Review by the President and CEO
Interim Report January-March 2016:
“Our order backlog grew by 8 percent from the end of last year and by 15 percent from the end of March 2015 at comparable exchange rates. Since the start of the year, we have announced two big and exciting life cycle contracts in line with our strategy. In Finland, we will deliver the Total Technical Solutions covering all building systems in the Nummi service centre for the City of Hämeenlinna. Once completed, we will be responsible for the property’s Technical Maintenance and Managed Services for the next 20 years. This means Caverion will be responsible for the property’s usability, conditions, safety and energy use during its entire life cycle. Another similar but even bigger project worth over EUR 80 million was signed at Kalvebod Brygge in Copenhagen at the beginning of the year. It is one of the largest PPP projects in Denmark and also one of the largest orders Caverion has ever received. These projects show that we are bringing our vision to life by providing Life Cycle Solutions for our clients.
We are still affected by changes in our operating environment in e.g. Norway. The market conditions in Norway have not improved from the end of 2015 and Caverion does not expect any immediate improvement.
During the period, we have also recognised a lower than planned utilisation rate. This mainly relates to the utilisation rate in Technical Installation and Maintenance in Sweden and Denmark-Norway, which was lower than expected during the first quarter. We have initiated actions to mitigate additional negative outcome: closed non-performing units, merged regions, made temporary lay-offs as well as decreased our administrative costs in the divisions. At the end of the first quarter we have 300 people on temporary layoffs and have initiated restructuring actions corresponding to a cost of EUR 2.0 million in the first quarter.
During the period, we continued to invest in the implementation of our harmonised systems througout the group. At the end of the first quarter both Northern and Central Europe now share the same infrastructure. In the second quarter we continue to implement the harmonised systems in all our divisions, which also enable easier integration of potential acquired businesses into our operations.”