Caverion Corporation’s Financial Statement Release for 1 January – 31 December 2018

Caverion Corporation Financial Statement Release 5 February 2019 at 8.00 a.m. EET

Caverion Corporation’s Financial Statement Release for 1 January – 31 December 2018

Strong improvement in full-year cash flow, turnaround in profitability progressing

1 October – 31 December 2018

  •  Revenue: EUR 587.6 (592.3) million.
  •  Adjusted EBITDA: EUR 11.0 (-5.2) million, or 1.9 (-0.9) percent of revenue.
  •  EBITDA: EUR -1.3 (10.3) million, or -0.2 (1.7) percent of revenue, impacted particularly by capital gains and losses from divestments and restructuring costs totalling EUR -7.4 (17.2) million.
  •  Operating cash flow before financial and tax items: EUR 53.7 (66.9) million.
  •  Earnings per share, undiluted: EUR -0.12 (-0.02) per share.
  •  Net debt/EBITDA*: 0.2x (2.9x). 

1 January – 31 December 2018

  •  Revenue: EUR 2,204.1 (2,275.8) million.
  •  Adjusted EBITDA: EUR 53.4 (25.8) million, an improvement of 106.7 percent. Adjusted EBITDA margin of 2.4 (1.1) percent of revenue.
  •  EBITDA: EUR -8.8 (3.8) million, or -0.4 (0.2) percent of revenue, impacted by the German anti-trust fine of EUR 40.8 million and other costs.
  •  Operating cash flow before financial and tax items: EUR 21.6 (-8.7) million. Excluding the impact of the German fine of EUR 40.8 million and related costs, an improvement of EUR 72.3 million compared to the previous year.
  •  Earnings per share, undiluted: EUR -0.40 (-0.24) per share.
  •  EUR 60 million share issue completed in June to support strategic flexibility. 

Unless otherwise noted, the figures in brackets refer to the corresponding period in the previous year. The figures for 2017 have been restated according to IFRS 15.

* Based on calculation principles confirmed with the lending parties.


EUR million  10–12/18 10–12/17 Change  1–12/18  1–12/17  Change
Order backlog 1,494.3 1,491.0  0.2%  1,494.3 1,491.0 0.2%
Revenue  587.6 592.3 -0.8% 2,204.1 2,275.8 -3.2%
Adjusted EBITDA 11.0 -5.2 53.4 25.8 106.7%
Adjusted EBITDA margin, % 1.9 -0.9 2.4 1.1
EBITDA -1.3 10.3 -8.8 3.8
EBITDA margin, % -0.2 1.7 -0.4 0.2
Operating profit  -8.7 2.5 -35.9 -26.6 -35.2%
Operating profit margin, %  -1.5 0.4 -1.6 -1.2
Result for the period -15.8 -1.4 -48.1 -27.0 -78.4%
Earnings per share, undiluted, EUR -0.12 -0.02 -0.40 -0.24 -66.0%
Operating cash flow before financial and tax items 53.7 66.9 -19.7% 21.6 -8.7
Working capital -54.6 -30.8 -77.0%
Interest-bearing net debt 6.9 64.0 -89.2%
Net debt/EBITDA* 0.2 2.9
Gearing, % 2.7 27.2
Equity ratio, % 30.2 25.8
Personnel, end of period  14,950 16,216 -7.8%

* Based on calculation principles confirmed with the lending parties.


The Board of Directors proposes to the Annual General Meeting to be held on March 25, 2019 that a dividend of EUR 0.05 per share be paid.

Ari Lehtoranta, President and CEO:

“After the first full year of implementation of our 2020 strategy, the results from the “Fit” phase are becoming visible. Our adjusted EBITDA more than doubled and amounted to EUR 53.4 (25.8) million in January–December. The adjusted EBITDA for the fourth quarter was EUR 11.0 (-5.2) million, or 1.9 (-0.9) percent of revenue. It was still impacted by a high amount of write-downs and costs from old projects initiated in 2016 or earlier.

A highlight of the year was our improving cash flow. Our operating cash flow before financial and tax items improved to EUR 21.6 (-8.7) million during 2018, although impacted by the German cartel fine payment of EUR 40.8 million in August. Excluding the fine and related costs, our operating cash flow improved materially by EUR 72.3 million compared to the previous year.

Revenue for 2018 was EUR 2,204.1 (2,275.8) million, down by 3.2 percent compared to the previous year. Taking into account the completed divestments, our revenue was at about the same level as last year in local currencies. Revenue for the Services business increased by 2.5 percent while revenue for the Projects business decreased by 5.6 percent in local currencies. Revenue for the fourth quarter was EUR 587.6 (592.3) million. Measured in local currencies, revenue increased by 0.5 percent and the Services business continued to grow by 1.5 percent.

