Caverion Corporation’s Half-year Financial Report for January 1 – June 30, 2019

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Caverion Corporation Half-year Financial Report 24 July 2019 at 8.00 a.m. EEST

Caverion Corporation’s Half-year Financial Report for January 1 – June 30, 2019

Projects burden end of the Fit phase -  Strong cash flow, increased order backlog and decreased project risks pave the way to the Growth phase

April 1 – June 30, 2019

  • Revenue: EUR 512.3 (564.8) million. Services business revenue increased by 2.7 percent.
  • Adjusted EBITDA: EUR 10.0 (12.9) million, or 2.0 (2.3) percent of revenue, strongly impacted by finalisation of old projects in the Fit phase.
  • EBITDA: EUR 9.1 (-31.7) million, or 1.8 (-5.6) percent of revenue.
  • Operating cash flow before financial and tax items: EUR 29.1 (-15.0) million.
  • Earnings per share, undiluted: EUR -0.06 (-0.32) per share.
  • Net debt/EBITDA*: 0.8x (0.2x).  

January 1 – June 30, 2019 

  • Order backlog: EUR 1,704.7 (1,596.8) million, up by 6.8 percent.
  • Revenue: EUR 1,026.7 (1,091.6) million. Services business revenue increased by 3.3 percent.
  • Adjusted EBITDA: EUR 37.1 (23.9) million, or 3.6 (2.2) percent of revenue.
  • EBITDA: EUR 31.7 (-21.8) million, or 3.1 (-2.0) percent of revenue.
  • Operating cash flow before financial and tax items: EUR 59.2 (4.9) million.
  • Earnings per share, undiluted: EUR -0.04 (-0.31) per share.
  • Maintpartner acquisition signed during Q1, competition authority review ongoing.
  • EUR 75 million unsecured senior bond issued during Q1, partial redemption of hybrid notes.

Unless otherwise noted, the figures in brackets refer to the corresponding period in the previous year.

* Based on calculation principles confirmed with the lending parties.

Caverion has adopted IFRS 16 Leases standard as of the effective date of January 1, 2019. The Group applies the modified retrospective approach and comparative figures for the financial periods prior to the first date of adoption have not been restated. Additional information is presented under Changes in external financial reporting in 2019 and in financial tables section note 1 Accounting principles. 


EUR million  4–6/19
(IFRS 16)
(non IFRS 16)
Change  1–6/19
(IFRS 16)
(non IFRS 16)
Change  1–12/18
(non IFRS 16)
Order backlog 1,704.7 1,596.8  6.8%  1,704.7 1,596.8 6.8% 1,494.3
Revenue  512.3 564.8 -9.3% 1,026.7 1,091.6 -5.9% 2,204.1
Adjusted EBITDA 10.0 12.9 -22.3% 37.1 23.9 55.5% 53.4
Adjusted EBITDA margin, % 2.0 2.3 3.6 2.2 2.4
EBITDA 9.1 -31.7 31.7 -21.8 -8.8
EBITDA margin, % 1.8 -5.6 3.1 -2.0 -0.4
Operating profit  -7.7 -38.7 80.0% -2.4 -35.3 93.1% -35.9
Operating profit margin, %  -1.5 -6.9 -0.2 -3.2 -1.6
Result for the period -7.1 -39.7 82.2% -4.1 -37.6 89.2% -48.1
Earnings per share, undiluted, EUR -0.06 -0.32 82.4% -0.04 -0.31 86.0% -0.40
Operating cash flow before financial and tax items 29.1 -15.0 59.2 4.9 21.6
Working capital -80.8 -57.2 -41.2% -54.6
Interest-bearing net debt 158.9 10.2 6.9
Net debt/EBITDA* 0.8  0.2 0.2
Gearing, % 77.3 3.9 2.7
Equity ratio, % 20.8 28.2 30.2
Personnel, end of period  14,681  15,751 -6.8% 14,950

* Based on calculation principles confirmed with the lending parties. 

Ari Lehtoranta, President and CEO:

“We launched our Fit for Growth strategy in November 2017, estimating that the Fit phase would be finalised by the end of the first half of this year. Over the last few years we have focused on turnaround actions, particularly in the Projects business. Although there are certain Fit actions still to be finalised, our risk level is reduced going forward and we are now ready to move forward to the Growth phase of our strategy.

