Caverion Corporation's Interim Report for January 1–March 31, 2014: Positive development in order backlog and EBITDA
INTERIM REPORT FOR JANUARY 1 – MARCH 31, 2014
Positive development in order backlog and EBITDA
- Revenue: EUR 591.3 (607.9) million, decreased by 3 percent
- Revenue increased by 1percent at previous year’s exchange rates for corresponding period.
- EBITDA: excluding non-recurring items EBITDA was EUR 13.1 (12.2) million, or 2.2 (2.0) percent of revenue.
- EBITDA including non-recurring items was EUR 9.6 (9.4) million, or 1.6 (1.5) percent of revenue.
- In Sweden, the profitability improved according to plan compared to the previous year.
- Projects in Norway diluted the profitability in the first quarter but the profitability is expected to improve during 2014.
- Non-recurring payment of EUR 3.5 million related to a final settlement of an old export project in Danish operations due to bankruptcy of a joint venture partner.
- Operating cash flow after investments: EUR -16.9 (-2.2) million.
- Burdened by IT license prepayments and investments of EUR 5.8 million and a non-recurring payment of EUR 3.5 million related to a final settlement mentioned above.
- Working capital: EUR 64.5 (87.2) million at the end of March.
- Order backlog: EUR 1,335.3 (1,315.2) million at the end of March.
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).
|EBITDA margin, %
|EBITDA excluding non-recurring items
|EBITDA margin excluding non-recurring items, %
|Operating profit margin, %
|Net profit for the period
|Earnings per share, basic, EUR
|Operating cash flow after investments
|Interest-bearing net debt, end of period
|Gearing, end of period, %
|Personnel, average for the period
Word from the new CEO Fredrik Strand: Moving on to the next stage of our strategy
“Caverion has unique opportunities to be a forerunner in the Building and Industrial Services markets in the future. This is due to the advanced industry knowledge and skilled people within Caverion combined with the possibilities presented in the digital, ‘always connected’ world.
After the successful start of the new company we will now be entering the next stage of our strategy: from fix to build phase and then moving on to the create and reach phases, where we concentrate on building the winning team and developing our services. Our vision is to be a leading European provider of advanced and sustainable life cycle solutions for buildings and industries. In order to reach our vision we need a strong company image, innovative and advanced solutions, excellent leadership and operational excellence. If these four targets are fulfilled in a proper way, they will enable growth and profitability. Together, these form our six strategic focus areas. We have also introduced a new way of looking at our market offering to our clients, which can be described best as a matrix of service areas, disciplines and client segments.
I genuinely believe that we can make a difference with good people. And in order to have good people to perform successfully excellent leadership is required. That is how we as a company will make the difference.
I welcome all our shareholders to be part of this journey together with us.
OUTLOOK FOR 2014
Market outlook for Caverion’s services
The increase of technology in buildings, energy efficiency requirements, increasing digitalisation and automation all promote demand for Caverion’s services 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 repair work 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.
Guidance for 2014
Caverion reiterates its guidance announced on 28 January, 2014, according to which Caverion estimates that the Group’s revenue for 2014 with comparable exchange rates will remain at the previous year's level and EBITDA for 2014 excluding non-recurring items will grow clearly to EUR 90–110 million.
In 2014 the EBITDA increase will be executed 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 first 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 Thursday, April 24, 2014, at 10:00 a.m. (Finnish Time, EEST) 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 +44 203 1940 550 (no conference ID or pin code required) at 9:55 a.m. (Finnish time, EEST) at the latest. More practical information on the news conference can be found on Caverion's website, www.caverion.com/investors.
Other IR events in 2014
Caverion will arrange an Analyst and Media Presentation in Helsinki on June 10, 2014 at 2:00 p.m. (Finnish Time, EEST). Further information on the programme will be sent to the analysts and media representatives following Caverion.
Caverion will also arrange a Capital Markets Day in Stockholm on September 10, 2014 at 9:00 a.m. (Swedish Time, CEST). Further information on the programme will be published as a stock exchange release closer to the date.
Financial information in 2014
Interim Reports will be published on July 22, 2014 at 9:00 a.m. (Finnish Time, EEST) and October 31, 2014 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.
President and CEO
For further information, please contact:
Antti Heinola, Chief Financial Officer, Caverion Corporation, tel. +358 40 352 1033, email@example.com
Milena Hæggström, Head of Investor Relations, Caverion Corporation, tel. +358 40 5581 328, firstname.lastname@example.org
Distribution: NASDAQ OMX Helsinki, principal media, www.caverion.com