing, he was actually granted his own private sauna shift. His youth left him with a particularly strong memory of the deliciously soft sauna bath given off by a continuously heated stove forged by a village blacksmith. Mr. H made the first woodburning stove for his own use in 1950 and became the world’s leading manufacturer of woodburning stoves during the 1980s. As a result of strong urbanization and changing lifestyles, the demand for electric sauna heaters increased. At the end of the decade, the company initiated the manufacturing of electric sauna heaters. The Nordic company has since evolved from a small workshop to a technologically advanced sauna heater manufacturer and into an acclaimed sauna and spa brand whose products and solutions are available in over 80 countries.
CEO Mr. P shared: "The first half of 2020 was very strong and steady despite the impacts of the COVID-19 pandemic. During the review period, our revenue increased significantly, representing growth of more than 25% year-on-year. Sales growth further accelerated during the second quarter. The year-on-year increase amounted to 50.1%, of which 32% was organic growth. Increased interest in home improvement and renovation projects in both the consumer and professional channel was clearly reflected in the favorable sales development in Finland, the other Nordic countries and Germany."
"The sauna and spa market has historically been resilient, due in particular to the demand arising from the need to replace sauna heaters. The sauna and spa industry has not been particularly sensitive to the corona pandemic, and demand has remained on a good level on average despite the coronavirus situation. 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. We aim to be agile in bringing new innovations and concepts to the market that create added value and well-being as well as support the global growth of the sauna and spa market. We remain humble but keep our determined focus on the cornerstones of our strategy and its systematic implementation: increasing the value of the average purchase, geographical expansion and continuous improvement of productivity. In addition to organic growth, we are actively looking into suitable opportunities to grow in the sauna and spa market through business acquisitions.”