During the second quarter our main effort was in finalising our old projects. Our result was burdened by major project forecast changes with a negative net impact of about EUR 16 million, about half of which was explained by one single old project. In the second quarter, our adjusted EBITDA was EUR 10.0 (12.9) million. Our revenue for the second quarter was EUR 512.3 (564.8) million. For the first time, our Services business accounted for over 60 percent of Group revenue. Measured in local currencies, revenue decreased by 8.5 percent; the Services business was up by 3.7 percent while the Projects business revenue was down by 22.6 percent.

In the Services business, most of our divisions continued to improve their margins in accordance with targets. The Projects business profitability was still negatively impacted by old projects. However, I believe that the magnitude of project write-downs and cost overruns will decrease going forward. I also expect the Projects business to improve its profitability in the second half of the year. Our remaining Fit actions are specifically concentrated on Denmark and the Projects business in Germany. I am particularly happy that our German business has already turned its cash flow to positive, indicating a turnaround.

Our ongoing business continues to develop positively. Our strong cash flow is a clear sign of this. In the second quarter, our operating cash flow before financial and tax items improved to EUR 29.1 (-15.0) million. Our working capital improved to the level of EUR -80.8 (-57.2) million. An increasing part of our business is already Fit and taking growth actions. As a proof of this, our order backlog increased by 6.8 percent to EUR 1,704.7 (1,596.8) million. This will support our organic growth going forward. Highlights of new orders were our first PPP life cycle project in Austria, where the maintenance period covers 25 years, as well as our new life cycle projects in Finland.

Our financial position has clearly improved. Our net debt excluding lease liabilities amounted to EUR 24.7 (10.2) million at the end of June and the net debt/EBITDA ratio was 0.8x (0.2x). Going forward, we are looking more actively for bolt-on acquisitions in our selected focus areas and geographies. Regarding the Maintpartner acquisition signed in March, the Finnish Competition and Consumer Authority has, as part of its standard procedure, decided to initiate further proceedings concerning the transaction.

The future of Caverion looks promising, supported by megatrends such as energy efficiency and digitalisation. Environmental regulations and legislation are further tightening, requiring increased actions in energy efficiency in buildings, and our enhanced offering is well suited to meet the new demands enabling smart cities and smart buildings. All these factors pave the way to Caverion’s profitable growth.”


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 as well as technical building management 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, life cycle projects and different types of partnership projects such as alliance projects 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’s guidance for 2019 is unchanged: “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).

Adjusted EBITDA ‒ Items affecting comparability

4–6/19 4–6/18 1–6/19 1–6/18 1–12/18 
EUR million (IFRS 16) (non IFRS 16) (IFRS 16) (non IFRS 16) (non IFRS 16)
EBITDA  9.1 -31.7 31.7 -21.8 -8.8
EBITDA margin, %  1.8 -5.6 3.1 -2.0 -0.4
Items affecting EBITDA 
-   Capital gains and/or losses and transaction costs related to divestments and acquisitions  0.3 2.5 5.5
-   Write-downs, expenses and income from major risk projects 2.2 1.6 3.1 9.3
-   Restructuring costs 0.5 1.1 1.0 1.2 5.3
-   Other items* 0.1 41.3 0.2 41.3 42.1
Adjusted EBITDA 10.0 12.9 37.1 23.9 53.4
Adjusted EBITDA margin, % 2.0 2.3 3.6 2.2 2.4

* Including the German anti-trust fine and related legal and other costs in 2018


Caverion will hold a news conference and webcast on the Half-year Financial Report on Wednesday, 24 July 2019, at 10:00 a.m. (Finnish time, EEST) at Hotel Lilla Roberts (meeting room Selim), Pieni Roobertinkatu 1, 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 9104 at 9:55 a.m. (Finnish time, EEST) at the latest. The participant code for the conference call is “778951 / Caverion”. More practical information on the news conference can be found on Caverion's website, 

Financial information to be published in 2019

Q3 Interim Report will be published on 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 12:00 noon  (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,



Projects burden end of the Fit phase - Strong cash flow, increased order backlog and decreased project risks pave the way to the Growth phase
Caverion Half-year Financial Report 1-6 2019