Caverion Oyj - Company Announcement

Caverion’s Capital Markets Day: Strategic focus on life cycle solutions and delivering on growth and profitability − financial targets, guidance and outlook intact

Helsinki, 2014-09-10 08:00 CEST (GLOBE NEWSWIRE) -- 

CAVERION CORPORATION      STOCK EXCHANGE RELEASE     SEPTEMBER 10, 2014 AT 9:00
EEST 


Caverion's Capital Markets Day: Strategic focus on life cycle solutions and
delivering on growth and profitability − financial targets, guidance and
outlook intact 

Caverion will today hold its Capital Markets Day in Stockholm, Sweden. The
event focuses on Caverion's strategy and service offering. There are no changes
to the previously communicated financial targets, market outlook or guidance
for 2014. 

The President and CEO Fredrik Strand will emphasise the significance of life
cycle solutions for Caverion's future success and explains how Caverion is
aiming to reach its strategic targets of growth and profitability improvement.
Caverion has in the recent months developed a more commercialised way of
viewing its market offering, with a matrix of service areas, disciplines and
client segments. 

The presentations given by Karl-Walter Schuster (Project Excellence) and Matti
Malmberg (Service Efficiency) describe in more detail each of Caverion's seven
service areas as well as actions taken to improve profitability in projects and
services. Antti Heinola, CFO, will give an update on Caverion's financial
performance. 

The day will end with a site visit to the medical technology company
Bactiguard's new production facility, for which Caverion has provided advanced
clean room technology, illustrating Caverion's expertise in technically
demanding properties. 

President and CEO Fredrik Strand: Life cycle solutions Caverion's competitive
edge 

“Caverion's competitive edge is built on life cycle solutions: they are at the
core of our brand and included in everything we do. There is growing demand for
life cycle solutions in the market as building technologies are increasingly
advanced and integrated. This requires multi-discipline expertise, which we can
offer our clients. We understand the complexity of building technologies and
industrial processes, and can provide services for their entire life cycle,”
says President and CEO Fredrik Strand. 

Caverion aims to be a leading European provider of advanced and sustainable
life cycle solutions. 
“I have great faith in our ability to achieve this vision. The megatrends, such
as tightening requirements for energy efficiency, digitalisation and fragmented
markets, work in our favour. Energy efficiency is incorporated in all of our
services, from energy inspections to total deliveries of energy-saving
contracts,” Fredrik Strand continues. 

Clear implementation plan to reach the 2016 profitability targets

Caverion's long-term financial targets by the end of 2016 are intact: average
annual growth in revenue of more than 10%, EBITDA over 6% of revenue and
negative working capital. The company's aim is to distribute at least 50% of
the result for the year after taxes, excluding changes in fair value, as
dividend and capital redemption to the company's shareholders. 

“We are now focusing especially on building future leadership and a coherent
operating model. Caverion is transforming from an old financial holding model
into one, coherent service and project corporation, and we need to have common
processes and tools in place in all of our countries. While this work has
progressed well, increasing profits is admittedly not yet a closed project, and
the harmonisation of processes is also still on-going.” 

Caverion's target to reach negative working capital by the end of 2016 is
pursued by measures such as increasing the number of mobile devices in the
field and by introducing a common SAP template. Furthermore, efficient working
capital management is ensured by monitoring, reporting and invoicing on a daily
basis. 

The procurement process and organisation will be harmonised with centrally
negotiated agreements and common policies for approving suppliers, among
others. The importance of strong cash flow and prompt invoicing has been
highlighted throughout the group. As a result, Caverion has been able to
improve its working capital during the first half of 2014. 

Growth through balancing the business mix

“Once we have succeeded in improving the profits, we can move on to the actual
growth phase. Our goal is to grow revenue both organically and through
carefully selected acquisitions, which account for approximately half of the
targeted growth. Organically, the growth is pursued through developing our
business mix: growing service and maintenance and long-term service agreements
and, at the same time, increasing Design & Build projects. The aim is to
develop strong own concepts in both projects and services,” states Strand. 