Our adjusted EBITDA margin improved quarter by quarter in 2018 compared to the previous year. Both business units improved their margins in 2018 from last year. The profitability of the Services business increased according to our expectations. Order intake in Services has been developing well and we have won several important long-term facility management contracts. The overall performance improvement in our Services business and the investments we have made both in sales and in digitalisation make the outlook going forward positive.

Although we materially improved our performance in the Projects business compared to two previous years, its profitability for the full year remained negative due to non-performing old projects. At the end of 2018, slightly above 10 percent of our projects order backlog was from projects initiated in 2016 or earlier. We expect this figure to be only a few percent at the end of the first half of 2019. I am satisfied that we are observing better and more stable profitability in our new projects at the same time. We furthermore settled two out of three large Industrial Solutions projects from our risk list during the year. In the fourth quarter, due to an updated risk evaluation based on a delay of an arbitration decision, we booked a write-down in receivables totalling EUR 4.4 million in the third large project on our risk list for 2018. I expect the Projects business to continue markedly improving its result in 2019, although there are still project risks remaining especially from old projects. 

Following our strategy, we divested three non-core units at year-end 2018 and the beginning of 2019. These included the divestment of the project piping and tank business and the related Ylivieska workshop of the Industrial Solutions division and the sale of our small subsidiaries in Poland and Czech Republic. After these divestments, Caverion has operations in ten European countries. We also made one acquisition during the fourth quarter to strengthen our Services business. The acquisition of Jetitek Oy in Finland extends our cooling services.

By division, Finland and Austria continued to deliver strong results in the fourth quarter. Excluding non-recurring items, the result of Industrial Solutions was also strong. Sweden continued its positive development, along with the Services business in Germany and Norway. In Germany, the overall performance was still burdened by write-downs from old projects and restructuring. In Denmark and Eastern Europe, our restructuring actions were continued, which impacted their quarterly profitability compared to the previous year.

Our financial position strengthened during the year, which now enables investments in digitalisation and possible bolt-on acquisitions in key areas in Services. Our net debt amounted to only EUR 6.9 million at the end of December and the net debt/EBITDA ratio was 0.2x. We also refinanced our bank loans and revolving credit facilities in the beginning of February 2019.

The implementation of the IFRS 16 Leases standard will impact our financial figures as of the Q1/2019 interim report. Consequently, we converted our existing financial targets until the end of 2020 to reflect the impacts of IFRS 16. The level of ambition in our financial targets remains unchanged.

The implementation of the “Fit” phase of our strategy will continue during the first half of 2019. While we are experiencing strong improvements in several fronts both in Services and Projects, we will still streamline our operations in certain divisions. For the full year of 2019, I expect a further clear improvement in our profitability.”


Market outlook for Caverion’s services and solutions

The megatrends in the industry, such as the increase of technology in built environments, energy efficiency requirements, increasing digitalisation and automation as well as urbanisation continue to promote demand for Caverion’s services and solutions over the coming years.


The underlying demand for Services is expected to remain strong. As technology in buildings increases, the need for new services and digital solutions is expected to increase. Customer focus on core operations continues to open up outsourcing and maintenance opportunities for Caverion. There is a trend towards a deeper collaboration in order to gain business benefits instead of mere cost savings. International customers are looking for unified operating models across countries, especially within the Nordic region. There is an increasing interest for services supporting sustainability, such as energy management.


The Projects market in the non-residential construction market segment is expected to remain stable. Good demand is expected to continue from both private and public sectors. Customer demand for total technical deliveries and public–private partnership models (PPP) is increasing, mainly driven by risk management. However, price competition is expected to remain tight. Low interest rates and the availability of financing continue to support investments. The requirements for increased energy efficiency, better indoor climate and tightening environmental legislation are increasing the costs of building systems investments.

Guidance for 2019 

Caverion estimates that the Group’s Services business revenue and its relative share of the Group’s total revenue will increase in 2019, while the Projects business revenue will decrease. The Group’s Adjusted EBITDA for 2019 will be over EUR 120 million. The guidance takes into account the adoption of IFRS 16 in 2019, which has an estimated annual impact of adding around 2 percentage points to the Group’s EBITDA margin.

Adjusted EBITDA = EBITDA before items affecting comparability (IAC).

