Caverion Oyj - Company Announcement

Caverion’s Capital Markets Day: Financial targets, guidance and outlook intact, strategic focus on operational efficiency

Helsinki, Finland, 2013-11-19 07:00 CET (GLOBE NEWSWIRE) -- 





CAVERION CORPORATION      STOCK EXCHANGE RELEASE     NOVEMBER 19, 2013 AT 8:00
EET 



Caverion's Capital Markets Day: Financial targets, guidance and outlook intact,
strategic focus on operational efficiency 


Caverion Corporation will today on November 19, 2013 hold its Capital Markets
Day in Frankfurt, Germany. The event gives further insight into Caverion's
strategy as one of the leading companies in building systems and industrial
services in Europe. In his presentation, President and CEO Juhani Pitkäkoski
will go through strategic milestones for reaching company's profitability
target, among others. Presentations by Caverion's key management cover the
newly established company's prospects for its two main businesses, project
business and service and maintenance, as well as the company's financial
performance, market situation, competitive landscape and M&A opportunities. The
day will end with a visit to construction site of European Central Bank's new
headquarters, to which Caverion has delivered various building systems. 



President and CEO Juhani Pitkäkoski:

“During the strategy period 2014−2016 our focus is first and foremost on
operational efficiency. Caverion aims to be the leading and most efficient
building systems company in Europe, and its key strategic targets include
increasing profitability in Northern Europe, strong growth in Central Europe
organically and through acquisitions as well as developing wide, new and
advanced projects and services.”   “Our guidance is still intact. We repeat the
 estimate announced in early  June 2013, according to which the Group's revenue
for the second half of 2013 is more than EUR 1.3 billion and EBITDA more than
EUR 50 million”, Pitkäkoski continues. 


Long-term financial targets recently updated with a new target for working
capital 

Caverion announced its updated long-term financial targets for the strategy
period 2014−2016 on November 1. The target for operating cash flow after
investments was replaced with a target for working capital. The company's
long-term financial targets by the end of 2016 are average annual growth in
revenue of more than 10 per cent, EBITDA over 6 per cent of revenue and
negative working capital. The company's aim is to distribute at least 50 per
cent of the result for the year after taxes, excluding changes in fair value,
as dividend and capital redemption to the company's shareholders. 

Caverion's key competitive strengths include comprehensive services, covering
all building systems throughout the life cycle of the property, geographically
extensive operations in 13 countries and strong market position in all key
operating countries.  The company has strong technological expertise with own
innovative solutions with energy efficiency as part of all services and
solutions.  Low capital employed, extensive customer base and significant share
of service and maintenance provide preconditions for strong and stable cash
flow. 


Acquisitions  especially in German-speaking countries

Caverion is seeking growth in revenue both organically and through
acquisitions. Organic growth is mainly pursued by increasing service and
maintenance and the share of long-term contracts as well as increasing the
share of Design & Build projects. 

“Approximately half of the revenue growth over cycle is sought through
acquisitions, taking place especially in Germany and German-speaking countries.
We have a clear track record in growing through acquisitions”, ends Pitkäkoski. 



Strong market position with growth potential

Sakari Toikkanen, Senior Vice President, Business Development, says that the
aim is to conduct major acquisitions frequently also in the future. Caverion
has strong growth potential in the building systems' fragmented markets in
Europe. The company  is one of the leading service companies in building
systems and industrial services in Europe.  According to its estimate, Caverion
occupies the number one position in Finland and Norway, number three in Sweden
and Denmark and Austria, and is among top five in Germany. 

Caverion expects modest growth in its core markets in the near future. Stable
demand is estimated for service and maintenance during 2014−2015, and the new
non-residential construction volumes are forecasted to increase moderately. 
The increasing amount of technology in buildings, growing need for energy
efficiency, digitalisation and automation of building systems all support the
demand for Caverion's  business. 



Improving the business mix in projects

Karl-Walter Schuster, Building Services Central Europe and Project Excellence,
talks about improving the business mix in projects and introduces opportunities
related to Design & Build projects. Participating in the design from an early
stage of the project provides significantly better margins than in traditional
tender-based contracts. Long-lasting and demanding process is also less
attractive to smaller competitors.  Research & development and own products are
clear strengths for Caverion's project business. The company's in-house R&D
centre in Aachen, Germany specialises in the research and development of
advanced products related to ventilation, cooling and heating. 



Service efficiency is a key driver for profitability improvement

Matti Malmberg, Building Services Northern Europe and Service Efficiency,
discusses service efficiency, which is a key driver for Caverion's
profitability improvement. Continuous development of operations and tools are
also of high importance.  Caverion's goal is to increase the share of long-term
service and maintenance contracts through reaching the full potential of
ServiFlex service concept, strong focus on Facility Management and creating
additional value for customers through control room services and energy
efficiency. 



Focusing on cash flow and capital efficiency


Antti Heinola, CFO, discusses driving Caverion's financial performance. The
third quarter of 2013, which was Caverion's first quarter as an independent
company,  showed improvement in profitability according to company's plan.
EBITDA for July−September decreased from the previous year, but has improved
for the second consecutive quarter in 2013. Heinola notes that right-sizing the
organisation is key for margin improvement. 

Increased selectiveness in project business has resulted in decrease in revenue
in July−September. However, increased order intake in Germany, in particular,
is expected to contribute favorably to the revenue development during the first
half of 2014. Group order backlog has increased by 8% since December 2012, and
in Central Europe alone by 31%. 

Caverion aims to improve cash flow by decreasing operative working capital from
its balance sheet. At the end of September, working capital was EUR 120
million. The company's  target to reach negative working capital by the end of
2016 is pursued by focusing especially on business related receivables and
liabilities. 




The Capital Markets Day will start at 9:00 a.m. Central European time (10:00
a.m. Finnish time). All presentations are at that time available in English at
www.caverion.com/investors.  It is also possible to follow the presentation
through a live webcast at approximately 9:00 a.m.-13:00 p.m. The teleconference
will be open during Juhani Pitkäkoski's presentation at 9:00-9:45 at the
following numbers: 

Germany: +49 (0) 69 566 036 000
UK: +44 (0) 203 059 5869
Finland: +358 (0) 800 9 14574



For additional information, please contact:

Milena Hæggström, Head of Investor Relations, tel. +358 40 5581 328,
milena.haeggstrom@caverion.fi 


CAVERION CORPORATION


Distribution: NASDAQ OMX, principal media, www.caverion.com

Caverion designs, builds and maintains user-friendly and energy-efficient
building systems and offers industrial services. Our services are used in
offices and retail properties, housing, public premises and industrial plants,
among other places. We aim to be the number one building systems company in
Europe. Our strengths include technological competence and customer-oriented
service, covering all building systems throughout the life cycle of the
property. Caverion was established through the demerger of Building Services
and Industrial Services businesses from YIT Group on June 30, 2013. Our revenue
for 2012 amounted to approximately EUR 2.8 billion. Caverion has over 18,000
employees in 13 countries in Northern and Central Europe. The company's shares
are listed on the NASDAQ OMX Helsinki. www.caverion.com