Caverion already has a strong market position in all of its key market areas.
It is among the top five companies in its industry in all of of its six largest
operating countries. “The extensive services and operations in 13 countries are
competitive advantages in a market where most service providers focus on a few
individual solutions locally. There is still growth potential, especially in
German-speaking countries,” concludes Strand. 

Striving for excellence in the project business

In the project business, Caverion's competitive edge is its ability to deliver
extensive, multi-discipline projects. Furthermore, the company differentiates
itself from its competitors through special expertise in technologies for
demanding properties such as hospitals, laboratories and clean rooms as well as
its arrowhead competencies in cooling, building automation and remote
monitoring, security and fire safety systems. 

The company aims to increase the share of its own products and solutions.
Caverion's in-house R&D centre supports its product development. During the
past 12 months, the company has registered more than 10 patent proposals. 

Progress towards one coherent Caverion requires tighter control in the project
process. Projects are more closely reviewed in all phases, and steering
committees have been set up for larger projects. In addition, Caverion plans to
establish centralised project offices in all divisions for large-scale projects
as well as competence centres for Design & Engineering projects. Currently, the
focus is on ensuring that common processes and decision gates are used in all
projects. 

Caverion is careful in choosing projects in terms of their risks and
profitability as well as competence and resources required, and has a highly
structured process for project selection. The company has introduced renewed
and strict delegation of authority with clear approval limits for contracts:
Contracts that are more than EUR 100 million in value are approved by the Board
of Directors, contracts in the category of EUR 20−100 million are approved by
the President and CEO, and when they fall into EUR 5−20 million rage, by the
head of business area. 

Moving up in the value chain in the service business

In the service business, Caverion's aim is to move up in the value chain by
stepping from technical maintenance, the foundation of service business,
towards more comprehensive services, in which Caverion manages the entire life
cycle of the client's property. 

Caverion offers a full range of technical and soft services for buildings and
industrial processes. Ultimately, it can assume all the responsibility for
designing, building, operating and maintaining the technical solutions
throughout the life cycle, which is sometimes more than 20 years. The life
cycle model decreases the costs related to the property, and ensures that the
clients' properties are safe, functional, sustainable and energy-efficient. 

Caverion aims to increase the profitability of its service business through
several actions, such as developing service concepts with higher margin
potential, such as its ServiFlex concept for preventive technical maintenance.
Growth is sought by generating new business potential through new service
areas, client segments and disciplines. Boosting add-on sales and expanding
existing contracts with additional services and disciplines receive enhanced
focus. 

Caverion has established a Centre for Service Excellence to support the
services' sales and to develop common processes and IT platforms related to
services. For example, the aim is to roll out the ERP solution in all operating
countries with mobile devices used in the field fully integrated to it. 


The Capital Markets Day will start at 9:00 a.m. CEST (10:00 a.m. Finnish time,
EEST). All presentations are available in English at
www.caverion.com/investors. It is also possible to follow the presentations
through a live webcast at approximately 9:00 a.m.-12:30 p.m. CEST. The
teleconference will be open on the following numbers: 

Finland: +358 (0)9 2313 9201
Germany: +49 (0)695 8999 0507
Sweden: +46 (0)8 5052 0110
UK: +44 (0)20 7162 0077

To connect to the meeting, please give the company name Caverion.

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, operates and maintains user-friendly and
energy-efficient technical solutions for buildings and industries. Our services
are used in offices, retail properties, housing, public premises, industrial
plants and infrastructure, among other places. We aim to be a leading European
provider of advanced and sustainable life cycle solutions. Our strengths
include technological competence and comprehensive services, covering all
technical disciplines throughout the life cycle of the property and industrial
plant. Caverion was established through the demerger of Building Services and
Industrial Services businesses from YIT Group in June 2013. Our revenue for
2013 amounted to approximately EUR 2.5 billion. Caverion has nearly 18,000
employees in 13 countries in Northern and Central Europe. Caverion's shares are
listed on NASDAQ OMX Helsinki. www.caverion.com