Caverion Corporation’s Interim Report for January 1 – March 31, 2019

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Caverion Corporation Interim Report 26 April 2019 at 8.00 a.m. EEST

Caverion Corporation’s Interim Report for January 1 – March 31, 2019

Profitability improvement continues, important steps taken toward the Growth phase

1 January – 31 March 2019

  •  Revenue: EUR 514.4 (526.8) million. Our Fit divisions were experiencing healthy growth.
  •  Adjusted EBITDA: EUR 27.1 (10.9) million, or 5.3 (2.1) percent of revenue.
  •  EBITDA: EUR 22.6 (9.9) million, or 4.4 (1.9) percent of revenue.
  •  Operating cash flow before financial and tax items: EUR 30.1 (19.8) million.
  •  Earnings per share, undiluted: EUR 0.01 (0.01) per share.
  •  Net debt/EBITDA*: 0.7x (1.8x).  
  •  Acquisition of Maintpartner’s operations in Finland, Estonia and Poland signed.
  •  EUR 75 million unsecured senior bond issued, 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  1–3/19
(IFRS 16)
(non IFRS 16)
Change  1–12/18
(non IFRS 16)
Order backlog 1,579.7 1,540.0 2.6% 1,494.3
Revenue  514.4 526.8 -2.4% 2,204.1
Adjusted EBITDA 27.1 10.9 147.5% 53.4
Adjusted EBITDA margin, % 5.3 2.1 2.4
EBITDA 22.6 9.9 127.9% -8.8
EBITDA margin, % 4.4 1.9 -0.4
Operating profit  5.3 3.4 54.2% -35.9
Operating profit margin, %  1.0 0.7 -1.6
Result for the period 3.0 2.2 39.6% -48.1
Earnings per share, undiluted, EUR 0.01 0.01 33.3% -0.40
Operating cash flow before financial and tax items 30.1 19.8 51.8% 21.6
Working capital -60.4 -41.4 -45.8% -54.6
Interest-bearing net debt 162.7 47.2 244.6% 6.9
Net debt/EBITDA* 0.7 1.8 0.2
Gearing, % 75.1 19.4 2.7
Equity ratio, % 21.3 27.7 30.2
Personnel, end of period  14,489 15,687 -7.6% 14,950

* Based on calculation principles confirmed with the lending parties.

Ari Lehtoranta, President and CEO:

“Caverion’s year 2019 has started as planned and we took important steps towards the Growth phase. While we are still finalising our “Fit” actions in a few divisions in accordance with our strategy, our adjusted EBITDA increased to EUR 27.1 (10.9) million in the first quarter of the year. The comparative figures for the prior financial periods have not been restated to comply with the IFRS 16 Leases standard adopted from the beginning of the year. Our revenue for the first quarter was EUR 514.4 (526.8) million, with the Services business continuing to grow and the Projects business revenue declining, as anticipated. Measured in local currencies, revenue decreased by 1.2 percent; the Services business was up by 5.4 percent while the Projects business revenue was down by 9.3 percent. It is of specific note that all our Fit divisions experienced healthy growth in the first quarter.

Both business units improved their profitability in the first quarter. In the Services business, most of our divisions continued to improve their margins in accordance with targets. The Projects business profitability was supported by a positive arbitration decision related to the third and last major Industrial Solutions risk project for 2018. This decision further lowered our risk position going forward. The result was still negatively impacted by old projects. We are continuing our efforts to close or settle the remaining non-performing projects from our project portfolio.

In the first quarter, our operating cash flow before financial and tax items was EUR 30.1 (19.8) million. Our working capital improved to the level of EUR -60.4 (-41.4) million.

There were several important events during the quarter. In March we signed an agreement with Maintpartner Holding Oy to acquire all of the shares in Maintpartner Group Oy including its subsidiaries in Finland, Poland and Estonia. Maintpartner is an industrial maintenance and service provider operating in sectors such as energy, chemicals, metal, food and manufacturing industries. The revenue of the business to be acquired was approximately EUR 137 million in 2018 and it employed approximately 1,500 people. The acquisition complements our knowledge in industrial maintenance and services as well as in the development of digital solutions. It also supplements our geographical coverage and customer base in various industrial segments. The transaction is subject to approval by the competition authorities.

At the end of the quarter, we issued a new EUR 75 million senior unsecured four-year bond. The senior bond issue opened up a new instrument for Caverion in the capital markets and diversified our funding base further. We partially redeemed our hybrid bond notes with the proceeds from the new issue and proactively managed our debt portfolio. Earlier in the quarter, we also refinanced our bank loans and undrawn revolving credit facilities. Both these events have improved our financial position and support us in moving from the Fit phase of our strategy towards the Growth phase. Our net debt excluding lease liabilities amounted to EUR 27.1 (47.2) million at the end of March and the net debt/EBITDA ratio was 0.7x (1.8x).

We continued our strategic planning process with several streams in preparation for the Growth phase of our strategy. We will come back to this in more detail at our Capital Markets Day to be held in Helsinki on 5 November 2019. In the meanwhile, the implementation of the “Fit” phase of our strategy will continue during the first half of 2019. The remaining Fit actions are specifically concentrated on Germany and Denmark.”


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, 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

1–3/19 1–3/18 1–12/18 
EUR million (IFRS 16) (non IFRS 16) (non IFRS 16)
EBITDA  22.6 9.9 -8.8
EBITDA margin, %  4.4 1.9 -0.4
Items affecting EBITDA 
-  Capital gains and/or losses and transaction costs related to
divestments and acquisitions 
2.3 5.5
-  Write-downs, expenses and income from major risk projects 1.6 0.9 9.3
-  Restructuring costs 0.5 0.1 5.3
-  Other items* 0.1 42.1
Adjusted EBITDA 27.1 10.9 53.4
Adjusted EBITDA margin, % 5.3 2.1 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 Interim Report on Friday, 26 April 2019, at 10:00 a.m. (Finnish time, EEST) 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, EEST) at the latest. The participant code for the conference call is “1644846 / Caverion”. More practical information on the news conference can be found on Caverion's website, 

Financial information to be published in 2019

Interim/Half-yearly Reports will be published on 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 12:00 noon 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,



Profitability improvement continues, important steps taken toward the Growth phase
Interim Report 1-3/2019 | Q1