Caverion Corporation’s Interim Report for January 1 – September 30, 2019

Report this content

Caverion Corporation Interim Report 29 October 2019 at 8.00 a.m. EET

Caverion Corporation’s Interim Report for January 1 – September 30, 2019

Clear improvement in profitability in the third quarter

July 1 – September 30, 2019

  •  Revenue: EUR 507.5 (524.9) million. Services business revenue increased by 6.1 percent.
  •  Adjusted EBITDA: EUR 36.2 (18.5) million, or 7.1 (3.5) percent of revenue.
  •  EBITDA: EUR 35.3 (14.3) million, or 7.0 (2.7) percent of revenue.
  •  Operating cash flow before financial and tax items: EUR 3.8 (-37.0) million.
  •  Earnings per share, undiluted: EUR 0.08 (0.03) per share.
  •  Net debt/EBITDA*: 1.1x (1.1x).  

January 1 – September 30, 2019 

  •  Order backlog: EUR 1,676.9 (1,552.3) million, up by 8.0 percent.
  •  Revenue: EUR 1,534.2 (1,616.5) million. Services business revenue increased by 4.2 percent.
  •  Adjusted EBITDA: EUR 73.3 (42.4) million, or 4.8 (2.6) percent of revenue.
  •  EBITDA: EUR 67.1 (-7.5) million, or 4.4 (-0.5) percent of revenue.
  •  Operating cash flow before financial and tax items: EUR 63.0 (-32.1) million.
  •  Earnings per share, undiluted: EUR 0.04 (-0.27) 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  7–9/19
  (IFRS 16)
  (non IFRS 16)
Change  1–9/19
  (IFRS 16)
  (non IFRS 16)
Change  1–12/18
  (non IFRS 16)
Order backlog 1,676.9 1,552.3  8.0%  1,676.9 1,552.3 8.0% 1,494.3
Revenue  507.5 524.9 -3.3% 1,534.2 1,616.5 -5.1% 2,204.1
Adjusted EBITDA 36.2 18.5 95.7% 73.3 42.4 73.0% 53.4
Adjusted EBITDA margin, % 7.1 3.5 4.8 2.6 2.4
EBITDA 35.3 14.3 147.3% 67.1 -7.5 -8.8
EBITDA margin, % 7.0 2.7 4.4 -0.5 -0.4
Operating profit  18.9 8.1 133.4% 16.4 -27.2 -35.9
Operating profit margin, %  3.7 1.5 1.1 -1.7 -1.6
Result for the period 11.6 5.3 120.9% 7.5 -32.3 -48.1
Earnings per share, undiluted, EUR 0.08 0.03 142.6% 0.04 -0.27 -0.40
Operating cash flow before financial and tax items 3.8 -37.0 63.0 -32.1 21.6
Working capital -46.8 -3.2 -54.6
Interest-bearing net debt 172.9 50.2 244.5% 6.9
Net debt/EBITDA* 1.1 1.1 0.2
Gearing, % 79.5 18.9 2.7
Equity ratio, % 22.6 30.9 30.2
Personnel, end of period  14,606 15,556 -6.1% 14,950

* Based on calculation principles confirmed with the lending parties. 

Ari Lehtoranta, President and CEO:

“The highlight of the quarter was a clear improvement in our profitability. This was supported by our lower-performing divisions improving their profitability. At the same time, there was no material negative impact from Projects. In the third quarter our adjusted EBITDA improved to EUR 36.2 (18.5) million, or 7.1 (3.5) percent of revenue. Our revenue for the third quarter was EUR 507.5 (524.9) million. Excluding the impact of currencies and divestments, revenue grew year-on-year. Our order backlog increased by 8.0 percent to EUR 1,676.9 (1,552.3) million, supporting our future organic growth.

Measured in local currencies, Group revenue decreased by 2.5 percent. However, the Services business revenue increased by 7.1 percent, while the Projects business revenue decreased by 13.4 percent. In the quarter, our Services business accounted for 58.5 (53.3) percent of Group revenue. In the Services business, most of our divisions continued to improve their margins in accordance with targets. In the Projects business, after being able to close several old projects, there was a clear profitability improvement in several divisions. The profitability of the Projects business is nevertheless yet far from the targeted level and performance management actions will be continued in all our divisions.

In the third quarter, which is typically a weak quarter in terms of cash flow, our operating cash flow before financial and tax items amounted to EUR 3.8 (-37.0) million. Our working capital improved to the level of EUR -46.8 (-3.2) million. Our net debt excluding lease liabilities amounted to EUR 41.7 (50.2) million at the end of September and the net debt/EBITDA ratio was 1.1x (1.1x). We were able to sign two important acquisitions in October. The first one, Pelsu Pelastussuunnitelma Oy underpins our focus on digital services, while the other one, the Refrigeration Solutions business of Huurre Group strengthens our focus on selected Smart Technologies. Regarding the Maintpartner acquisition signed in March, the Finnish Competition and Consumer Authority decided to initiate further proceedings concerning the transaction.

Caverion’s future profitable growth is strongly supported by the sustainability and digitalisation megatrends. 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. We launched the Growth phase of our Fit for Growth strategy in the third quarter. We will unfold our Growth strategy more in detail in the upcoming Capital Markets Day on 5 November 2019.”  


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 good. 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.


Despite increased uncertainties in the economic environment, the Projects market in the non-residential construction market segment is expected to remain stable in other Caverion countries than Sweden. In Sweden, the activity level in residential and commercial projects is slowing down, while the infrastructure market is expected to be active. In other main Caverion countries, stable demand is expected to continue in 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

7–9/19 7–9/18 1–9/19 1–9/18 1–12/18 
EUR million (IFRS 16)  (non IFRS 16) (IFRS 16)  (non IFRS 16) (non IFRS 16)
EBITDA  35.3 14.3 67.1 -7.5 -8.8
EBITDA margin, %  7.0 2.7 4.4 -0.5 -0.4
Items affecting EBITDA 
-   Capital gains and/or losses and transaction costs related to divestments and acquisitions  0.2 1.2 2.7 1.2 5.5
-   Write-downs, expenses and income from major risk projects 1.8 1.6 4.9 9.3
-   Restructuring costs 0.7 1.0 1.7 2.2 5.3
-   Other items* 0.1 0.2 0.2 41.5 42.1
Adjusted EBITDA 36.2 18.5 73.3 42.4 53.4
Adjusted EBITDA margin, % 7.1 3.5 4.8 2.6 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 Tuesday, 29 October 2019, at 10:00 a.m. (Finnish time, EET) at GLO Hotel Kluuvi, 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 “8210083 / Caverion”. More practical information on the news conference can be found on Caverion's website, 

Financial information to be published in 2019

Caverion will arrange a Capital Markets Day in Helsinki on 5 November 2019 at 12:00 noon (EET). Further information on the programme is available on Caverion’s website,

Financial Statement Release for 2019 will be published on 7 February 2020 at 12:00 noon (EET). 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


Distribution: Nasdaq Helsinki, principal media,

For more 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,



Caverion Corporation’s Interim Report for January 1 – September 30, 2019 | Clear improvement in profitability in the third quarter
Caverion’s Interim Report for 1.1.-30.9.2019