2014-07-22 08:00:00 CEST
2014-07-22 08:00:05 CEST
REGULATED INFORMATION
Caverion Oyj - Interim report (Q1 and Q3)
Caverion Corporation's Interim Report for January 1–June 30, 2014: Improved working capital management – Increasing profit remains in focus
Helsinki, 2014-07-22 08:00 CEST (GLOBE NEWSWIRE) --
CAVERION CORPORATION INTERIM REPORT 1-6/2014 July
22, 2014 at 9:00 a.m.
Improved working capital management - Increasing profit remains in focus
April 1 - June 30, 2014
-- Revenue:
EUR 588.4 (652.8) million, decreased by 10 percent.
-- Revenue decreased by 7 percent at previous year's exchange rates for
corresponding period.
-- EBITDA:
excluding non-recurring items EBITDA was EUR 2.9 (16.0) million, or 0.5
(2.5) percent of revenue.
-- EBITDA including non-recurring items was EUR 2.1 (12.9) million, or 0.4
(2.0) percent of revenue.
-- Activities relating to the demerger and the restructuring of the
business have taken a longer time than expected and are still partly
ongoing. Projects in Norway and Denmark have continued to dilute the
profitability in April−June 2014. Furthermore, Caverion has reviewed the
project business more closely in all the divisions and revised the cost
estimates and provisions relating to some low-performing projects in the
overall project portfolio. The profitability of the Norwegian project
business is expected to improve during the second half of 2014.
-- Operating cash flow after investments:
EUR -9.4 (-35.3) million. Improved cash flow as a result of focus on
working capital management.
-- Working capital:
EUR 48.6 (99.8) million at the end of June. The target to reach negative
working capital by the end of 2016 is progressing according to plan.
-- Order backlog:
EUR 1,350.3 (1,274.2) million at the end of June.
January 1 - June 30, 2014
-- Revenue:
EUR 1,179.7 (1,260.6) million, decreased by 6 percent.
-- Revenue decreased by 3 percent at previous year's exchange rates for
corresponding period.
-- EBITDA:
excluding non-recurring items EBITDA was EUR 16.0 (28.2) million, or 1.4
(2.2) percent of revenue.
-- EBITDA including non-recurring items was EUR 11.7 (22.3) million, or 1.0
(1.8) percent of revenue. -- EBITDA is burdened by non-recurring items of EUR -4.3 million in total.
The non-recurring costs of EUR 17.5 million consisted of expenses
relating to a terminated M&A project, reorganisation costs and
provisions for old, completed projects
, including a final settlement of EUR 3.5 million from an old export
project in Danish operations due to bankruptcy of a joint venture
partner. These were offset by a non-recurring release of pension
liability to pension costs of EUR 13.2 million following a transfer into
a new pension scheme in Norway.
-- Operating cash flow after investments:
EUR -26.3 (-37.5) million, burdened by IT license prepayments of EUR 4.3
million and a non-recurring payment of EUR 3.5 million related to a final
settlement in Denmark. Investments of EUR 8.2 million in January-June
related mainly to IT and development of common business processes.
Unless otherwise noted, the figures in brackets refer to the corresponding
period in the previous year. Comparative figures for 2013 are carve-out figures
for the periods before the effective date of the partial demerger (June 30,
2013).
KEY FIGURES
EUR million 4-6/14 4-6/13 Change 1-6/14 1-6/13 Change 1-12/13
--------------------------------------------------------------------------------
Revenue 588.4 652.8 -10% 1,179.7 1,260.6 -6% 2,543.6
--------------------------------------------------------------------------------
EBITDA 2.1 12.9 -84% 11.7 22.3 -48% 70.9
--------------------------------------------------------------------------------
EBITDA margin, % 0.4 2.0 1.0 1.8 2.8
--------------------------------------------------------------------------------
EBITDA excl. 2.9 16.0 -82% 16.0 28.2 -43% 81.7
non-recurring items
--------------------------------------------------------------------------------
EBITDA margin excl. 0.5 2.5 1.4 2.2 3.2
non-recurring items,
%
--------------------------------------------------------------------------------
Operating profit -3.6 7.8 0.4 12.1 -97% 49.4
--------------------------------------------------------------------------------
Operating profit -0.6 1.2 0.0 1.0 1.9
margin, %
--------------------------------------------------------------------------------
Net profit for the -4.1 4.2 -2.3 7.0 35.5
period
--------------------------------------------------------------------------------
Earnings per share, -0.03 0.03 -0.02 0.06 0.28
basic, EUR
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Working capital 48.6 99.8 -51% 48.6 99.8 -51% 46.0
--------------------------------------------------------------------------------
----------------------
Operating cash flow -9.4 -35.3 -26.3 -37.5 74.2
after investments
----------------------------------------------------------
--------------------------------------------------------------------------------
Interest-bearing net 142.5 194.0 -27% 142.5 194.0 -27% 86.5
debt, end of period
--------------------------------------------------------------------------------
Gearing, end of 64.8 85.5 64.8 85.5 34.6
period, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Personnel, average 17,333 18,106 -4% 17,354 18,229 -5% 18,071
for the period
--------------------------------------------------------------------------------
Word from the President and CEO Fredrik Strand
“The work to move from the old YIT financial holding model into a competitive
coherent service and project corporation with common processes and tools is
progressing well with full speed.
