2014-10-31 08:00:01 CET
2014-10-31 08:00:05 CET
REGULATED INFORMATION
Caverion Oyj - Interim report (Q1 and Q3)
Caverion Corporation's Interim Report for January 1–September 30, 2014: Profitability and cash flow increased, operational improvement according to the plan
Helsinki, 2014-10-31 08:00 CET (GLOBE NEWSWIRE) --
CAVERION CORPORATION INTERIM REPORT 1-9/2014
October 31, 2014 at 9:00 a.m.
Profitability and cash flow increased, operational improvement according to the
plan
July 1 - September 30, 2014
· Order backlog: EUR 1,379.5 (1,296.0) million at the end of September,
an increase of 6% from the end of September 2013.
· Revenue: EUR 566.7 (594.8) million.
- Revenue decreased by 3 percent at previous year's exchange rates for
corresponding period.
· EBITDA: excluding non-recurring items EBITDA was EUR 25.3 (26.8)
million, or 4.5 (4.5) percent of revenue.
- Profitability improved from the previous quarter and the EBITDA margin
excl. non-recurring items was at the same level as last year for corresponding
period.
- EBITDA including non-recurring items was EUR 21.5 (23.3) million, or
3.8 (3.9) percent of revenue.
· Operating cash flow before financial and tax items: EUR 20.5 (11.1)
million.
· Working capital: EUR 49.4 (119.9) million at the end of September. The
target to reach negative working capital by the end of 2016 is progressing
according to plan.
January 1 - September 30, 2014
· Revenue: EUR 1,746.4 (1,855.5) million.
- Revenue decreased by 3 percent at previous year's exchange rates for
corresponding period.
· EBITDA: excluding non-recurring items EBITDA was EUR 41.3 (55.0)
million, or 2.4 (3.0) percent of revenue.
- EBITDA including non-recurring items was EUR 33.2 (45.6) million, or
1.9 (2.5) percent of revenue.
- The non-recurring items totalled EUR -8.2 million. The non-recurring
costs of EUR 21.4 million consisted of expenses relating to a terminated M&A
project, reorganisation costs and provisions for old, completed projects. 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.
- Projects in Norway and Denmark diluted the profitability in
January−September 2014. The turnaround of the Norwegian project operations has
progressed well during the third quarter, according to plan.
· Operating cash flow before financial and tax items: Improved from the
previous year to EUR 13.4 (7.1) million as a result of focus on working capital
management. Cash flow was 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.
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 7-9/14 7-9/13 Change 1-9/14 1-9/13 Change 1-12/13
--------------------------------------------------------------------------------
Revenue 566.7 594.8 -5% 1,746.4 1,855.5 -6% 2,543.6
--------------------------------------------------------------------------------
EBITDA 21.5 23.3 -8% 33.2 45.6 -27% 70.9
--------------------------------------------------------------------------------
EBITDA margin, % 3.8 3.9 1.9 2.5 2.8
--------------------------------------------------------------------------------
EBITDA excl. 25.3 26.8 -5% 41.3 55.0 -25% 81.7
non-recurring items
--------------------------------------------------------------------------------
EBITDA margin excl. 4.5 4.5 2.4 3.0 3.2
non-recurring items,
%
--------------------------------------------------------------------------------
Operating profit 15.7 17.8 -12% 16.0 29.9 -46% 49.4
--------------------------------------------------------------------------------
Operating profit 2.8 3.0 0.9 1.6 1.9
margin, %
--------------------------------------------------------------------------------
Net profit for the 9.9 11.4 -13% 7.6 18.4 -59% 35.5
period
--------------------------------------------------------------------------------
Earnings per share, 0.08 0.09 -13% 0.06 0.15 -59% 0.28
basic, EUR
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Working capital 49.4 119.9 -59% 49.4 119.9 -59% 46.0
--------------------------------------------------------------------------------
----------------------
Operating cash flow 20.5 11.1 84% 13.4 7.1 89% 108.5
before financial and
tax items
----------------------------------------------------------
--------------------------------------------------------------------------------
Interest-bearing net 131.6 190.1 -31% 131.6 190.1 -31% 86.5
debt, end of period
--------------------------------------------------------------------------------
Gearing, end of 57.8 79.7 57.8 79.7 34.6
period, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Personnel, average 17,329 18,016 -4% 17,346 18,174 -5% 18,071
for the period
--------------------------------------------------------------------------------
Word from the President and CEO Fredrik Strand
“At our Capital Markets Day held in Stockholm in September, we emphasised our
clear plan for improving our profitability. In line with this, we reiterated
our key focus to address the great potential of our life cycle solutions. The
megatrends in our business field, such as tightening requirements for energy
efficiency, digitalisation and fragmented markets, work in our favour.
The key to our ongoing profitability improvement lies in our own internal
efficiency, which we are enhancing by making needed changes to our operational
model and processes. We are transforming from a financial holding model into
one coherent service and project company. Therefore, our operating principles
and processes will be essentially the same in all countries. The project
management related to project controls has already been improved, project
business are being centralised into project office units and the ability to run
projects according to set targets has improved. As a result, the turnaround of
the Norwegian project operations has progressed well during the third quarter,
according to plan. In addition, we have invested in systems, tools and further
harmonisation to shorten the invoicing process. Our improved working capital
management can be seen in our improved operating cash flow also for
July-September.
We also had a positive development in our order backlog, up 6 percent from the
end of September 2013, amounting to EUR 1,379.5 million at the end of
September. We have announced several multi-million orders, such as the
Henninger Tower project in Germany worth EUR 33 million, a project delivery of
DZNE research centre in Bonn (close to EUR 9 million) and a deal to Aquis Plaza
shopping centre in Aachen (around EUR 5 million). In Finland, some of our
customers have had to postpone their projects, but we have also been able to
secure relatively large new deals, such as the delivery of electricity systems
to the Valkea shopping centre in Oulu, worth EUR 3.5 million. In Norway, we are
providing a total technical solution for Arendal police station, also worth
more than EUR 3 million.”
OUTLOOK FOR 2014
Market outlook for Caverion's services and solutions
The increase of technology in buildings, energy efficiency requirements,
increasing digitalisation and automation all promote demand for Caverion's
services and solutions 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 proactive maintenance 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.
Overall changes in the operating environment due to growing uncertainty over
the general marcoeconomic development and mounting geopolitical tensions have
led to some expected cautiousness in project start-ups and service demand
during the rest of the year.
Guidance for 2014 (unchanged)
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 third 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
Friday, October 31, 2014, at 11:00 a.m. (Finnish Time, EET) at Restaurant Bank,
Unioninkatu 20, 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 20 31940550 (no conference ID or pin code required) at 10:55 a.m.
(Finnish time, EET) at the latest. More practical information on the news
conference can be found on Caverion's website, www.caverion.com/investors.
Financial information in 2014
Financial Statements Bulletin for January - December 2014 will be published on
January 29, 2015 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 Helsinki, principal media, www.caverion.com
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