Items affecting comparability (IAC) in 2019 are material items or transactions, which are relevant for understanding the financial performance of Caverion when comparing the profit of the current period with that of the previous periods. These items can include (1) capital gains and/or losses and transaction costs related to divestments and acquisitions; (2) write-downs, expenses and/or income from separately identified major risk projects; (3) restructuring expenses and (4) other items that according to Caverion management’s assessment are not related to normal business operations.

In 2018, major risk projects included three completed Large Projects from Industrial Solutions, the financial effects of which were reported under category (2). The German anti-trust fine and related legal and other costs were reported under category (4). In 2019, major risk projects only include one risk project in Germany reported under category (2).

In its adjusted EBITDA guidance Caverion applies a 2 percent threshold. 

Adjusted EBITDA ‒ Items affecting comparability

EUR million  10–12/18 10–12/17 1–12/18  1–12/17 
EBITDA  -1.3 10.3 -8.8 3.8
EBITDA margin, %  -0.2 1.7 -0.4 0.2
Items affecting EBITDA 
-  Write-downs, expenses and income from major risk projects 4.4 1.7 9.3 27.1 
-  Restructuring costs 3.1 -4.9 5.3 7.3 
-  Capital gains and losses from divestments 4.3 -12.3 5.5 -12.3
-  Other items* 0.6 42.1
Adjusted EBITDA 11.0 -5.2 53.4 25.8
Adjusted EBITDA margin, % 1.9 -0.9 2.4 1.1

* Including the German anti-trust fine and related legal and other costs.


Caverion has today on 5 February 2019 published a stock exchange release on its updated financial targets. As a result of the modified retrospective adoption of the new IFRS 16 Leases standard effective from 1 January 2019, Caverion converts its strategic financial targets until the end of 2020 to comply with the IFRS 16 accounting principles. Caverion Group will not restate its financial figures for the financial periods prior to the first date of adoption of IFRS 16. The converted IFRS 16 financial targets (until the end of 2020) with key changes are listed below.

Cash conversion (unchanged) = Operating cash flow before financial and tax items / EBITDA > 100%
Profitability: Adjusted EBITDA over 8% of revenue (earlier target: EBITDA over 6% of revenue)
Debt leverage (unchanged): Net debt / EBITDA* < 2.5x
Growth (unchanged):
-       Revenue growth target will be given by the end of 2019.
-       Services growth > market growth.
-       Long-term target beyond 2020: Services generate over two-thirds of Group revenue. 
Dividend policy (unchanged): distribute at least 50% of the result for the year after taxes, however, taking profitability and leverage level into account.

* Based on calculation principles confirmed with the lending parties. The confirmed calculation principles exclude the effects of the IFRS 16 standard and contain certain adjustments. If IFRS 16 adjusted figures were applied in the calculation, the target would be adjusted accordingly.


Caverion will hold a news conference and webcast on the Financial Statement Release on Tuesday, 5 February 2019, at 10:00 a.m. (Finnish time, EET) at the Glo Hotel Kluuvi (VideoWall meeting room), Kluuvikatu 4, 2nd floor, Helsinki, Finland. The news conference can also be viewed live on Caverion’s website at It is also possible to participate in the event through a conference call by calling the assigned number +44 (0)330 336 9105 at 9:55 a.m. (Finnish time, EET) at the latest. The participant code for the conference call is “2066048 / Caverion”. More practical information on the news conference can be found on Caverion's website, 

Financial information to be published in 2019

The Annual Review, including the financial statements for 2018, will be published on Caverion's website and IR App in English and Finnish during week 9/2019, at the latest. Interim/Half-yearly Reports will be published on April 26, July 24 and October 29, 2019.

Financial reports and other investor information are available on Caverion's website,, and IR App. The materials may also be ordered by sending an e-mail to

Caverion will arrange a Capital Markets Day in Helsinki on 5 November 2019 at 9:00 a.m. (EET). Further information on the programme will be published closer to the date.


Distribution: Nasdaq Helsinki, principal media,

For further information, please contact:

Martti Ala-Härkönen, Chief Financial Officer, Caverion Corporation, tel. +358 40 737 6633,

Milena Hæggström, Head of Investor Relations, Caverion Corporation, tel. +358 40 5581 328,

About Us

Caverion provides smart technical solutions and services for buildings, industrial processes and infrastructure. Our unique service offering covers the entire life cycle: design, build and maintenance. Our vision is to be the first choice in digitalising environments for customers, employees, partners and investors. Our revenue in 2018 was approximately EUR 2.2 billion. Caverion has about 15,000 employees in 10 countries in Northern, Central and Eastern Europe. Caverion’s shares are listed on Nasdaq Helsinki. Twitter: @CaverionGroup



Strong improvement in full-year cash flow, turnaround in profitability progressing
Financial Statements Release 2018