During April-June we have reviewed our overall project portfolio more closely
in all the divisions and revised the cost estimates and provisions relating to
some low-performing projects. The review has negatively impacted the reported
EBITDA and the EBITDA full year guidance due to cost estimate adjustments to
projects in the completion phase, provisions made for low-performing active
projects and provisions made for old, completed projects. The latter has been
considered as non-recurring items as defined in the financial tables under note
5. Caverion is conservative in defining non-recurring items, which are excluded
from our EBITDA guidance.
Our Q2 results should be seen as an integrated part of our overall performance
and part of completing the demerger and restructuring of the operations within
Caverion and not an individual quarter as projects typically stretch over 12-24
months.
We are still in progress in increasing our profitability. This is the
foundation we need in order to achieve growth in line with our vision: to
become a leading European provider of advanced and sustainable life cycle
solutions for buildings and industries.
We also strive to have more efficient and harmonised processes in all our
countries. Having the best people is not enough, if the processes and tools
supporting their work are not sufficient. We have therefore initiated process
development and it is our firm goal to have all the redefined processes in
place as by the end of the year.
In addition, we are investing in tools and templates to shorten the invoicing
process. Our improved working capital management is already bearing fruit,
which can be seen in our improved cash flow from operations for April-June.”
OUTLOOK FOR 2014
Market outlook for Caverion's services
There are no changes to the previously communicated market outlook.
The increase of technology in buildings, energy efficiency requirements,
increasing digitalisation and automation all promote demand for Caverion's
services over the coming years. The opportunities to grow in service and
maintenance business are still favourable in all of Caverion's divisions in
2014. As technology in buildings is increasing the need for new services and
the demand for life cycle solutions are expected to increase. New investments
in building systems are expected to increase slightly and positive signs can be
seen in tendering activity. The growing public investments and the need for
renovation and repair work are expected to be the key factors behind the
growth. The tightening of environmental legislation will improve the growth
potential of energy efficiency services. Environmental certifications and
energy efficiency will be significant factors that will allow the property
owners to upgrade their property value. An increasing number of properties will
be connected to remote monitoring through command centres.
Guidance for 2014
Caverion updated its guidance for 2014 on July 14, 2014. According to the
updated guidance Caverion estimates that the Group's revenue with comparable
exchange rates and EBITDA excluding non-recurring items for 2014 will remain at
the previous year's level.
In 2014 the targeted EBITDA level will be reached by improving the operational
efficiency, growing the service and maintenance business as well as increasing
the project business in Germany. The potential changes in general macroeconomic
environment nonetheless may have an effect on Caverion's business and
customers.
One single operative segment
The Board of Directors of Caverion Corporation decided on 27 January, 2014 that
Caverion's external reporting structure will be changed as of January 1, 2014
to better match the company's new management structure and business areas. The
segments based on geographical areas (Building Services Northern Europe and
Building Services Central Europe) are replaced by one single operative segment,
that will also include the Group services and other items. Since Caverion's
establishment, both service and maintenance and project businesses have been
developed strongly across all countries. This interim report is the second one
based on the new reporting structure. The change in reporting structure has no
effect on the Group's strategic targets.
INFORMATION SESSION, WEBCAST AND CONFERENCE CALL
Caverion will hold a news conference and webcast on the Interim Report on
Tuesday, July 22, 2014, at 11:00 a.m. (Finnish Time, EEST) at the Kämp Hotel
(Gallen-Kallela meeting room), Kluuvikatu 2, Helsinki, Finland. The news
conference can also be viewed live on Caverion's website at
www.caverion.com/investors. It is also possible to participate in the event
through a conference call by calling the assigned number +44 207 660 2078 (no
conference ID or pin code required) at 10:55 a.m. (Finnish time, EEST) at the
latest. More practical information on the news conference can be found on
Caverion's website, www.caverion.com/investors.
Other IR events in 2014
Caverion will arrange a Capital Markets Day in Stockholm on September 10, 2014
at 9:00 a.m. (Swedish Time, CEST). More information on the programme has been
published as a stock exchange release on June 18, 2014.
Financial information in 2014
Interim Report for January - September will be published on October 31, 2014 at
9:00 a.m. (Finnish Time, EET).
Financial reports and other investor information are available at Caverion's
website, www.caverion.com/investors, and IR App. The materials may also be
ordered by sending an e-mail to IR@caverion.com.
CAVERION CORPORATION
For further information, please contact:
Antti Heinola, Chief Financial Officer, Caverion Corporation, tel. +358 40 352
1033, antti.heinola@caverion.fi
Milena Hæggström, Head of Investor Relations, Caverion Corporation, tel. +358
40 5581 328, milena.haeggstrom@caverion.fi
Distribution: NASDAQ OMX Helsinki, principal media, www.caverion.com
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