Financial position at the end of June 2017

Caverion’s cash and cash equivalents amounted to EUR 19.8 million at the end of June (3/2017: EUR 24.7 million). In addition, Caverion has undrawn revolving credit facilities amounting to EUR 100.0 million and undrawn overdraft facilities amounting to EUR 19.0 million.

The Group’s interest-bearing loans and borrowings amounted to EUR 118.4 million at the end of June (3/2017: EUR 189.6 million), and the average interest rate after hedges was 2.35 percent. Approximately 67 percent of the loans have been raised from banks and other financial institutions, approximately 13 percent directly from the money markets and approximately 17 percent from insurance companies. A total of EUR 45.0 million of the interest-bearing loans and borrowings will fall due during the next 12 months. The Group’s net debt amounted to EUR 98.6 million at the end of June (3/2017: EUR 164.9 million).

On June 9, 2017 Caverion Corporation issued a EUR 100 million hybrid bond, an instrument subordinated to the company's other debt obligations and treated as equity in the IFRS financial statements. The hybrid bond does not confer to its holders the rights of a shareholder and does not dilute the holdings of the current shareholders. The coupon of the hybrid bond is 4.625 per cent per annum until June 16, 2020. The hybrid bond does not have a maturity date but the issuer is entitled to redeem the hybrid for the first time on June 16, 2020, and subsequently, on each coupon interest payment date. If the hybrid bond was not redeemed on June 16, 2020, there will be a step-up of 500 basis points in the coupon. The hybrid bond strengthened the capital structure and financial position of the company. EUR 40 million of the proceeds from the hybrid bond were used to refinance existing bank loan facilities during the period and the remaining part will be used for general corporate purposes. Subsequently, the company’s five existing bank loan facilities were combined into one agreement. Following the EUR 100m hybrid transaction, Caverion’s key figures improved as follows: equity ratio improved to 28.1% (3/2017: 19.2%) and gearing to 37.2% (3/2017: 90.1%).

Caverion’s external loans are subject to a financial covenant based on the ratio of the Group’s net debt to EBITDA. Caverion and its core banks agreed on changes in the loan documentation in connection with the hybrid transaction. Financial covenant shall not exceed 5.0:1 by the end of September 2017 and thereafter the ratio shall not exceed 3.5:1. At the end of June, the Group’s Net debt to EBITDA was 3.4x according to the confirmed calculation principles. 

Debt maturity Q2 2017

Sources of funds
Interest rate type

Net debt development Q2 2017

Gross debt to net debt

Liquidity reserve Q2 2017

Cash flow and working capital

The Group's free cash flow was negative although improving from the corresponding period last year. Free cash flow amounted to EUR -46.7 (-61.3) million in January–June. Free cash flow was improved by the lower level of investments compared to last year. The Group's operating cash flow before financial and tax items amounted to EUR -38.1 (-31.1) million in January–June.

Working capital was EUR 31.0 (15.3) million at the end of June. Working capital was negative and there was positive development in working capital in divisions Finland, Sweden and Denmark-Norway. Working capital was tied by risk projects in divisions Industrial Solutions and Germany. The amount of POC receivables amounted to EUR 297.3 million (292.8) at the end of June. Trade receivables amounted to EUR 315.6 million (334.1) at the end of June.